1
Exhibit 99.2
The following unaudited pro forma condensed consolidated
statement of earnings for the nine months ended September 30,
1994 gives effect to the consummation of the disposition of
the KCI Medical Services net assets described more fully in
Note 5 to the financial statements. The unaudited pro forma
condensed consolidated financial statements present the Medical
Services Division's activity as if the disposition had been
consummated on January 1, 1994.
These unaudited pro forma condensed consolidated financial
statements should be read in conjunction with the notes to the:
(i) unaudited pro forma condensed consolidated financial
statements filed herewith; and (ii) consolidated financial
statements of Kinetic Concepts, Inc. (the "Company")
included in the Forms 10-K and 8-K filed by the Company on
March 29, 1994, and October 17, 1994, respectively.
KINETIC CONCEPTS, INC. AND SUBSIDIARIES
Pro Forma Condensed Divested Statement of Earnings
For the nine months ended September 30, 1994
UNAUDITED
(in thousands, except per share data)
Medical Services Pro-Forma
Kinetic Concepts, Inc. Division ------------------------------
and Subsidiaries To Be Sold Adjustments Divested
---------------------- ---------------- ----------- --------
Revenue:
Service and rental $ 177,790 $ 35,312 $ 0 $ 142,478
Sales and other 32,285 9,296 0 22,989
---------- -------- -------- ---------
Total revenue 210,075 44,608 0 165,467
Rental expenses 125,167 28,071 0 97,096
Cost of goods sold 16,504 6,751 0 9,753
---------- -------- -------- ---------
141,671 34,822 0 106,849
---------- -------- -------- ---------
Gross profit 68,404 9,786 0 58,618
Selling, general and administrative
expenses 40,874 7,227 0 33,647
Unusual Items (82,868) 0 0 -82,868
---------- -------- -------- ---------
Operating income 110,398 2,559 0 107,839
Interest expense 5,477 310 (4,672) (a) 494
---------- -------- -------- ---------
Earnings before income taxes, minority
interest and cumulative effect of change
in accounting principle 104,921 2,249 4,672 107,345
Income tax 49,625 876 1,822 (b) 50,571
---------- -------- -------- ---------
Earnings before minority interest
and cumulative effect of change in
accounting principle $ 55,296 $ 1,372 $ 2,850 $ 56,775
========== ======== ======== =========
Earnings per share before minority
interest and cumulative effect of change
in accounting principle $ 1.25 $ 1.29
========== =========
Shares used in earnings per
share computations 44,006 44,006
========== =========
See accompanying notes to pro forma condensed consolidated financial
statements.
2
The pro forma condensed divested statements of earnings
for the nine months ended September 30, 1994 excluded certain
historical items such as cumulative effect of changes in
accounting principle, extraordinary items, and minority
interests. The statements presented give effect to the
following pro forma adjustments:
(a) Reduction of interest expense assuming the cash
proceeds of $ 65,300 were used to pay down debt, and
record the interest income earned under the notes
receivable.
(b) The tax rate used for pro forma adjustments was the
statutory rate of 39% which is made up of 35% for
federal Income taxes and 4% for state income
taxes.