EXHIBIT 99.1 (B)
(b) (i) PRO FORMA FINANCIAL INFORMATION
INSIGHT HEALTH SERVICES CORP.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 1998
(Amounts in thousands)
Signal Pro
Historical Historical Acquisition Forma
InSight Signal Adjustments Combined
---------- ---------- ----------- --------
ASSETS
Cash and cash equivalents $ 9,650 $ 1,642 $ - $ 11,292
Trade accounts receivable, net 21,674 3,397 - 25,071
Other receivables, net 330 239 - 569
Other current assets 2,149 121 - 2,270
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Total current assets 33,803 5,399 - 39,202
Property and equipment, net 46,745 12,286 4,309 (2) 63,340
Investment in partnerships 495 - - 495
Other assets net 2,471 660 3,131
Intangible assets, net 43,273 - 26,189 (1) 69,462
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$ 126,787 $ 18,345 $ 30,498 $ 175,630
--------- --------- --------- ---------
--------- --------- --------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of equipment and other notes $ 5,706 $ 3,302 $ - $ 9,008
Accounts payable and accrued expenses 14,905 2,121 - 17,026
--------- --------- --------- ---------
Total current liabilities 20,611 5,423 - 26,034
Long term portion of equipment and other note 67,781 4,598 32,155 (1)
4,309 (2) 108,843
Other 680 2,358 - 3,038
--------- --------- --------- ---------
Total liabilities 89,072 12,379 36,464 137,915
--------- --------- --------- ---------
Minority interest 1,871 - - 1,871
--------- --------- --------- ---------
Redeemable convertible cumulative
preferred stock - 2,000 (2,000)(1) -
--------- --------- --------- ---------
Stockholders' equity
Convertible Series B preferred stock 23,923 - - 23,923
Convertible Series C preferred stock 13,173 - - 13,173
Common Stock 3 - - 3
Additional paid-in capital 23,366 156 (156)(1) 23,366
(Accumulated deficit) retained earnings (24,621) 4,310 (4,310)(1) (24,621)
Treasury stock - (500) 500 (1) -
--------- --------- --------- ---------
Total stockholders' equity 35,844 3,966 (3,966) 35,844
--------- --------- --------- ---------
$ 126,787 $ 18,345 $ 30,498 $ 175,630
--------- --------- --------- ---------
--------- --------- --------- ---------
The pro forma condensed combined balance sheet as of March 31, 1998 reflects
the following pro forma adjustments:
(1) To record the acquisition of common stock of Signal for $32,155 in
borrowed funds and the resulting goodwill of $26,189.
(2) To record the acquisition of equipment for debt on equipment that is
currently under operating leases.
The above reflects the acquisition of Signal by InSight using the purchase
method of accounting. Under the principles of purchase accounting, the assets
and liabilities of Signal are stated at fair market value (FMV). For purposes
of these pro forma financial statements, the book value of Signal's assets
and liabilities are assumed to approximate FMV. The excess purchase price is
allocated to goodwill.
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(b) (ii)
INSIGHT HEALTH SERVICES CORP.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1997
(Amounts in thousands)
Signal
Historical Historical Acquisition Pro Forma
InSight Signal Adjustments Combined
----------- ---------- ----------- ---------
Revenues $ 93,063 $ 19,331 $ - $ 112,394
----------- --------- ---------- ---------
Costs of services 52,070 9,390 - 61,460
Equipment leases 18,396 3,651 (1,518)(4) 20,529
Depreciation and amortization 9,871 3,354 1,309 (1) 15,396
---------
862 (2)
----------- --------- ---------- ---------
Costs of operations 80,337 16,395 653 97,385
----------- --------- ---------- ---------
Gross profit 12,726 2,936 (653) 15,009
Corporate operating expenses 7,431 - - 7,431
----------- --------- ---------- ---------
Income (loss) from company operations 5,295 2,936 (653) 7,578
Equity in earnings of unconsolidated
partnerships 468 - - 468
----------- --------- ---------- ---------
Operating income (loss) 5,763 2,936 (653) 8,046
Interest expense 4,055 720 2,894 (3) 7,669
----------- --------- ---------- ---------
Income (loss) before provision for taxes 1,708 2,216 (3,547) 377
Provision (benefit) for income taxes 427 887 (1,220)(5) 94
----------- --------- ---------- ---------
Net income (loss) $ 1,281 $ 1,329 $ (2,327) $ 283
----------- --------- ---------- ---------
----------- --------- ---------- ---------
Income (loss) per common and preferred share:
Basic $ 0.25 $ 0.05
Diluted $ 0.24 $ 0.05
Weighted average common shares
outstanding:
Basic 5,215 5,215
Diluted 5,440 5,440
The pro forma combined condensed statement of operations for the year ended
June 30, 1997 reflects the following acquisition adjustments:
(1) To record amortization of goodwill over 20 years.
(2) To record depreciation expense on operating leases purchased.
(3) To record interest expense for acquisition financing.
(4) To record the reversal of lease expense on operating leases purchased.
(5) To record the tax effect on the above entries at estimated effective
rates.
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(b) (iii)
INSIGHT HEALTH SERVICES CORP.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED MARCH 31, 1998
(Amounts in thousands)
Signal
Historical Historical Acquisition Pro Forma
InSight Signal Adjustments Combined
---------- ---------- ----------- ---------
Revenues $ 85,673 $ 16,095 $ - $ 101,768
--------- --------- --------- ---------
Costs of services 46,038 5,993 - 52,031
Equipment leases 12,983 2,412 (1,138)(4) 14,257
Depreciation and amortization 10,670 2,989 982 (1) 15,287
646 (2)
--------- --------- --------- ---------
Costs of operations 69,691 11,394 490 81,575
--------- --------- --------- ---------
Gross profit 15,982 4,701 (490) 20,193
Provision for supplemental service
fee termination 6,309 - 6,309
Corporate operating expenses 6,510 2,165 - 8,675
--------- --------- --------- ---------
Income (loss) from company operations 3,163 2,536 (490) 5,209
Equity in earnings of unconsolidated
partnerships 480 - - 480
--------- --------- --------- ---------
Operating income (loss) 3,643 2,536 (490) 5,689
Interest expense 4,665 492 2,170 (3) 7,327
--------- --------- --------- ---------
Income (loss) before provision for taxes (1,022) 2,044 (2,660) (1,638)
Provision (benefit) for income taxes 431 829 (997)(5) 263
--------- --------- --------- ---------
Net income (loss) $ (1,453) $ 1,215 $ (1,663) $ (1,901)
--------- --------- --------- ---------
--------- --------- --------- ---------
Income (loss) per common and preferred share:
Basic $ (0.19) $ (0.25)
Diluted $ (0.19) $ (0.25)
Weighted average common shares
outstanding:
Basic 7,590 7,590
Diluted 7,590 7,590
The pro forma combined condensed statement of operations for the nine months
ended March 31, 1998 reflects the following acquisition adjustments:
(1) To record amortization of goodwill over 20 years.
(2) To record depreciation expense on operating leases purchased.
(3) To record interest expense for acquisition financing.
(4) To record the reversal of lease expense on operating leases purchased.
(5) To record the tax effect on the above entries at estimated
effective rates.
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