Exhibit 99.2
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[Pro Forma Financial Information]
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF MARCH 31, 1997
(IN THOUSANDS)
PRO FORMA
--------------------------
IDX PHAMIS ADJUSTMENTS(1) COMBINED(3)
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ASSETS
Current assets:
Cash and cash equivalents....... $ 5,119 $ 4,085 0 $ 9,204
Securities available for sale... 83,441 19,101 0 102,542
Accounts receivable (net)....... 43,058 13,526 0 56,584
Other current assets............ 8,636 3,566 $1,520 13,722
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Total current assets.......... 140,254 40,278 1,520 182,052
Property and equipment (net)...... 19,064 4,746 0 23,810
Other assets:
Other assets.................... 238 8,904 0 9,142
Deferred tax asset.............. 2,235 0 (1,702) 533
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Total other................... 2,473 8,904 (1,702) 9,675
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Total assets...................... $161,791 $53,928 $ (182) $215,537
======== ======= ====== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
expenses....................... $ 14,254 $ 9,475 $8,300 $ 32,029
Taxes payable................... 2,084 0 0 2,084
Deferred revenue................ 9,120 9,959 0 19,079
Current portion of long-term
obligations.................... 500 100 0 600
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Total current liabilities..... 25,958 19,534 8,300 53,792
Long-term obligations (net)....... 2,600 28 0 2,628
Deferred income taxes............. 0 1,702 (1,702) 0
Minority interest................. 2,207 0 0 2,207
Shareholders' equity.............. 131,026 32,664 (6,780) 156,910
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Total liabilities and
shareholders' equity............. $161,791 $53,928 $ (182) $215,537
======== ======= ====== ========
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
2
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA
IDX PHAMIS COMBINED(3)
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Net revenues...................................... $45,058 $14,602 $59,660
Cost of revenues.................................. 21,496 8,679 30,175
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Gross margin.................................. 23,562 5,923 29,485
Operating expenses:
Selling, general and administrative............... 9,547 3,183 12,730
Research and development.......................... 7,039 1,329 8,368
Write-off of acquired in-process research and
development...................................... 2,290 0 2,290
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Total operating expenses...................... 18,876 4,512 23,388
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Operating income.................................. 4,686 1,411 6,097
Other income, net................................. 980 215 1,195
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Income before income taxes........................ 5,666 1,626 7,292
Provision for income taxes........................ 2,266 528 2,794
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Net income.................................... $ 3,400 $ 1,098 $ 4,498
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Net income per share............................ $ 0.17
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Weighted average shares outstanding............. 26,226
=======
See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
3
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA
IDX PHAMIS COMBINED(3)
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Net revenues........................................ $37,345 $12,115 $49,460
Cost of revenues.................................... 19,391 7,000 26,391
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Gross margin.................................... 17,954 5,115 23,069
Operating expenses:
Selling, general and administrative................. 7,491 2,869 10,360
Research and development............................ 5,786 1,473 7,259
Merger and acquisition costs........................ 0 292 292
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Total operating expenses........................ 13,277 4,634 17,911
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Operating income.................................... 4,677 481 5,158
Other income, net................................... 910 180 1,090
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Income before income taxes.......................... 5,587 661 6,248
Provision for income taxes.......................... 2,234 306 2,540
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Net income...................................... $ 3,353 $ 355 $ 3,708
======= ======= =======
Net income per share.............................. $ 0.14
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Weighted average shares outstanding............... 25,946
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See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
4
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA
IDX PHAMIS COMBINED(3)
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Net revenues....................................... $157,579 $49,300 $206,879
Cost of revenues................................... 79,545 28,718 108,263
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Gross margin................................... 78,034 20,582 98,616
Operating expenses:
Selling, general and administrative................ 33,422 11,395 44,817
Research and development........................... 23,974 5,793 29,767
Merger and acquisition costs....................... 0 292 292
Corporate headquarters relocation.................. 0 304 304
International market entry costs................... 0 810 810
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Total operating expenses....................... 57,396 18,594 75,990
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Operating income................................... 20,638 1,988 22,626
Other income....................................... 4,165 717 4,882
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Income before income taxes......................... 24,803 2,705 27,508
Provision for income taxes......................... 9,921 927 10,848
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Net income..................................... $ 14,882 $ 1,778 $ 16,660
======== ======= ========
Net income per share.............................. $ 0.64
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Weighted average shares outstanding............... 26,047
--------
See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
5
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA
IDX(2) PHAMIS COMBINED(3)
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Net revenues........................................ $128,120 $47,165 $175,285
Cost of revenues.................................... 68,750 28,000 96,750
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Gross margin.................................... 59,370 19,165 78,535
Operating expenses:
Selling, general and administrative................. 25,539 10,533 36,072
Research and development............................ 19,529 3,896 23,425
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Total operating expenses........................ 45,068 14,429 59,497
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Operating income.................................... 14,302 4,736 19,038
Other income........................................ 1,805 1,060 2,865
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Income before income taxes.......................... 16,107 5,796 21,903
Provision for income taxes.......................... 6,500 1,488 7,988
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Net income...................................... $ 9,607 $ 4,308 $ 13,915
======== ======= ========
Net income per share.............................. $ 0.63
--------
Weighted average shares outstanding............... 22,158
--------
See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
6
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA
IDX(2) PHAMIS COMBINED(3)
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Net revenues................................... $104,706 $39,101 $143,807
Cost of revenues............................... 58,303 24,924 83,227
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Gross margin............................... 46,403 14,177 60,580
Operating expenses:
Selling, general and administrative............ 21,859 8,800 30,659
Research and development....................... 17,616 2,957 20,573
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Total operating expenses................... 39,475 11,757 51,232
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Operating income............................... 6,928 2,420 9,348
Other (expenses), net.......................... (1,911) (151) (2,062)
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Income before income taxes and extraordinary
items......................................... 5,017 2,269 7,286
Provision for income taxes..................... 2,700 30 2,730
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Income before extraordinary items.............. 2,317 2,239 4,556
Extraordinary items............................ 0 298 298
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Net income................................. $ 2,317 $ 2,537 $ 4,854
======== ======= ========
Income per share before extraordinary items.. $ 0.22
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Net income per share......................... $ 0.24
--------
Weighted average shares outstanding.......... 20,505
--------
See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
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NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
NOTE 1.
The pro forma adjustment to accrued expenses represents certain Merger
related charges expected by IDX. Included are transaction fees as well as
employee termination benefits costs and lease termination costs. The tax
benefit associated with the costs, exclusive of transaction fees which are not
tax deductible, is also reflected.
NOTE 2.
The 1994 and 1995 IDX provision for income taxes is presented on a pro forma
basis as if IDX, which was an S corporation, had been a C corporation for each
of these years.
NOTE 3.
On March 25, 1997, IDX and PHAMIS jointly announced the signing of the
Merger Agreement. Under its terms, each share of PHAMIS Common Stock issued
and outstanding immediately prior to the Effective Time of the Merger will be
converted to .73 shares of IDX Common Stock. The Merger is subject to
regulatory approval as well as the approval of the shareholders of IDX and
PHAMIS. The Merger is intended to be a tax-free stock-for-stock transaction
valued at approximately $150 million. IDX's pro forma consolidated results
were restated to reflect the Merger which is intended to be accounted for as a
"pooling-of-interests."
The terms of the Merger Agreement allow the .73 Conversion Ratio to "float"
between .80 shares and .6811 shares based upon the market value of IDX shares
as more fully described in the Merger Agreement. The per share values used in
the pro forma combined condensed statement of income assumes a .73 Conversion
Ratio. See "The Merger Agreement--Conversion of Shares."
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