UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
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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
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Insight Health Services Corp.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER )
Delaware 0-28622 33-0702770
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(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S EMPLOYER
OF INCORPORATION) FILE NUMBER) DENTIFICATION NO.)
4400 MacArthur Boulevard, Suite 800, Newport Beach, CA 92660
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(714) 476-0733
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
N/A
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(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
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(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
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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
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$ 72,543 $ 8,711 $ 81,254
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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
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Total current liabilities 25,691 2,048 27,739
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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
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Total long-term liabilities 38,771 6,663 45,434
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MINORITY INTEREST 1,929 - 1,929
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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)
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Total stockholders' equity 6,152 - 6,152
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$ 72,543 $ 8,711 $ 81,254
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SEE NOTES TO UNAUDITED PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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(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
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Total revenues 68,129 5,432 - 73,561
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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
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Total costs of operations 59,527 3,763 202 63,492
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GROSS PROFIT 8,602 1,669 (202) 10,069
CORPORATE OPERATING EXPENSES 5,343 - - 5,343
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INCOME FROM COMPANY OPERATIONS 3,259 1,669 (202) 4,726
EQUITY IN EARNING OF UNCONSOLIDATED 364 - - 364
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PARTNERSHIPS
OPERATING INCOME (LOSS) 3,623 1,669 (202) 5,090
INTEREST EXPENSE, Net 2,741 128 518 (B) 3,387
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INCOME BEFORE TAXES 882 1,541 (720) 1,703
INCOME TAX EXPENSE 134 29 158 (C) 321
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NET INCOME $ 748 $ 1,512 $ (878) $ 1,382
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INCOME PER COMMON SHARE:
Net Income $ 0.14 $ 0.25
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Weighted average number of common
shares outstanding 5,444,308 5,444,308
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SEE NOTES TO UNAUDITED PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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(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.
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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
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E. Larry Atkins
President and Chief Executive Officer
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