SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 14, 1999
Health Fitness Corporation
(Exact name of Registrant as Specified in its Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
0-25064 41-1580506
(Commission File Number) (IRS Employer
Identification No.)
3500 West 80th Street
Minneapolis, Minnesota 55431
(Address of Principal Executive Offices and Zip Code)
(612) 831-6830
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets.
On May 14, 1999, the Registrant sold to HealthSouth Corporation
substantially all of the assets and business (excluding cash, accounts
receivable and accounts payable) of a majority of the Registrant's freestanding
physical therapy clinics. The Registrant also entered in a noncompetition
agreement with HealthSouth Corporation. The aggregate sale price for the clinics
and consideration for the noncompetition covenant was $3,600,000 cash, and was
determined by negotiation between the Registrant and HealthSouth Corporation.
Item 7. Financial statements and Exhibits
(a) Financial Statements:
None
(b) Pro Forma Financial Information:
The Registrant's unaudited Pro Forma Condensed Consolidated
Balance Sheet as of March 31, 1999 and notes thereto are filed
with this report immediately following the signature page
hereto.
(c) Exhibits:
See Exhibit Index immediately following Pro Forma Financial
Information.
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 hereunto duly authorized.
HEALTH FITNESS CORPORATION
By /s/ Loren S. Brink
Date May 28, 1999 Loren S. Brink, President
PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma condensed consolidated financial statements set
forth, for the dates indicated, summarize unaudited pro forma condensed
consolidated financial information for Health Fitness Corporation. This
information is derived from the historical consolidated financial statements and
notes thereto and reflects the condensed consolidated balance sheet as of March
31, 1999 as if the sale of the Company's physical therapy clinics had occurred
on March 31, 1999.
In accordance with the rules and regulations of the Securities and
Exchange Commission, a pro forma condensed consolidated statement of income has
not been filed because the historical income statements for the twelve months
ending December 31, 1998 and the three months ending March 31, 1999 reflect the
transaction as discontinued operations for the entire periods.
Assumptions underlying the pro forma adjustments are described in the
accompanying notes which should be read in conjunction with the unaudited pro
forma condensed consolidated financial statements. These financials statements
should also be read in conjunction with the historical financial statements of
Health Fitness Corporation and notes thereto. Actual adjustments may differ from
the proforma adjustments presented herein.
Health Fitness Corporation
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
March 31, 1999
Pro Forma Adjustments
Reflecting the
Sale of
Physical
Historical Therapy Clinics Pro-Forma
---------- --------------- ----------
ASSETS
CURRENT ASSETS:
Cash $ 26,692 $ 3,600,000 (a) $ 26,692
(2,250,000)(c)
(1,350,000)(b)
Trade accounts and notes receivable, less
allowance for doubtful accounts of $1,093,688 and $1,293,000 5,093,930 5,093,930
Inventories 28,548 28,548
Prepaid expenses and other 121,612 121,612
---------- ----------
Total current assets 5,270,782 5,270,782
PROPERTY AND EQUIPMENT, net 711,627 711,627
OTHER ASSETS:
Goodwill, less accumulated amortization of $1,697,929 and $1,580,098,
respectively 7,518,700 7,518,700
Noncompete agreements, less accumulated amortization of
$417,290 and $374,478, respectively 549,560 549,560
Copyrights, less accumulated amortization of $96,775 and
$85,608, respectively 573,225 573,225
Trade names, less accumulated amortization of $24,114 and $20,613,
respectively 185,886 185,886
Contracts, less accumulated amortization of $33,333 and $23,334,
respectively 46,667 46,667
Trade accounts and notes receivable, less allowance for doubtful
accounts of $30,000 and $30,000, respectively 530,511 530,511
Deferred financing costs, less accumulated amortization of
$1,086,907 and $836, 082, respectively 334,435 334,435
Other 40,983 40,983
Net assets of discontinued operations 3,196,962 (3,600,000)(a) 946,962
1,350,000 (b)
---------- ----------
$18,959,338 $16,709,338
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Checks written in excess of bank balance $ 671,288 $ 671,288
Notes payable 7,048,031 $(2,250,000 (c) 4,798,031
Current maturites of long-term debt 526,544 526,544
Trade accounts payable 927,545 927,545
Accrued salaries, wages, and payroll taxes 1,632,087 1,632,087
Accrued earn-out 215,370 215,370
Other accrued liabilities 659,501 659,501
Deferred revenue 1,659,247 1,659,247
---------- ----------
Total current liabilities 13,339,613 11,089,613
LONG-TERM DEBT, less current portion 809,853 809,853
SUBORDINATED DEBT 115,000 115,000
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; authorized 5,000,000
shares, none issued or outstanding -- --
Common stock, $.01 par value; 25,000,000 shares authorized;
11,884,413 and 8,136,828 shares issued and outstanding, respectively 118,844 118,844
Additional paid-in capital 16,725,125 16,725,125
Accumulated deficit (12,103,466) (12,103,466)
---------- ----------
4,740,503 4,740,503
Stockholder note and interest receivable (45,631) (45,631)
---------- ----------
4,694,872 4,694,872
---------- ----------
$18,959,338 $16,709,338
========== ==========
Notes to Pro Forma Condensed Consolidated Balance Sheet:
(a) To reflect the cash proceeds received from the sale of the physical
therapy clinics sold May 14, 1999.
(b) To reflect payment of certain liabilities associated with the sale of
the physical therapy clinics.
(c) To reflect payment of notes payable with remaining proceeds.
EXHIBIT INDEX
Health Fitness Corporation
Form 8-K Current Report
Dated May 14, 1999
Exhibit Number Description
2.1 Agreement to Purchase Assets, dated as of May 14,
1999, among the Registrant, certain of its
subsidiaries and HealthSouth Corporation. The
following exhibits to the Agreement and Plan of
Reorganization have not been included, but the
Registrant agrees to furnish a copy of them
supplementally to the Commission upon request:
A. Listing of Purchased Assets of Sellers
B. Listing of All Leases, Contracts and Agreements
C. Sellers' Patient Information and Sellers' Financial
Information
D. Disclosure Schedule
E. List of Sellers' Employees to be retained by
HealthSouth
F. Risk Management Information
G. Legal Opinion