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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): June 27, 1996
CLINTRIALS RESEARCH INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 33-69586 62-1406017
- ----------------------------- --------------------- -------------------
(State or Other (Commission File No.) (I.R.S. Employer
Jurisdiction of Incorporation Identification No.)
One Burton Hills Boulevard
Suite 210
Nashville, Tennessee 37215
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (615) 665-9665
N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On May 24, 1996, the Registrant announced a definitive Asset Purchase
Agreement with Bio-Research Laboratories Ltd., of Montreal
("Bio-Research"). In connection with the pending acquisition, the Registrant
files the attached documents, which the Registrant deems of importance to
security holders.
1. Consolidated Financial Statements of Bio-Research for the years ended
December 31, 1995 and 1994, including the Notes thereto (Incorporated
by reference to the Registrant's Current Report on Form 8-K dated
June 19, 1996).
2. Unaudited Pro Forma Condensed Combined Financial Statements,
including the Notes thereto, reflecting the pending acquisition
of Bio-Research by the Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to report to be signed on its behalf
by the undersigned hereunto duly authorized.
CLINTRIALS RESEARCH INC.
June 27, 1996 /s/ John W. Robbins
-------------------------
John W. Robbins
Chief Financial Officer
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CLINTRIALS RESEARCH INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The unaudited pro forma condensed combined statements of income for the
year ended December 31, 1995 and for the three months ended March 31, 1996 gives
effect to the Acquisition as if it had occurred on January 1, 1995. The
unaudited pro forma condensed combined balance sheet as of March 31, 1996, gives
effect to the Acquisition as if it had occurred on March 31, 1996.
The unaudited pro forma condensed combined financial statements give effect
only to the reclassifications and adjustments set forth in the accompanying
Notes to unaudited pro forma condensed combined financial statements. The pro
forma financial information is provided as additional information only and is
not necessarily indicative of actual results that would have been achieved had
the Acquisition been consummated at the beginning of the periods presented or of
future results.
These statements have been prepared from the consolidated financial
statements of the Company and the financial statements of Bio-Research and
should be read in conjunction with such statements and the related Notes. The
financial statements of Bio-Research are incorporated herein by reference. The
consolidated financial statements of the Company are incorporated herein by
reference.
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CLINTRIALS RESEARCH INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(DOLLARS IN THOUSANDS)
MARCH 31, 1996
-------------------------------------------------------------------------------------
PRO FORMA PRO FORMA
ADJUSTMENTS ADJUSTMENTS
AS REPORTED AS REPORTED TO REFLECT TO REFLECT COMBINED
CLINTRIALS BIO-RESEARCH ACQUISITION SUBTOTAL OFFERING PRO FORMA
----------- ------------ ----------- -------- ----------- ---------
Assets
Current assets:
Cash and cash
equivalents............. $16,831 $ 5,548 $ -- $ 22,379 $ 92,641(2) $ 50,020
(65,000)(2)
Accounts receivable....... 25,407 6,913 32,320 32,320
Other current assets...... 4,515 2,753 7,268 7,268
----------- ------------ ----------- -------- ----------- ---------
Total current assets........ 46,753 15,214 61,967 27,641 89,608
Property and equipment.... 13,387 28,439 41,826 41,826
Less accumulated
depreciation and
amortization............ 5,491 11,639 17,130 17,130
----------- ------------ ----------- -------- ----------- ---------
7,896 16,800 24,696 24,696
Excess of purchase price
over net assets
acquired.................. 6,965 38,367(1) 45,332 45,332
Other assets................ 38 38 38
----------- ------------ ----------- -------- ----------- ---------
$61,652 $ 32,014 $ 38,367 $132,033 $ 27,641 $159,674
=========== ============ =========== ========= =========== =========
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable and
accrued expenses........ $ 8,143 $ 3,192 $ -- $ 11,335 $ -- $ 11,335
Advance billings.......... 21,167 2,189 23,356 23,356
Payable to stockholders of
Bio-Research............ 65,000(1) 65,000 (65,000)(2) --
----------- ------------ ----------- -------- ----------- ---------
Total current liabilities... 29,310 5,381 65,000 99,691 (65,000) 34,691
Deferred income taxes....... 234 234 234
Stockholders' equity:
Common stock.............. 88 3,128 (3,128)(1) 88 26(2) 114
Additional paid-in
capital................. 40,180 39 (39)(1) 40,180 92,615(2) 132,795
Retained earnings......... (8,229) 24,941 (24,941)(1) (8,229) (8,229)
Cumulative foreign
currency translation
adjustments............. 69 (1,475) 1,475(1) 69 69
----------- ------------ ----------- -------- ----------- ---------
Total stockholders'
equity.................... 32,108 26,633 (26,633) 32,108 92,641 124,749
----------- ------------ ----------- -------- ----------- ---------
$61,652 $ 32,014 $ 38,367 $132,033 $ 27,641 $159,674
=========== ============ =========== ========= =========== =========
See notes to unaudited pro forma condensed combined balance sheet.
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NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED BALANCE SHEET
(1) To record the purchase of the net assets (including the recording of excess
of purchase price over net assets acquired) and eliminate the stockholders'
equity of Bio-Research. No estimate of any purchase accounting adjustments
to record property and equipment at fair value has been made at this time.
ClinTrials expects to obtain and record a valuation of Bio-Research's
property and equipment within six months following the Acquisition. It is
not expected that the reclassification between excess of purchase price
over net assets acquired and property and equipment will be significant to
the combined balance sheet. The pro forma adjustments reflect a temporary
payable to the stockholders of Bio-Research to effect the purchase of
Bio-Research. The temporary payable would be satisfied from the proceeds of
the offering referred to in pro forma adjustment (2).
(2) To record the net proceeds from the completion of the offering of 2,600,000
shares of ClinTrials Common Stock at an assumed price of $37.75 per share.
Gross proceeds of $98.1 million, less estimated issuance costs of $5.5
million, provides net proceeds of $92.6 million. A portion of the net
proceeds would be utilized to retire the temporary payable to the
stockholders of Bio-Research referred to in pro forma adjustment (1).
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CLINTRIALS RESEARCH INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT FOR EARNINGS PER SHARE)
AS REPORTED AS REPORTED PRO FORMA COMBINED PRO
CLINTRIALS BIO-RESEARCH ADJUSTMENTS FORMA(1)
----------- ------------ ----------- ------------
Net service revenue........................ $17,670 $6,324 $ -- $ 23,994
Operating costs:
Direct costs............................. 10,526 3,658 14,184
Selling, general and administrative
costs................................. 4,750 1,954 6,704
Depreciation and amortization............ 700 426 240(2) 1,366
----------- ------------ ----------- ------------
Income from operations..................... 1,694 286 (240) 1,740
Other income (expense):
Interest income.......................... 215 77 --(3) 292
Interest expense......................... (14) (1) (15)
----------- ------------ ----------- ------------
Income before income taxes................. 1,895 362 (240) 2,017
Provision for income taxes................. (782) 176 --(4) (606)
----------- ------------ ----------- ------------
Net income................................. $ 1,113 $ 538 $ (240) $ 1,411
========= ========= ========= ==========
Weighted average common shares............. 9,185 1,868(5) 11,053
========= ========= ==========
Earnings per common and common equivalent
share.................................... $ 0.12 $ 0.13
========= ==========
See notes to unaudited pro forma condensed combined statement of income.
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CLINTRIALS RESEARCH INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS, EXCEPT FOR EARNINGS PER SHARE)
AS REPORTED AS REPORTED PRO FORMA COMBINED
CLINTRIALS BIO-RESEARCH ADJUSTMENTS PRO FORMA(1)
----------- ------------ ----------- ------------
Net service revenue............................. $57,846 $ 26,342 $ -- $ 84,188
Operating costs:
Direct costs.................................. 34,850 14,408 49,258
Selling, general and administrative costs..... 15,209 8,024 23,233
Depreciation and amortization................. 2,287 1,573 959(2) 4,819
----------- ------------ ----------- ------------
Income from operations.......................... 5,500 2,337 (959) 6,878
Other income (expense):
Interest income............................... 744 373 --(3) 1,117
Interest expense.............................. (79) (10) (89)
----------- ------------ ----------- ------------
Income before income taxes...................... 6,165 2,700 (959) 7,906
Provision for income taxes...................... (2,564) 1,026 --(4) (1,538)
----------- ------------ ----------- ------------
Net income...................................... $ 3,601 $ 3,726 $ (959) $ 6,368
========= ========= ========= ==========
Weighted average common shares.................. 9,088 1,868(5) 10,956
========= ========= ==========
Earnings per common and common equivalent
share......................................... $ 0.40 $ 0.58
========= ==========
See notes to unaudited pro forma condensed combined statement of income.
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NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENTS OF INCOME
(1) The pro forma condensed combined statements of income do not give effect to
any overhead reductions or cost savings, if any, which may be realized
after the consummation of the Acquisition.
(2) To adjust amortization expense. The excess of purchase price over net assets
acquired related to the Acquisition will be amortized over 40 years using
the straight line method. The amounts for the year ended December 31, 1995
and the three months ended March 31, 1996 were $959 and $240, respectively.
No estimate of any purchase accounting adjustments to record property and
equipment at fair value has been made at this time. ClinTrials expects to
obtain and record a valuation of Bio-Research's property and equipment
within six months following the Acquisition. It is not expected that any
reclassification between excess of purchase price over net assets acquired
and property and equipment would significantly affect amortization expense.
(3) Interest income as a result of the cash proceeds received in excess of the
cash used to acquire Bio-Research and for costs of the Offering is not
reflected in the pro forma condensed combined statements of income. The
Company is presently earning a 4.11% yield on tax exempt investments. The
following table summarizes the total effect on the pro forma condensed
combined statements of income as if the interest had been earned on the
excess cash.
YEAR ENDED THREE MONTHS
DECEMBER 31, 1995 ENDED MARCH 31, 1996
----------------- --------------------
Excess cash invested.................................. $27,641 $27,641
======= =======
Pro forma income, as stated........................... 6,368 1,411
Estimated tax exempt interest income.................. 1,136 284
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Pro forma income with excess cash invested............ $ 7,504 $ 1,695
======= =======
Pro forma weighted average shares outstanding for
entire offering..................................... 11,688 11,785
======= =======
Pro forma earnings per share after consideration of
investment of excess funds.......................... $ 0.64 $ 0.14
======= =======
(4) The pro forma amortization adjustment (Note 2) does not affect the income
tax provision as such tax benefit of the amortization adjustment would
merely increase the federal and Quebec research and development tax credits
to be carried forward to future periods. The pro forma condensed combined
statements of income do not provide for deferred United States taxes on the
income earned by Bio-Research in Canada as ClinTrials intends to
permanently reinvest any earnings outside the United States.
(5) The weighted average common shares outstanding in the pro forma columns
include the 1,868,000 shares of Common Stock offered hereby that will be
used to fund the $65 million cost of the Acquisition. The calculation of
these shares is based on an offering price of $37.75 per share, net of
offering costs.