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EXHIBIT 99.2
SELECTED SUPPLEMENTAL CONSOLIDATED FINANCIAL DATA
The following tables set forth selected supplemental consolidated financial
information for Medaphis for and as of each of the five fiscal years in the
period ended December 31, 1995, for the three months ended March 31, 1996 and
1995, and as of March 31, 1996. The selected supplemental consolidated financial
information of Medaphis for each of the three fiscal years in the period ended
December 31, 1995 and as of December 31, 1995 and 1994 has been derived from the
audited supplemental consolidated financial statements of Medaphis (as
restated), which give retroactive effect to the merger on April 3, 1996 with
Rapid Systems Solutions, Inc. ("Rapid Systems") and the merger on May 6, 1996
with BSG Corporation ("BSG") both of which have been accounted for as poolings
of interests. The selected supplemental consolidated financial data of Medaphis
for each of the two fiscal years in the period ended December 31, 1992, as of
December 31, 1993, 1992 and 1991, for the three-month periods ended March 31,
1996 and 1995 and as of March 31, 1996 has been derived from the unaudited
supplemental consolidated financial statements of Medaphis, which give
retroactive effect to the mergers described above. Management believes the
unaudited financial statements referred to above include all adjustments
(consisting only of normal recurring adjustments) that are necessary for a fair
presentation of the financial position and results of operations for such
periods. The interim financial statements are not necessarily reflective of
results to be expected for an entire fiscal period.
Prior to its merger with Medaphis Corporation, HRI reported on a fiscal
period ending June 30. For purposes of the selected supplemental consolidated
financial data, HRI's financial position and operating results as of and for the
periods ended June 30, 1994, 1993, 1992 and 1991 were combined with the
Company's financial position and operating results as of and for the years ended
December 31, 1993, 1992, 1991 and 1990. HRI's financial position and operating
results for 1994, which were restated to a calendar year basis, were combined
with the Company's financial position and operating results as of and for the
year ended December 31, 1994. Accordingly, HRI's operating results for the six
months ended June 30, 1994, were duplicated in each of the years ended December
31, 1994 and 1993. HRI's revenues and net income for that six-month period were
$7,822,000 and $755,000, respectively. Consolidated retained earnings has been
reduced by $554,000 which represents HRI's net income applicable to common
stockholders for the six months ended June 30, 1994 in order to eliminate the
duplication of income applicable to common stockholders for that period in the
retained earnings balance.
Prior to its merger with the Company, HDS reported on a fiscal period
ending March 31. HDS's financial position and operating results as of and for
the years ended March 31, 1996, 1995 and 1994 were combined with the Company's
financial position and operating results as of and for the years ended December
31, 1995, 1994 and 1993, respectively.
The Company has restated its financial statements for the three months and
year ended December 31, 1995. The restatement results primarily from a software
licensing agreement entered into by the Company's Imonics subsidiary in December
1995 for which the Company recognized associated license fee revenue in 1995.
Subsequent to the issuance of the Company's 1995 consolidated financial
statements, management discovered unauthorized correspondence made by an Imonics
employee which created a contingency for the license fee payable under this
agreement. Such contingency precluded recognition of license fee revenue in 1995
associated with this agreement. The previously recognized license fee revenue
and certain other adjustments, previously considered immaterial and not
recorded, are included as part of the restatement adjustments to the Company's
previously reported results of operations and financial position.
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The information set forth below should be read in conjunction with (i) the
historical supplemental consolidated financial statements of Medaphis and the
notes thereto which are included herein and (ii) Management's Discussion and
Analysis of Financial Condition and Results of Operations of Medaphis, which is
included herein.
SELECTED SUPPLEMENTAL CONSOLIDATED FINANCIAL DATA
THREE MONTHS
YEAR ENDING DECEMBER 31, ENDED MARCH 31,
--------------------------------------------------------- -------------------
1995 1994 1993 1992 1991 1996 1995
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(AS RESTATED) (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
STATEMENT OF INCOME (LOSS) DATA
Revenue.......................... $ 559,877 $398,934 $279,326 $175,424 $109,295 $163,627 $133,093
Salaries and wages............... 325,868 227,109 164,474 106,296 65,528 90,565 76,138
Other operating expenses......... 140,296 95,195 71,363 51,241 32,255 39,354 30,498
Depreciation..................... 14,487 9,430 7,285 4,775 3,556 4,951 3,397
Amortization..................... 18,048 10,691 7,878 4,043 1,731 4,909 4,278
Interest expense, net............ 10,062 5,926 6,573 965 2,058 2,105 3,947
Restructuring and other
charges........................ 54,950 1,905 -- -- -- 150 31,750
Income (loss) before
extraordinary items and
cumulative effect of accounting
change......................... (5,621) 32,523 14,704 5,534 3,907 12,725 (7,983)
Net income (loss)................ (5,621) 32,523 14,704 9,010(1) 3,907 12,725 (7,983)
Pro forma net income (loss)(2)... $ (8,504) $ 30,706 $ 13,524 $ 9,629 $ 3,859 $ 13,079 $(11,857)
Weighted average shares
outstanding.................... 56,591 60,245 51,109 46,843 32,053 75,704 50,932
PRO FORMA PER SHARE DATA(2)
Pro forma income (loss) before
extraordinary items and
cumulative effect of accounting
change......................... $ (0.15) $ 0.51 $ 0.26 $ 0.13 -- $ 0.17 $ (0.23)
Pro forma net income
(loss)......................... $ (0.15) $ 0.51 $ 0.26 $ 0.21 -- $ 0.17 $ (0.23)
DECEMBER 31, AS OF
--------------------------------------------------------- MARCH 31,
1995 1994 1993 1992 1991 1996
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(AS RESTATED) (UNAUDITED
AS RESTATED)
BALANCE SHEET DATA
Working capital........................ 95,230 89,262 71,278 36,570 46,918 130,237
Intangible assets...................... 455,611 376,827 183,190 116,383 27,570 470,276
Total assets........................... 795,606 627,151 367,281 228,305 119,133 858,815
Long-term debt......................... 150,565 148,261 9,803 16,059 22,965 191,823
Convertible subordinated debentures.... 63,375 63,375 63,375 60,000 -- --
Stockholders' equity................... 421,306 257,097 189,850 87,876 56,433 507,977
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(1) Reflects the extraordinary loss of $2.1 million relating to the prepayment
of certain indebtedness net of income tax benefit and the cumulative
benefit for the change in accounting for income taxes arising from the
adoption of Statement of Financial Accounting Standards No. 109 of $5.6
million.
(2) In 1995 and 1996, the Company acquired Atwork, MMS, Rapid Systems and BSG in
merger transactions which were recorded as poolings-of-interests. Prior to
the mergers, Atwork, MMS, Rapid Systems and a company acquired by BSG prior
to the BSG Merger had elected "S" Corporation status for income tax
purposes. As a result of the mergers (or, in the case of the company
acquired by BSG, its acquisition by BSG), such entities terminated their
"S" Corporation elections. Pro forma net income and pro forma net income
per common share are presented as if the entities had been "C" Corporations
during the years ended December 31, 1995, 1994, 1993 and 1992 and the three
months ended March 31, 1996 and 1995. Pro forma net income per common share
is not presented for the year ended December 31, 1991.