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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 (as restated) 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, 1991, 1992, 1993 and 1994 were combined with the
Company's financial position and operating results as of and for the years ended
December 31, 1990, 1991, 1992 and 1993. 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, 1993 and 1994. 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.
The Company has restated its supplemental consolidated financial statements
for the three months and year ended December 31, 1995 and as of March 31, 1996.
The restatement results primarily from a software licensing agreement entered
into by Imonics Corporation, a wholly owned subsidiary of the Company
("Imonics"), in December 1995 for which the Company recognized associated
license fee revenue in 1995. Subsequent to the issuance of the Company's 1995
supplemental consolidated financial statements in the Company's Current Report
on Form 8-K dated April 3, 1996, management discovered unauthorized
correspondence 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) (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS
DATA
Revenue................ $ 547,706 $376,870 $259,575 $ 160,252 $94,579 $159,869 $130,367
Salaries and wages..... 320,057 221,575 158,703 100,607 60,022 88,963 74,811
Other operating
expenses............. 132,144 90,836 66,412 47,246 29,043 38,618 29,027
Depreciation........... 14,346 9,269 6,960 4,405 3,140 4,917 3,376
Amortization........... 14,753 7,748 5,317 2,170 532 4,023 3,522
Interest expense,
net.................. 10,417 5,896 6,517 966 1,763 2,242 3,931
Restructuring and other
charges.............. 54,950 1,905 -- -- -- 150 31,750
Income (loss) before
extraordinary items
and cumulative effect
of accounting
change............... (2,448) 26,486 8,617 2,288 (181) 12,343 (7,118)
Net income (loss)...... (2,448) 26,486 8,617 5,764(1) (181) 12,343 (7,118)
Pro forma net income
(loss)(2)............ $ (5,331) $ 24,669 $ 7,437 $ 6,383 $ -- $ 12,697 $(10,992)
Weighted average shares
outstanding.......... 53,362 54,623 45,505 41,338 27,014 69,164 47,704
PRO FORMA PER SHARE
DATA(2)
Pro forma income (loss)
before extraordinary
items and cumulative
effect of accounting
change............... $ (0.10) $ 0.45 $ 0.16 $ 0.07 $ -- $ 0.18 $ (0.23)
Pro forma net income
(loss)............... $ (0.10) $ 0.45 $ 0.16 $ 0.15 $ -- $ 0.18 $ (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................... $ 71,541 $ 66,502 $ 57,176 $ 27,940 $41,126 $106,548
Intangible assets................. 447,843 368,813 175,368 109,478 22,158 462,508
Total assets...................... 740,563 580,622 331,833 205,102 99,988 803,772
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.............. 376,525 234,808 173,296 70,292 42,196 463,106
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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 (loss) and pro forma net
income (loss) 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 (loss) per common share is not presented for the year ended December
31, 1991.
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