-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DiS++leUkGD1kEruAWMEmSphUH8vmcirnvp1riT1HlTkKSSHqy8PVXM1wC+n4wON Y6XpUAL7o3gDLiHidcH5Wg== 0000950135-04-000689.txt : 20040212 0000950135-04-000689.hdr.sgml : 20040212 20040212164956 ACCESSION NUMBER: 0000950135-04-000689 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040212 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040212 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07211 FILM NUMBER: 04592341 BUSINESS ADDRESS: STREET 1: 65 GROVE ST CITY: WATERTOWN STATE: MA ZIP: 02172 BUSINESS PHONE: 6179262500 8-K 1 b49506iie8vk.txt IONICS INCORPORATED 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): February 12, 2004 IONICS, INCORPORATED (Exact name of registrant as specified in its charter) Massachusetts 1-7211 04-2068530 (State of incorporation) (Commission File Number) (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) -2- Item 5. Other Events and Required FD Disclosure. On November 18, 2003, Ionics, Incorporated and the shareholders and members of Ecolochem, Inc. and its affiliated companies (collectively, the "Ecolochem Group") entered into a Purchase Agreement that provides for the acquisition by Ionics of the stock and membership interests of the Ecolochem Group for $200 million in cash and 4,905,660 shares of Ionics common stock, in each case subject to adjustment as provided in the Purchase Agreement. This report is being filed to disclose the unaudited combined financial statements of the Ecolochem Group as of December 31, 2003 and for the three months ended December 31, 2003 and 2002, which appear as Exhibit 99.1 to this report and are incorporated herein by this reference. Item 7. Financial Statements and Exhibits. (a) Financial Statements of Business Acquired. None. (b) Pro Forma Financial Information. None. (c) Exhibits.
Exhibit Number Description - -------------- ----------- Exhibit 99.1 The following combined financial statements of the Ecolochem Group: Combined balance sheets as of December 31, 2003 (unaudited) and September 30, 2003 Combined statements of earnings for the three months ended ended December 31, 2003 and 2002 (unaudited) Combined statements of cash flows for the three months ended ended December 31, 2003 and 2002 (unaudited) Notes to combined financial statements
-3- 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 hereunto duly authorized. IONICS, INCORPORATED February 12, 2004 By: /s/ Stephen Korn -------------------------------- Name: Stephen Korn Title: Vice President and General Counsel -4- EXHIBIT INDEX
Exhibit Number Description - -------------- ----------- Exhibit 99.1 The following combined financial statements of the Ecolochem Group: Combined balance sheets as of December 31, 2003 (unaudited) and September 30, 2003 Combined statements of earnings for the three months ended ended December 31, 2003 and 2002 (unaudited) Combined statements of cash flows for the three months ended ended December 31, 2003 and 2002 (unaudited) Notes to combined financial statements
EX-99.1 3 b49506iiexv99w1.txt COMBINED FINANCIAL STATEMENTS OF ECOLOCHEM GROUP . . . THE ECOLOCHEM GROUP Combined Balance Sheets (Unaudited)
DECEMBER 31, SEPTEMBER 30, 2003 2003 ---- ---- ASSETS Current assets: Cash and cash equivalents $ 4,715,199 4,074,193 Short-term investments 11,386,420 11,379,528 Trade accounts receivable, net 19,941,037 21,879,247 Other receivables 748,215 1,187,092 Inventories 3,791,441 3,436,517 Prepaid expenses 320,816 357,492 ------------ ----------- Total current assets 40,903,128 42,314,069 ------------ ----------- Property, plant and equipment: Land 4,557,135 4,417,295 Buildings and improvements 26,441,250 25,987,078 Plant equipment 15,201,392 15,200,807 Processing equipment 112,177,857 109,059,574 Transportation equipment 5,635,494 5,635,494 Furniture and fixtures 4,253,392 4,220,260 Construction in progress 12,473,494 12,176,020 ------------ ----------- 180,740,014 176,696,528 Less accumulated depreciation 93,786,102 89,818,367 ------------ ----------- Net property, plant and equipment 86,953,912 86,878,161 Other assets, net 2,554,745 3,146,229 ------------ ----------- $130,411,785 132,338,459 ============ =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current installments of long-term debt 2,013,416 2,098,967 Accounts payable 2,805,947 6,364,166 Accrued expenses 4,050,569 3,644,328 ------------ ----------- Total current liabilities 8,869,932 12,107,461 Notes payable 4,350,000 4,800,000 Long-term debt, less current installments 8,700,000 8,700,000 Deferred income taxes 1,438,000 1,438,000 ------------ ----------- Total liabilities 23,357,932 27,045,461 ------------ ----------- Minority interest 1,365,331 1,329,045 ------------ ----------- Stockholders' equity: Ecolochem, Inc. common stock, $1 par value Authorized 30,000 shares; issued and outstanding 12,000 shares 12,000 12,000 Ecolochem International, Inc.: Class A common stock, voting, no par value Authorized 1,000 shares; issued and outstanding 100 shares -- -- Class B common stock, nonvoting, no par value Authorized 1,000 shares; issued and outstanding 400 shares -- -- Moson Holdings, L.L.C -- -- Ecolochem S.A.R.L., $13.51 par value. Authorized 1,048 shares; issued and outstanding 1,048 shares 14,156 14,156 Additional paid-in capital 1,688,316 1,688,316 Retained earnings 101,185,053 101,460,859 Accumulated other comprehensive income 2,788,997 788,622 ------------ ----------- Total stockholders' equity 105,688,522 103,963,953 ------------ ----------- $130,411,785 132,338,459 ============ ===========
See accompanying notes to combined financial statements (unaudited). 1 THE ECOLOCHEM GROUP Combined Statements of Earnings (Unaudited)
THREE MONTHS THREE MONTHS ENDED ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ---- ---- Sales $ 24,074,065 27,761,096 Cost of goods sold 14,662,490 14,379,279 ------------ ---------- Gross profit 9,411,575 13,381,817 Selling, general and administrative expenses 7,224,944 6,856,184 Loss on sale of property and equipment 99,632 17,043 ------------ ---------- Operating income 2,086,999 6,508,590 ------------ ---------- Other income (expense): Interest expense (100,896) (182,847) Interest income 37,015 30,637 Other, net (note 2) (42,423) 12,987,532 ------------ ---------- (106,304) 12,835,322 ------------ ---------- Earnings before income taxes 1,980,695 19,343,912 Income taxes 124,500 654,000 ------------ ---------- Net earnings $ 1,856,195 18,689,912 ============ ==========
See accompanying notes to combined financial statements (unaudited). 2 THE ECOLOCHEM GROUP Combined Statements of Stockholders' Equity and Comprehensive Income (Unaudited) Three Months ended December 31, 2003
ECOLOCHEM ECOLOCHEM INTERNATIONAL, INTERNATIONAL, ECOLOCHEM, INC. INC. ACCUMULATED INC. CLASS A CLASS B MOSON ADDITIONAL OTHER TOTAL COMMON COMMON COMMON HOLDINGS, ECOLOCHEM PAID-IN RETAINED COMPREHENSIVE STOCKHOLDERS' STOCK STOCK STOCK L.L.C. S.A.R.L. CAPITAL EARNINGS INCOME (LOSS) EQUITY ----- ----- ----- ------ -------- ------- -------- ------------- ------ Balance at September 30, 2003 12,000 -- -- -- 14,156 1,688,316 101,460,859 788,622 103,963,953 Net earnings -- -- -- -- -- -- 1,856,195 -- 1,856,195 Unrealized changes in: Cash flow hedging derivatives -- -- -- -- -- -- -- 53,163 53,163 Cumulative foreign currency translation adjustments -- -- -- -- -- -- -- 1,947,212 1,947,212 Comprehensive income 3,856,570 Distributions to stockholders -- -- -- -- -- -- (2,132,001) -- (2,132,001) --------- ---------- ---------- -------- ------ --------- ----------- ------------- ----------- Balance at December 31, 2003 $ 12,000 -- -- -- 14,156 1,688,316 101,185,053 2,788,997 105,688,522 ========= ========== ========== ======== ====== ========= =========== ============= ===========
See accompanying notes to combined financial statements (unaudited). 3 THE ECOLOCHEM GROUP Combined Statements of Cash Flows (Unaudited)
THREE MONTHS THREE MONTHS ENDED ENDED DECEMBER 31, DECEMBER 31, 2003 2002 Cash flows from operating activities: Net earnings $ 1,856,195 18,689,912 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 2,982,947 3,066,768 Loss on sale of property and equipment, net 99,632 17,043 Changes in assets and liabilities increasing (decreasing) cash flows from operating activities: Trade accounts receivable, net 1,938,210 405,441 Other receivables 438,877 (36,632) Inventories (354,924) (141,151) Prepaid expenses 36,676 (211,847) Other assets 591,484 220,473 Accounts payable (3,558,219) (824,857) Accrued expenses 459,404 1,295,899 ----------- ----------- Net cash provided by operating activities 4,490,282 22,481,049 ----------- ----------- Cash flows from investing activities: Capital expenditures (3,160,774) (3,837,994) Proceeds from sale of property and equipment 2,444 24,000 Additions to short-term investments (6,892) (1,615,972) ----------- ----------- Net cash used in investing activities (3,165,222) (5,429,966) ----------- ----------- Cash flows from financing activities: Principal repayments on debt (85,551) (455,615) Repayments on notes payable (450,000) (800,000) Minority interest contributions 36,286 -- Distributions to stockholders (2,132,001) (3,100,000) ----------- ----------- Net cash used in financing activities (2,631,266) (4,355,615) ----------- ----------- Changes due to exchange rate 1,947,212 711,977 ----------- ----------- Net increase in cash and cash equivalents 641,006 13,407,445 Cash and cash equivalents at beginning of period 4,074,193 5,005,655 ----------- ----------- Cash and cash equivalents at end of period $ 4,715,199 18,413,100 =========== =========== Supplemental disclosure of cash flow information - Cash paid during the year for: Interest $ 56,914 142,205 =========== =========== Income taxes $ 341,166 574,771 =========== ===========
See accompanying notes to combined financial statements (unaudited). 4 THE ECOLOCHEM GROUP Notes to Combined Financials Statements (Unaudited) The accompanying combined financial statements of the Ecolochem Group have been prepared in accordance with accounting principles generally accepted in the United States. These accounting principles were applied on a basis consistent with those of the audited combined financial statements of the Ecolochem Group for the fiscal year ended September 30, 2003, contained in the Proxy Statement of Ionics, Incorporated filed with the Securities and Exchange Commission on January 9, 2004 (the "Ionics Proxy Statement"). In the opinion of management, the accompanying unaudited interim combined financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the Ecolochem Group's financial position as of December 31, 2003, its results of operations for the three months ended December 31, 2003 and 2002, and its cash flows for the three months ended December 31, 2003 and 2002. The combined balance sheet of the Ecolochem Group at September 30, 2003 was derived from the audited financial statements of the Ecolochem Group for the fiscal year ended September 30, 2003 as filed in the Ionics Proxy Statement. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full year or any future period. The accompanying combined financial statements have been prepared with the assumption that users of the interim financial information have either read or have access to the Ecolochem Group's combined financial statements for the year ended September 30, 2003 contained in the Ionics Proxy Statement. Accordingly, footnote disclosures that would substantially duplicate the disclosures contained in the Ecolochem Group's audited combined financial statements as of and for the year ended September 30, 2003 have been omitted from these combined financial statements. These combined financial statements have been prepared in accordance with the instructions to Form 10-Q and the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such instructions, rules and regulations. The accompanying combined financial statements should be read in conjunction with the Ecolochem Group's audited combined financial statements for the fiscal year ended September 30, 2003 contained in the Ionics Proxy Statement. (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) OPERATIONS The Ecolochem Group (the Group) provides emergency and supplemental water treatment services and long-term outsourced industrial water treatment systems primarily to electric utilities, refineries, petro-chemical plants, and pulp and paper mills. The Group is headquartered in the United States with operations also in Mexico, United Kingdom, France, Brazil, the Philippines, Belgium, Australia and Singapore. (B) INCOME TAXES Ecolochem, Inc. and Ecolochem International, Inc. are treated as S corporations for federal and certain state income tax purposes. Moson Holdings, L.L.C. and Ecolochem S.A.R.L. are partnerships for federal and state income tax purposes. Therefore, earnings of the Group are taxable to the individual stockholders rather than to the entities. Certain states and foreign jurisdictions do not recognize S corporation status; thus, income taxes are reported and paid by Ecolochem, Inc. and Ecolochem International, Inc. to those states and foreign jurisdictions. Total foreign and state income tax expense was approximately $124,500 and $654,000 for the three months ended December 31, 2003 and 2002, respectively. Ecolochem, Inc. and Ecolochem International, Inc. file income tax returns in foreign jurisdictions as may be applicable. Deferred income taxes have been recorded for temporary differences arising in those foreign jurisdictions and relate primarily to differences in depreciation of property, plant and equipment. 5 (2) LITIGATION SETTLEMENT In December 2002, Ecolochem, Inc. settled a patent infringement suit. The courts upheld Ecolochem, Inc.'s exclusive patent rights and Ecolochem, Inc. recovered damages. The damages recovered are included in other income on the accompanying combined statements of earnings for the three months ended December 31, 2002. 6 -----END PRIVACY-ENHANCED MESSAGE-----