UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------- FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) August 18, 1997 ------------------------------- Insight Health Services Corp. - -------------------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER ) Delaware 0-28622 33-0702770 - -------------------------------------------------------------------------------- (STATE OR OTHER JURISDICTION (COMMISSION (I.R.S EMPLOYER OF INCORPORATION) FILE NUMBER) DENTIFICATION NO.) 4400 MacArthur Boulevard, Suite 800, Newport Beach, CA 92660 -------------------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (714) 476-0733 ------------------------------------------------------------- REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE N/A - -------------------------------------------------------------------------------- (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED. The financial statements of Mobile Imaging Consortium required by this item are attached. (b) PRO FORMA FINANCIAL INFORMATION. The Unaudited Pro Forma Condensed Financial Statements are presented which reflect the acquisition of certain assets of Mobile Imaging Consortium, Limited Partnership, and Mobile Imaging Consortium - New Hampshire (collectively "MIC") by InSight Health Services Corp. ("Registrant") through its wholly owned subsidiary, InSight Health Corp. ("InSight"). The Unaudited Pro Forma Condensed Financial Statements are provided for informational purposes only and are not necessarily indicative of the results that actually would have occurred had the acquisition been in effect for the period presented. The Unaudited Pro Forma Condensed Consolidated Balance Sheet is based on the historical balance sheet as of March 31, 1997 and is presented as if the acquisition had been consummated at that date. The Unaudited Pro Forma Condensed Consolidated Statement of Income is based on the historical statements of operations of each of InSight and MIC for the nine months ended March 31, 1997, and reflects certain adjustments to give effect to the acquisition as if it had occurred on July 1, 1996. Pro forma adjustments are based on the purchase method of accounting and a preliminary allocation of the purchase price. However, changes to the adjustments included in the Unaudited Pro Forma Combined Financial Statements are expected as evaluations of assets and liabilities are completed and additional information becomes available. Accordingly, the final allocated values will differ from the amounts used to calculate the adjustments in the Unaudited Pro Forma Condensed Consolidated Financial Statements. (c) EXHIBITS 99.1(a) Independent Auditors' Report 99.1(b) Audited Combined Financial Statements for the years ended December 31, 1996, 1995 and 1994 2 (b) (i) INSIGHT HEALTH SERVICES CORP. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (AMOUNTS IN THOUSANDS) As reported Pro Forma Pro Forma March 31, 1997 Adjustments March 31, 1997 -------------- ----------- -------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 6,504 $ - $ 6,504 Trade accounts receivable 13,841 250 (A) 14,091 Other current assets 2,914 - 2,914 --------- -------- --------- Total current assets 23,259 250 23,509 PROPERTY AND EQUIPMENT 30,309 3,070 (B) 33,379 OTHER ASSETS 18,975 5,391 (C) 24,366 --------- -------- --------- $ 72,543 $ 8,711 $ 81,254 --------- -------- --------- --------- -------- --------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and other accrued expenses $ 13,154 - $ 13,154 Current portion of equipment and other notes 11,716 2,048 13,764 Current portion of deferred gain on debt restructure 821 - (D,E) 821 --------- -------- --------- Total current liabilities 25,691 2,048 27,739 --------- -------- --------- LONG-TERM LIABILITIES: Equipment and other notes, less current portion 37,103 6,663 (D,E) 43,766 Deferred gain on debt restructure, less current portion 902 - 902 Other long-term liabilities 766 - 766 --------- -------- --------- Total long-term liabilities 38,771 6,663 45,434 --------- -------- --------- MINORITY INTEREST 1,929 - 1,929 --------- -------- --------- STOCKHOLDERS' EQUITY: Convertible Series A preferred stock 6,750 - 6,750 Common stock 3 - 3 Additional paid-in capital 23,100 - 23,100 Accumulated deficit (23,701) - (23,701) --------- -------- --------- Total stockholders' equity 6,152 - 6,152 --------- -------- --------- $ 72,543 $ 8,711 $ 81,254 --------- -------- --------- --------- -------- --------- SEE NOTES TO UNAUDITED PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3 (b)(ii) INSIGHT HEALTH SERVICES CORP. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA) InSight Health InSight Health Services Corp. Services Corp. and Subsidiaries and Subsidiaries as reported MIC Combined Pro Forma for the nine for the nine for the nine months ended months ended Pro Forma months ended March 31, 1997 March 31, 1997 Adjustments March 31, 1997 ----------------- -------------- ----------- ---------------- REVENUES: Contract services $ 35,186 $ 4,090 $ - $ 39,276 Patient services 31,153 1,342 - 32,495 Other 1,790 - - 1,790 --------- -------- -------- --------- Total revenues 68,129 5,432 - 73,561 --------- -------- -------- --------- COSTS OF OPERATIONS: Cost of services 37,386 2,730 - 40,116 Provision for doubtful accounts 1,116 109 - 1,225 Equipment leases 13,822 - - 13,822 Depreciation and amortization 7,203 924 202 (A) 8,329 --------- -------- -------- --------- Total costs of operations 59,527 3,763 202 63,492 --------- -------- -------- --------- GROSS PROFIT 8,602 1,669 (202) 10,069 CORPORATE OPERATING EXPENSES 5,343 - - 5,343 --------- -------- -------- --------- INCOME FROM COMPANY OPERATIONS 3,259 1,669 (202) 4,726 EQUITY IN EARNING OF UNCONSOLIDATED 364 - - 364 --------- -------- -------- --------- PARTNERSHIPS OPERATING INCOME (LOSS) 3,623 1,669 (202) 5,090 INTEREST EXPENSE, Net 2,741 128 518 (B) 3,387 --------- -------- -------- --------- INCOME BEFORE TAXES 882 1,541 (720) 1,703 INCOME TAX EXPENSE 134 29 158 (C) 321 --------- -------- -------- --------- NET INCOME $ 748 $ 1,512 $ (878) $ 1,382 --------- -------- -------- --------- --------- -------- -------- --------- INCOME PER COMMON SHARE: Net Income $ 0.14 $ 0.25 --------- --------- --------- --------- Weighted average number of common shares outstanding 5,444,308 5,444,308 --------- --------- --------- --------- SEE NOTES TO UNAUDITED PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 4 (b)(iii) INSIGHT HEALTH SERVICES CORP. AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. NOTE 1: UNAUDITED PRO FORMA BALANCE SHEET ADJUSTMENTS The Unaudited Pro Forma Condensed Consolidated Balance Sheet of the Registrant as of March 31, 1997, gives affect to the following pro forma adjustments: (A) To record the net trade accounts receivable acquired. (B) To record the three mobile medical imaging equipment units acquired at their estimated fair value. The mobile medical imaging equipment will be depreciated over five years. (C) To record the goodwill related to the assets acquired. The goodwill will be amortized over an assumed 20 year period. (D) To record the assumption of the current and long-term portions of the capital lease obligations related to the mobile medical imaging equipment acquired. (E) To record the current and long-term portions of the $6,800,000 debt borrowed from General Electric Medical Systems (GEMS). NOTE 2: UNAUDITED PRO FORMA STATEMENT OF INCOME ADJUSTMENTS The Unaudited Pro Forma Condensed Consolidated Statement of Income of the Registrant for the nine months ended March 31, 1997, gives affect to the following pro forma adjustments: (A) To record the amortization of the goodwill associated with the acquisition over an assumed 20 year period. (B) To record interest expense on the long-term debt borrowed from GEMS associated with the acquisition at a rate of 10.5 percent per annum. (C) To record an income tax expense based upon an assumed composite (federal, state and local) income tax rate of 20 percent. 5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: August 18, 1997 INSIGHT HEALTH SERVICES CORP. BY: /s/ E. LARRY ATKINS ----------------------------------------- E. Larry Atkins President and Chief Executive Officer 6