-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, OqRQCnNpxbYg2gs81i7/pFecQwmTJdn+v5svP5JZekf5eKp4z4k480PHLSudInxB sodxhbPN6wJQRe7fYzVt4Q== 0000052466-95-000005.txt : 19950517 0000052466-95-000005.hdr.sgml : 19950516 ACCESSION NUMBER: 0000052466-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IONICS INC CENTRAL INDEX KEY: 0000052466 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 042068530 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07211 FILM NUMBER: 95537509 BUSINESS ADDRESS: STREET 1: 65 GROVE ST CITY: WATERTOWN STATE: MA ZIP: 02172 BUSINESS PHONE: 6179262500 10-Q 1 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-7211 IONICS, INCORPORATED (exact name of registrant as specified in its charter) MASSACHUSETTS 04-2068530 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 65 Grove Street, Watertown, Massachusetts 02172 (Address of principal executive offices) (Zip Code) (617) 926-2500 (Registrant's telephone number, including area code) NONE (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at March 31, 1995 Common Stock, Par Value $1 14,015,899 Shares /1 IONICS, INCORPORATED FORM 10-Q FOR QUARTER ENDED MARCH 31, 1995 INDEX Page No. Part I - Financial Information Consolidated Statements of Operations 2 Consolidated Balance Sheets 3 Consolidated Statements of Cash Flows 4 Notes to Consolidated Financial Statements 5 Management's Discussion and Analysis of Results of Operations and Financial Condition 6 Part II - Other Information 8 Signatures 9 Exhibit Index 10 Exhibit 11 - Computation of Earnings Per Share 11 Exhibit 27 - Financial Data Schedule 12 (for electronic purposes only) - 1 - /2 PART I - FINANCIAL INFORMATION IONICS, INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands, except earnings per share)
Three Months Ended March 31, 1995 1994 Net revenue: Membranes and related equipment $28,856 $28,534 Water, food and chemical supply 15,753 12,898 Consumer products 12,264 11,603 56,873 53,035 Costs and expenses: Cost of membranes and related equipment 21,555 22,262 Cost of water, food and chemical supply 10,432 8,515 Cost of consumer products 6,694 6,561 Research and development 811 803 Selling, general and administrative 11,507 10,250 50,999 48,391 Income from operations 5,874 4,644 Interest income 237 233 Equity income 143 118 Income before income taxes 6,254 4,995 Provision for income taxes 2,126 1,598 Net income $ 4,128 $ 3,397 Earnings per share $ .29 $ .24 Shares used in earnings per share calculations 14,429 14,140 The accompanying notes are an integral part of these financial statements. -2- /3
IONICS, INCORPORATED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands, except per share amounts)
March 31, December 31, 1995 1994 ASSETS Current assets: Cash and cash equivalents $ 11,473 $ 14,966 Short-term investments 4,959 5,617 Notes receivable, current 2,994 3,126 Accounts receivable 52,255 61,675 Receivables from affiliated companies 1,688 2,170 Inventories: Raw materials 11,001 11,088 Work in process 5,778 5,964 Finished goods 2,599 2,353 19,378 19,405 Other current assets 6,490 6,518 Total current assets 99,237 113,477 Notes receivable, long-term 5,327 5,246 Investments in affiliated companies 5,549 5,419 Property, plant and equipment: Land 2,587 2,584 Buildings 24,806 23,621 Machinery and equipment 160,081 148,881 Other, including furniture, fixtures and vehicles 22,797 22,122 210,271 197,208 Less accumulated depreciation (77,727) (73,115) 132,544 124,093 Other assets 31,780 28,929 Total assets $274,437 $277,164 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable and current portion of long-term debt $ 239 $ 370 Accounts payable 22,014 30,317 Customer deposits 4,138 4,959 Accrued commissions 1,650 1,852 Accrued expenses 15,440 15,407 Taxes on income 2,004 1,972 Total current liabilities 45,485 54,877 Long-term debt and notes payable 91 99 Deferred income taxes 4,135 2,928 Other liabilities 596 650 Stockholders' equity: Common stock, par value $1, 30,000,000 authorized shares; issued: 14,015,899 in 1995 and 13,989,896 in 1994 14,016 13,990 Additional paid-in capital 125,962 125,529 Retained earnings 88,155 84,027 Cumulative translation adjustments (4,003) (4,936) Total stockholders' equity 224,130 218,610 Total liabilities and stockholders' equity $274,437 $277,164 The accompanying notes are an integral part of these financial statements. -3- /4
IONICS, INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
Three Months Ended March 31, 1995 1994 Operating activities: Net income $ 4,128 $ 3,397 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,955 4,258 Provision for losses on accounts and notes receivable 322 149 Changes in assets and liabilities: Notes receivable 24 (87) Accounts receivable 9,567 1,860 Inventories 18 (1,248) Other current assets 77 (1,576) Investments in affiliates (130) (111) Accounts payable and accrued expenses (9,290) (284) Income taxes 1,609 1,199 Other (6) (9) Net cash provided by operating activities 11,274 7,548 Investing activities: Additions to property, plant and equipment (12,667) (6,592) Sale of short-term investments 672 6,226 Purchase of long-term investments (3,000) - Payment for Ionics RCC acquisition - (11,000) Net cash used by investing activities (14,995) (11,366) Financing activities: Principal payments on current debt (152) (302) Proceeds from issuance of current debt - 179 Proceeds from stock option plans 459 118 Net cash provided (used) by financing activities 307 (5) Effect of exchange rate changes on cash (79) 168 Net change in cash and cash equivalents (3,493) (3,655) Cash and cash equivalents at beginning of period 14,966 21,534 Cash and cash equivalents at end of period $ 11,473 $ 17,879 The accompanying notes are an integral part of these financial statements. -4- /5
IONICS, INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of the Company, the accompanying consolidated financial statements contain all adjustments (consisting of only normal, recurring accruals) necessary to present fairly the consolidated financial position of the Company as of March 31, 1995 and December 31, 1994, the consolidated results of its operations for the three months ended March 31, 1995 and 1994 and the consolidated cash flows for the three months then ended. 2. The consolidated results of operations of the Company for the three months ended March 31, 1995 and 1994 are not necessarily indicative of the results of operations to be expected for the full year. 3. Reference is made to the Notes to Consolidated Financial Statements appearing in the Company's 1994 Annual Report as filed on Form 10-K with the Securities and Exchange Commission. There have been no significant changes in the information reported in those Notes, other than from the normal business activities of the Company, and there have been no changes which would, in the opinion of Management, have a materially adverse effect upon the Company. 4. Certain prior year amounts have been reclassified to conform to the current year presentation with no impact on net income. 5. At the Annual Meeting on May 4, 1995, the stockholders approved the 1994 Restricted Stock Plan (the "1994 Plan"). The purpose of the 1994 Plan is to increase stock ownership among officers and other key employees of the Company. -5- /6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations Comparison of the Three Months Ended March 31, 1995 with the Three Months Ended March 31, 1994 Revenues for the first quarter of 1995 increased 7.2% to $56.9 million from $53.0 million in 1994. The largest growth was in the Water, Food and Chemical Supply segment due to continuing improvement in the Company's own and operate and service businesses. Consumer Product revenues increased as higher revenues from bottled water and home water products more than offset seasonal softness in certain other consumer products, particularly windshield wash. Bottled water revenues increased at existing locations as well as through the opening of a new distribution facility in Charlotte, North Carolina. Home water product sales increased through expansion of the independent dealer base as well as through increased sales by the existing distribution network. Revenues from the Membranes and Related Equipment segment reflected increased spare parts sales, continuing strength in the sale of ultrapure water systems, particularly to the semiconductor industry, and revenues from zero liquid discharge systems which offset lower sales of traditional capital equipment. Cost of sales as a percentage of revenues was 68.0% in 1995 and 70.4% in 1994. Decreases in cost of sales as a percentage of revenues occurred in both the Membranes and Related Equipment and Consumer Products segments while the percentage for the Water, Food and Chemical Supply segment was unchanged. The improvement in the Membranes and Related Equipment segment resulted from a more favorable mix between capital equipment and spare parts revenues and among individual capital equipment jobs. The improvement in the Consumer Products segment also resulted from an overall improvement in product mix. Operating expenses as a percentage of revenues were 21.7% in the first quarter of 1995, up from 20.8% in the first quarter of 1994. This increase was due to higher selling and other related expenses primarily associated with a different mix of sales between equipment and consumer products. Sales of equipment contributed to the increase as a percentage of revenues due to a different mix between products and distribution channels. Within Consumer Products, the increase reflected increased start-up costs of new locations. Interest income increased slightly, despite lower average cash and investment balances, due to an increase in average interest rates. -6- /7 Financial Condition Working capital decreased $4.8 million during the first three months of 1995, while the Company's current ratio increased to 2.2 at March 31, 1995 from 2.1 at December 31, 1994. Cash provided from net income, depreciation and a reduction in accounts receivable totaled $18.7 million in the first three months of 1995 while the primary uses of cash were for payment of accounts payable, additions to property, plant and equipment and the purchase of long-term investments. Significant capital expenditures were made for bleach manufacturing operations, bottled water operations, trailers and other "own and operate" facilities. At March 31, 1995, the Company had $19.4 million in cash and investments (including $3.0 million of U.S. government securities included in other assets), a decrease of $1.2 million from December 31, 1994. The Company believes that its cash and investments, cash from operations, lines of credit and foreign exchange facilities are adequate to meet its currently anticipated needs. -7- /8 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 11- Computation of Earnings Per Share (included on Page 11 of this report). (b) Reports on Form 8-K No reports on Form 8-K were filed with the Securities and Exchange Commission during the quarter ended March 31, 1995. All other items reportable under Part II have been omitted as inapplicable or because the answer is negative, or because the information was previously reported to the Securities and Exchange Commission. -8- /9 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 thereunto duly authorized. IONICS, INCORPORATED Date: May 12, 1995 By: /s/Arthur L. Goldstein Arthur L. Goldstein Chairman and Chief Executive Officer (duly authorized officer) Date: May 12, 1995 By: /s/Robert J. Halliday Robert J. Halliday Vice President, Finance and Accounting (chief financial officer) -9- /10 EXHIBIT INDEX
Exhibit Page 11 Computation of Earnings Per Share 12 27 Financial Data Schedule 13 (for electronic purposes only) -10- /11
EX-11 2 EXHIBIT 11 IONICS, INCORPORATED COMPUTATION OF EARNINGS PER SHARE (Amounts in thousands, except earnings per share)
Three Months Ended March 31, 1995 1994 Net income $ 4,128 $ 3,397 Earnings per common and common equivalent share: Weighted average number of shares outstanding 14,004 13,894 Incremental shares for stock options under treasury stock method 425 246 Weighted average number of common and common equivalent shares outstanding 14,429 14,140 Earnings per common and common equivalent share $ .29 $ .24 Earnings per common and common equivalent share - assuming full dilution: Weighted average number of shares outstanding 14,004 13,894 Incremental shares for stock options under treasury stock method 464 262 Weighted average number of common and common equivalent shares outstanding - assuming full dilution 14,468 14,156 Earnings per common and common equivalent share - assuming full dilution $ .29 $ .24 -11- /12
EX-27 3
5 1,000 3-MOS DEC-31-1995 MAR-31-1995 11,473 4,959 57,263 (2,014) 19,378 99,237 210,271 (77,727) 274,437 45,485 0 14,016 0 0 210,114 274,437 56,873 56,873 38,681 38,681 0 322 0 6,111 2,126 4,128 0 0 0 4,128 .29 .29
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