8-K 1 form8k-august2004.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 9, 2004 IONICS, INCORPORATED (Exact name of registrant as specified in its charter)
Massachusetts 1-7211 04-2068530 (State of incorporation) (Commission File No.) (IRS Employer Identification No.) 65 Grove Street, Watertown, MA 02472 (617) 926-2500 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code)
Item 7. Financial Statements and Exhibits Exhibit Number Description 99 Press Release dated August 9, 2004, reporting the financial results of Ionics, Incorporated for the quarter ended June 30, 2004. Item. 12. Results of Operations and Financial Condition On August 9, 2004, Ionics, Incorporated issued a press release reporting its financial results for the quarter ended June 30, 2004. A copy of the Press Release is attached hereto as Exhibit 99 and is hereby incorporated by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized. IONICS, INCORPORATED August 9, 2004 By: /s/Stephen Korn ---------------------------- Name: Stephen Korn Title: Vice President and General Counsel 2 EXHIBIT INDEX Number Description Page Number ------ ----------- ----------- 99 Press release dated August 9, 2004, reporting the 4 financial results of Ionics, Incorporated for the quarter ended June 30, 2004. 3 EXHIBIT 99 IONICS REPORTS RESULTS FOR THE SECOND QUARTER AND FIRST HALF OF 2004 Watertown, MA, August 9, 2004 . . . Ionics, Incorporated (NYSE-ION) today filed its quarterly report on Form 10-Q, reporting results for the three and six-months periods ended June 30, 2004. Second quarter revenues were $125.8 million compared to $83.6 million for the second quarter of 2003. The net loss of $2.3 million, or ($0.10) per share, in Q2 2004 compared to a net loss of $4.9 million, or ($0.28) per share, for Q2 2003. The loss per share from continuing operations of ($0.07) in Q2 2004 compares to a loss per share of ($0.11) in Q2 2003. Excluding amortization of intangibles, net of tax, the results of continuing operations were break-even, compared to a loss per share of ($0.11) in the second quarter of 2003. Revenues for the first half of 2004 were $231.5 million compared to $163.8 million for the first half of 2003. The net loss of $6.3 million, or ($0.29) per share, in the first half of 2004 compared to a net loss of $4.3 million, or ($0.25) per share, for the first half of 2003. The loss per share from continuing operations, of ($0.14) in the first half of 2004 compares to a loss per share of ($0.06) in the first half of 2003. Excluding amortization of intangibles, net of tax, the loss per share for continuing operations of ($0.05) compares to a loss per share of ($0.05) in the first half of 2003. Income from continuing operations before income taxes and minority interest expense for the second quarter and for the first six months of 2004 was $3.3 million and $1.8 million, respectively. This compares to a loss from continuing operations before income taxes and minority interest expense for the second quarter and first six months of 2003 of ($2.9) million and ($1.3) million, respectively. The results for the second quarter include a non-cash charge for the establishment of a deferred tax asset valuation allowance in the amount of $3.3 million, which equates to approximately $0.15 per share. Other items included in the results were $0.6 million of restructuring charges, and $0.9 million in systems development and Sarbanes-Oxley Section 404 preparedness charges. Also included are the consolidated results of the Ecolochem Group (acquired on February 13, 2004), and Desalcott (Desalination Company of Trinidad and Tobago Ltd.), the Company's 40%- owned joint venture in Trinidad. Desalcott's results were included in the consolidated results of the Company in accordance with the provisions of FIN46. Ecolochem revenues for the quarter and the first half were $24.4 million and $36.3 million, respectively. Desalcott revenues for the quarter and for the first half were $7.5 million and $14.4 million, respectively. For further information about the Company's second quarter and first half 2004 financial results, please refer to the Company's quarterly report on Form 10-Q. - more - 4 Ionics will host a conference call tomorrow, Tuesday, August 10, 2004 at 10:00AM, EDT to discuss its second quarter financial results. This conference call will be accessible on the Company's home page, at http://www.shareholder.com/ion/medialist.cfm. Recorded replays of the financial results conference call will be available on the web site for a one-week period beginning later that day. About Ionics, Inc. Ionics is a global leader in water purification and wastewater treatment. The Company has over 50 years of experience in the design, installation, operation and maintenance of water and wastewater treatment systems and is a leading provider of emergency and long-term water treatment services. More membrane-based desalination systems have been designed and built by Ionics than any other supplier worldwide. Ionics is also a leader in supplying zero-liquid-discharge systems, in providing ultrapure water systems for the power and microelectronics industries, and in the measurement and analysis of water impurities. The Company also supplies Point-of-Use and Point-of-Entry water treatment systems for commercial and residential applications. For more information, visit www.ionics.com. Safe-harbor statement under the Private Securities Litigation Reform Act of 1995: Forward-looking statements in this news release involve risk and uncertainty. The statements contained in this release which are not historical facts are forward-looking statements. These forward-looking statements are based on management's current views and assumptions and are neither promises nor guarantees but are subject to risks, uncertainties and other factors that could cause actual results to differ materially from management's current expectations as described in such forward-looking statements, including overall economic and business conditions; competitive factors, such as acceptance of new products, pricing pressures and competition from competitors larger than the Company; risks of nonpayment of accounts receivable, including those from affiliated companies; risks associated with foreign operations; technological and product development risks; availability of manufacturing capacity; risks associated with the Company's restructuring program announced in September 2003; risks associated with the integration of Ecolochem's operations with those of the Company; and other factors described in the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2003 and its quarterly report on Form 10-Q for the quarter ended June 30, 2004. You should not place undue reliance on the forward-looking statements in this press release, and the Company disavows any obligation to update or supplement those statements in the event of any changes in the facts, circumstances, or expectations that underlie those statements. -more- 5
IONICS REPORTS SECOND QUARTER RESULTS CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts) Three months ended Six months ended June 30, June 30, ----------------------- ---------------------- 2004 2003 2004 2003 ----------- ---------- ---------- ---------- Revenues: Equipment Sales $ 37,991 $ 33,286 $ 71,421 $ 62,838 Operations 62,270 26,589 114,676 54,271 Consumer Water 4,038 2,626 7,990 5,477 Instruments 9,700 8,049 18,451 16,428 Affiliated companies 11,801 13,006 18,916 24,783 ----------- ---------- ---------- ---------- 125,800 83,556 231,454 163,797 ----------- ---------- ---------- ---------- Costs and expenses: Cost of sales of Equipment Sales 30,433 26,673 58,306 49,315 Cost of sales of Operations 38,805 19,096 73,353 38,229 Cost of sales of Consumer Water 1,606 1,039 3,477 2,413 Cost of sales of Instruments 3,977 3,872 7,983 7,461 Cost of sales to affiliated companies 10,494 11,166 16,603 21,383 Research and development 1,572 1,954 3,103 3,731 Selling, general and administrative 30,874 20,449 58,729 40,752 Restructuring charges 624 - 1,188 - ----------- ---------- ---------- ---------- 118,385 84,249 222,742 163,284 ----------- ---------- ---------- ---------- Income (loss) from continuing operations 7,415 (693) 8,712 513 Interest (expense) income, net (4,914) 491 (8,236) 1,047 Equity income (loss) 801 (2,742) 1,291 (2,843) ----------- ---------- ---------- ---------- Income (loss) from continuing operations before income tax and minority interest expense 3,302 (2,944) 1,767 (1,283) Income tax (expense) benefit (4,724) 1,142 (4,228) 561 ----------- ---------- ---------- ---------- Loss from continuing operations before minority interest expense (1,422) (1,802) (2,461) (722) Minority interest expense 231 188 484 386 ----------- ---------- ---------- ---------- Loss from continuing operations (1,653) (1,990) (2,945) (1,108) Loss on discontinued operations, net of tax (676) (2,934) (3,334) (3,240) ----------- ---------- ---------- ---------- Net loss $ (2,329) $ (4,924) $ (6,279) $ (4,348) =========== ========== ========== ========== Basic loss per share from continuing operations $ (0.07) $ (0.11) $ (0.14) $ (0.06) Basic loss per share from discontinued operations (0.03) (0.17) (0.16) (0.18) ----------- ---------- ---------- ---------- Basic net loss per share $ (0.10) $ (0.28) $ (0.29) $ (0.25) =========== ========== ========== ========== Diluted loss per share from continuing operations $ (0.07) $ (0.11) $ (0.14) $ (0.06) Diluted loss per share from discontinued operations (0.03) (0.17) (0.16) (0.18) ----------- ---------- ---------- ---------- Diluted net loss per share $ (0.10) $ (0.28) $ (0.29) $ (0.25) =========== ========== ========== ========== Shares used in basic loss per share calculations 22,588 17,564 21,455 17,559 =========== ========== ========== ========== Shares used in diluted loss per share calculations 22,588 17,564 21,455 17,559 =========== ========== ========== ========== Backlog 424,624 346,048 ========== ==========
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Other Data: Three months ended Six months ended June 30, June 30, ----------------------- ---------------------- 2004 2003 2004 2003 ----------- ---------- ---------- ---------- Reconciliation of loss from continuing operations to net loss from continuing operations adjusted for amortization of intangibles, net of tax: Loss from continuing operations $ (1,653) $ (1,990) $ (2,945) $ (1,108) Add back: Amortization of intangibles, net of tax 1,548 100 1,767 156 ----------- ---------- ---------- ---------- Net loss from continuing operations adjusted for amortization of intangibles, net of tax $ (105) $ (1,890) $ (1,178) $ (952) =========== ========== ========== ========== Diluted loss per share from continuing operations $ (0.07) $ (0.11) $ (0.14) $ (0.06) Add back: Amortization of intangibles, net of tax 0.07 0.01 0.08 0.01 ----------- ---------- ---------- ---------- Diluted loss per share from continuing operations adjusted for amortization of intangibles, net of tax $ (0.00) $ (0.11) $ (0.05) $ (0.05) =========== ========== ========== ==========
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IONICS REPORTS SECOND QUARTER RESULTS CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) June 30, December 31, 2004 2003 ---------------- --------------- Current assets: Cash and cash equivalents $ 60,258 $ 133,815 Restricted cash 16,736 - Short-term investments 1,476 - Notes receivable, current 7,872 6,365 Accounts receivable, net 116,641 87,415 Receivables from affiliated companies 29,470 22,140 Inventories 28,834 24,595 Assets from discontinued operations 1,081 7,959 Other current assets 42,974 33,781 ---------------- --------------- Total current assets 305,342 316,070 Receivables from affiliated companies, long-term 10,720 20,915 Notes receivable, long-term, net 31,951 28,408 Investments in affiliated companies 10,615 14,362 Property, plant and equipment, net 396,474 171,533 Goodwill 185,377 7,695 Intangible assets, net 77,199 6,378 Other assets 29,267 26,616 ---------------- --------------- Total assets $ 1,046,945 $ 591,977 ================ =============== Current liabilities: Notes payable and current portion of long-term debt $ 11,877 $ 6,276 Accounts payable 42,369 28,279 Billings in advance from affiliated companies - 3,629 Liabilities from discontinued operations - 396 Other current liabilities 95,325 79,512 ---------------- --------------- Total current liabilities 149,571 118,092 Long-term debt and notes payable 281,499 8,889 Deferred income taxes 33,054 30,979 Minority interest 15,592 1,426 Accumulated losses in investments in affiliated companies 4,117 5,068 Other liabilities 10,803 11,358 Stockholders' equity 552,309 416,165 ---------------- --------------- Total liabilities and stockholders' equity $ 1,046,945 $ 591,977 ================ =============== For more information, contact: John F. Curtis Daniel M. Kuzmak Vice President, Strategy and Operations, Treasurer Vice President and Chief Financial Officer Ionics, Incorporated Ionics, Incorporated Tel: (617) 673-4403 Tel: (617) 673-4350 jcurtis@ionics.com dkuzmak@ionics.com