-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NVAOxzNpWeNQpHdpp2gv8L6gyVRNRnZ6kvt1KjeMCotHtXza9VoChNjLoYRd11QJ HAXFYVVKXeTRcdPSgnIiRA== 0000950135-99-000031.txt : 19990106 0000950135-99-000031.hdr.sgml : 19990106 ACCESSION NUMBER: 0000950135-99-000031 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981222 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GALILEO CORP CENTRAL INDEX KEY: 0000711425 STANDARD INDUSTRIAL CLASSIFICATION: OPTICAL INSTRUMENTS & LENSES [3827] IRS NUMBER: 042526583 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-11309 FILM NUMBER: 99500761 BUSINESS ADDRESS: STREET 1: PO BOX 550 STREET 2: GALILEO PARK CITY: STURBRIDGE STATE: MA ZIP: 01566 BUSINESS PHONE: 5083479191 MAIL ADDRESS: STREET 1: GALILEO PARK STREET 2: PO BOX 550 CITY: STURBRIDGE STATE: MA ZIP: 01566 FORMER COMPANY: FORMER CONFORMED NAME: GALILEO ELECTRO OPTICS CORP DATE OF NAME CHANGE: 19920703 8-K 1 GALILEO CORPORATION 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) DECEMBER 22, 1998 ----------------- GALILEO CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 04-2526583 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 0-11309 (Commission File Number) GALILEO PARK, P.O. BOX 550, STURBRID MASSACHUSETTS 01566 (Address of principal executive offices) (Zip Code) Registrant's telephone number includ (508) 347-9191 - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 5. OTHER EVENTS The Registrant reported financial results for its fourth quarter and for the fiscal year ended September 30, 1998. The Company also announced the signing of an agreement with an investment entity under which that entity will, subject to satisfaction of conditions to closing, purchase for $6.0 million in a private transaction 2,000,000 shares of the Company's common stock, together with warrants for an additional 2,000,000 shares. The Company also announced that it had implemented further cost reduction measures, consisting principally of reductions in staffing at its Sturbridge, Massachusetts facility. Additionally, the Company terminated operations of its Telecommunications business and is seeking buyers for this business. A press release, dated December 22, 1998, describing each of these items is attached hereto as Exhibit 99.1. Item 7. FINANCIAL STATEMENTS AND EXHIBITS a) Exhibits 99.1 Press Release dated December 22, 1998. 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. GALILEO CORPORATION Date: December 30, 1998 By: /s/ Josef W. Rokus ------------------------------------- Josef W. Rokus Vice President, Corporate Development and Secretary 4 EXHIBIT INDEX Exhibit No. - ----------- 99.1 Press Release dated December 22, 1998. EX-99.1 2 PRESS RELEASE DATED DECEMBER 22, 1998 1 EXHIBIT 99.1 Contact: Stephen P. Todd - Interim Chief Financial Officer - 508-347-4222 GALILEO CORP. REPORTS FISCAL YEAR 1998 RESULTS, FOURTH QUARTER RESULTS AND OTHER DEVELOPMENTS STURBRIDGE, MA, DECEMBER 22, 1998 - Galileo Corporation (Nasdaq National Market: GAEO) today reported results for its fourth quarter and for the fiscal year ended September 30, 1998. For the fiscal year ended September 30, 1998, sales were $44.3 million versus $34.1 million for the previous fiscal year, an increase of 29.9%. The loss for the year amounted to $12.6 million, or $1.65 per share. The results for the year were impacted by one-time charges of $5.0 million, or $0.66 per share, for costs to reduce the carrying values of certain equipment and inventories to fair market value related to the previously announced termination of the Medical Endoscope Products business and a reduction of certain receivables to net realizable value. For fiscal year 1997, the Company incurred a loss of $11.2 million, or $1.63 per share. The fiscal year 1997 results included restructuring charges totaling $9.1 million for the reduction in carrying value of certain long-lived assets and reorganization costs. For the fourth quarter, revenues were $11.8 million versus $8.2 million in the fourth quarter of the previous fiscal year, an increase of 44.0%. The Company incurred a loss of $7.4 million, or $0.91 per share, which compares to a loss of $1.1 million, or $0.16 per share for the same period in fiscal year 1997. During the fourth quarter, the Company recorded one-time charges of $4.4 million, or $0.55 per share, for costs to reduce the carrying values of certain equipment and inventories to fair market value related to the previously announced termination of its Medical Endoscope Products business, and a benefit of $0.4 million, or $0.05 per share, from recovery of previously written-off accounts receivable. The Company is in violation of covenants under its bank loan agreement, and the bank has the right to accelerate the loan. The Company is attempting to negotiate revised financial covenants with the bank. However, there can be no assurance that a revised agreement can be reached. As a result of the default under the bank loan agreement and continuing losses, the Company's auditors have indicated that their report on the Company's fiscal year 1998 will include a going-concern qualification. The Company also announced the signing of an agreement with an investment entity formed by the principals of Andlinger & Company, Inc. under which that entity will purchase for $6.0 million in a private transaction 2,000,000 shares of the Company's common stock, together with warrants for an additional 2,000,000 shares. The warrants are exercisable for a period of 7 1/2 years at a price of $1.50 per share, subject to antidilution adjustment. At December 15, 1998, the Company had 8,071,250 shares of common stock outstanding. Consummation of the transaction is subject to a number of conditions, including obtaining waivers and amendments under the Company's bank loan agreements and the issuance of a waiver by The Nasdaq Stock Market of the requirement for shareholder approval of the transaction. Following completion of the sale, the Company's board of directors would be enlarged to seven members, of which three would be designated by the purchaser including the Chairman. In addition, certain specified transactions, such as mergers, 2 acquisitions, divestitures and financings, would require the consent of five directors. Prior to entering into this transaction, the Company's board of directors received an opinion from its financial advisor, Needham & Company, Inc., as to the fairness from a financial point of view of the consideration to be received by the Company in the investment. Andlinger & Company is a twenty-year old private investment company with offices in Tarrytown, New York, Brussels, Belgium and Vienna, Austria. As a result of continuing losses in some of its businesses, the Company announced in the first quarter of fiscal year 1999, ending December 31, 1998, that it had implemented further cost reduction measures, consisting principally of reductions in staffing at its Sturbridge, Massachusetts facility. Additionally, the Company terminated operations of its Telecommunications business and is seeking buyers for this business. The Company anticipates continuing operating losses through the first quarter of fiscal year 1999, which losses include a charge for the reduction of carrying values of certain long-lived assets of $1.6 million, or $0.20 per share, and severance and other consolidation costs of $1.4 million, or $0.17 per share. W. Kip Speyer, President and Chief Executive Officer, commented, "Management is very enthusiastic about the new investment. This capital infusion will allow management to focus on strategic growth and profitability. The Company's aggressive reduction of overhead costs and our renewed focus on our customers should lead the Company to improved future results." He continued, "Optical Filter Corporation, the Company's acquisition earlier this year, has contributed positive cash flow throughout the year, and the Company's women's health products revenues continue to grow. If all conditions are met so as to allow this investment to close, we anticipate that Galileo will reemerge as a profitable company." Galileo, along with its wholly owned subsidiary, Optical Filter Corporation, develops, manufactures and markets products based on its core optical and photonic technologies for applications in medical products and instruments, analytical instruments and office equipment. Leisegang Medical, Inc., a wholly-owned subsidiary, develops, manufactures, and markets women's health-related medical products. Please visit our web sites at www.galileocorp.com, www.ofccorp.com and www.leisegang.com for additional information. This press release contains forward-looking statements which are subject to the inherent uncertainties in predicting future results and conditions, such as comments regarding future financial performance and growth opportunities. Certain factors that could cause actual results to differ materially from those projected include the following: satisfaction of conditions to the closing of the new investment, some of which are beyond the control of the Company; satisfactory restructuring or refinancing of the Company's bank loans; the Company's ability to remain in compliance with the restructured covenants, if so received and the ability of the Company to obtain adequate supplies of materials and services from vendors and to successfully market its products to customers in light of the Company's impaired liquidity. Other factors affecting the Company's business are discussed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1997. (Financial Information Follows) 3 GALILEO CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Year Ended September 30, September 30, (Dollars in thousands except per share data) 1998 1997 1998 1997 Net sales $11,766 $ 8,169 $ 44,306 $ 34,117 Cost of sales 11,153 5,630 33,012 22,363 ------- ------- -------- -------- Gross profit 613 2,539 11,294 11,754 Engineering expenses 1,180 1,438 5,790 5,282 Selling & administrative expenses 5,212 2,362 15,387 9,230 Provision for (recovery of) uncollectible accounts receivable (415) - 569 - Reduction in carrying value of certain long-lived assets 1,525 - 1,525 2,226 Reorganization costs - - - 6,872 ------- ------- -------- -------- Total operating expense 7,502 3,800 23,271 23,610 ------- ------- -------- -------- Operating loss (6,889) (1,261) (11,977) (11,856) Interest expense, net (246) - (524) - Other income, net 125 144 162 835 ------- ------- -------- -------- Loss before provision for income (7,010) (1,117) (12,339) (11,021) Provision for income taxes 352 10 288 163 ------- ------- -------- -------- Net loss (7,362) (1,127) (12,627) (11,184) ======= ======= ======== ======== Net loss per common and common equivalent shares outstanding $ (0.91) $ (0.16) $ (1.65) $ (1.63) Weighted average common and common equivalent share outstanding 8,053 6,864 7,646 6,851
4 GALILEO CORPORATION CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, (Dollars in thousands) 1998 1997 ASSETS Current assets: Cash and cash equivalents $ 710 $ 9,546 Accounts receivable, less allowance of $1,265 and $244, respectively 7,952 5,639 Inventories 8,828 6,614 Other current assets 1,092 187 ----------------------- Total current assets 18,582 21,986 Property, plant and equipment, net 16,128 15,372 Excess of cost over fair value of assets acquired, net 19,396 3,873 Other assets, net 1,548 1,496 ----------------------- Total assets 55,654 42,727 ======================= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 8,683 $ 5,669 Notes payable in default 11,846 - Current portion of notes payable 1,458 - ----------------------- Total current liabilities 21,987 5,669 Long-term notes payable and other liabilities 1,008 956 Shareholders' equity: Common stock, $0.01 par value, 36,000,000 shares authorized and 8,052,786 and 6,872,205 outstanding, respectively 81 69 Additional paid-in capital 52,176 42,951 Accumulated comprehensive income (53) - Accumulated deficit (19,545) (6,918) ----------------------- Total shareholders' equity 32,659 36,102 ----------------------- Total liabilities and shareholders' equity $ 55,654 $42,727 =======================
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