-----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, jmzgu11USFJx7EuwPeqZHCzWjiMD04NYDRRL8Nw4arQ+61QdQucmLiqu1gwQsM+b q5NcJrUrZUNVAkgMK+lBKQ== 0000066479-94-000004.txt : 19940331 0000066479-94-000004.hdr.sgml : 19940331 ACCESSION NUMBER: 0000066479-94-000004 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940328 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MILLIPORE CORP CENTRAL INDEX KEY: 0000066479 STANDARD INDUSTRIAL CLASSIFICATION: 3826 IRS NUMBER: 042170233 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-09781 FILM NUMBER: 94518122 BUSINESS ADDRESS: STREET 1: 80 ASHBY RD CITY: BEDFORD STATE: MA ZIP: 01730 BUSINESS PHONE: 6172759200 MAIL ADDRESS: STREET 1: 80 ASHBY ROAD CITY: BEDFORD STATE: MA ZIP: 01730 FORMER COMPANY: FORMER CONFORMED NAME: MILLIPORE FILTER CORP DATE OF NAME CHANGE: 19661116 10-K 1 FORM 10 K FOR THE YEAR ENDED 12/31/93 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1993 Commission File Number 0-1052 MILLIPORE CORPORATION (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-2170233 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 80 Ashby Road, Bedford, MA 01730 (Address of principal executive (Zip Code) offices) Registrant's telephone number, including area code 617-275-9200 Securities registered pursuant to Section 12(b) of the Act: Name of exchange Title of Class on which registered COMMON STOCK, $1.00 PAR VALUE NEW YORK STOCK EXCHANGE, INC. Securities registered pursuant to Section 12(g) of the Act: None 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of regulation S-K is not contained herein and will not be contained to the best of registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of Form 10-K or any amendment to this Form 10-K [ ] As of January 31, 1994, the aggregate market value of the registrant's voting stock held by non-affiliates of the registrant was approximately $1,141,605,000 based on the closing price on that date on the New York Stock Exchange. As of February 25, 1994, 28,191,515 shares of the registrant's Common Stock were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Document Incorporated into Form 10K 1993 Annual Report to Shareholders Parts I and II (pages 33-51 only) Definitive Proxy Statement Part III dated March 18, 1994 Page 1 Item 1. Business. The Company Millipore Corporation was incorporated under the laws of Massachusetts on May 3, 1954. Millipore and its subsidiaries operate in a single business segment, the analysis, identification and purification of fluids using separations technology. Business segment information is discussed in Note M to the Millipore Corporation Consolidated Financial Statements (the "Financial Statements") included in the Millipore Corporation Annual Report to Shareholders for the year ended December 31, 1993 (the "Annual Report"), which note is hereby incorporated herein by reference. Unless the context otherwise requires, the terms "Millipore" or the "Company" mean Millipore Corporation and its subsidiaries. On November 11, 1993, Millipore announced that its Board of Directors had approved a plan to focus the Company on its membrane business and to divest operations of its Instrumentation Divisions (the Waters Chromatography business and the non-membrane bioscience instrument business). The description of Millipore's business contained herein treats both the Waters Chromatography Business and the non-membrane bioscience business (the "Instrumentation Divisions") as discontinued operations. These Divisions with separate product lines with separate customers are accounted for as discontinued operations. The Company expects to realize a net gain in 1994 upon the disposition of these businesses. Operations of the discontinued Instrumentation Divisions subsequent to November 11, 1993 are set forth in the Company's Balance Sheet and are not material to its financial position; operations prior to that date are included in the Company's 1993 Consolidated Statement of Income. For a description of Millipore's business which includes no discontinued operations reference is made to the Company's Annual Report on Form 10-K for the year ended December 31, 1992. Millipore is a leader in the field of membrane separations technology. The Company develops, manufactures and sells products which are used primarily for the analysis and purification of fluids. The Company's products are based on a variety of membranes and certain other technologies and effect separations, principally through physical and chemical methods. Millipore is an integrated multinational manufacturer of these products. During 1993, approximately 62% of Millipore's net sales were made to customers outside the Americas. For financial information concerning foreign and domestic operations and export sales, see Note M to the Financial Statements. Products and Technologies For analytical applications, the Company's products are used to gain knowledge about a molecule, compound or micro-organism by detecting, identifying and quantifying the relevant components of a sample. For purification applications, the Company's products are used in manufacturing and research operations to isolate and purify specific components or to remove contaminants. Page 2 The principal separation technologies utilized by the Company are based on membrane filters, and certain chemistries, resins and enzyme immunoassays. Membranes are used to filter either the wanted or the unwanted particulate, bacterial, molecular or viral entities from fluids, or concentrate and retain such entities (in the fluid) for further processing. Some of the Company's newer membrane materials also use affinity, ion-exchange or electrical charge mechanisms for separation. Both analytical and purification products incorporate membrane and other technologies. The Company's products include disc and cartridge filters and housings of various sizes and configurations, filter-based test kits and precision pumps and other ancillary equipment and supplies. The Company has more than 3,000 products. Most of the Company's products are listed in its catalogs and are sold as standard items, systems or devices. For special applications, the Company assembles custom products, usually based upon standard modules and components. In certain instances, the Company also designs and engineers process systems specifically for the customer. Customers and Markets The Company's continuing operations sells its products primarily to customers in the following markets: pharmaceutical/biotechnology, microelectronics, chemical and food and beverage companies; government, university and private research and testing laboratories; and health care and medical facilities. Within each of these markets, the Company focuses its sales efforts upon those segments where customers have specific requirements which can be satisfied by the Company's products. Pharmaceutical/Biotechnology Industry. The Company's products are used by the pharmaceutical/biotechnology industry in sterilization, including virus reduction, and sterility testing of products such as antibiotics, vaccines, vitamins and protein solutions; concentration and fractionation of biological molecules such as vaccines and blood products; cell harvesting; isolation and purification of compounds from complex mixtures and the purification of water for laboratory use. The Company's membrane products also play an important role in the development of new drugs, particularly with respect to the mechanism through which they act. In addition, Millipore has developed and is developing products for biopharmaceutical applications in order to meet the separations requirements of the biotechnology industry. Microelectronics Industry. The microelectronics industry uses the Company's products to purify the liquids and gases used in the manufacturing processes of semiconductors and other microelectronics components, by removing particles and unwanted contaminating molecules. Chemical Industry. This industry uses the Company's products for purification of reagent grade chemicals, for monitoring in the industrial workplace and of waste streams and in the purification of water for laboratory use. Page 3 Food and Beverage Industry. The Company's products are widely used by the food and beverage industry in quality control and process applications principally to monitor for microbiological contamination; to remove bacteria and yeast from products such as wine and beer, in order to prevent spoilage, and in producing pure water for laboratory use. Universities and Government Agencies. Universities, government and private and corporate research and testing laboratories, environmental science laboratories and regulatory agencies purchase a wide range of the Company's products. Typical applications include: purification of proteins; cell culture, structure studies and interactions; concentration of biological molecules; fractionation of complex molecular mixtures; and collection of microorganisms. The Company's water purification products are used extensively by these organizations to prepare high purity water for sensitive assays and the preparation of tissue culture media. Health Care and Medical Research. Customers in this field include hospitals, clinical laboratories, medical schools and medical research institutions who use the Company's products to filter particulate and bacterial contaminants which may be present in intravenous solutions, and its water purification products to produce high purity water. Sales and Marketing The Company sells its products within the United States primarily to end users through its own direct sales force. The Company sells its products in foreign markets through the sales forces of its subsidiaries and branches located in more than 25 major industrialized and developing countries as well as through independent distributors in other parts of the world. During 1993, the Company's marketing, sales and service forces consisted of approximately 360 employees in the United States and 520 employees abroad. The Company's marketing efforts focus on application development for existing products and on new and differentiated products for other existing, newly-identified and proposed customer uses. The Company seeks to educate customers as to the variety of analytical and purification problems which may be addressed by its products and to adapt its products and technologies to separations problems identified by customers. The Company believes that its technical support services are important to its marketing efforts. These services include assistance in defining the customer's needs, evaluating alternative solutions, designing a specific system to perform the desired separation and training users. Research and Development In its role as a pioneer of membrane separations Millipore has traditionally placed heavy emphasis on research and development. Research and development activities include the extension and enhancement of existing separations technologies to respond to new applications, the development of Page 4 new membranes, and the upgrading of membrane based systems to afford the user greater purification capabilities. Research and development efforts also identify new separations applications to which disposable separations devices would be responsive, and develop new configurations into which membrane and ion exchange separations media can be fabricated to efficiently respond to the applications identified. Instruments, hardware, and accessories are also developed to incorporate membranes, modules and devices into total separations systems. Introduction of new applications frequently requires considerable market development prior to the generation of revenues. Millipore performs substantially all of its own research and development and does not provide material amounts of research services for others. Millipore's research and development expenses in 1991, 1992 and 1993 with respect to continuing operations were, $32,633,000, $32,953,000 and $34,952,000 respectively. When it believes it to be in its long-term interests, the Company will license newly developed technology from unaffiliated third parties and/or will acquire exclusive distribution rights with respect thereto. Competition The Company's continuing operations face intense competition in all of its markets. The Company believes that its principal competitors include Pall Corporation, Barnstead Thermolyne Corporation, Sartorius GmbH, and Gelman, Inc. Certain of the Company's competitors are larger and have greater resources than the Company. However, the Company believes that it offers a broader line of products, making use of a wider range of separations technologies and addressing a broader range of applications than any single competitor. While price is an important factor, the Company competes primarily on the basis of technical expertise, product quality and responsiveness to customer needs, including service and technical support. Acquisitions, Restructuring, and Divestitures On November 11, 1993 Millipore announced that its Board of Directors had approved a plan to divest its Instrumentation Division (the Waters Chromatography and non-membrane bioscience businesses) in order to focus the Company on its membrane business. The Waters Chromatography business was acquired in 1980. Growth in the analytical instrument market has been limited in the past few years. In the years 1986-1988 the Company expanded its MilliGen division in order to extend its analytical and chemical capabilities into the bio-instrumentation and chemicals field. In 1990 this business was consolidated into Millipore's then existing businesses, in order to achieve better focus and meaningful economics. The Company believes that the divestiture of its chromatography business along with that of its non- membrane bioscience business, will enable Millipore to better serve its membrane customers, improve operating performance and increase shareholder value. It is anticipated that the divestiture of the Instrumentation Page 5 Divisions will be completed in the first half of 1994 and is anticipated to result in a net gain. At the time of the 1990 consolidation of MilliGen, the Company took certain other actions to improve profitability, these measures in total resulted in a non-recurring charge in the fourth quarter of 1990 amounting to $34,750,000. The Company took a further charge, with respect to the restructuring of its Waters Chromatography Division, of $13,000,000 in the first quarter of 1993. In the five-year period prior to its November 11, 1993 announcement concerning the sale of its Waters Chromatography and non-membrane bioscience business, the Company undertook a number of initiatives to expand its business into new markets within the field of analysis and purification. The Company has made several small, strategic acquisitions to accelerate technology and market development in its several divisions. These included the acquisition of the Bio Image division of Kodak in 1989, Extrel Corporation in February of 1992, and Immunosystems Incorporated in July of 1992. In November of 1989, the Company sold its process water division for approximately $54,000,000 in cash. Included in the transaction were the worldwide facilities and equipment and other assets for developing, manufacturing and marketing that division's complete line of water purification products, other than its laboratory scale water business. Also included were the Company's 18 service deionization branches located throughout the continental United States. This transaction is the subject of litigation brought by Eastern Enterprises (see "Legal Proceedings"). Other Information In April, 1988, the Company adopted a shareholder rights plan (the "Rights Plan") and declared a dividend to its shareholders of the right to purchase (a "Right"), for each share of Millipore Common Stock owned, one additional share of Millipore Common Stock at a price of $160 for each share. The Rights Plan is designed to protect Millipore's shareholders from attempts by others to acquire Millipore on terms or by using tactics that could deny all shareholders the opportunity to realize the full value of their investment. The Rights will be exercisable only if a person or group of affiliated or associated persons acquires beneficial ownership of 20% or more of the outstanding shares of the Company Common Stock or commences a tender or exchange offer that would result in a person or group owning 20% or more of the outstanding Common Stock. In such event, or in the event that Millipore is subsequently acquired in a merger or other business combination, each Right will entitle its holder to purchase, at the then current exercise price, shares of the common stock of the surviving company having a value equal to twice the exercise price. Millipore has been granted a number of patents and licenses and has other patent applications pending both in the United States and abroad. While these patents and licenses are viewed as valuable assets, Millipore's patent position is not of material importance to its operations. Millipore also owns a number of trademarks, the most significant being "Millipore." Page 6 Millipore's products are made from a wide variety of raw materials which are generally available in quantity from alternate sources of supply; as a result, Millipore is not substantially dependent upon any single supplier. Millipore's business is neither seasonal nor dependent upon a single or limited group of customers. Bringing the Company's facilities into compliance with federal, state and local laws regulating the discharge of materials into the environment or otherwise relating to the protection of the environment has not, to date, had a material effect upon Millipore's capital expenditures, earnings or competitive position. (See "Legal Proceedings.") As of December 31, 1993, Millipore's continuing operations employed 3,664 persons worldwide, of whom 1,938 were employed in the United States and 1,726 overseas. Page 7 Executive Officers of Millipore There follows a listing as of March 1, 1994 of the Executive Officers of Millipore. All of the following individuals were elected to serve until the Directors Meeting next following the 1994 Annual Stockholders Meeting. First Elected: To An Present Name Age Office Officer Office John A. Gilmartin 51 Chairman of the Board 1980 1986 President and Chief (Chairman Executive Officer of in 1987) the Corporation Geoffrey Nunes 63 Senior Vice President 1976 1980 General Counsel Douglas A. Berthiaume 45* Senior Vice President 1985 1989 of the Corporation Jack T. Johansen 51* Senior Vice President 1987 1989 of the Corporation Glenda K. Burkhart 42 Vice President 1993 1993 of the Corporation Douglas B. Jacoby 47 Vice President 1989 1989 of the Corporation Michael P. Carroll 43 Vice President of the Corporation Chief Financial Officer and Treasurer 1992 1992 Dominique F. Baly 45 President Intertech - 1988 Division of Millipore John E. Lary 47 Senior Vice President - 1993 and General Manager - Americas Operation Geoffrey D. Woodard 54 President of - 1989 Millipore's Analytical Group * It is anticipated that Messrs. Berthiaume and Johansen will leave the employ of the Company to head up the businesses to be divested, Waters Chromatography and non-membrane bioscience respectively. Mr. Gilmartin joined Millipore's finance department in 1978, was elected Vice President and Chief Financial Officer in 1980, Senior Vice President in 1982, and to the additional position of President of the Membrane Division in 1985. In 1986, Mr. Gilmartin was elected President and Chief Executive Officer of the Company and to the additional position of Chairman in 1987. Mr. Nunes joined Millipore in 1976 as Vice President and General Counsel and was elected a Senior Vice President in 1980. Page 8 Mr. Berthiaume joined Millipore in 1980, was elected Vice President and Chief Financial Officer in 1985, and as a Senior Vice President in 1989. Dr. Johansen joined Millipore in 1987 as Vice President and was elected a Senior Vice President in 1989. Ms. Burkhart joined Millipore in 1993 as Corporate Vice President/Human Resources. Prior to joining Millipore, she was a principal of Mass Burkhart, a strategy consulting firm (1991-1993), responsible for organization development and work force planning for Exxon Chemical (1989-1991), a principal for Synectics, an organizational development consulting firm (1987- 1989), and a consultant for Bain and Co., a strategy consulting firm (1985- 1987). Mr. Jacoby joined Millipore in 1975. After serving in various sales and marketing capacities, Mr. Jacoby became Director of Marketing for the Millipore Membrane Products Division in 1983 and in 1985, he assumed the position of General Manager of the Membrane Pharmaceutical Division. Since 1987, Mr. Jacoby has been responsible for the Company's process membrane business. Mr. Jacoby was elected a Corporate officer in December, 1989. Mr. Carroll joined Millipore in 1986 as Vice President/Finance for the Membrane Products Division following a ten-year career in the general practice audit division of Coopers and Lybrand. In 1988, Mr. Carroll assumed the position of Vice President of Information Systems (worldwide) and in December of 1990, he became the Vice President of Finance for the Company's Waters Chromatography Division. Mr. Carroll was elected to his current position in February, 1992. Mr. Baly joined Millipore, S.A. (France) in 1972. For at least five years prior to relocating to the U.S. to assume his current position as President of the Millipore Intertech Division in 1988, Mr. Baly held positions of increasing sales and marketing responsibility within Millipore's European operations including Vice President/General Manager of the Millipore Products Division (1986-1987) and the Waters Chromatography Division (1984- 1985). Mr. Lary is Senior Vice President and General Manager of the Americas Operation, a position he has held since May, 1993. For the ten years prior to that time, he served as Senior Vice President of the Membrane Operations Division of Millipore. Mr. Woodard joined Millipore (U.K.) Ltd. (England) in 1976 and for the next seven years served in product management and marketing positions in Europe. In 1983, he was named Director of Marketing for Millipore Europe, and, in 1985, he relocated to the U.S. to assume the position of Director of Product Management for the Membrane Products Division. He continued in this position until 1986 when he became Vice President and General Manager of the Laboratory Products Division. In 1989 Mr. Woodard became President of the Membrane Analytical Group. Messrs. Baly, Lary and Woodard were first listed as executive officers in the Company's Annual Report on Form 10-K for 1989, the year it was determined they met the Securities and Exchange Commission's definition of "executive officer". Page 9 Item 2. Properties. Millipore owns in excess of 1.6 million square feet of facilities located in the United States, Europe and Japan. The following table identifies the principal properties owned by Millipore and describes the purpose, floor space and land area of each. Sq.Ft. of Floor Land Location Facility Space Area Bedford, Executive Offices, research, 346,000 32 acres Mass. pilot production & warehouse Milford,* Manufacturing, research, 410,000 31 acres Mass. office & warehouse Cidra, Manufacturing, warehouse Puerto Rico and office 134,000 36 acres Jaffrey, Manufacturing, warehouse 169,000 32 acres N.H. and office Pittsburgh,* Manufacturing, research 55,000 7 acres PA and office Molsheim, Manufacturing, warehouse 165,200 20 acres France and office Yonezawa, Manufacturing and warehouse 156,300 7 acres Japan Taunton,* Manufacturing 32,000 12 acres Mass. Cork, Manufacturing 83,000 20 acres Ireland St. Quentin Office and research 50,000 5 acres France _____________________________________ * It is anticipated that these properties will be sold in connection with the divestiture of the Waters Chromatography and non-membrane bioscience businesses. In addition to the above properties, Millipore has entered into a long term lease for premises abutting its Bedford facility. This lease makes 75,000 square feet of building available to Millipore and contains rights of first refusal and options with respect to the purchase of the premises by Millipore. During 1988 Millipore entered into a 10-year lease for a building of 130,000 square feet located in Burlington, Massachusetts, approximately 5 miles from its Bedford headquarters. This lease contains a single 5-year extension option. In 1991, the Company entered into two long term lease arrangements. The first was a sublease of a 130,000 square foot office Page 10 building located in Marlborough, Massachusetts. This lease expires at the end of 1995 and Millipore has obtained from the owner an option to lease these premises for an additional five years. This facility is being used as the consolidated headquarters for all the Company's U. S. sales and support operations. It is anticipated that the Company will vacate these premises in 1994 and will not exercise its renewal option. The second lease arrangement is a 15-year lease with renewal options for an aggregate of 20 years, as well as a purchase option covering a 134,000 square foot building which is adjacent to the Company's Bedford facility and will be used for expansion purposes, initially the consolidation of the Company's Process System Division (part of the Membrane Process Group). In addition to its foregoing properties, Millipore currently leases various manufacturing, sales, warehouse, and administrative facilities throughout the world. Such leases expire at different times through 2017. The rented space aggregate is approximately 1,050,000 square feet and cost was approximately $8,068,000 in 1993. No single lease, in the opinion of Millipore, is material to its operations. Millipore is of the opinion that all the facilities owned or leased by it are well maintained, appropriately insured, in good operating condition and suitable for their present uses. Item 3. Legal Proceedings. Millipore has been sued in the Superior Court for Middlesex County, Massachusetts by Eastern Enterprises and its subsidiary, Ionpure Technologies, Inc. ("Ionpure"), alleging misrepresentations made in conjunction with the sale by Millipore of its Process Water Division to Ionpure in November of 1989. The Company believes it has adequate and complete defenses to this litigation and intends to vigorously defend the action. Although the Company is unable to predict with certainty the outcome of the lawsuit, its ultimate disposition is not expected to have a material adverse effect on Millipore's financial condition. Millipore has been notified in nine instances that the United States Environmental Protection Agency ("EPA") has determined that a release or a substantial threat of a release of hazardous substances (a "Release") as defined in Section 101 of the Comprehensive Environmental Response Compensation and Liability Act of 1980 ("CERCLA") as amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA) (the so-called "Superfund" law) has occurred at certain sites to which chemical wastes generated by the manufacturing operations of Millipore or one of its divisions may have been sent. These notifications typically also allege that Millipore may be a responsible party under CERCLA with respect to any remedial action needed to control or prevent any such Release. Under CERCLA the EPA may undertake remedial action in response to a Release and responsible parties may by liable, without regard to fault or negligence, for costs incurred. As a result it is possible, although highly unlikely given the large number and size of financially solvent corporations participating at each site who have been similarly notified, that the Company might be liable for all of the Page 11 costs incurred in such a cleanup. In each instance Millipore knows that it is only one of many companies and entities which received such notification and who may likewise be held liable for any such remedial costs. In 1992, the EPA unexpectedly proposed settlements for several of these sites. Based on those proposed settlements and all other information available to management, the Company recorded a provision of $5,800,000 against cost of sales which, in management's best estimate, when combined with previously established reserves, will be sufficient to satisfy all known claims by the EPA. In seven separate instances involving a total of ten such sites; the Company has entered into consent decrees; paid approximately $13.9 million; and received partial releases. The aggregate of any future potential liabilities is not expected to have a material adverse effect on Millipore's financial condition. Item 4. Submission of Matters to a Vote of Security Holders. This item is not applicable. PART II Item 5. Market for Millipore's Common Stock, and Related Stockholder Matters. The information called for by this item is set forth under the caption "Millipore Stock Prices" on page 51 of Millipore's Annual Report to Shareholders for the year ended December 31, 1993, which information is hereby incorporated herein by reference. Item 6. Selected Financial Data. The information called for by this item is set forth under the caption "Millipore Corporation Eleven Year Summary of Operations" on pages 48 and 49 of Millipore's Annual Report to Shareholders for the year ended December 31, 1993, which information is hereby incorporated herein by reference. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. The information called for by this item is set forth under the caption "Management's Discussion and Analysis" on pages 33 and 34 of Millipore's Annual Report to Shareholders for the year ended December 31, 1993, which information is hereby incorporated herein by reference. Item 8. Financial Statements and Supplementary Data. The information called for by this item is set forth on pages 35 to 47 and under the caption "Quarterly Results (Unaudited)" on page 50 of Millipore's Annual Report to Shareholders for the year ended December 31, 1993, which information is hereby incorporated herein by reference. Item 9. Disagreements on Accounting and Financial Disclosure. This item is not applicable. Page 12 PART III Item 10. Directors and Executive Officers of Millipore. The information called for by this item with respect to registrant's directors and compliance with Section 16(a) of the Securities Exchange Act of 1934 as amended is set forth under the caption "Management and Election of Directors--Nominees for Election as Directors" on pages 2 - 8 of Millipore's definitive Proxy Statement, dated March 18, 1994, for Millipore's Annual Meeting of Stockholders to be held on April 21, 1994, which information is hereby incorporated herein by reference. Information called for by this item with respect to registrant's executive officers is set forth under "Executive Officers of Millipore" in Item 1 of this report. Item 11. Executive Compensation. The information called for by this item is set forth under the caption "Management and Election of Directors-Executive Compensation" on pages 8 - 17 of Millipore's definitive Proxy Statement, dated March 18, 1994, for Millipore's Annual Meeting of Stockholders to be held on April 21, 1994, which information is hereby incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management. The information called for by this item is set forth under the caption "Ownership of Millipore Common Stock" on page 18 of Millipore's definitive Proxy Statement, dated March 18, 1994, for Millipore's Annual Meeting of Stockholders to be held April 21, 1994, which information is hereby incorporated herein by reference. Item 13. Certain Relationships and Related Transactions. The information called for by this item is set forth under the caption "Management and Election of Directors - Executive Compensation" on pages 2 - 8 and 12 - 17 of Millipore's definitive Proxy Statement, dated March 18, 1994, for Millipore's Annual Meeting of Stockholders to be held on April 21, 1994, which information is hereby incorporated herein by reference. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (a) The following documents are filed as part of this report: 1. Financial Statements The financial statements set forth on pages 35 through 47, the Report of Independent Accounts on Page 47 and the Quarterly Results (Unaudited) set Page 13 forth on page 50 of Millipore's Annual Report to Shareholders for the year ended December 31, 1993, are hereby incorporated herein by reference. Filed as part of this report are: (1) Report of Independent Accountants on the Financial Statement Schedules included in Form 10-K Annual Report. (2) Consent of Independent Accountants relating to the incorporation of their report on the Consolidated Financial Statements and their report on the Financial Statement Schedules into Registrant's Securities Act Registration Nos. 2-72124, 2-85698, 2-91432, 2-97280, 33-37319, 33-37323 and 33-11-790 on Form S-8 and Securities Act Registration Nos. 2-84252, 33-9706, 33-20792, 33- 22196, 33-47213 on Form S-3. 2. Financial Statement Schedules Schedule V Property, Plant and Equipment - Consolidated Schedule VI Accumulated Depreciation of Property, Plant and Equipment - Consolidated Schedule VIII Valuation and Qualifying Accounts Schedule IX Short-term Borrowings Schedule X Supplementary Income Statement Information All Schedules other than those listed above have been omitted because they are not applicable or not required under Regulation S-X. Items 5 through 8 and Item 14 (a) (1) of this Annual Report on Form 10-K incorporate only the indicated portions of Pages 33 through 51 of Millipore's Annual Report to Shareholders for the year ended December 31, 1993; no other portion of such Annual Report to Shareholders shall be deemed to be incorporated herein or filed with the Commission. For purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into registrant's Registration Statements on Form S-8 Nos.: 2-72124; 2-85698; 2-91432; 2-97280; 33-37319; 33-37323 and 33- 11-790: Insofar as indemnification for liabilities arising under the Securities Act of 1933 (The "Act") may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has Page 14 been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Page 15 3. Exhibits: A. Incorporated by Reference Document Incorporated Referenced Document on file with the Commission (3) Amendment to Restated Articles Form 10-K Report for of Organization dated May 22, year ended 12/31/87 1987 and By Laws and Form 10-K Report for year ended 12/31/90 respectively (4) Indenture dated as of March 30, Registration Statement 1988, relating to the issuance on Form S-3 (No. of $100,000,000 principal amount 33-20792); and a of Registrant's 9.20% Notes Due Form T-1 (No. 1998 22-18144) (10) Millipore's various employee benefit and executive compensation plans and arrangements are incorporated herein by reference to the indicated documents filed with the Commission: Document Referenced Document on File Incorporated with the Commission: Shareholder Rights Agreement Form 8-K Report for April, 1988 dated as of April 15, 1988 between Millipore and The First National Bank of Boston Long Term Restricted Stock Form 10-K Report for the year (Incentive) Plan for Senior ended December 31, 1984. Management 1985 Combined Stock Option Form 10-K Report for the year Plan ended December 31, 1985 Supplemental Savings and Form 10-K Report for the year Retirement Plan for Key ended December 31, 1984. Salaried Employees of Millipore Corporation Long Term Performance Plan Form 10-K Report for the year for Senior Executives ended December 31, 1984. Executive Termination Form 10-K Report for the year Agreement ended December 31, 1984. B. The following Exhibits are filed herewith: (10) Executive "Sale of Business" Incentive Termination Agreements (2) (11) Computation of Per Share Earnings (13) Annual Report to Shareholders, December 31, 1993 Page 16 (21) Subsidiaries of Millipore (23) Consents of Experts (see page 21 hereto) (24) Power of Attorney (b) On November 30, 1993 the Company filed a Current Report on Form 8-K reporting on our November 11, 1993 event, the issuance of its press release announcing plans to divest its Waters Chromatography business and exit its non-membrane bioscience business. Said Report contained the following Company financial statements: (i) Consolidated Statements of Income (Restated) for the nine months ended September 30, 1993 and September 30, 1992. (ii) Consolidated Statements of Income (Restated) for each of the first three quarters of 1993 and the nine months ended September 30, 1993. (iii) Consolidated Statements of Income (Restated) for each quarter of 1992 and for the full year ended December 31, 1992. (iv) Consolidated Statements of Income (Restated) for each quarter of 1991 and for the full year ended December 31, 1991. (v) Consolidated Balance Sheet (Restated) as of September 30, 1993 and December 31, 1992. Page 17 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. MILLIPORE CORPORATION Geoffrey Nunes By /s/ Geoffrey Nunes Senior Vice President Dated: March 25, 1994 Page 18 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated. SIGNATURE TITLE DATE JOHN A. GILMARTIN* Chairman, President, February 10, 1994 John A. Gilmartin Chief Executive Officer, and Director /s/ Michael P. Carroll Vice President February 10, 1994 Michael P. Carroll Chief Financial Officer Treasurer CHARLES D. BAKER* Director February 10, 1994 Charles D. Baker ______________________ Director February 10, 1994 Samuel C. Butler MARK HOFFMAN* Director February 10, 1994 Mark Hoffman GERALD D. LAUBACH* Director February 10, 1994 Gerald D. Laubach STEVEN MULLER* Director February 10, 1994 Steven Muller THOMAS O. PYLE* Director February 10, 1994 Thomas O. Pyle JOHN F. RENO* Director February 10, 1994 John F. Reno JAMES L. VINCENT* Director February 10, 1994 James L. Vincent WARREN E. C. WACKER* Director February 10, 1994 Warren E. C. Wacker *By /s/ Geoffrey Nunes Attorney-in-Fact Geoffrey Nunes Page 19 REPORT OF INDEPENDENT ACCOUNTANTS Our report on the consolidated financial statements of Millipore Corporation has been incorporated by reference in this Form 10-K from Page 47 of the 1993 Annual Report to Shareholders of Millipore Corporation. In connection with our audits of such financial statements, we have also audited the related financial statement schedules listed in the index (Item 14 (a)2 - Financial Statement Schedules) on Page 14 of this Form 10-K. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein. COOPERS & LYBRAND Boston, Massachusetts January 24, 1994, except as to the information presented in Note F, for which the date is March 3, 1994 Page 20 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of Millipore Corporation on Form S-8 (File Nos. 2-91432, 2-72124, 2-85698, 2- 97280, 33-37319, 33-37323, 33-11-790), and on Form S-3 (File Nos. 2-84252, 33- 9706, 33-22196, 33-20792, 33-47213) of our report dated January 24, 1994, except as to the information presented in Note F, for which the date is March 3, 1994, on our audits of the consolidated financial statements and financial statement schedules of Millipore Corporation as of December 31, 1993 and 1992, and for the years ended December 31, 1993, 1992, and 1991, which report is incorporated by reference in this Annual Report on Form 10-K. COOPERS & LYBRAND Boston, Massachusetts March 24, 1994 Page 21 Millipore Corporation Schedule V - Property Plant, and Equipment - Consolidated (In Thousands)
Balance Other Chgs. Balance Beginning Additions RetirementsDebit and/or at End of Period at Cost or Sales (Credit) (a) of Period Year Ended December 31, 1993 Land $ 6,939 $ 0 $ 0 $ 27 $ 6,966 Leadhold improvements 11,669 237 (307) 4,509 16,108 Buildings and improvements 104,041 684 (678) 4,007 108,054 Production and other equipment 183,179 9,347 (5,136) 18,817 206,207 Construction in progress 35,352 15,717 (99) (30,339) 20,631 Property, plant, and equipment $341,180 $25,985 $(6,220) $(2,979) $357,966 Year Ended December 31, 1992 Land $ 7,181 $ 0 $ 0 $ (242) $ 6,939 Leasehold improvements 11,638 1,397 (780) (586) 11,669 Buildings and improvements 101,093 3,107 (11) (148) 104,041 Production and other equipment 179,936 9,933 (8,899) 2,209 183,179 Construction in progress 29,159 26,550 (5,383) (14,974) 35,352 Property, plant, and equipment $329,007 $40,987 $(15,073) $(13,741) $341,180 Year Ended December 31, 1991 Land $ 7,051 $ 103 $ (129) $ 156 $ 7,181 Leasehold improvements 7,484 2,385 (913) 2,682 11,638 Buildings and improvements 86,957 3,514 (2,937) 13,559 101,093 Production and other equipment 156,682 15,085 (8,423) 16,592 179,936 Construction in progress 36,933 23,814 0 (31,588) 29,159 Property, plant, and equipment $295,107 $44,901 $ (12,402) $ 1,401 $329,007 (a)Represents the reclassification of construction in progress to depreciable assets and the impact on the translation of property, plant and equipment of changes in the value of foreign currencies relative to the United States dollar.
Page 22 Millipore Corporation Schedule VI - Accumulated Depreciation of Property, Plant, and Equipment - Consolidated (In Thousands)
Balance Other Chgs. Balance at Beginning Additions Retirement Debit and/or End of of Period at Cost or Sales (Credit) Period (a) (b) Year Ended December 31, 1993 Leashold improvements $ 6,571 $ 1,848 $ (264) $ (163) $ 7,992 Buildings and improvements 31,314 4,550 (642) (224) 34,998 Production and other equipment 108,225 17,377 (3,798) (1,723) 120,081 Accumulated depreciation of property, plant, and equipment$146,110 $ 23,775 $(4,704) $(2,110) $163,071 Year Ended December 31, 1992 Leasehold improvements $ 5,493 $ 1,721 $ (240) $ (403) $ 6,571 Buildings and improvements 27,087 4,347 (11) (109) 31,314 Production and other equipment 102,323 17,439 (7,741) (3,796) 108,225 Accumulated depreciation of property, plant, and equipment$134,903 $ 23,507 $(7,992) $(4,308) $146,110 Year Ended December 31, 1991 Leasehold improvements $ 4,968 $ 1,335 $ (734) $ (76) $ 5,493 Buildings and improvements 24,579 3,384 (1,204) 328 27,087 Production and other equipment 92,218 16,186 (6,223) 142 102,323 Accumlated depreciation of property, plant, and equipment$121,765 $ 20,905 $(8,161) $ 394 $134,903 (a)Property, plant, and equipment is generally depreciated over the following useful lives: buildings and improvements, 33 years: production and other equipment, 10 years: leasehold improvements, the lives of the related leases. (b)Represents the impact on the translation of property, plant, and equipment of changes in the value of foreign currencies relative to the United States dollar.
Page 23 Millipore Corporation Schedule VIII - Valuation and Qualifying Accounts (In Thousands)
Column A Column B Column C Column D Column E Balance at Additions Deductions Balance at Beginning of Charged to Costsfrom End of Period and Expenses Reserve Period Allowance for doubtful accounts (deducted from related asset account in the consolidated balance sheet): Year ended December 31, 1993 $1,752 $1,825 $(514) $3,063 Year ended December 31, 1992 $2,387 $ 325 $(960) $1,752 Year ended December 31, 1991 $2,182 $ 354 $(149) $2,387
Page 24 Millipore Corporation Schedule IX - Short Term Borrowings (In Thousands)
Weighted Avg Max. Amt. Avg. Amt. Weight Avg. Balance at Interest Rate Outstanding Outstanding Interest Rate End of at End of During the During the During the Period Period Period Period Period Year ended December 31, 1993 $ 51,420 4.5% $129,332 $ 94,465(a) 4.3%(b) Year ended December 31, 1992 $112,064 4.7% $182,439 $132,696(a) 5.1%(b) Year ended December 31, 1991 $ 91,339 6.5% $114,913 $ 93,390(a) 7.1%(b) (a) Computed on a month-end basis (b) Computed on a quarter-end basis
Page 25 Millipore Corporation Schedule X - Supplementary Income Statement Information (In Thousands) Charged to Costs and Expenses Year ended December 31, Item 1993 1992 1991 Maintenance and Repairs * * * Depreciation and Amortization of intangible assets, preoperating costs and similar deferrals * * * Taxes, other than payroll and income taxes * * * Royalties * * * Advertising costs $ 7,447 $ 5,950 $ 5,368 * Less than 1% of total sales Page 26 - ------------------------------------------------------------------------ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ANNUAL REPORT OF MILLIPORE CORPORATION For the Fiscal Year Ended December 31, 1993 **************** EXHIBITS **************** - ---------------------------------------------------------------- Page 27 INDEX TO EXHIBITS Exhibit No. Description Tab No. (10) Executive "Sales of Business" 1 Incentive Termination Agreements (2) (11) Computation of Per Share Earnings 2 (13) Annual Report to Shareholders, December 31, 1993 3 (21) Subsidiaries of Millipore 4 (23) Consents of Experts (see page 21 hereto) (24) Power of Attorney 5 Page 28 EX-10 2 EXHIBIT 10 Exhibit (10) M E M O R A N D U M TO: Jack Johansen FROM: John Gilmartin SUBJECT: Proposal Initialed By Us On 11-11-93 DATE: November 22, 1993 The proposal initialed by us on November 11, 1993 concerning the conditions of your future employment with Millipore (severance, commission on the sale of the bioscience businesses, etc.) is amended by replacing Section B with the revised Section B set forth below. Its last paragraph is also amended to reflect the agreed upon definition of the "Business" also as set forth below. Please initial this memorandum to confirm your agreement with these ammendments. B. Commission on Sale of the Business: Millipore will pay a **** commission on the net cash proceeds to Millipore from the sale or other disposition of the "Business" (see definition below). "Net cash proceeds" shall mean the proceeds received by Millipore, in the form of cash or immediately marketable securities, from the sale or other disposition of the "Business", reduced by the amount of cash advanced by Millipore to the "Business" between December 1, 1993 and the closing date of such sale or other disposition, further reduced by transactional costs. In the event that the "Business" is included as part of a transaction involving the sale of the Waters Chromatography Division, then "Net cash proceeds" will be construed to equal $20,000,000 for purposes of calculating the commission payment, or a reasonable amount less than $20,000,000 if some but not all assets assigned to the "Business" are included in such a transaction. It is agreed that commission payments will be distributed according to the table below, in part to you personally and in part to a pool (the "pool") for the benefit of other employees of the "Business". You will determine, with the prior approval of Geoffrey Nunes, the list of your colleagues who are employed in the "Business" who will participate in the pool. To JTJ To Pool On the first $20,000,000 of net cash proceeds **** **** On the next $10,000,000 of net cash proceeds **** **** On net cash proceeds in excess of $30,000,000 **** **** Commission payments to you will be made on or within thirty days following the closing date of the sale or other disposition of the "Business". Payments from the pool to participating employees will be offset against any retention bonuses agreed to by Millipore in their cases. If, when all retention bonuses for pool participants have been funded from pool proceeds, there are excess proceeds remaining in the pool ("excess proceeds"), then such excess proceeds will be distributed to participants within thirty days following the final accounting thereof. Should you and Geoffrey Nunes decide to include one or more individuals as participants in the pool who are not entitled to retention bonuses, an amount of money ("non-bonus credits") will be included for their benefit along with other participants' retention bonuses in determining the divisor used to calculate individual participant's percentage shares of excess proceeds. Each participant's share will be determined as follows: participant's retention bonus or non-bonus credits divided by the sum of retention bonuses and non-bonus credits for all partici pants, expressed as a percent and multiplied by the total of excess proceeds. Only Millipore employees in good standing the closing date will be eligible to share in these commission payments. Last Paragraph As used above, "Business" shall mean that entity to be called Biosearch comprised of the existing biosynthesis business, the existing ConSep/MemSep business, and the proposed Time of Flight business, and any other businesses which John Gilmartin agrees to add. /s/Jack T. Johansen Proposal - Jack T. Johansen 11-11-93 A. Severance: Should your employment by Millipore cease for whatever reason (except termination for cause) at any time during the period from the date of this agreement until two years thereafter, you will be entitled to: 1. An amount equal to two times your then current annual salary, paid in a lump sum on the effective date of termination (the "Termination Date"), if your separation from Millipore is in conjunction with your assuming a full- time position in a Business (as defined below) that has been spun off from, or disposed of by, Millipore. Otherwise, you will be engaged as a consultant to Millipore, at your then current salary for a period of 24 months from and after the Termination Date (the "Consulting Period"). The amount of consultation required of you will not interfere with your full time engagement in pursuit of other business activities generally or in the conduct of a full scale job search. 2. During the Consulting Period we will provide you with all of your existing medical and insurance benefits (excluding short-term disability). Although you will not be eligible to participate in Millipore's Cash Profit Sharing Plan (or its replacement) during the Consulting Period, you will be eligible to participate in contributions allocated under the Participation Plan for such period. You will also be provided with the services of an outplacement firm at Millipore's sole expense. 3. If your separation from Millipore is in conjunction with your assuming a full-time position in a Business that has been spun off from, or disposed of by, Millipore, Millipore Management will recommend to the Board of Directors that the vesting schedule for all stock options held by you be accelerated to the effective date of such spin off or disposition and that all restrictions on restricted shares be waived as of that date. You will then be allowed 12 months from that date to exercise any or all stock options. If your separation from Millipore does not involve your assuming a full-time position in a Business spun off from, or disposed of by, Millipore, then the vesting of your stock options and maturing of restrictions on your restricted stock will continue during the Consulting Period, and you will be allowed to exercise any or all vested options during that time. You will continue to participate in Millipore's stock option distributions during the period prior to your separation in a business as usual fashion. B. Commission on Sale of Businesses: Millipore will pay a commission on the net cash proceeds to Millipore from the sale or other disposition of Bioscience assets under your management. "Net cash proceeds" shall mean the proceeds received by Millipore, in the form of cash or immediately marketable securities, of a sale(s) or other disposition, reduced by the amount of cash advanced by Millipore to the Business(es) in question between December 1, 1993 and the closing date(s) of such sale or other disposition (each, a "Closing Date") and further reduced by transactional costs. In the event that the Bioscience assets under your management are included as part of a transaction involving the sale of the Waters Chromatography Division, then "Net cash proceeds" will be construed to equal $20,000,000 for purposes of calculating the commission payment, or a reasonable amount less than $20,000,000 if some but not all Bioscience assets under your management are included in such a transaction. The following commission schedule will apply. The commission will be payable on the respective Closing Date. It is understood that 50% of such commission amounts will be distributed to you personally while the remaining 50% will be distributed to a group of your senior colleagues employed in the business. Such payments to your senior colleagues will be offset against any retention bonuses that may be agreed to by Millipore in their cases. You will determine, with the prior approval of John Gilmartin, the list of such senior colleagues. Only Millipore employees in good standing on a Closing Date will be eligible to share in these commission payments. On the first $10,000,000 of net cash proceeds **** On the second $10,000,000 of net cash proceeds **** On the third $10,000,000 of net cash proceeds **** On net cash proceeds in excess of $30,000,000 **** C. Additional Consideration: For your part, and as additional consideration for the incentives and benefits set forth above, if the Board of Directors determines to pursue the courses of action contemplated herein, you agree as follows: 1) As of a date to be agreed among you, John Gilmartin, and Geoff Woodard, to assume executive and operating responsibility for the "Business"; 2) To structure the "Business" for divestiture; 3) To develop with Millipore's investment bankers, its other independent advisors, and its Deal Coordinator, appropriate sell book(s) or other offering documents; 4) To coordinate all selling activities with, and cooperate in whatever support activities may reasonably be required by, Millipore's investment bankers, its other independent advisors, and its Deal Coordinator, in satisfying the information needs of prospective investors; and 5) To use your good faith efforts to operate the Business until the Termination Date (or until the earlier sale or other disposition of the Business) in a manner so as to ensure that the Business sold, or otherwise disposed of on a Closing Date, is structured, resourced, and performing as represented during negotiations, except that you will not be responsible for any representations made by the Deal Coordinator or other representative of Millipore to third parties without your knowledge and consent thereof. As used above, "Business" shall mean, individually and collectively, those portions of Millipore's Bioscience businesses as agreed to by you and Geoff Woodard with John Gilmartin's approval. /s/Jack T. Johansen November 5, 1993 Mr. Douglas A. Berthiaume Waters Chromatography Division of Millipore Corporation 34 Maple Street Milford, MA 01757 Dear Mr. Berthiaume: As you know, Millipore Corporation is contemplating the sale or other disposition of The Waters Chromatography Division. Respecting that this course creates an uncertain future for individual members of the WCD management team and challenges them as a group to extraordinarily high levels of professionalism and exertion during the period leading up to the completion of a transaction, the incentive compensation arrangements and other considerations described below will be effective immediately upon Millipore's Board of Director's final approval of Management's proposal to divest The Waters Chromatography Division. Incentive Compensation: As a participating WCD management team member, you will share in the proceeds of the incentive pools described below. You must be a Millipore employee at the closing date or have been terminated other than for cause to be eligible to participate and share in the incentive pools. Successful Transaction Incentive: Subject only upon (B) below. (A) Millipore will pay you as your share of a Successful Transaction Incentive Pool **** of a total pool of $5 million if you remain in the employ of the business for a period of six months subsequent to the closing date or earlier when and if terminated by the new owner. (B) If in the judgment of Douglas Berthiaume, it proves necessary to expand participation in the Successful Transaction Pool beyond the currently contemplated **** participants, then the amount payable in (A) can be reduced as follows. 1. The first expanded participation beyond the current **** participants **** will require Douglas Berthiaume's Successful Transaction Incentive to be reduced by up to ****. If further expanded participation is required, then all participants with the exception of **** and Douglas Berthiaume will have their incentive reduced equally to fund the increased participation. Douglas Berthiaume's incentive will be reduced a further $2.00 for each $1.00 reduction by the other participants. In no event will this condition operate to reduce the Successful Transaction Incentive to **** below ****. Price-Based Incentive Pool 1: Subject only to (B) below. (A) Millipore will pay you as your share of a "Price-Based Incentive" Pool, no later than thirty (30) days following the closing date, **** of a total pool calculated by subtracting **** from the actual sales price of Waters Chromatography Division or ****, whichever is lower, and multiplying the difference by 10%. (B) If in the judgment of Douglas Berthiaume, it proves necessary to expand participation in the Price Based Incentive beyond the currently contemplated **** participants, then the amount payable in (A) can be reduced as follows: 1. The first expanded participation beyond the **** participants **** will require Douglas Berthiaume's Price Based Incentive to be reduced by up to ****. If further expanded participation is required, then all participants with the exception of **** and Douglas Berthiaume will have their incentive reduced equally to fund the increased participation. Douglas Berthiaume's incentive will be reduced a further $2.00 for each $1.00 reduction by the other participants. In no event will this condition operate to reduce the Price Based Incentive to **** by more than **** should they otherwise qualify under (A). Price-Based Incentive Pool 2: Millipore will pay into a separate pool (Price-Based Incentive Pool #2), no later than 30 days following the closing date **** of the amount by which the actual selling price or ****, whichever is lower, exceeds ****. This pool will be distributed to participating WCD Management Team Members based solely on the judgment of Douglas Berthiaume. Stock Options and Restricted Shares: As a WCD management team member employed in good standing on the closing date, Millipore Management will recommend to the Board of Directors that the vesting schedule for all stock options held by you be accelerated to the closing date and that all restrictions on restricted shares be waived as of that date. You will be allowed twelve months from the closing date to exercise any or all stock options. WCD managers and key employees will participate in Millipore's stock option and restricted stock distributions for 1993 in a business as usual fashion. Severance Benefits: As a WCD management team member, if you are involuntarily separated from the company prior to the close, you will be afforded severance benefits (or not, should they be terminated for cause) according to the customary policies and practice of Millipore Corporation. WCD management team members whose services are required by the new owner following the closing date will not be eligible for severance benefits from Millipore Corporation. However, Millipore Management will use its best efforts to ensure that the new owner will provide reasonable severance provision should employment be terminated after the closing date. Change in Scope of the Transaction: If, prior to the closing date, the Board of Directors decides to pursue a transaction materially different from that contemplated here, this agreement will be voided and WCD management team members covered by this agreement will receive retention and other transaction-related rewards no less lucrative than those afforded other Millipore managers and key employees involved in that transaction. Possible Longer Time to Transition: In weighing the relative merits of alternative offers to acquire the business to be divested, Millipore Management will take into account the financial (and other) advantages of a divestiture which provides for continued sharing of space, organizations and other assets, subsequent to a closing. For your part and as additional consideration for the incentive compensation set forth above, you agree to apply your best efforts to: 1. Structure the business for sale as a stand-alone concern. 2. Develop with the investment bankers a sell book that attractively and fairly describes the business we are selling. 3. Coordinate all selling efforts with and cooperate in whatever support activities may be required by Millipore's investment bankers. 4. Operate the WCD business for the period 4Q93 through the closing date in a manner so as to ensure that the business actually delivered to the new owner is structured, resourced, and performing as represented during negotiations. /s/Douglas A. Berthiaume /s/John A. Gilmartin ****Information redacted, considered to be confidential by registrant. Application for confidential treatment has been filed with Commission. EX-11 3 EXHIBIT 11 Millipore Corporation Exibit 11 Computation of Earnings Per Share (In Thousands Except Per Share Data)
Years Ended December 31, Calculation of shares: 1993 1992 1991 Weighted average of shares outstanding during the year 27,951 (b) 28,242 (b) 28,294 (b) Shares outstanding from assumed exercise of stock option 970 1,476 1,519 (Treasury Method) (873) (1,268) (1,184) Weighted average shares and common stock equivalents outstanding during the year 28,048 (a) 28,450 (a) 28,629 (a) Additional shares assumed exercised with full dilution 0 0 0 Weighted average of shares used in calculation of fully diluted earnings per share $ 28,048(a) $ 28,450(a) $ 28,629(a) Net Income $ 34,603 $33,183 $54,565 Earnings per common share as reported in the Consolidated Financial Statements $ 1.24 $ 1.17 $ 1.93 Primary earnings per common share$ 1.23(a) $ 1.16(a) $ 1.91(a) Net fully diluted earnings per common share $ 1.23(a) $ 1.16(a) $ 1.91(a) (a)These calculations are submitted in accordance with Securities Exchange Act of 1934 Release N. 9083 although not required by APB No. 15 because they result in dilutions of less than 3%. (b)Represents weighted average of shares outstanding used in the earnings per share calculations. Common stock equivalents for 1993, 1992, and 1991 were not included in the weighted average share computation as they were less than 3% dilutive.
EX-13 4 EXHIBIT 13 ANNUAL REPORT TO SHAREHOLDERS Exhibit (13) Management's Discussion and Analysis General On November 11, 1993, the Company's Board of Directors approved a plan to divest operations of the Company's Instrumentation Divisions, which serve primarily chromatography and bioscience markets. These divisions, which represented separate product lines with separate customers, are accounted for as discontinued operations. The Company expects to realize a net gain in 1994 upon disposition of these divisions. The consolidated statement of income in 1993 includes the results of discontinued operations through November 11, 1993. The loss from discontinued operations during this period includes the impact of a $13.0 million restructuring charge recorded in the first quarter of 1993. The following discussion on results of operations applies to continuing operations. Results of Operations Consolidated net sales increased 4 percent in 1993 to $445 million. Sales growth rates, measured both in local currencies and in U.S. dollars, are summarized in the table below. Sales growth rates Sales growth rates measured in local currencies measured in U.S. dollars 1993 1992 1991 1993 1992 1991 Americas 6% (1%) 5% 6% (1%) 5% Europe 4% 9% 5% (7%) 12% 4% Asia/Pacific 10% (6%) 17% 18% (2%) 25% Consolidated 6% 1% 8% 4% 3% 9% Sales growth in the Americas in 1993 was 6 percent following a decline of 1 percent in 1992, as sales to microelectronics and biotechnology customers grew faster in 1993 than in 1992. Sales of the Company's laboratory water products were also strong in 1993. In Europe, sales growth slowed to 4 percent following a strong 1992. Sales growth was impeded by increased competition and a recessionary environment, particularly in the laboratory and laboratory water markets. Also, sales of large process systems were lower in 1993 than in 1992. Sales in Japan grew 2 percent in 1993 following a decline of 11 percent in 1992, as sales growth was adversely impacted by a weak Japanese economy, particularly in the microelectronics market. Sales growth in the balance of Asia continued to be strong in 1993 led by strong sales to the microelectronics customers in Korea. Foreign currency exchange rates had a 2 percent net unfavorable impact on sales growth in 1993, compared to a 2 percent net favorable impact in 1992 and a 1 percent net favorable impact in 1991. Though a weaker dollar will benefit, and a stronger dollar will affect adversely, future operations, the Company is unable to predict future currency movements and to quantify their effect on income. The Company sells a wide range of products in many worldwide industrial markets. Price changes and inflation have not significantly affected the comparability of sales during the past three years. Gross Margins were 56.5 percent in 1993, 54.2 percent in 1992, and 53.1 percent in 1991. Excluding the charges for EPA settlements and the accrual of costs associated with increasing the efficiency of our manufacturing operations in 1992, margins in 1992 were 56.3 percent. The slight improvement in margins in 1993 was primarily due to continued cost reduction activities in the Company's manufacturing operations. Selling, General and Administrative (S,G&A) expenses, excluding the effects of foreign exchange grew 6 percent in 1993, 10 percent in 1992 and 11 percent in 1991. The Company continued its focus on cost control in 1993 in light of lower sales growth rates, as headcount levels were flat in 1993 compared to 1992. Research and Development Expenses (R&D) increased by 6 percent in 1993, following a marginal increase in 1992 and an increase of 10 percent in 1991. The Company continued to fund all major programs in 1993. The Loss on Sale of Business reflects the loss taken on the sale of the Company's environmental testing business Resource Analysts Inc. (RAI) in 1992. The business was sold because it no longer fit with the Company's long-term strategic goals. Net Interest Expense in 1993 was slightly higher than in 1992 and 1991, primarily due to higher net borrowings during the first half of 1993 and slightly lower capitalized interest on facilities projects. Overall, effective interest rates in 1993 were slightly lower than in 1992 and 1991. The Provision for Income Taxes was 22.5 percent of pre-tax income in 1993, as compared to 22.5 percent in 1992 and 28.9 percent in 1991. The Company continues to benefit from low tax rates in Puerto Rico and tax incentives attributable to its U.S. export operations. Page 33 Extraordinary Loss on Early Extinguishment of Debt reflects the after tax cost recorded by the Company in the fourth quarter to pre-pay it's $100 million note, which bore interest at 9.2 percent and was callable in 1995. In March 1994, the Company issued a new $100 million note bearing interest at 6.78 percent. Earnings Per Share for the past three years include a number of charges resulting from either specific transactions or adoption of new accounting pronouncements. Earnings per share from continuing operations adjusted for these events are summarized as follows: 1993 1992 1991 Earnings from continuing operations after accounting changes and charges $1.62 $1.07 $1.27 Adoption of new Accounting Pronouncements: SFAS #106 Charges - cumulative impact - .19 - SFAS #109 Charges - - .11 Charges .13 .34 - Earnings from continuing operations before accounting changes and charges $1.75 $1.60 $1.38 The charge in 1993 resulted from the early extinguishment of the Company's long-term debt. The charges in 1992 resulted from providing for the settlement of all known environmental disputes with the Environmental Protection Agency (EPA), the sale of the Company's environmental testing business (RAI), and an additional charge taken to cover costs of increasing the efficiencies of our manufacturing operations. Legal Proceedings The potential settlement amount of all environmental claims against all participants at hazardous waste ("Superfund") sites in which the Company has been named a potential responsible party by the EPA is significant. It is unlikely, however, that the Company's share of these costs will have a material impact on the financial condition of the Company. The Company is only one of many potentially responsible parties named at each site. Additionally, in certain instances the Company believes that its insurance will cover a portion of the costs incurred. In 1992, the EPA unexpectedly proposed settlements for several of these sites. Based on these proposed settlements and all other information available to management, the Company recorded a provision of $5.8 million against cost of sales in 1992, which, in management's best estimate, will be sufficient to satisfy all known claims by the EPA. No individual settlement to date has had a material impact on the Company's financial condition. Capital Resources and Liquidity In 1993, the Company generated $34 million of cash from continuing operations, compared to using $14 million in 1992 and $6 million in 1991. Cash provided by operations continues to be the Company's primary source of funding working capital requirements and capital expenditures. In 1993, cash flow from continuing operations, net of working capital requirements, was $73 million compared to $47 million in 1992. The improved cash flow from continuing operations in 1993 was primarily driven by a $15 million decrease in spending on inventory in 1993. Capital expenditures by continuing operations were significantly lower in 1993 than in 1992 and 1991 as the Company spent less on facility expansions. The Company expects capital expenditures in 1994 to be comparable with 1993. At December 31, 1993 the Company had no significant commitments for capital expenditures. The Company has $41 million of cash and short-term investments on hand at the end of 1993, which along with the Company's strong financial position, provides a high degree of flexibility in financing future requirements. In addition, the Company prepaid it's $100 million note callable in 1995 and secured a new $100 million note due in 2004. Dividends The quarterly dividend was increased in the second quarter of 1993 from $0.13 to $0.14 per share. Dividends paid in 1993 were $15.1 million. Page 34 Consolidated Statements of Income Millipore Corporation Year ended December 31 (In thousands except per share data) 1993 1992 1991 Net sales $ 445,366 $ 427,188 $415,075 Cost of sales 193,575 195,462 194,557 Gross profit 251,791 231,726 220,518 Selling, general and administrative expenses 145,647 142,701 129,593 Research and development expenses 34,952 32,953 32,633 Operating income 71,192 56,072 58,292 Loss on sale of business - (2,415) - Interest income 4,069 6,888 6,182 Interest expense (12,038) (14,692) (13,984) Income from continuing operations before income taxes 63,223 45,853 50,490 Provision for income taxes 14,225 10,317 14,570 Income from continuing operations before extraordinary item and cumulative effect of change in accounting principle 48,998 35,536 35,920 Earnings (loss) from discontinued operations (10,851) 2,715 18,645 Income before extraordinary item and cumulative effect of change in accounting principle 38,147 38,251 54,565 Extraordinary item - loss on early extinguishment of debt 3,544 - - Cumulative effect of change in accounting for postretirement benefits other than pensions - 5,068 - Net income $ 34,603 $ 33,183 $ 54,565 Income per share Income from continuing operations$ 1.75 $ 1.26 $ 1.27 Net income per common share $ 1.24 $ 1.17 $ 1.93 Weighted average common shares outstanding 27,951 28,242 28,294 The accompanying notes are an integral part of the consolidated financial statements. Page 35 Consolidated Balance Sheets Millipore Corporation December 31 (In thousands) 1993 1992 Assets Current assets: Cash $2,140 $1,915 Short-term investments 38,502 68,536 Accounts receivable (less allowance for doubtful accounts of $3,063 in 1993 and $1,752 in 1992) 99,655 94,627 Inventories 65,187 72,279 Other current assets 12,790 13,915 Net current assets of discontinued operations 138,687 147,480 Total current assets 356,961 398,752 Property, plant and equipment, net 194,895 195,070 Intangible assets (less accumulated amortization of $1,169 in 1993 and $911 in 1992) 2,769 1,670 Other assets 48,332 45,957 Net long-term assets of discontinued operations 99,647 106,194 Total assets $702,604 $747,643 Liabilities and Shareholders' Equity Current liabilities: Notes payable and current portion of long-term debt $51,420 $112,064 Accounts payable and accrued expenses 57,505 51,465 Dividends payable 3,921 3,633 Accrued retirement plan contributions 2,547 2,706 Accrued and deferred income taxes payable 4,894 5,431 Total current liabilities 120,287 175,299 Long-term debt 102,047 103,240 Other liabilities 19,116 16,269 Commitments and contingent liabilities - - Shareholders' equity: Common stock, par value $1.00 per share, 80,000 shares authorized. 28,344 shares issued as of December 31, 1993 and 1992 28,344 28,344 Additional paid-in-capital 16,803 16,524 Retained earnings 434,988 416,563 Translation adjustments (7,624) 4,028 472,511 465,459 Less: Treasury stock at cost, 341 and 370 shares as of December 31, 1993 and 1992, respectively 11,357 12,624 Total shareholders' equity 461,154 452,835 Total liabilities and shareholders' equity $702,604 $747,643 The accompanying notes are an integral part of the consolidated financial statements. Page 36 Consolidated Statements of Shareholders' Equity Millipore Corporation Year ended December 31, 1991, 1992 and 1993 (In thousands)
Additional Total Common Stock Paid-in Retained Translation Treasury Stock Shareholders' Shares Par Value Capital Earnings Adjustments Shares Cost Equity Balance at January 1, 1991 28,344 $28,344 $14,219 $360,954 $24,984 (107) $(1,493) $427,008 Net income 54,565 54,565 Cash dividends declared, $0.47 per share (13,098) (13,098) Treasury stock acquired (391) (15,938) (15,938) Stock options exercised (3,517) 384 13,444 9,927 Employees' stock purchase plan proceeds (330) 45 1,621 1,291 Incentive plan awards 69 69 2,366 2,435 U.S. tax benefit from stock plan activity 1,524 1,524 Translation adjustments (3,218) (3,218) Balance at December 31, 1991 28,344 $28,344 $15,743 $398,643 $21,766 0 $0 $464,496 Net income 33,183 33,183 Cash dividends declared, $0.51 per share (14,376) (14,376) Treasury stock acquired (484) (16,777) (16,777) Stock options exercised (889) 111 4,033 3,144 Employees' stock purchase plan proceeds 2 3 120 122 U.S. tax benefit from stock plan activity 781 781 Translation adjustments (17,738) (17,738) Balance at December 31, 1992 28,344 $28,344 $16,524 $416,563 $4,028 (370) $(12,624)$452,835 Net income 34,603 34,603 Cash dividends declared, $0.55 per share (15,396) (15,396) Treasury stock acquired (112) (3,427) (3,427) Stock options exercised (899) 104 3,468 2,569 Employees' stock purchase plan proceeds (32) 10 353 321 Incentive plan awards 161 22 721 882 Stock Awards (12) 5 152 140 U.S. tax benefit from stock plan activity 279 279 Translation adjustments (11,652) (11,652) Balance at December 31, 1993 28,344 $28,344 $16,803 $434,988 $(7,624) (341) $(11,357)$461,154
The accompanying notes are an integral part of the consolidated financial statements. Page 37 Consolidated Statements of Cash Flows Millipore Corportion Year ended December 31 (In thousands) 1993 1992 1991 Cash Flows From Operating Activities: Net income $34,603 $33,183 $54,565 Adjustments to reconcile net income to net cash provided by continuing operations Net loss (income) from discontinued operations 10,851 (2,715) (18,645) Depreciation and amortization 23,775 23,507 20,905 Deferred income tax provision (1,745) 225 10,731 Extraordinary item-loss on extinguishment of debt 3,544 - - Change in operating assets and liabilities: (Increase) decrease in accounts receivable (5,440) 8,348 (10,939) Decrease (increase) in inventories 6,398 (8,269) 2,250 Decrease (increase) in other current assets 763 1,276 (2,251) (Increase) in other assets (1,981) (16,003) (5,181) Increase (decrease) in accounts payable and accrued expenses 3,740 (2,475) (5,608) (Decrease) increase in accrued retirement plan contributions (104) 600 (12) (Decrease) increase in accrued income taxes payable (1,002) (2,111) 3,474 Increase - Other 53 11,898 585 Net cash provided by continuing operations 73,455 47,464 49,874 Net cash provided by discontinued operations 8,708 4,691 9,842 Net cash provided by operating activities 82,163 52,155 59,716 Cash Flows From Investing Activities: Additions to property, plant and equipment, net (24,469) (33,906) (40,660) Net investing activities of discontinued operations (9,357) (11,018) (7,668) Net cash used for investing activities (33,826) (44,924) (48,328) Cash Flows From Financing Activities: Treasury stock acquired (3,427) (16,777) (15,938) Issuance of treasury stock under stock plans 3,912 3,266 13,653 (Decrease) increase in short-term debt (59,887) 20,137 26,548 (Decrease) in long-term debt (1,222) (2,988) (1,320) Dividends paid (15,108) (14,093) (12,814) Net cash (used for) provided by financing activities (75,732) (10,455) 10,129 Effect of foreign exchange rates on cash and short-term investments (2,414) (2,765) (442) Net (decrease) increase in cash and short-term investments (29,809) (5,989) 21,075 Cash and short-term investments on January 1 70,451 76,440 55,365 Cash and short-term investments on December 31 $ 40,642 $ 70,451 $ 76,440 The accompanying notes are an integral part of the consolidated financial statements. Page 38 Notes to Consolidated Financial Statements (In thousands except per share data) Note A - Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All material intercompany balances and transactions have been eliminated. Translation of Foreign Currencies For most of the Company's foreign subsidiaries, assets and liabilities are translated at exchange rates prevailing on the balance sheet date, revenues and expenses are translated at average exchange rates prevailing during the period, and elements of shareholders' equity are translated at historical rates. Any resulting translation gains and losses are reported separately in shareholders' equity. For the Company's subsidiary in Brazil, where inflation is very high, the translation is the same except that inventories, cost of sales, property, plant and equipment, and depreciation are translated at historical rates. Resulting translation gains and losses for this subsidiary are included in income. Net losses from foreign currency transactions and translations of $867 in 1993, $1,767 in 1992, and $715 in 1991 were included in selling, general and administrative expenses. Short-term Investments Short-term investments consist primarily of government securities and certificates of deposit and are carried at cost plus accrued interest, which approximates market value. Inventories The Company values all of its inventories at the lower of cost or market, principally on a last-in, first-out (LIFO) basis. The remaining inventories are valued on a first-in, first-out (FIFO) basis. Property, Plant and Equipment Property, plant and equipment is recorded at cost. Expenditures for maintenance and repairs are charged to expense while the costs of significant improvements are capitalized. Depreciation on assets acquired before January 1, 1989 generally is provided using accelerated methods over the estimated useful lives of the assets. Assets acquired after January 1, 1989 primarily are depreciated using straight-line methods. Upon retirement or sale, the cost of assets disposed and the related accumulated depreciation are eliminated and related gains or losses reflected in income. Intangible Assets Intangible assets consist primarily of licenses. Intangible assets are amortized on a straight-line basis over appropriate periods not exceeding 10 years. Income Taxes In 1992, the Company adopted the provisions of SFAS #109 "Accounting for Income Taxes." As discussed more fully in Note H, deferred income taxes under SFAS #109 are determined on the liability method. The Company provides deferred income taxes on the unremitted earnings of foreign and Puerto Rican subsidiaries which are expected to be repatriated. Treasury Stock Treasury stock is recorded at its cost on the date acquired and is relieved at its weighted average cost upon reissuance. The excess of the cost over proceeds of treasury stock reissued is charged to retained earnings. Net Income Per Common Share Net income per common share is calculated by dividing the net income for the period by the weighted average number of common shares outstanding for the period. Postretirement Benefits Other Than Pensions In 1992, the Company adopted the provisions of SFAS #106 "Employers' Accounting for Postretirement Benefits Other than Pensions." This new standard, discussed more fully in Note L requires that the expected cost of retiree health benefits be expensed during the years employees render service rather than the Company's prior practice of recognizing these costs on a cash basis. Reclassifications Certain reclassifications have been made to prior years' financial statements to conform with the 1993 presentation. Page 39 Note B - Discontinued Operations On November 11, 1993, the Company's Board of Directors approved a plan to divest operations of the Company's Instrumentation Divisions, which serve primarily chromatography and bioscience markets. The operating results of these businesses, which have been classified as discontinued operations in the accompanying consolidated financial statements, are summarized as follows: 1993 1992 1991 through 11/11/93 Net sales $279,303 $349,813 $346,314 Pre-tax income (loss) $(14,001) $5,632 $26,226 Provision (credit) for income taxes (3,150) 1,267 7,581 Cumulative effect of change in accounting for post- retirement benefits - 1,650 - Net income (loss) $ (10,851) $ 2,715 $ 18,645 Earnings (loss) per share $ (0.38) $ 0.10 $ 0.66 The operating results for 1993 are for the period ended November 11, 1993, the date the divestiture plan was approved. In the first quarter of 1993, the Company recorded a restructuring charge of $13.0 million to cover costs associated with reorganizing and restructuring the Company's chromatography division into more market-focused customer-oriented business units. The restructuring charge covered the cost of severance and other personnel related items resulting from the reorganization. The operating results from November 11, 1993 to the date of divestiture will be deferred until the divestiture is completed. The Company expects to realize a net gain in 1994 upon the sale of these businesses. Net current and long-term assets of discontinued operations consist primarily of accounts receivable, inventory, property, plant and equipment, intangibles, and accounts payable, and have been classified separately in the accompanying consolidated balance sheets. Note C - Inventories Inventories at December 31 consisted of the following: 1993 1992 Raw materials $ 18,782 $ 17,778 Work in process 7,852 9,004 Finished goods 38,553 45,497 $ 65,187 $ 72,279 The value of inventories determined using the LIFO cost method was $47,097 or 72 percent of the total at December 31, 1993 and $50,793 or 70 percent of the total at December 31, 1992. If these inventories had been valued using the FIFO cost method, they would have been $48,847 at December 31, 1993 and $53,244 at December 31, 1992. Note D - Property, Plant and Equipment Property, plant and equipment at December 31 consisted of the following: 1993 1992 Land $ 6,966 $ 6,939 Leasehold improvements 16,108 11,669 Buildings and improvements 108,054 104,041 Production and other equipment 206,207 183,179 Construction in progress 20,631 35,352 357,966 341,180 Less: accumulated depreciation and amortization 163,071 146,110 $ 194,895 $ 195,070 Page 40 Note E - Notes Payable and Current Portion of Long-term Debt Short-term borrowings and related lines of credit at December 31 are summarized as follows: 1993 1992 Notes payable and current portion of long-term debt: Notes payable $ 50,802 $111,489 Current portion of long-term debt 618 575 $ 51,420 $112,064 Unused lines of credit $240,755 $192,347 Average amount outstanding at month-end during the year $94,465 $132,696 Maximum month-end amount outstanding during the year $129,332 $182,439 Weighted average interest rate during the year 4.3% 5.1% Weighted average interest rate at year-end 4.5% 4.7% Notes payable generally consist of renewable, uncollateralized borrowings under lines of credit that are denominated in various currencies and bear interest at prevailing rates. Note F - Long-term Debt Long-term debt at December 31 consisted of the following: 1993 1992 Notes payable with interest rates of 9.2% due in 1998 $100,000 $100,000 Other notes payable with average interest of 5.9% in 1993 and 7.0% in 1992, due through 2005 2,665 3,815 102,665 103,815 Less: Current portion (618) (575) Long-term debt $102,047 $103,240 In the fourth quarter of 1993, the Company entered into an agreement to retire the $100,000 notes payable before their call date of March 30, 1995. Accordingly, the Company recorded an extraordinary charge of $5,906 ($3,544 net of income taxes or $0.13 per share) in December, 1993 to reflect the cost of extinguishing the notes. In March, 1994, the Company issued $100,000 of 6.78% notes due in 2004. Interest is payable semi-annually on these notes beginning in September 1994. Long-term debt, including current portion and after consideration of the events discussed above, matures as follows: Year ended December 31, 1994 $ 618 Year ended December 31, 1995 562 Year ended December 31, 1996 454 Year ended December 31, 1997 247 Year ended December 31, 1998 249 Years subsequent to December 31, 1998 100,535 Certain notes contain covenants relating to maintenance of current asset levels, cash dividends and limitations on long-term debt. The Company is in compliance with all such covenants. The Company capitalized interest costs associated with the construction of certain assets of $1,301 in 1993, $1,561 in 1992, and $1,645 in 1991. Interest paid on debt during 1993, 1992, and 1991 amounted to $13,356, $16,637, and $15,263, respectively. The Company had partially hedged its foreign currency net asset exposure by entering into a currency swap which was to mature in 1995. Under the terms of the original swap, the Company exchanged $100,000 of dollar debt service obligations for foreign obligations of 9,936,000 yen and 33,193 DM. The Company's foreign currency obligations had an effective weighted average interest rate of 6.02 percent in 1993. The effects of foreign currency exchange rate fluctuations resulting from these swap agreements are included in translation adjustments and in transaction gains/losses. Unrealized losses on these swap agreements of $8,020 at December 31, 1993 and $92 at December 31, 1992 are included in other assets in the consolidated balance sheets. In January, 1994, the Company closed out the yen denominated swap and simultaneously exchanged $80,000 of dollar debt service obligation for a yen denominated obligation of 8,760,000 yen, which bears interest at a rate of 4.49 percent. The swap matures in 2004. Page 41 Note G - Foreign Exchange In the fourth quarter of 1992, the Company entered into forward exchange contracts to reduce the impact of foreign currency fluctuations on certain transactions in 1993. A gain of $2.3 million was realized on these contracts and was recorded in cost of sales in 1993. In the fourth quarter of 1993, the Company has again entered into forward exchange contracts to reduce the impact of foreign currency fluctuations on certain transactions. The gains or losses on these contracts will be included in income when the operating revenues and expenses related to the underlying transactions are recognized. Contracts open at December 31, 1993, aggregating $85,000, have an unrealized gain of $1,000. All open contracts have maturities which do not exceed fifteen months. Note H - Income Taxes The Company has provided for income taxes on both continuing and discontinued operations according to the provisions of SFAS #109 "Accounting for Income Taxes" which the Company adopted in 1992. Data related to the provisions for income taxes are summarized as follows: 1993 1992 1991 Domestic and foreign income before income taxes: Domestic $16,690 $27,077 $51,530 Foreign 32,532 24,408 25,186 49,222 51,485 76,716 Less: (income) loss from discontinued operations 14,001 (5,632) (26,226) Income from continuing operations before income taxes $63,223 $45,853 $50,490 Domestic and foreign provisions for income taxes: Domestic $(2,781) $ 2,842 $ 8,589 Foreign 13,356 8,242 13,063 State 500 500 499 11,075 11,584 22,151 Less: portion applied to discontinued operations 3,150 (1,267) (7,581) $14,225 $10,317 $14,570 Current and deferred components of the provision for income taxes: Current $12,820 $11,359 $11,420 Deferred (1,745) 225 10,731 $11,075 $11,584 $22,151 Components of the deferred income tax provisions: Intercompany and inventory-related transactions $(2,241) $2,542 $545 Unremitted foreign earnings - - (802) Depreciation (1,232) (111) 530 Costs related to business dispositions- - 438 Restructuring charge - 576 8,813 Provision for postretirement benefits other than pensions (419) (555) - Other 2,147 (2,227) 1,207 $(1,745) $ 225 $10,731 Summary of the differences between the Company's consolidated effective tax rate and the United States statutory federal income tax rate: U.S. statutory income tax rate 35.0% 34.0% 34.0% Puerto Rico tax rate benefits (11.9) (9.8) (8.0) Excess foreign over U.S. tax rate 5.6 - 6.4 State income tax, net of federal income tax benefit .7 .6 .4 Foreign Sales Corporation income not taxed (4.6) (4.1) (2.8) U.S. tax credits - - (1.8) Other (2.3) 1.8 .7 Effective tax rate applicable to operations 22.5% 22.5% 28.9% Page 42 Net deferred tax assets result from temporary differences in the recognition of revenues and expenses for financial statement and income tax purposes. Components of the net deferred tax assets are as follows: 1993 1992 Intercompany and inventory $18,698 $16,457 related transactions Postretirement benefits other than pensions 4,435 4,016 Tax credits (including foreign tax credits on unremitted earnings) 21,800 17,640 U.S. net operating loss carryforwards 14,001 12,000 Other, net 1,248 (4,183) 60,182 45,930 Valuation allowance (19,390) (15,526) Net deferred tax asset $ 40,792 $ 30,404 Net deferred tax assets are classified in other assets in the balance sheet. The valuation allowance is provided primarily against foreign tax credits which can be utilized against future taxable income in the United States after the utilization of other carryforwards and expire no later than 1996. The reduction in tax expense attributable to tax exemptions on the Company's operations in Puerto Rico was $5,843 in 1993, $5,035 in 1992, and $6,275 in 1991 or $.21, $.18, and $.22 per share, respectively. Tax exemptions relating to these operations are effective through 2004. Income taxes paid during 1993, 1992, and 1991 were $15,185, $18,634 ,and $10,753 respectively. Note I - Legal Proceedings The Company has been notified in a number of instances that the United States Environmental Protection Agency (EPA) has determined that a release or a substantial threat of a release of hazardous substances (Release) as defined in Section 101 of the Comprehensive Environmental Response Compensation and Liability Act of 1980 as amended by the Superfund Amendments and Reauthorization Act of 1986 (the so-called "Superfund" law) has occurred at certain sites to which chemical wastes generated by the manufacturing operations of the Company have been sent. These notifications typically also allege that the Company may be a responsible party under the law with respect to any remedial action needed to control or prevent any such Release. Under the law the EPA may undertake remedial action and responsible parties may be liable, without regard to fault or negligence, for all costs incurred. In several of these instances the EPA has issued a proposal for remedial action it considers necessary to protect the environment. In each instance the Company was only one of a large number of corporations and entities which received such notification, and anticipates that any ultimate liability for remedial costs will be shared by others. In 1992, the EPA unexpectedly proposed settlements for several of these sites. Based on those proposed settlements and all other information available to management, the Company recorded a provision of $5,800 against cost of sales which, in management's best estimate will be sufficient to satisfy all know claims by the EPA. The Company has paid a total of $13,900 to date to satisfy environmental claims. The aggregate of further potential liabilities is not expected to have a material adverse effect on the Company's financial condition. Eastern Enterprises has filed a lawsuit against the Company alleging misrepresentations made in connection with its 1989 purchase of the Company's Process Water Division. The Company believes it has meritorious defenses against all claims. Although the Company is unable to predict with certainty the outcome of this matter, its ultimate disposition is not expected to have a material adverse effect on the Company's financial condition. Note J - Leases Lease agreements cover sales offices, warehouse space, computers and automobiles. These leases have expiration dates through 2026. Certain land and building leases contain renewal options for periods ranging from five to ten years and purchase options at fair market value. Rental expense was $10,878 in 1993, $8,880 in 1992, and $7,706 in 1991. At December 31, 1993 future minimum rents payable under noncancelable leases with initial terms exceeding one year were as follows: 1994 $10,615 1995 9,056 1996 6,851 1997 6,146 1998 5,142 1999 - 2026 48,617 Page 43 Note K - Stock Plans Stock Option Plan Under the Company's Combined Stock Option Plan, stock options to purchase Millipore common stock may be granted to employees. The plan provides that the option price per share may not be less than the fair market value of the stock at the time the option is granted and that options must expire not later than 10 years from the date of grant. Plan data are summarized as follows: 1993 1992 1991 Option shares: Outstanding at beginning of period 2,431 2,207 2,136 Issued during period 516 510 527 Exercised during period (100) (111) (384) Canceled during period (127) (175) (72) Outstanding at end of period 2,720 2,431 2,207 Exercisable at end of period 1,536 1,254 1,073 Shares available for granting of options at end of period 879 270 604 Average price of outstanding options at end of period $33.34 $32.70 $32.14 Average price of exercised options during the period $24.51 $28.22 $25.95 Shares available include 1,000 shares authorized by the Board of Directors in December, 1993 subject to shareholder approval at the Annual Meeting in April, 1994. Non-Employee Director Stock Option Plan In 1990, a stock option plan for Non-Employee Directors was approved by the Company's shareholders. Under this plan, stock options to purchase up to 100 shares of Millipore common stock may be granted to non-employee directors of the Company. The plan provides that the option price per share may not be less then the fair market value of the stock at the time the option is granted. At December 31, 1993, 59 options have been issued and 54 are outstanding. Employees' Stock Purchase Plan Under the Company's Employees' Stock Purchase Plan, all employees of the Company and its subsidiaries who have 90 days continuous service prior to the beginning of the plan year, May 1, may purchase shares of Millipore common stock by payroll deduction. The purchase price per share during the plan year is the lesser of the fair market value of the common stock at the time of purchase or on May 1. In 1993, 1992, and 1991 shares issued under the plan were 10, 3, and 45, respectively. As of December 31, 1993, 117 shares of Millipore common stock were available for sale to employees under the plan. Incentive Plan for Senior Management Under this plan, Millipore common stock is awarded to key members of senior management at no cost to them. The stock cannot be sold, assigned, transferred or pledged during a restriction period which is normally four years. Shares are subject to forfeiture should employment terminate during the restriction period. The stock issued under the plan is recorded at its fair market value on the award date; the related deferred compensation is amortized to selling, general and administrative expenses over the restriction period. At the end of 1993, 1992, and 1991, 133, 114, and 160 shares, respectively, were outstanding under the plan. Plan expense was $833 in 1993, $924 in 1992, and $1,159 in 1991. As of December 31, 1993, 78 shares of Millipore common stock were available for future awards under this plan. Note L - Employee Retirement Plans Participation and Savings Plan The Millipore Corporation Employees' Participation and Savings Plan (Participation and Savings Plan), maintained for the benefit of all full-time U.S. employees, combines both a defined contribution plan (Participation Plan) and an employee savings plan (Savings Plan). Contributions to the Participation Plan are allocated among the U.S. employees of the Company who have completed at least two years of continuous service on the basis of the compensation they received during the year for which the contribution is made. The Savings Plan allows employees with one year of continuous service to make certain tax-deferred voluntary contributions which the company matches with a 25 percent contribution (50 percent contribution for employees with 10 years of service). Total expense under the Participation and Savings Plan was $8,679 in 1993, $8,520 in 1992, and $8,143 in 1991. Retirement Plan The Company's Retirement Plan for Employees of Millipore Corporation (Retirement Plan) is a defined benefit plan for all U.S. employees which provides benefits to the extent that assets of the Participation Plan, Page 44 described above, do not provide guaranteed retirement income levels. Guaranteed retirement income levels are determined based on years of service and salary level as integrated with Social Security benefits. Employees are eligible under the Retirement Plan after one year of continuous service and are vested after 5 years of service. For accounting purposes, the Company uses the projected unit credit method of actuarial valuation. The actuarial method for funding purposes is the entry age normal method. The Company contributes annually to the Retirement Plan, subject to Internal Revenue Service and ERISA funding limitations. No contributions were required for 1993 and 1992. The following table summarizes the funded status of the plan and amounts reflected in the Company's consolidated balance sheets at December 31. The projected benefit obligation was calculated using discount and investment return rates of 7.5 percent in 1993 and 8 percent in 1992, and a salary progression rate of 6 percent in both years. Plan assets are invested primarily in common stock, mutual funds and money market funds. 1993 1992 Actuarial present value of benefit obligations: Accumulated benefit obligation, including vested benefits of $2,804 on December 31, 1993 and $1,813 on December 31, 1992 $ 2,983 $ 1,919 Projected benefit obligation for service rendered to date $(5,003) $(3,434) Plan assets at fair value 5,663 5,225 Plan assets in excess of projected benefit obligation 660 1,791 Unrecognized net actuarial loss 3,069 1,653 Unrecognized prior service cost 413 448 Unrecognized net asset being amortized over 16.7 years (747) (831) Prepaid pension cost included in financial statements $ 3,395 $ 3,061 Net pension income includes the following components Service cost $ 393 $ 323 Interest cost (358) (260) Return on plan assets 430 393 Amortization and deferral (131) (46) Net pension income $ 334 $ 410 Postretirement Benefits Other Than Pensions The Company sponsors several unfunded defined benefit postretirement plans covering all U.S. employees. The plans provide medical and life insurance benefits and are, depending on the plan, either contributory or non-contribu- tory. As discussed in Note A, the Company adopted the provisions of SFAS #106 "Employers' Accounting for Postretirement Benefits Other Than Pensions" effect- ive January 1, 1992. In adopting this standard, the Company recorded in the first quarter of 1992, a one-time, non-cash charge against earnings from con- tinuing operations of $7,678 before taxes and $5,068 after taxes, or $.19 per share. Net periodic postretirement benefit cost included the following components: 1993 1992 Service cost-benefits attributed to service during the year $ 754 $ 834 Interest cost on accumulated postretirement benefit obligation 787 800 Net amortization and deferral (15) - Net periodic postretirement benefit cost $ 1,526 $ 1,634 Summary information on the Company's plans as of December 31 is as follows: 1993 1992 Accumulated postretirement benefit obligation: Retirees and dependents $ (3,520) $ (3,702) Fully eligible active plan participants (478) (368) Other active plan participants (8,171) (7,743) Accrued postretirement benefit cost (12,169) (11,813) Unrecognized gain from past experience different from that assumed and from changes in assumptions (361) - Accrued postretirement benefit obligation $(12,530) $(11,813) Page 45 The discount rate used in determining the accumulated postretirement benefit obligation was 7.5 percent as of December 31, 1993 and 8 percent as of December 31, 1992. The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was 12 percent in 1993, declining gradually to 6 percent through the year 2003 and remaining level thereafter. If the health care cost trend rate assumptions were increased by 1 percent, the accumulated postretirement benefit obligation as of December 31, 1993 would be increased by $2,336 while the aggregate of the service and interest cost components of net periodic postretirement benefit cost for 1993 would be increased by $343. Note M - Business Segment Information Industry Segments The Company operates in one industry segment. Using primarily membrane technology, the Company develops, manufactures and markets products used for analysis and purification. Geographical Segments The Company operates in the geographical segments indicated in the table below. Sales are reflected in the segment from which the sales are made. The Americas segment includes North and South America. The European region includes Western and Central Europe, Russia, the Middle East and Africa. The Asia/Pacific region includes Japan, Korea, Taiwan, Hong Kong, China, South- east Asia and Australia. Transfer sales between geographical areas are generally made at a discount from list price. Operating profits for each geographical segment exclude general corporate expenses. Identifiable assets consist of those assets utilized within each respective geographic segment and exclude cash and short-term investments, which are classified as corporate assets. Americas Europe Pacific Eliminations Total 1993 Sales: Unaffiliated customers $168,800 $145,485 $128,840 $443,125 Unaffiliated export: Pacific customers 977 977 European customers 1,264 1,264 Total unaffiliated 171,041 145,485 128,840 445,366 Transfer between areas 85,438 24,513 6,162 (116,113) - Total sales $256,479 $169,998 $135,002 $(116,113) $445,366 Operating profits $ 23,180 $ 36,902 $ 27,731 $ 87,813 General corporate expenses (16,621) Interest expense, net (7,969) Income from continuing operations before income taxes $ 63,223 Identifiable assets $280,941 $138,326 $127,302 $(122,941) $423,628 Corporate assets 40,642 Net current assets of discontinued operations 138,687 Net long term assets of discontinued operations 99,647 Total assets $702,604 1992 Sales: Unaffiliated customers $159,458 $154,200 $108,923 $422,581 Unaffiliated export: Pacific customers 908 908 European customers 3,699 3,699 Total unaffiliated 164,065 154,200 108,923 427,188 Transfer between areas 80,944 23,391 7,360 (111,695) - Total sales $245,009 $177,591 $116,283 $(111,695) $427,188 Operating profits $ 23,715 $ 40,962 $ 7,186 $ 71,863 General corporate expenses (15,791) Interest expense, net (7,804) Page 46 Loss on sale of business(2,415) (2,415) Income from continuing operations before income taxes $ 45,853 Identifiable assets $268,819 $178,224 $102,035 $(125,560) $423,518 Corporate assets 70,451 Net current assets of discontinued operations 147,480 Net long term assets of discontinued operations 106,194 Total assets $747,643 1991 Sales: Unaffiliated customers $162,182 $135,140 $110,115 $407,437 Unaffiliated export: Pacific customers 1,943 1,943 European customers 5,695 5,695 Total unaffiliated 169,820 135,140 110,115 415,075 Transfer between areas 76,293 18,901 5,787 (100,981) - Total sales $246,113 $154,041 $115,902 $(100,981) $415,075 Operating profits $ 49,101 $ 16,619 $ 9,820 $ 75,540 General corporate expenses (17,248) Interest expense, net (7,802) Income from continuing operations before income taxes $ 50,490 Identifiable assets $253,071 $214,509 $ 97,975 $(136,293) $429,262 Corporate assets 76,440 Net current assets of discontinued operations 140,364 Net long term assets of discontinued operations 99,593 Total assets $745,659 Report of Independent Accountants To the Shareholders and Directors of Millipore Corporation: We have audited the accompanying consolidated balance sheets of Millipore Corporation as of December 31, 1993 and 1992, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Millipore Corporation at December 31, 1993 and 1992, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 1993 in conformity with generally accepted accounting principles. As discussed in Notes A, H and L to the consolidated financial statements, the Company changed its method of accounting for postretirement benefits other than pensions and its accounting for income taxes in 1992. Boston, Massachusetts Coopers & Lybrand January 24, 1994, except as to the information presented in Note F, for which the date is March 3, 1994 Page 47 Eleven-year Summary of Operations Millipore Corporation (In thousands except per share) 1993 1992 1991 1990 1989 1988 Net sales $445,366 $427,188 $415,075 $380,983 $365,825 $347,267 Cost of sales 193,575 195,462 194,557 170,049 165,979 161,613 Gross profit 251,791 231,726 220,518 210,934 199,846 185,654 Selling, general and administrative expenses 145,647 142,701 129,593 117,214 115,951 116,636 Research and devel- opment expenses 34,952 32,953 32,633 29,538 28,756 22,336 Restructuring charge - - - 17,103 - - Operating income 71,192 56,072 58,292 47,079 55,139 46,682 Other income/loss, net - (2,415) - - 3,149 - Interest income 4,069 6,888 6,182 6,723 3,914 3,450 Interest expense (12,038) (14,692) (13,984) (10,418) (8,543) (6,543) Income from continuing operations before income taxes 63,223 45,853 50,490 43,384 53,659 43,589 Provision for income taxes excluding non- recurring tax benefit 14,225 10,317 14,570 13,629 11,619 10,955 Nonrecurring benefit - - - - - - Income from continuing operations 48,998 35,536 35,920 29,755 42,040 32,634 Earnings (loss) from discontinued operations (10,851) 2,715 18,645 (6,678) 10,462 22,751 Income before extraordinary item and cumulative effect of change in accounting principle 38,147 38,251 54,565 23,077 52,502 55,385 Extraordinary item-loss on early extinguishment of debt 3,544 - - - - - Cumulative effect of change in accounting for postretirement benefits - 5,068 - - - - Net income $34,603 $33,183 $54,565 $23,077 $52,502 $55,385 Net income per common share: Income from continuing operations $1.75 $1.26 $1.27 $1.05 $1.48 $1.15 Net income per common share 1.24 1.17 1.93 0.82 1.85 1.96 Cash dividends declared per share 0.55 0.51 0.47 0.43 0.39 0.35 Average common shares and equivalents 27,951 28,242 28,294 28,307 28,323 28,329 Financial Data Working Capital $236,674 $223,453 $250,064 $227,219 $251,486 $251,825 Total assets 702,604 747,643 745,659 688,651 615,038 547,997 Long-term obligations 102,047 103,240 106,306 107,517 106,147 105,946 Shareholders' equity $461,154 $452,835 $464,496 $427,008 $403,827 $362,800 The Company adopted SFAS #109 "Accounting for Income Taxes" during 1992 and restated tax provisions in 1991, 1990 and 1986. 1984 earnings per share include a $.15 per share non-recurring tax benefit from the reversal of all deferred taxes provided on DISC income prior to 1984. Page 48 Eleven-year Summary of Operations (continued) (In thousands except per share) 1987 1986 1985 1984 1983 Net sales $298,728 $251,212 $202,411 $193,190 $171,730 Cost of sales 138,587 117,997 99,427 97,048 85,631 Gross profit 160,141 133,215 102,984 96,142 86,099 Selling, general and administrative expenses 98,730 87,058 66,409 62,777 57,579 Research and development expenses 19,742 16,756 15,132 15,407 14,033 Restructuring charge - - - - - Operating income 41,669 29,401 21,443 17,958 14,487 Other income/loss, net - - - - - Interest income 2,234 3,066 3,403 4,145 3,129 Interest expense (3,432) (3,762) (3,300) (3,136) (3,355) Income from continuing operations before income taxes 40,471 28,705 21,546 18,967 14,261 Provision for income taxes excluding nonrecurring tax benefit 10,040 10,538 5,357 5,121 3,824 Nonrecurring benefit - - - (4,002) - Income from continuing operations 30,431 18,167 16,189 17,848 10,437 Earnings (loss) from discontinued operations 17,993 14,797 15,541 12,645 10,227 Income before extraordinary item and cumulative effect of change in accounting principle 48,424 32,964 31,730 30,493 20,664 Extraordinary item-loss on early extinguishment of debt - - - - - Cumulative effect of change in accounting for postretirement benefits - - - - - Net income $48,424 $32,964 $31,730 $30,493 $20,664 Net income per common share: Income from continuing operations $1.07 $0.65 $0.59 $0.65 $0.38 Net income per common share 1.71 1.18 1.15 1.11 0.76 Cash dividends declared per share0.31 0.27 0.24 0.22 0.20 Average common shares and equivalents 28,344 27,931 27,632 27,552 27,270 Financial Data Working Capital $168,594 $165,421 $146,334 $121,075 $107,102 Total assets 452,387 369,414 326,903 283,517 259,700 Long-term obligations 6,378 12,094 13,446 10,630 10,545 Shareholders' equity $327,604 $283,547 $244,607 $214,289 $192,886 Page 49 Quarterly Results (Unaudited) The Company's unaudited quarterly results are summarized below. (In thousands, except per share data) First Second Third Fourth quarter quarter quarter quarter Year 1993 Net sales $105,189 $114,613 $111,854 $113,710 $445,366 Cost of sales 45,140 49,271 49,587 49,577 193,575 Gross profit 60,049 65,342 62,267 64,133 251,791 Selling, general and administrative expenses 36,555 36,946 36,424 35,722 145,647 Research and development expenses 8,587 9,010 8,652 8,703 34,952 Operating income 14,907 19,386 17,191 19,708 71,192 Interest (expense), net (2,217) (2,083) (1,968) (1,701) (7,969) Income from continuing operations before income taxes 12,690 17,303 15,223 18,007 63,223 Provision for income taxes 2,855 3,893 3,425 4,052 14,225 Income from continuing operations 9,835 13,410 11,798 13,955 48,998 Loss from discontinued operations (9,083) (579) (1,189) - (10,851) Extraordinary item - loss on early extinguishment of debt - - - 3,544 3,544 Net income $ 752 $ 12,831 $ 10,609 $ 10,411 $ 34,603 Per share information Income from continuing operations $0.35 $0.48 $0.42 $0.50 $1.75 Net income $0.03 $0.46 $0.38 $0.37 $1.24 Weighted average common shares outstanding 27,983 27,946 27,921 27,954 27,951 1992 Net sales $110,290 $108,300 $104,600 $103,998 $427,188 Cost of sales 49,268 52,829 45,534 47,831 195,462 Gross profit 61,022 55,471 59,066 56,167 231,726 Selling, general and administrative expenses 34,837 35,868 35,608 36,388 142,701 Research and development expenses 8,373 8,246 8,241 8,093 32,953 Operating income 17,812 11,357 15,217 11,686 56,072 Loss on sale of business - (2,415) - - (2,415) Interest (expense), net (1,720) (1,785) (2,026) (2,273) (7,804) Income from continuing operations before income taxes 16,092 7,157 13,191 9,413 45,853 Provision for income taxes 3,620 1,610 2,969 2,118 10,317 Income from continuing operations 12,472 5,547 10,222 7,295 35,536 Earnings (loss) from discontinued operations 1,149 (705) 2,735 (464) 2,715 Income before cum. effect of change in accounting principle 13,621 4,842 12,957 6,831 38,251 Cum. effect of change in accounting for postretirement benefits other than pensions 5,068 - - - 5,068 Net income $ 8,553 $ 4,842 $ 12,957 $ 6,831 $33,183 Per share information Income from continuing operations $0.44 $0.20 $0.36 $0.26 $1.26 Net income $0.30 $0.17 $0.46 $0.24 $1.17 Weighted average common shares outstanding 28,360 28,292 28,207 28,108 28,242 Page 50 Investor Information Registrar and Transfer Agent The First National Bank of Boston Shareholders Services Division P.O. Box 644 Boston, Massachusetts 02102-0644 Annual Meeting The Annual Meeting of Shareholders of Millipore Corporation will be held at our Bedford Massachusetts Facility (80 Ashby Road) on Thursday, April 21, 1994 at 11 a.m. Dividend Reinvestment An automatic dividend reinvestment program is available to shareholders. A descriptive brochure and authorization card are available on request. Reports In addition to our Annual Report, each shareholder will receive copies of our three Quarterly Reports. Form 10-K is filed annually with the Securities and Exchange Commission and is now available on request from the Company. All inquiries should be directed to: John S. Glass Director of Investor Relations Millipore Corporation 80 Ashby Road Bedford, Massachusetts 01730 (617) 275-9200 Common Stock Millipore's Common Stock is traded on the New York Stock Exchange. Our symbol is MIL. Stock price information is shown below. Millipore Stock Prices Stock price data from the New York Stock Exchange is based on high and low sales prices. There were approximately 3,985 shareholders of record as of December 31, 1993. Range of Stock Prices Dividends Declared Per Share 1993 1992 1993 1992 High Low High Low First Quarter $35.50 $25.88 $42.00 $34.25 $0.13 $0.12 Second Quarter 32.38 26.50 39.50 33.00 0.14 0.13 Third Quarter 34.25 29.75 34.25 27.13 0.14 0.13 Fourth Quarter 40.25 32.75 38.00 30.00 0.14 0.13 Page 51 EX-21 5 EXHIBIT 21 Exhibit (21) SUBSIDIARIES OF MILLIPORE CORPORATION Pursuant to Item 601, Paragraph 22, clause (ii) of Regulation S-K, the following list excludes subsidiaries who conduct no business operations or which have no significant assets. COMPANY JURISDICTION Millipore Asia Ltd. Delaware Millipore Cidra, Inc. Delaware Millipore Intertech, (V.I.), Inc. U.S. Virgin Is. Millipore International Holding Company B.V. Netherlands Millipore Japan Company L.L.C. Delaware Millipore S.A./N.V. Belgium Millipore (Canada) Ltd. Canada Millipore (U.K.) Ltd. United Kingdom Millipore S.A. France Millipore Ireland B.V. Netherlands Millipore GmbH West Germany Millipore S.p.A. Italy Millipore A.B. Sweden Millipore A.G. Switzerland Millipore A/S Denmark Millipore Australia Pty. Ltd. Australia Millipore GesmbH Austria Millipore Iberica S.A. Spain Millipore S.A. de C.V. Mexico Millipore I.E.C., Ltda. Brazil Millipore OY Finland Millipore B.V. The Netherlands Millipore Korea Ltd. Korea Millipore China Ltd. Hong Kong Millipore of New Hampshire, Inc. New Hampshire Millicorp, Inc. Delaware Minerva Insurance Corp. Ltd. Bermuda Nihon Millipore Limited Japan Biosyntech Biochemische Synthesetechnik Gmbh Germany Millipore Investment Holdings Ltd. Delaware Sterimatics Corporation Massachusetts Immunosystems Incorporated Maine Waters Investments Limited Delaware Waters Puerto Rico, Inc. Delaware Extrel Corporation Pennsylvania Extrel FTMS, Inc. Delaware Biosearch, Inc. Massachusetts Milliscope, Inc. Delaware Millipore AS Norway MSUB Ltd United Kingdom Shallford Entity SDN BHD Malaysia EX-24 6 EXHIBIT 24 Exhibit (24) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned Directors and Officers of Millipore Corporation (the "Corporation"), do hereby constitute and appoint John A. Gilmartin and Geoffrey Nunes and each of them individually, their true and lawful attorneys and agents to execute on behalf of the Corporation the Form 10-K Annual Report of the Corporation for the fiscal year ended December 31, 1993, and all such additional instruments related thereto which such attorneys and agents may deem to be necessary and desirable to enable the Corporation to comply with the requirements of the Securities Exchange Act of 1934, as amended, and any regulations, orders, or other requirements of the United States Securities and Exchange Commission thereunder in connection with the preparation and filing of said Form 10-K Annual Report, including specifically, but without limitation of the foregoing, power and authority to sign the names of each of such Directors and Officers on his behalf, as such Director or Officer, as indicated below to the said Form 10-K Annual Report or documents filed or to be filed as a part of or in connection with such Form 10-K Annual Report; and each of the undersigned hereby ratifies and confirms all that said attorneys and agents shall do or cause to be done by virtue thereof. SIGNATURE TITLE DATE /s/ John A. Gilmartin Chairman, President February 10, 1994 John A. Gilmartin Chief Executive Officer and Director /s/ Charles D. Baker Director February 10, 1994 Charles D. Baker ____________________ Director February ____, 1994 Samuel C. Butler /s/ Mark Hoffman Director February 10, 1994 Mark Hoffman /s/ Gerald D. Laubach Director February 10, 1994 Gerald D. Laubach Power of Attorney Page 2 SIGNATURE TITLE DATE /s/ Steven Muller Director February 10, 1994 Steven Muller /s/ Thomas O. Pyle Director February 10, 1994 Thomas O. Pyle /s/John F. Reno Director February 10, 1994 John F. Reno /s/ James L. Vincent Director February 10, 1994 James L. Vincent /s/ Warren E. Wacker Director February 10, 1994 Warren E.C. Wacker -----END PRIVACY-ENHANCED MESSAGE-----