-----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, D90EXUfY/oY5EJZ7QxwZPrhX4QatJoBGRbCSGRr6YzoVaGoFE29Xw1NaeZi0Q2dC oZWQSA1V/GWL3uYGW+mMfQ== 0000950129-99-001521.txt : 19990413 0000950129-99-001521.hdr.sgml : 19990413 ACCESSION NUMBER: 0000950129-99-001521 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990412 ITEM INFORMATION: FILED AS OF DATE: 19990412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OI CORP CENTRAL INDEX KEY: 0000073773 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 730728053 STATE OF INCORPORATION: OK FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-06511 FILM NUMBER: 99591335 BUSINESS ADDRESS: STREET 1: P O BOX 9010 STREET 2: 151 GRAHAM RD CITY: COLLEGE STATION STATE: TX ZIP: 778429010 BUSINESS PHONE: 4096901711 MAIL ADDRESS: STREET 1: 151 GRAHAM RD STREET 2: P O BOX 9010 CITY: COLLEGE STATION STATE: TX ZIP: 778429010 FORMER COMPANY: FORMER CONFORMED NAME: OCEANOGRAPHY INTERNATIONAL CORP DATE OF NAME CHANGE: 19801205 8-K/A 1 O.I. CORPORATION - DATED APRIL 12, 1999 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------- FORM 8-K/A Filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 DATE OF REPORT: APRIL 12, 1999 O. I. CORPORATION (Exact name of registrant as specified in its charter) OKLAHOMA (State of Incorporation) 0-6511 73-0728053 (Commission file number) (IRS Employer Identification No.) 151 GRAHAM ROAD, BOX 9010 77842-9010 COLLEGE STATION, TEXAS (Zip Code) (Address of principal executive offices) (409) 690-1711 ------------------------------------------- (Registrant's Telephone Number, including area code) AMENDMENT NO. 1 The undersigned registrant hereby amends the following items, financial statements, exhibits, or other portions of its Current Report on Form 8-K Dated February 12, 1999 as set forth the pages attached hereto: (List all such items, financial statements, exhibits or other portions amended) 1. Amendment of "Item 7.A Financial Statements of Business Acquired", to read in its entirety as enclosed. 2. Amendment of "Item 7.B Unaudited Pro Forma Combined Financial Information", to read in its entirety as enclosed. 3. Amendment of "Item 7.C" to read in its entirety as enclosed. This document contains 23 pages. 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) FINANCIAL STATEMENTS OF GENERAL ANALYSIS CORPORATION Independent Auditor's Report Consolidated Balance Sheets as of June 30, 1998 and 1997 Consolidated Statement of Changes in Stockholders' (Deficiency) for the years ended June 30, 1998 and 1997 Consolidated Statements of Operations for the years ended June 30, 1998 and 1997 Consolidated Statements of Cash Flows for the years ended June 30, 1998 and 1997 Notes to Consolidated Financial Statements Unaudited Consolidated Balance Sheet as of December 31, 1998 Unaudited Consolidated Statement of Operations for the six months ended December 31, 1998 (b) UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS Introduction Unaudited Pro Forma Combined Balance Sheet at December 31, 1998 Unaudited Pro Forma Combined Statement of Income for the year ended December 31, 1998 Notes to Unaudited Pro Forma Combined Financial Statements (c) EXHIBITS 2.1 Asset Purchase Agreement between O.I. Corporation and General Analysis Corporation, dated as of January 20, 1999. 2.2 First Amendment to the Asset Purchase Agreement, dated as of January 27, 1999. 23.1 Consent of Schwartz & Hofflich LLP 99.1 Press release of O.I. Corporation regarding acquisition of General Analysis Corporation, dated as of January 28, 1999. 3 INDEPENDENT AUDITOR'S REPORT The Board of Directors General Analysis Corporation Norwalk, Connecticut We have audited the accompanying consolidated balance sheets of General Analysis Corporation as of June 30, 1998 and 1997, and the related consolidated statements of operations, shareholders' (deficiency), and cash flows for the years then ended. 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 did not audit the financial statements of G.A.C. Europe Limited and G.A.C. Asia-Pacific PTE, Ltd., wholly-owned subsidiaries, for the year ended June 30, 1998 and 1997, which statements as of June 30, 1998, reflect total assets of $26,697 and $52,481, respectively, and total revenues of $102,628 and $127,124, respectively, for the year then ended. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to data included for G.A.C. Europe Limited and G.A.C. Asia-Pacific PTE, Ltd., is based solely on the report of the other auditors. 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 from 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 and the reports of other auditors provides a reasonable basis for our opinion. In our opinion, based on our audits and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of General Analysis Corporation as of June 30, 1998 and 1997, and the consolidated results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming that General Analysis Corporation will continue as a going concern. As more fully described in Note 1, the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has not complied with certain loan agreements with its bank. These conditions raise substantial doubt about the Company's ability to continue as a going concern. (Management's plans in regard to these matters are described in Note 1). Schwartz & Hofflich LLP October 31, 1998 4 GENERAL ANALYSIS CORPORATION CONSOLIDATED BALANCE SHEETS AS OF JUNE 30,
1998 1997 ------------ ------------ ASSETS CURRENT ASSETS Cash and cash equivalents $ 6,000 $ 90,000 Accounts receivable - trade (net of allowance of $16,000 and $4,000) 565,000 974,000 Inventories 664,000 1,019,000 Prepaid expenses and other current assets 42,000 56,000 ------------ ------------ TOTAL CURRENT ASSETS 1,277,000 2,139,000 Property and equipment, net 153,000 200,000 Other assets, net 16,000 52,000 ------------ ------------ TOTAL ASSETS $ 1,446,000 $ 2,391,000 ============ ============ LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) CURRENT LIABILITIES Notes payable $ 825,000 $ 925,000 Accounts payable and accrued expenses 885,000 899,000 Deferred revenue 543,000 416,000 Deferred compensation 333,000 180,000 ------------ ------------ TOTAL CURRENT LIABILITIES 2,586,000 2,420,000 DEFERRED COMPENSATION, NONCURRENT 0 78,000 ------------ ------------ TOTAL LIABILITIES 2,586,000 2,498,000 ------------ ------------ STOCKHOLDERS' (DEFICIENCY) Common stock, no par value: 1,000,000 shares authorized, 909,400 and 804,400 issued and outstanding in 1998 and 1997 2,223,000 2,222,000 Accumulated deficit (3,262,000) (2,236,000) Foreign currency translation adjustment (98,000) (90,000) Treasury stock, at cost (3,000) (3,000) ------------ ------------ TOTAL STOCKHOLDERS' (DEFICIENCY) (1,140,000) (107,000) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) $ 1,446,000 $ 2,391,000 ============ ============
See independent auditor's report and notes to consolidated financial statements 2 5 GENERAL ANALYSIS CORPORATION CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIENCY) FOR THE YEARS ENDED JUNE 30, 1998 AND 1997
Foreign Currency Number Accumulated Translation Treasury of Shares Amount Deficit Adjustment Stock ------------- -------------- -------------- --------------- -------------- BALANCE, JULY 1, 1996 804,400 $ 2,222,000 $ (2,000,000) $ (72,000) $ (3,000) Net loss (236,000) Foreign currency translation adjustment (18,000) ------------- -------------- -------------- --------------- -------------- BALANCE, JUNE 30, 1997 804,400 2,222,000 (2,236,000) (90,000) (3,000) Sale of common stock 105,000 1,000 Net loss (1,026,000) Foreign currency translation adjustment (8,000) ------------- -------------- -------------- --------------- -------------- BALANCE, JUNE 30, 1998 909,400 $ 2,223,000 $ (3,262,000) $ (98,000) $ (3,000) ============= ============== ============== =============== ==============
See independent auditor's report and notes to consolidated financial statements 3 6 GENERAL ANALYSIS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30,
1998 1997 ------------ ------------ REVENUES Equipment sales $ 2,482,000 $ 3,980,000 Field support sales 1,389,000 1,500,000 ------------ ------------ TOTAL REVENUES 3,871,000 5,480,000 ------------ ------------ COST OF SALES Cost of equipment sales 1,307,000 1,562,000 Cost of field support sales 1,277,000 1,111,000 ------------ ------------ TOTAL COST OF SALES 2,584,000 2,673,000 ------------ ------------ GROSS PROFIT 1,287,000 2,807,000 ------------ ------------ OPERATING EXPENSES Selling 1,238,000 1,754,000 General and administrative 373,000 499,000 Research and development 646,000 745,000 ------------ ------------ TOTAL OPERATING EXPENSES 2,257,000 2,998,000 ------------ ------------ LOSS FROM OPERATIONS (970,000) (191,000) OTHER INCOME (EXPENSES) Interest income 0 2,000 Interest expense (70,000) (69,000) Foreign currency gains 19,000 26,000 ------------ ------------ Loss before provision for income taxes (1,021,000) (232,000) Provision for income taxes 5,000 4,000 ------------ ------------ NET LOSS $ (1,026,000) $ (236,000) ============ ============
See independent auditor's report and notes to consolidated financial statements 4 7 GENERAL ANALYSIS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30,
1998 1997 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: NET LOSS $ (1,026,000) $ (236,000) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 75,000 84,000 Changes in operating assets and liabilities: Accounts receivable, trade 409,000 (193,000) Inventories 355,000 134,000 Prepaid expenses and other current assets 14,000 27,000 Deferred tax assets (1,332,000) (783,000) Accounts payable and accrued expenses (14,000) 97,000 Deferred compensation 75,000 0 Deferred revenue 127,000 21,000 Deferred tax liability 1,332,000 783,000 ------------ ------------ NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 15,000 (66,000) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (47,000) (51,000) Other assets 36,000 2,000 Book value of assets disposed of 3,000 0 ------------ ------------ NET CASH (USED) BY INVESTING ACTIVITIES (8,000) (49,000) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Unrelated party repayments (100,000) 0 Unrelated party borrowings 0 100,000 Proceeds from issuance of common stock 1,000 0 ------------ ------------ NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (99,000) 100,000 Effect of exchange rate changes on cash 8,000 18,000 ------------ ------------ Net increase (decrease) in cash and cash equivalents (84,000) 3,000 Cash and cash equivalents at beginning of year 90,000 87,000 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF YEAR $ 6,000 $ 90,000 ============ ============ SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION Interest paid $ 65,000 $ 75,000 ============ ============ Taxes paid $ 5,000 $ 2,000 ============ ============
See independent auditor's report and notes to consolidated financial statements 5 8 GENERAL ANALYSIS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1998 AND 1997 NOTE 1 - BASIS OF PRESENTATION General Analysis Corporation and its subsidiaries (the "Company") are engaged in the manufacture, sale and rental of proprietary infrared analytical instruments primarily for use as continuous monitoring systems in the beverage and environmental/industrial processing industries. The Company sells primarily in the United States, Canada, Latin America, Europe and Asia. The following is a summary of its significant accounting principles: Consolidation The consolidated financial statements include the accounts of General Analysis Corporation and its wholly owned foreign subsidiaries, G.A.C. Europe Limited and G.A.C. Asia-Pacific PTE, Ltd. (Singapore). All significant intercompany accounts and transactions have been eliminated. Diatrac Holdings, Inc., a 35% owned affiliate is a development stage company that is accounted for by the equity method. During 1998, the investment in Diatrac Holdings, Inc. was written off. In November of 1997, G.A.C. Europe Limited terminated its operations, in the United Kingdom. Going concern The Company has incurred recurring operating losses, has a working capital deficiency and has not complied with certain loan agreements with banks (see Note 5). These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company has implemented a cost-cutting program and is actively pursuing new sales opportunities in the United States and abroad. Management believes the Company's most likely source of liquidity will be the sale of one of its product lines or a complete sale of the Company. To that end, management is actively negotiating the sale of the Company. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Revenue recognition Revenue from equipment sales is recognized at the date of shipment. Deferred revenue represents equipment rental, service contract and warranty revenues and is recognized over the term of the applicable agreement. Cash equivalents Cash and cash equivalents include cash on hand and investments that are readily convertible to cash and have original maturities of three months or less from the date acquired. 6 9 GENERAL ANALYSIS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1998 AND 1997 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Inventories Inventories are stated at the lower of cost or market determined on the first-in, first-out method. Property and equipment Rental equipment, furniture and equipment are recorded at cost net of accumulated depreciation. Depreciation is computed using straight-line and accelerated methods over the assets estimated useful lives, which range from four to seven years. Other assets Other assets include organization costs and patents which are amortized on a straight-line basis over five and seventeen years. Income taxes The Company accounts for income taxes under the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". This statement provides for a liability approach under which deferred income taxes are provided based upon enacted tax laws and rates applied to the periods in which the taxes become payable. Fair value Cash and cash equivalents, accounts receivable and accounts payable: The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts receivable and accounts payable approximate their fair value. Foreign Translation The Company's functional currency is the U.S. dollar. The Functional currencies of the foreign subsidiaries is both the British pound and the Singapore dollar. The monetary assets and liabilities of the foreign entities have been remeasured at the respective exchange rates as of June 30, 1998 and 1997. Nonmonetary items were remeasured at historical rates. Income and expense accounts were remeasured at the average rates in effect during the year. Previous remeasurement adjustments were recognized in the year of occurrence and are included as a component of stockholders' equity. NOTE 3 - INVENTORIES Inventories consist of the following at June 30,:
1998 1997 ---- ---- Raw materials $ 422,000 $ 543,000 Work-in-process 240,000 196,000 Finished goods 90,000 288,000 ------------ ------------ $ 752,000 $ 1,027,000 Less, allowance for obsolescence and slow moving (88,000) (8,000) ------------ ------------ $ 664,000 $ 1,019,000 ============ ============
7 10 GENERAL ANALYSIS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1998 AND 1997 NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment consists of the following at June 30,:
1998 1997 ---- ---- Rental equipment $ 249,000 $ 245,000 Furniture and equipment 433,000 545,000 ------------ ------------ 682,000 790,000 Accumulated depreciation (529,000) (590,000) ------------ ------------ $ 153,000 $ 200,000 ============ ============
Depreciation expense amounted to $75,000 and $83,000 for the years ended June 30, 1998 and 1997, respectively. NOTE 5 - NOTES PAYABLE Notes payable to a bank ($650,000) are pursuant to a $150,000 line of credit and a $500,000 line of credit, both of which were payable on demand. At this time, the Company is unable to repay the outstanding amounts under these lines of credit and is in default, on these loan amounts. Borrowings under these facilities are secured by a lien on all the Company's assets. Interest rates ranged from 6.69% to 9%. See Note 11 in connection with notes payable to related parties. NOTE 6 - STOCK OPTION PLANS The Company has stock option plans that provide for granting of options to officers, directors and employees, at a price that approximates the fair market value of the stock on the date of the grant. Options granted under a 1993 Stock Option Plan are exercisable cumulatively in four equal annual installments beginning one year after the date of grant. Options must be exercised within five years of the date of grant. At June 30, 1998, the Company has reserved 49,000 shares of the Company's common stock to be issued under stock option plans. 8 11 GENERAL ANALYSIS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1998 AND 1997 NOTE 6 - STOCK OPTION PLANS (cont.) Following is a summary of transactions for shares under option:
1998 1997 ------------ ------------ Outstanding, beginning of year $ 16,000 $ 16,000 Granted 0 0 Exercised 0 0 Canceled 12,000 0 ------------ ------------ Outstanding, end of year (at prices ranging from $10 to $12.50 share) 4,000 16,000 ============ ============ Exercisable, end of year $ 3,000 $ 11,000 ============ ============
NOTE 7 - DEFERRED COMPENSATION During fiscal 1989, the Company entered into an agreement with the former President of the Company which specified certain payments be made in the event of termination of his employment, provided he does not subsequently compete with the Company as defined in the agreement. The payments will continue for five years and are based on the date employment ceases and the then current salary level. Payments under such agreement commenced on July 1, 1994. NOTE 8 - INCOME TAXES The provision for income taxes consisted of the following for the years ended June 30:
1998 1997 --------------------------------- --------------------------------- Current Deferred Total Current Deferred Total United States: Federal $ 0 $ 0 0 $ 0 $ 0 0 State 5,000 0 5,000 4,000 0 4,000 --------- --------- --------- --------- --------- --------- $ 5,000 $ 0 $ 5,000 $ 4,000 $ 0 $ 4,000 ========= ========= ========= ========= ========= =========
No taxes are due or payable in foreign jurisdictions. Net operating loss carryforwards of $2,058,000 in the United States expire in 2013. Net operating loss carryforwards, related to G.A.C. Asia -Pacific PTE, Ltd. (Singapore) and G.A.C. Europe Limited of $627,000 and $236,000, respectively, at June 30, 1998, do not expire. 9 12 GENERAL ANALYSIS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1998 AND 1997 NOTE 8 - INCOME TAXES (cont.) Significant components of the Company's deferred tax liabilities and assets at June 30 are as follows:
1998 1997 ------------- ------------- Deferred tax assets: Deferred compensation $ 136,000 $ 103,000 Deferred revenue 22,000 22,000 R & D tax credit carryforward 99,000 99,000 Other 0 0 Benefits of net operating losses - Domestic 843,000 403,000 Benefits of net operating losses - Singapore 169,000 131,000 Benefits of net operating losses - UK 63,000 25,000 ------------- ------------- Deferred tax assets 1,332,000 783,000 Less, valuation allowance for deferred tax assets 1,332,000 783,000 ------------- ------------- Net deferred tax assets 0 0 ------------- ------------- Net $ 0 $ 0 ============= =============
NOTE 9 - DEFINED CONTRIBUTION PLAN The Company sponsors a defined contribution plan covering substantially all full-time employees in the United States. The Company matches employee contributions of up to 6% of compensation at a rate of 25%. Expenses recognized under the plan approximated $8,151 and $11,000, respectively, for the years ended June 30, 1998 and 1997. NOTE 10 - COMMITMENTS AND CONTINGENCIES The Company leases principally all of its facilities under noncancellable operating leases for varying periods. Leases that expire generally are expected to be renewed or replaced by other leases. At June 30, 1998 future minimum rental payments applicable to these noncancellable leases were as follows: 1999 $ 8,500 ============
Rent expense for the years ended June 30, 1998 and 1997 was $139,000 and $186,000, respectively. 10 13 GENERAL ANALYSIS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1998 AND 1997 NOTE 11 - RELATED PARTY TRANSACTIONS The Company leases office space from a corporation controlled by a stockholder of the Company. Rental payments to such corporation aggregated $108,000 and $91,000 for the years ended June 30, 1998 and 1997, respectively. The lease agreement expired November 30, 1996 and the Company is presently on a month to month basis. As of June 30, 1998 and 1997 the Company is obligated on a note to a former officer in the amount of $175,000. The note bears interest at the rate of 8.25% per annum and is payable on demand. NOTE 12 - YEAR 2000 (UNAUDITED) Like other business organizations and individuals around the world, the Company could be adversely affected if the computer systems it uses and those used by the Company's vendors and other service providers do not properly process date-related information and data from and after January 1, 2000. This is commonly known as the "Year 2000 issue". Management has assessed its computer systems not to be year 2000 complaint and is taking steps to obtain new software and hardware that is year 2000 complaint.. In addition, management is assessing the systems compliance of its vendors and providers. Based on the information available to management, the Company's vendors and service providers are taking steps that they believe are reasonably designed to address the Year 2000 issue with respect to the computer systems, that they use. At this time, however, there can be no assurance that these steps will be sufficient, and the failure of a timely completion of all necessary procedures could have a material adverse effect on the Company's operations. Management will continue to monitor the status of its exposure to this issue. 11 14 GENERAL ANALYSIS CORPORATION Unaudited Consolidated Balance Sheet December 31, 1998 (In thousands) ASSETS Current assets: Cash and cash equivalents $ 12 Accounts receivable 383 Inventories 595 Other current assets 25 --------- Total current assets 1,015 Property, plant and equipment, net 125 Other assets 14 Total assets $ 1,154 ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable, trade $ 854 Notes payable 825 Deferred compensation 333 Accrued liabilities 273 --------- Total current liabilities 2,285 --------- Deferred income taxes 0 --------- Commitments and contingencies Stockholders' equity: Common stock 2,223 Foreign currency translation adjustment (100) Treasury stock (3) Retained earnings (3,251) --------- Net stockholders' equity (1,131) --------- Total liabilities and stockholders' equity $ 1,154 =========
15 GENERAL ANALYSIS CORPORATION Unaudited Consolidated Statement of Operations For the six months ended December 31, 1998 (In thousands) Net revenue $ 1,796 Cost of revenue 936 --------- Gross profit 860 Selling, general & administrative expenses 626 Research and development expenses 182 --------- Operating income (loss) 52 Other income(expense) Interest income 0 Interest expense (37) Other income 0 --------- Income (loss) before income taxes 15 Provision for income taxes 0 --------- Net income $ 15 =========
16 O.I. CORPORATION AND GENERAL ANALYSIS CORPORATION UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS The following unaudited pro forma financial information, including the notes thereto, give effect to the acquisition of General Analysis Corporation (GAC) by O. I. Corporation (O.I.) and should be read in conjunction with the O.I. 1998 Annual Report on Form 10-K as filed with the Securities and Exchange Commission and the GAC financial statements included within this report on Form 8-K. The pro forma combined financial results are based on the purchase method of accounting. The unaudited pro forma consolidated condensed balance sheet at December 31, 1998, assumes the acquisition was consummated as of December 31, 1998 and the unaudited pro forma consolidated condensed statement of income assumes the acquisition was consummated as of the beginning of the period presented. The pro forma data is presented for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred had the acquisition been consummated at the dates indicated, nor is such data necessarily indicative of future operating results or financial position. There is no assurance that similar results will be achieved in the future. 17 O.I. CORPORATION AND GENERAL ANALYSIS CORPORATION Unaudited Pro Forma Combined Balance Sheet December 31, 1998 (In thousands)
Historical Pro ---------------------------- Adjustments Forma O. I. GAC (Note 1) Combined ------------ ------------ ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 1,537 $ 12 $ (261)(a) $ 1,288 Investments 2,772 0 0 2,772 Accounts receivable 3,361 383 0 3,744 Investment in sales-type leases 459 0 0 459 Inventories 4,917 595 (276)(b) 5,236 Deferred income tax assets 538 0 0 538 Other current assets 302 25 (25)(d) 302 ------------ ------------ ------------ ------------ Total current assets 13,886 1,015 (562) 14,339 Property, plant and equipment, net 3,620 125 (82)(c) 3,663 Investment in sales-type leases, net of current 576 0 0 576 Other assets 747 14 1,083 (e) 1,844 Total assets $ 18,829 $ 1,154 $ 439 $ 20,422 ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable, trade $ 1,198 $ 854 $ 0 $ 2,052 Notes payable 0 825 (825)(f) 0 Deferred compensation 0 333 (333)(g) 0 Accrued liabilities 2,659 273 466 (h) 3,398 ------------ ------------ ------------ ------------ Total current liabilities 3,857 2,285 (692) 5,450 ------------ ------------ ------------ ------------ Deferred income taxes 228 0 0 228 ------------ ------------ ------------ ------------ Commitments and contingencies Stockholders' equity: Preferred stock 0 0 0 0 Common stock 410 2,223 (2,223)(i) 410 Additional paid-in capital 4,374 0 0 4,374 Foreign currency translation adjustment 0 (100) 100 (i) 0 Treasury stock (3,328) (3) 3 (i) (3,328) Retained earnings 13,288 (3,251) 3,251 (i) 13,288 ------------ ------------ ------------ ------------ Net stockholders' equity 14,744 (1,131) 1,131 14,744 ------------ ------------ ------------ ------------ Total liabilities and stockholders' equity $ 18,829 $ 1,154 $ 439 $ 20,422 ============ ============ ============ ============
18 O.I. CORPORATION AND GENERAL ANALYSIS CORPORATION Unaudited Pro Forma Combined Statement of Income Twelve months ended December 31, 1998 (In thousands)
Historical ---------------------------- Adjustments Pro Forma O.I. GAC (Note 1) Combined Net revenue $ 23,684 $ 3,628 $ 0 $ 27,312 Cost of revenue 12,765 2,265 0 15,030 ------------ ------------ ------------ ------------ Gross profit 10,919 1,363 0 12,282 Selling, general & administrative expenses 7,093 1,292 97(j) 8,482 Research and development expenses 1,458 566 0 2,024 ------------ ------------ ------------ ------------ Operating income (loss) 2,368 (495) (97) 1,776 Other income(expense) Interest income 436 0 0 436 Interest expense 0 (75) 75(k) 0 Other income 55 0 0 55 ------------ ------------ ------------ ------------ Income (loss) before income taxes 2,859 (570) (22) 2,267 Provision for income taxes (1,037) (5) 8(l) (1,034) ------------ ------------ ------------ ------------ Net income $ 1,822 $ (575) $ (14) $ 1,233 ============ ============ ============ ============ Weighted average number of shares, basic 3,560,818 3,560,818 Basic earnings per share $ 0.51 $ 0.35 ============ ============ Weighted average number of shares, diluted 3,641,434 3,641,434 Diluted earnings per share $ 0.50 $ 0.34 ============ ============
19 O.I. CORPORATION AND GENERAL ANALYSIS CORPORATION Notes to Unaudited Pro Forma Combined Balance Sheet and Combined Statement of Income NOTE 1: PRO FORMA ADJUSTMENTS The unaudited pro forma combined balance sheet and combined statement of income have been prepared to reflect the acquisition of certain assets of GAC by O.I. for an aggregate price of approximately $1,840,000. The purchase price is comprised of $260,634 from available cash resources and assumed liabilities. Pro forma adjustments are made to reflect: (a) cash consideration paid by O.I. in connection with the acquisition; (b) the portion of inventory of GAC not acquired by O.I. and the portion reclassed from PP&E to conform to the O.I. presentation in the accompanying unaudited proforma financial statements; (c) the portion of inventory of GAC reclassified to conform to the O.I. presentation in the accompanying unaudited proforma financial statements; (d) the portion of prepaid assets of GAC not acquired by O.I; (e) the estimated intangibles and goodwill incurred in the GAC acquisition, with a useful life ranging from 5 to 15 years. The purchase price allocation is preliminary. Thus, as additional information concerning the value of assets acquired and liabilities assumed becomes known, adjustments will be made to the purchase price allocation; (f) liabilities discounted by certain creditors with the remaining balance paid by O.I. in connection with the acquisition; (g) liabilities not assumed by O.I.; (h) liabilities to be paid by O.I. in connection with the acquisition; (i) to eliminate GAC stockholders' equity accounts; (j) increased amortization expense for intangibles related to the acquisition of GAC, amortized over a period of 5 to 15 years; (k) reduced interest expense resulting from the payment of debt in connection with the acquisition; (l) the tax effect of the aforementioned pro forma adjustments based on the consolidated O.I. Corporation tax rate. 20 NOTE 2: GAC HISTORICAL INFORMATION The historical financial statements of GAC at December 31, 1998 include an inventory write-down of $350,000, $175,000 of which is included in cost of sales and $175,000 of which is included in R&D expense. The inventory write-downs are expected to be unusual and nonrecurring because of their magnitude and because O.I. Corporation is only purchasing such inventory that it believes is usable in the normal course of business. However, the elimination of such adjustments is not permitted under the rules for preparation of pro forma financial information. 21 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. O.I. CORPORATION --------------------------------------- (Registrant) Date: April 12, 1999 /s/ Julie A. Wright --------------------------------------- Julie A. Wright, Controller 22 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ----------- ----------- 2.1 Asset Purchase Agreement between O.I. Corporation and General Analysis Corporation, dated as of January 20, 1999. 2.2 First Amendment to the Asset Purchase Agreement, dated as of January 27, 1999. 23.1 Consent of Schwartz & Hofflich LLP 99.1 Press release of O.I. Corporation regarding acquisition of General Analysis Corporation, dated as of January 28, 1999.
EX-23.1 2 CONSENT OF SCHWARTZ & HOFFLICH LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 33-24505 and No. 33-26209 and No. 33-66822) of O. I. Corporation of our opinion dated October 31, 1998 relating to the financial statements of General Analysis Corporation for the twelve months ended June 30, 1998 and 1997 appearing within Item 7(a) of O. I. Corporation's Current Report on Form 8-K dated April 12, 1999. Schwartz & Hofflich LLP -----END PRIVACY-ENHANCED MESSAGE-----