1
Exhibit 99.2
PRO FORMA CONSOLIDATED FINANCIAL DATA
The following unaudited Pro Forma Condensed Consolidated Balance Sheet
as of September 30, 1996 and Condensed Consolidated Statements of Income for
the three months ended September 30, 1996 and the year ended June 30, 1996 are
based on the historical consolidated financial statements of the Company. The
Condensed Consolidated Balance Sheet is adjusted to give effect to acquisitions
completed subsequent to September 30, 1996 and prior to November 15, 1996, and
to the sale of 4,235,000 shares of Class A Common Stock by the Company pursuant
to a registered public offering in October 1996 and the application of the
estimated net proceeds therefrom as if these events had occurred on September
30, 1996. The Pro Forma Condensed Consolidated Statement of Income for the
three months ended September 30, 1996 is adjusted to give effect to the
completion of acquisitions completed subsequent to June 30, 1996 and prior to
November 15, 1996, and the sale by the Company in October 1996 of 4,235,000
shares of Class A Common Stock and the application of net proceeds therefrom as
if these events had occurred as of July 1, 1996. The Pro Forma Condensed
Consolidated Statement of Income for the year ended June 30, 1996 is adjusted
to give effect to the completion of acquisitions completed subsequent to June
30, 1995 and prior to November 15, 1996, and to the sales by the Company in
February 1996 and October 1996 of 4,476,000 and 4,235,000 shares of Class A
Common Stock, respectively, and the application of net proceeds therefrom as if
these events had occurred as of July 1, 1995. The Pro Forma Condensed
Consolidated Statements of Income combine the historical operations of the
Company with the historical operations of the acquired businesses prior to the
dates the Company made such acquisitions, using the purchase method of
accounting. The pro forma operating results are not necessarily indicative of
the operating results that would have been achieved had the acquisitions
actually occurred at July 1, 1995 and July 1, 1996, respectively. These Pro
Forma Consolidated Financial Statements are based on the assumptions set forth
in the notes to such statements.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (1)
SEPTEMBER 30, 1996
(IN THOUSANDS)
ASSETS
Historical NCS Offering Pro Forma
HealthCare and Acquired Pro Forma as
Subsidiaries Companies (A) Pro Forma Adjustments (B) Adjusted
---------------- ------------- --------- --------------- ---------
Current Assets:
Cash and cash equivalents ............................... $ 5,416 $ (23,547) $ (18,131) $ 117,533 $ 99,402
Accounts receivable, less allowances .................... 34,321 5,354 39,675 -- 39,675
Inventories ............................................. 11,202 2,407 13,609 -- 13,609
Other ................................................... 3,482 514 3,996 (398) 3,598
--------- --------- --------- --------- ---------
Total current assets ................................... 54,421 (15,272) 39,149 117,135 156,284
Property, plant and equipment, net ....................... 12,851 1,451 14,302 -- 14,302
Goodwill, net ............................................ 70,248 23,404 93,652 -- 93,652
Other assets, net......................................... 2,398 144 2,542 -- 2,542
--------- --------- --------- --------- ---------
Total assets........................................... $ 139,918 $ 9,727 $ 149,645 $ 117,135 $ 266,780
========= ========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable ....................................... $ 8,054 $ 3,870 $ 11,924 $ -- $ 11,924
Accrued expenses and notes payable ...................... 14,782 1,260 16,042 (6,491) 9,551
--------- --------- --------- --------- ---------
Total current liabilities ............................. 22,836 5,130 27,966 (6,491) 21,475
Long-term debt ........................................... 6,581 2,213 8,794 -- 8,794
Convertible subordinated debentures ...................... 6,549 -- 6,549 -- 6,549
Other .................................................... 493 214 707 -- 707
Stockholders' equity:
Preferred stock, par value $.01 per share .............. -- -- -- -- --
Common stock, par value $.01 per share
Class A .............................................. 60 1 61 45 103
Class B .............................................. 66 -- 66 (3) 63
Paid-in capital ........................................ 95,352 2,169 97,521 123,584 221,108
Retained earnings ...................................... 7,981 -- 7,981 -- 7,981
--------- --------- --------- --------- ---------
Total stockholders' equity ........................... 103,459 2,170 105,629 123,626 229,255
--------- --------- --------- --------- ---------
Total liabilities and stockholders' equity ........... $ 139,918 $ 9,727 $ 149,645 $ 117,135 $ 266,780
========= ========= ========= ========= =========
(1) See accompanying Notes to Pro Forma Condensed Consolidated Balance Sheet.
2
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
(A) Reflects acquisitions completed subsequent to September 30, 1996 and
prior to November 15, 1996 by the Company, all of which were accounted
for under the purchase method, at an aggregate purchase price of
$28,783.
(B) Reflects the sale of the 4,235,000 shares of Class A Common Stock by
the Company pursuant to a registered public offering in October 1996
and the receipt and application of the proceeds therefrom as follows:
Gross proceeds from the offering ........... $ 131,285
Underwriting discounts and commissions ..... (6,564)
Expenses of the offering ................... (1,095)
---------
Net proceeds ............................... 123,626
Repayment of notes payable ................. (7,144)
Prepaid offering costs ..................... 398
Accrued offering costs ..................... 653
---------
Net increase in cash and cash equivalents .. $ 117,533
=========
Also reflects the conversion, by certain Selling Stockholders, of
250,000 shares of Class B Common Stock into an equal number of shares
of Class A Common Stock in connection with the registered public
offering.
3
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (1)
THREE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
Historical
----------------------------------
NCS HealthCare Acquired Pro Forma
and Subsidiaries Companies (A) Adjustments Pro Forma
---------------- ------------- ----------- ----------
Revenues $ 43,042 $ 16,006 $ -- $ 59,048
Cost of revenues 31,854 12,137 -- 43,991
-------- -------- -------- --------
Gross profit 11,188 3,869 -- 15,057
Selling, general and
administrative expenses 7,654 3,085 163(B) 10,902
-------- -------- -------- --------
Operating income 3,534 784 (163) 4,155
Interest expense (income), net 123 77 82(C) 282
-------- -------- -------- --------
Income before income taxes 3,411 707 (245) 3,873
Income tax expense 1,501 312 (109) 1,704
-------- -------- -------- --------
Net income $ 1,910 $ 395 $ (136) $ 2,169
======== ======== ======== ========
Net income per share $ 0.15 $ 0.13
======== ========
Shares used in the computation 12,594 17,281
======== ========
(1) See accompanying Notes to Pro Forma Condensed Consolidated Statements of Income.
4
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (1)
YEAR ENDED JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Historical
---------------------------------
NCS HealthCare Acquired Pro Forma
and Subsidiaries Companies (A) Adjustments Pro Forma
---------------- -------------- ----------- ---------
Revenues $113,281 $111,359 $ -- $224,640
Cost of revenues 82,415 85,118 -- 167,533
-------- -------- -------- --------
Gross profit 30,866 26,241 -- 57,107
Selling, general and
administrative expenses 22,236 19,360 946(B) 42,542
Special compensation 2,811(D) -- -- 2,811
-------- -------- -------- --------
Operating income 5,819 6,881 (946) 11,754
Interest expense (income), net 1,611 616 (1,151)(E) 1,076
-------- -------- -------- --------
Income before income taxes 4,208 6,265 205 10,678
Income tax expense 1,852 2,755 91 4,698
-------- -------- -------- --------
Net income $ 2,356 $ 3,510 $ 114 $ 5,980
======== ======== ======== ========
Net income per share $ 0.26 $ 0.47
======== ========
Shares used in the computation 8,971 12,766
======== ========
(1) See accompanying Notes to Pro Forma Condensed Consolidated Statements of
Income.
5
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND YEAR ENDED JUNE 30, 1996
(IN THOUSANDS)
(A) The historical statement of income data for the acquired companies for the
three months ended September 30, 1996 represents the results of operations
of such companies from July 1, 1996 to the earlier of their respective
dates of acquisition or September 30, 1996. The historical statement of
income data for the acquired companies for the year ended June 30, 1996
represent the results of operations for such companies from July 1, 1995 to
the earlier of their respective dates of acquisition or June 30, 1996. Each
of the acquisitions has been accounted for as a purchase. Accordingly, the
results of the operations of each acquired company are included in the
Company's results of operations from the date of acquisition. The tables
below present the details of the historical operations of the acquired
companies.
The detail of the historical operations of the acquired companies for the
periods from July 1, 1996 to the earlier of their respective dates of
acquisition or September 30, 1996 are as follows:
ACQUIRED COMPANY
(DATE OF ACQUISITION)
IPAC Thrifty Clinical Others
(August 1, (August 13, (November 1, (Fiscal
1996) 1996) 1996) 1997) Total
----- ----- ----- ----- -----
STATEMENT OF INCOME DATA:
Revenues $1,152 $1,453 $6,206 $7,195 $16,006
Cost of revenues 847 1,075 4,825 5,390 12,137
------- ------- ------- ------- -------
Gross profit 305 378 1,381 1,805 3,869
Selling, general and
administrative expenses 256 224 961 1,644 3,085
------- ------- ------- ------- -------
Operating income 49 154 420 161 784
Interest expense 27 20 21 9 77
------- ------- ------- ------- -------
Income before income taxes 22 134 399 152 707
Income tax expense 10 59 176 67 312
------- ------- ------- ------- -------
Net income $ 12 $ 75 $ 223 $ 85 $ 395
======= ======= ======= ======= =======
The detail of the historical operations of the acquired companies for the
periods from July 1, 1995 to the earlier of their respective dates of
acquisition or June 30, 1996 are as follows:
ACQUIRED COMPANY
(DATE OF ACQUISITION)
Uni-Care IPAC Thrifty Clinical Others Others
(May 15, (August 1, (August 13, (November 1, (Fiscal (Fiscal
1996) 1996) 1996) 1996) 1996) 1997) Total
----- ----- ----- ----- ----- ----- -----
STATEMENT OF INCOME DATA:
Revenues $14,500 $13,829 $11,627 $20,968 $12,821 $37,614 $111,359
Cost of revenues 11,165 10,164 8,604 16,303 9,919 28,963 85,118
------- ------- ------- ------- ------- ------- --------
Gross profit 3,335 3,665 3,023 4,665 2,902 8,651 26,241
Selling, general and
administrative expenses 2,300 3,079 1,789 3,023 1,618 7,551 19,360
------- ------- ------- ------- ------- ------- --------
Operating income 1,035 586 1,234 1,642 1,284 1,100 6,881
Interest expense -- 324 159 33 80 20 616
------- ------- ------- ------- ------ ------- --------
Income before income taxes 1,035 262 1,075 1,609 1,204 1,080 6,265
Income tax expense 455 115 473 708 529 475 2,755
------- ------- ------- -------- ------ ------ --------
Net income $ 580 $ 147 $ 602 $ 901 $ 675 $ 605 $ 3,510
======= ======= ======= ======= ======= ======= ========
6
(B) The adjustment to selling, general and administrative expenses consists
of (i) a reduction of $121 and $1,366 for the three and twelve month
periods ended September 30, 1996 and June 30, 1996, respectively, to
acquired companies' historical amounts of compensation for owners and
certain employee benefits reflecting the difference between such
historical amounts and amounts specified in the post-acquisition
employment contracts for such individuals and continuing benefit programs
and (ii) a $284 and $2,312 adjustment for the three and twelve months
periods ended September 30, 1996 and June 30, 1996, respectively, to
increase amortization of the excess of cost over the fair value of net
assets of the acquired companies, using a 30-year amortization schedule.
(C) The adjustment reflects the reduction in interest expense had the
entire net proceeds of approximately $123.6 million from the Company's
registered public offering in October 1996 been used to reduce certain
outstanding indebtedness and to fund the acquisitions, as if such
offering had occurred on July 1, 1996.
(D) Represents a one-time, non-recurring charge in connection with the
termination of performance incentive agreements with prior owners of
certain acquired companies.
(E) The adjustment reflects the reduction in interest expense and the
elimination of interest income, had the entire net proceeds of
approximately $67.0 million and $123.6 million from the Company's
initial public offering in February 1996 and subsequent public
offering in October 1996, respectively, been used to reduce certain
outstanding indebtedness and to fund the acquisitions, as if such
offerings had occurred on July 1, 1995.