New York | 0-50194 | 11-3656261 | ||
(State of Incorporation) | (Commission File Number) | (I.R.S. Employer | ||
Identification Number) |
| An unaudited pro forma consolidated balance sheet as of June 30, 2005, giving effect to the Disposition as if it occurred on June 30, 2005. | ||
| An unaudited pro forma consolidated statement of income for the six months ended June 30, 2005, giving effect to the Disposition as if it had occurred on January 1, 2005. | ||
| An unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2004, giving effect to the Disposition as if it had occurred on January 1, 2004. |
As Reported | Business | Pro Forma | Pro Forma | |||||||||||||
June 30, 2005 | Disposition | Adjustments | June 30, 2005 | |||||||||||||
Assets |
||||||||||||||||
Current assets: |
||||||||||||||||
Cash and cash equivalents |
$ | 4,843 | $ | 2,000 | $ | | $ | 6,843 | ||||||||
Short-term investments |
28,850 | | | 28,850 | ||||||||||||
Accounts receivable, net |
13,992 | | | 13,992 | ||||||||||||
Prepaid expenses and other current assets, including deferred
tax assets of $2,173 at June 30, 2005 |
3,629 | | | 3,629 | ||||||||||||
Current assets of discontinued operations |
6,381 | (6,381 | ) | | | |||||||||||
Total current assets |
57,695 | (4,381 | ) | | 53,314 | |||||||||||
Property and equipment, net |
5,283 | | | 5,283 | ||||||||||||
Goodwill, net |
2,382 | | | 2,382 | ||||||||||||
Deferred income taxes, net |
6,747 | | | 6,747 | ||||||||||||
Other assets |
63 | 6,000 | | 6,063 | ||||||||||||
Noncurrent assets of discontinued operations |
3,986 | (3,986 | ) | | | |||||||||||
Total assets |
$ | 76,156 | $ | (2,367 | ) | $ | | $ | 73,789 | |||||||
Liabilities and Shareholders Equity |
||||||||||||||||
Current liabilities: |
||||||||||||||||
Accounts payable, accrued expenses and other liabilities |
$ | 8,639 | $ | | $ | | $ | 8,639 | ||||||||
Current liabilities of discontinued operations |
2,304 | (1,696 | ) | (608 | ) | | ||||||||||
Retained liabilities of discontinued operations |
| | 608 | 608 | ||||||||||||
Total current liabilities |
10,943 | (1,696 | ) | | 9,247 | |||||||||||
Other liabilities |
1,490 | | | 1,490 | ||||||||||||
Total liabilities |
12,433 | (1,696 | ) | | 10,737 | |||||||||||
Commitments and contingencies |
||||||||||||||||
Shareholders equity: |
||||||||||||||||
Preferred stock $.01 par value; 5,000,000 shares authorized;
none issued |
| | | | ||||||||||||
Common stock $.01 par value; 45,000,000 shares authorized;
21,551,735 shares issued and 19,888,889 shares outstanding at June 30, 2005 |
216 | | | 216 | ||||||||||||
Capital in excess of par value |
78,925 | | | 78,925 | ||||||||||||
Accumulated deficit |
(6,021 | ) | (671 | ) | | (6,692 | ) | |||||||||
Treasury stock, at cost; 1,662,846 at June 30, 2005 |
(9,397 | ) | | | (9,397 | ) | ||||||||||
Total shareholders equity |
63,723 | (671 | ) | | 63,052 | |||||||||||
Total liabilities and shareholders equity |
$ | 76,156 | $ | (2,367 | ) | $ | | $ | 73,789 | |||||||
a) | The Disposition reflects the cash proceeds of $2.0 million and the note receivable, which has a face value of $6.0 million and bears interest at 6%. | ||
b) | Pursuant to the Stock Purchase Agreement for the Disposition, if the net accounts receivable or net tangible assets at August 31, 2005 fall below specified levels, the purchase price will be adjusted downward. The final net accounts receivable or net tangible assets adjustment will not be determined until after the closing and was estimated solely for the purposes of this pro forma consolidated balance sheet. | ||
c) | Retained liabilities of discontinued operations primarily consist of liability for severance and certain contingent liabilities not transferred to the buyer and retained by the Company. |
Business | ||||||||||||
As Reported | Disposition | Pro Forma Adjusted | ||||||||||
Revenue |
$ | 25,361 | $ | 1,350 | (a) | $ | 26,711 | |||||
Cost of services: |
||||||||||||
Compensation |
12,122 | 961 | (b) | 13,083 | ||||||||
Data processing |
2,102 | 258 | (b) | 2,360 | ||||||||
Occupancy |
2,132 | 12 | (b) | 2,144 | ||||||||
Direct project costs |
4,365 | | 4,365 | |||||||||
Other operating costs |
3,148 | 66 | (b) | 3,214 | ||||||||
Total cost of services |
23,869 | 1,297 | 25,166 | |||||||||
Operating income |
1,492 | 53 | 1,545 | |||||||||
Net interest income |
448 | 215 | (c) | 663 | ||||||||
Income from continuing operations before income taxes |
1,940 | 268 | 2,208 | |||||||||
Income taxes |
55 | 8 | 63 | |||||||||
Income from continuing operations |
1,885 | 260 | 2,145 | |||||||||
Discontinued operations: |
||||||||||||
Income (loss) from operations |
(145 | ) | 1,257 | (d) | 1,112 | |||||||
Net income |
$ | 1,740 | $ | 1,517 | $ | 3,257 | ||||||
Basic income per share data: |
||||||||||||
Income per share from continuing operations |
$ | 0.10 | $ | 0.01 | $ | 0.11 | ||||||
Income (loss) per share from discontinued operations |
(0.01 | ) | 0.07 | 0.06 | ||||||||
Net income per basic share |
$ | 0.09 | $ | 0.08 | $ | 0.17 | ||||||
Weighted average common
shares outstanding, basic |
19,679 | 19,679 | 19,679 | |||||||||
Diluted income per share data: |
||||||||||||
Income per share from continuing operations |
$ | 0.09 | $ | 0.01 | $ | 0.10 | ||||||
Income (loss) per share from discontinued operations |
(0.01 | ) | 0.05 | 0.04 | ||||||||
Net income per diluted share |
$ | 0.08 | $ | 0.06 | $ | 0.14 | ||||||
Weighted
average common shares outstanding, diluted |
22,776 | 22,776 | 22,776 | |||||||||
a) | Reflects the estimated annual revenue associated with the agreement to provide certain data processing costs to Accordis as if the agreement were in place as of January 1, 2005. | ||
b) | Costs previously attributable to discontinued operations that principally relate to providing the services under the data services agreement. Effectively, these costs have been reclassified from discontinued operations to continuing operations. | ||
c) | Interest income on cash proceeds from sale and note receivable from AHC. | ||
d) | Includes $1,297,000 of costs reclassified to continuing operations reduced by a provision for additional alternative minimum tax of approximately $40,000 as if the data services agreement were in effect as of January 1, 2005. |
Business | ||||||||||||||||
Disposition | Pro Forma | Pro Forma | ||||||||||||||
As Reported | (a) | Adjustments | Adjusted | |||||||||||||
Revenue |
$ | 85,193 | $ | (34,742 | ) | $ | 2,700 | (b) | $ | 53,151 | ||||||
Cost of services: |
||||||||||||||||
Compensation |
43,421 | (20,359 | ) | 1,762 | (c) | 24,824 | ||||||||||
Data processing |
4,889 | (902 | ) | 433 | (c) | 4,420 | ||||||||||
Occupancy |
5,511 | (1,353 | ) | 18 | (c) | 4,176 | ||||||||||
Direct project costs |
13,971 | (5,427 | ) | | (c) | 8,544 | ||||||||||
Other operating costs |
8,127 | (2,550 | ) | 178 | (c) | 5,755 | ||||||||||
US Attorney investigation costs |
1,771 | (1,771 | ) | | (c) | | ||||||||||
Total cost of services |
77,690 | (32,362 | ) | 2,391 | 47,719 | |||||||||||
Operating income (loss) |
7,503 | (2,380 | ) | 309 | 5,432 | |||||||||||
Net interest income |
323 | (10 | ) | 430 | (d) | 743 | ||||||||||
Income
(loss) from continuing operations before income taxes |
7,826 | (2,390 | ) | 739 | 6,175 | |||||||||||
Income taxes |
115 | (12 | ) | 22 | 125 | |||||||||||
Income (loss) from continuing operations |
7,711 | (2,578 | ) | 717 | 6,050 | |||||||||||
Income from discontinued operations, net |
| 2,378 | 2,319 | (e) | 4,697 | |||||||||||
Net income |
$ | 7,711 | $ | | $ | 3,036 | $ | 10,747 | ||||||||
Basic income per share data: |
||||||||||||||||
Income (loss) per share from continuing operations |
$ | 0.40 | $ | (0.12 | ) | $ | 0.04 | $ | 0.32 | |||||||
Income per share from discontinued operations |
| 0.12 | 0.12 | 0.24 | ||||||||||||
Net income per basic share |
$ | 0.40 | $ | 0.00 | $ | 0.16 | $ | 0.56 | ||||||||
Weighted average common shares
outstanding, basic |
19,074 | 19,074 | 19,074 | 19,074 | ||||||||||||
Diluted income per share data: |
||||||||||||||||
Income (loss) per share from continuing operations |
$ | 0.35 | $ | (0.11 | ) | $ | 0.03 | $ | 0.27 | |||||||
Income per share from discontinued operations |
| 0.11 | 0.10 | 0.21 | ||||||||||||
Net income per diluted
share |
$ | 0.35 | $ | 0.00 | $ | 0.13 | $ | 0.48 | ||||||||
Weighted average common shares, diluted |
22,275 | 22,275 | 22,275 | 22,275 | ||||||||||||
a) | The business disposition column reflects the reclassification of the results of operations of Accordis as a discontinued operation, consistent with the presentation in the Companys quarterly filings on Form 10-Q for the quarters ended March 31, 2005 and June 30, 2005. | ||
b) | Reflects the estimated annual revenue associated with the agreement to provide certain data processing costs to Accordis as if the agreement were in place as of January 1, 2004. | ||
c) | Costs previously attributable to discontinued operations that principally relate to providing the services under the data services agreement. Effectively, these costs have been reclassified from discontinued operations to continuing operations. | ||
d) | Interest income on cash proceeds from sale and note receivable from AHC. | ||
e) | Includes $2,391,000 of costs reclassified to continuing operations reduced by a provision for additional alternative minimum tax of approximately $72,000 as if the data services agreement were in effect as of January 1, 2004. |
** | 99.1 | Press Release dated September 1, 2005. | |
* | 99.2 | Stock Purchase Agreement, dated August 31, 2005 (the Agreement), between HMS Holdings Corp., a New York corporation (Seller), and Accordis Holding Corp., a New York corporation (Purchaser)* | |
** | 99.3 | Data Services Agreement, dated August 31, 2005, between HMS Business Services, Inc. (Vendor) and Accordis Holding Corp. | |
** | 99.4 | Accordis Holding Corp. Subordinated Promissory Note dated August 31, 2005 | |
** | 99.5 | NON-COMPETE AGREEMENT, dated as of August 31, 2005, among HMS HOLDINGS CORP., a New York corporation (Seller), HEALTH MANAGEMENT SYSTEMS, INC., a New York corporation (HMS), HMS BUSINESS SERVICES, INC., a New York corporation (HMSBS and, together with Seller and HMS, the Seller Entities), ACCORDIS HOLDING CORP., a New York corporation (Purchaser), and ACCORDIS INC., a New York corporation (Accordis). | |
** | 99.6 | Sublease Agreement made as of the 31st day of August, 2005 between Health Management Systems, Inc., a New York corporation, having its offices at 401 Park Avenue South, 10th floor, New York, New York 10016 (Sublandlord), and Accordis, Inc., a Delaware corporation, having its offices at 401 Park Avenue South, 8th Floor, New York, New York 10016 (Subtenant). | |
** | 99.7 | TRANSITION SERVICES AGREEMENT, dated August 31, 2005, between HMS BUSINESS SERVICES, INC., a New York corporation (HMS), and ACCORDIS INC., a New York corporation (Accordis). | |
** | 99.8 | SUBCONTRACTING AGREEMENT, made the 31st day of August 2005, by and between Accordis Inc., a New York corporation (Accordis), and Reimbursement Services Group Inc. (RSG), a New York corporation. | |
** | 99.9 | Software License Agreement (License), dated as of August 31, 2005 between Accordis, Inc. (Licensor) and Health Management Systems, Inc. (Licensee) |
* | The schedules to this agreement have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. HMS Holdings will furnish copies of any of the schedules to the U.S. Securities and Exchange Commission upon request. | |
** | Previously filed with the original Form 8-K. |
HMS Holdings Corp. | ||
By: /s/ Robert M. Holster | ||
Robert M. Holster | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
By: /s/ Thomas G. Archbold | ||
Thomas G. Archbold | ||
Chief Financial Officer | ||
(Principal Financial Officer and | ||
Accounting Officer) |
Exhibit No. | Description | |
99.1
|
Press Release issued February 28, 2005 | |
99.2 |
Stock Purchase Agreement, dated August 31, 2005 (the Agreement), between HMS Holdings Corp., a New York corporation (Seller), and Accordis Holding Corp., a New York corporation (Purchaser). | |
99.3 |
Data Services Agreement, dated August 31, 2005, between HMS Business Services, Inc. (Vendor) and Accordis Holding Corp. | |
99.4
|
Accordis Holding Corp. Subordinated Promissory Note dated August 31, 2005 | |
99.5
|
NON-COMPETE AGREEMENT, dated as of August 31, 2005, among HMS HOLDINGS CORP., a New York corporation (Seller), HEALTH MANAGEMENT SYSTEMS, INC., a New York corporation (HMS), HMS BUSINESS SERVICES, INC., a New York corporation (HMSBS and, together with Seller and HMS, the Seller Entities), ACCORDIS HOLDING CORP., a New York corporation (Purchaser), and ACCORDIS INC., a New York corporation (Accordis). | |
99.6
|
Sublease Agreement made as of the 31st day of August, 2005 between Health Management Systems, Inc., a New York corporation, having its offices at 401 Park Avenue South, 10th floor, New York, New York 10016 (Sublandlord), and Accordis, Inc., a Delaware corporation, having its offices at 401 Park Avenue South, 8th Floor, New York, New York 10016 (Subtenant). | |
99.7
|
TRANSITION SERVICES AGREEMENT, dated August 31, 2005, between HMS BUSINESS SERVICES, INC., a New York corporation (HMS), and ACCORDIS INC., a New York corporation (Accordis). | |
99.8
|
SUBCONTRACTING AGREEMENT, made the 31st day of August 2005, by and between Accordis Inc., a New York corporation (Accordis), and Reimbursement Services Group Inc. (RSG), a New York corporation. | |
99.9
|
Software License Agreement (License), dated as of August 31, 2005 between Accordis, Inc. (Licensor) and Health Management Systems, Inc. (Licensee) |