8-K 1 eight-k.txt 8-K 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): October 24, 2001. INTERMAGNETICS GENERAL CORPORATION ------------------------------------------------------- (Exact name of registrant as specified in its charter.) Commission File Number 1-11344 New York 14-1537454 ------------------------------- ------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 450 Old Niskayuna Road, Latham, New York 12110 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (518) 782-1122 -------------- Item 2. Acquisition or Disposition of Assets. On October 24, 2001, Intermagnetics General Corporation ("Intermagnetics" or the "Company") sold substantially all of the assets of IGC-Advance Superconductors, a division that manufactures low temperature superconducting wire and tape. The sale was subject to a purchase agreement, dated October 4, 2001, between Intermagnetics and Outokumpu Copper Products Oy and Outokumpu Advanced Superconductors Inc. (together, the "Purchasers"). Under the Agreement, the Purchasers purchased substantially all assets and assumed certain liabilities associated with the manufacture, sale and distribution of low temperature superconducting (LTS) wire and tape. The purchase consideration was arrived at by arms length negotiation and consisted of $30,087,264 in cash paid on October 24 and an additional $4,000,000 payable two years from the closing. In addition, Intermagnetics can earn up to $4,000,000 as a performance payment if it attains specified levels of LTS wire purchases over the next two years. Under the Agreement, the parties must make certain post-closing calculations with respect to inventory levels, accounts payable and accounts receivable. In addition, Intermagnetics agreed to place certain funds in escrow for repairs to the IGC-AS manufacturing facility. These payments and adjustments are expected to bring the total sale price (excluding any performance payment) to approximately $33,500,000. Item 7. Financial Statements and Exhibits (b) Pro forma financial information. Intermagnetics General Corporation Pro Forma Condensed Consolidated Balance Sheets August 26, 2001 (Dollars in Thousands) The following Condensed Consolidated Balance Sheet as of August 26, 2001, gives effect to the sale of the assets and liabilities of IGC-Advanced Superconductors by Intermagnetics General Corporation (IGC), which was consummated on October 24, 2001, as if the transaction had occurred on August 26, 2001. The Pro Forma Condensed Consolidated Balance Sheet should be read in conjunction with the related Pro Forma Condensed Consolidated Statements of Operations and the notes to the Pro Forma Condensed Consolidated Financial Statements appearing elsewhere herein.
Note 2 Delete Consolidated Note 4 Divested Without Pro Forma Pro Forma Historical Entity Divested Entity Adjustments Consolidated ----------- ----------- ---------------- ----------- ------------ ASSETS (unaudited) CURRENT ASSETS Cash and cash equivalents $ 25,757 $(2) $ 25,755 $ 29,080 (4.1) $ 54,835 Trade accounts receivable, net 22,675 (966) 21,709 21,709 Costs and estimated earnings in excess of billings on uncompleted contracts 1,203 (33) 1,170 1,170 Inventories 36,287 (10,904) 25,383 25,383 Deferred income taxes 3,362 3,362 3,362 Prepaid expenses and other 1,220 (21) 1,199 1,199 -------- -------- -------- -------- -------- TOTAL CURRENT ASSETS 90,504 (11,926) 78,578 29,080 107,658 Property, plant and equipment, net 28,857 (4,233) 24,624 24,624 INTANGIBLE AND OTHER ASSETS Available for sale securities 6,034 6,034 6,034 Other investments 3,500 3,500 3,500 Goodwill and other non-amortizable intangibles 13,750 13,750 13,750 Other intangibles, less accumulated amortization 10,361 10,361 10,361 Note Receivable, net 3,804 (4.2) 3,804 Other assets 1,665 (23) 1,642 1,642 -------- -------- -------- -------- -------- $154,671 ($16,182) $138,489 $32,884 $171,373 ======== ======== ======== ======= ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $ 1,353 $ 1,353 $ 1,353 Accounts payable 9,033 (1,568) 7,465 7,465 Salaries, wages and related items 6,508 (455) 6,053 6,053 Customer advances and deposits 1,736 (933) 803 803 Product warranty reserve 1,556 (83) 1,473 1,473 Accrued income taxes 4,293 4,293 5,862 (4.3) 10,155 Other liabilities and accrued expenses 2,562 (71) 2,491 1,062 (4.4) 3,553 -------- -------- -------- -------- -------- TOTAL CURRENT LIABILITIES 27,041 (3,110) 23,931 6,924 30,855 LONG-TERM DEBT, less current portion 6,120 6,120 6,120 DEFERRED INCOME TAXES 2,383 2,383 2,383 DERIVATIVE LIABILITY 232 232 232 SHAREHOLDERS' EQUITY Common Stock, par value $.10 per share: Authorized - 40,000,000 shares Issued and outstanding (including shares in treasury): August 26, 2001 - 16,831,852 shares; May 27, 2001 - 16,693,997 shares 1,683 1,683 1,683 Additional paid-in capital 128,224 128,224 795 (4.4) 129,019 Notes receivable for executive stock purchases (1,354) (1,354) (1,354) Accumulated earnings (deficit) (950) (13,072) (14,022) 25,165 (4.5) 11,143 Accumulated other comprehensive income (loss) (2,887) (2,887) (2,887) -------- -------- -------- -------- -------- 124,716 (13,072) 111,644 25,960 137,604 Less cost of Common Stock in treasury August 26, 2001 - 661,282 shares; (5,821) (5,821) (5,821) -------- -------- -------- -------- -------- 118,895 (13,072) 105,823 25,960 131,783 -------- -------- -------- -------- -------- $154,671 ($16,182) $138,489 $32,884 $171,373 ======== ======== ======== ======= ========
Intermagnetics General Corporation Pro Forma Condensed Consolidated Statement of Operations Three Months Ended August 26, 2001 (Dollars in Thousands, Except Share and Per Share Amounts) The following Pro Forma Condensed Consolidated Statement of Operations for the three months ended August 26, 2001, gives effect to the sale of certain assets and liabilities of IGC-Advanced Superconductors by Intermagnetics General Corporation (IGC), excluding one time charges, which was consummated on October 24, 2001 as if the transaction occurred at the beginning of the quarter ended August 26, 2001. The Pro Forma Condensed Consolidated Statement of Operations should be read in conjunction with the related Pro Forma Condensed Consolidated Balance Sheet and the notes to the Pro Forma Condensed Consolidated Financial Statements appearing elsewhere herein.
Note 2 Delete Consolidated Note 3 Divested Without Pro Forma Pro Forma Historical Entity Divested Entity Adjustments Consolidated ----------- -------- --------------- ----------- ------------ (unaudited) Net sales $40,089 $1,031 $39,058 $39,058 Cost of products sold 22,850 850 22,000 22,000 ------- ------ ------- --- ------- Gross margin 17,239 181 17,058 0 17,058 Product research and development 4,018 (2) 4,016 4,016 Marketing, general and administrative 7,074 (369) 6,705 6,705 Amortization of intangible assets 529 529 529 ------- ------ ------- --- ------- 11,621 (371) 11,250 0 11,250 ------- ------ ------- --- ------- Operating income (loss) 5,618 (190) 5,808 0 5,808 Interest and other income 352 352 352 Interest and other expense (127) (8) (135) (135) ------- ------ ------- --- ------- Income before income taxes 5,843 (198) 6,025 0 6,025 Provision for income taxes (benefit) 2,203 (79) 2,282 0 2,282 ------- ------ ------- --- ------- NET INCOME (LOSS) $ 3,640 ($119) $ 3,743 $ 0 $ 3,743 ======= ====== ======= === ======= Net Income per Common Share: Basic $ 0.23 $ 0.23 ======= ======= Diluted $ 0.21 $ 0.21 ======= ======= Shares: Basic 16,104,002 16,104,002 Diluted 17,470,616 17,470,616
Intermagnetics General Corporation Pro Forma Condensed Consolidated Statement of Operations Year Ended May 27, 2001 (Dollars in Thousands, Except Share and Per Share Amounts) The following Pro Forma Condensed Consolidated Statement of Operations for the year ended May 27, 2001, gives effect to the sale of certain assets and liabilities of IGC Advanced Superconductors by Intermagnetics General Corporation (IGC), excluding one time charges, which was consummated on October 24, 2001, as if the transaction occurred at the beginning of the fiscal year ended May 27, 2001. The Pro Forma Condensed Consolidated Statement of Operations should be read in conjunction with the notes to the Pro Forma Condensed Consolidated Financial Statements appearing elsewhere herein.
Note 2 Delete Consolidated Note 3 Divested Without Pro Forma Pro Forma Historical Entity Divested Entity Adjustments Consolidated ---------- -------- --------------- ----------- ------------ Net sales $138,157 $7,547 $130,610 $130,610 Cost of products sold 80,990 (5,886) 75,104 75,104 Inventory recovered in restructuring (1,361) (1,361) (1,361) --------- ----- -------- --- -------- 79,629 (5,886) 73,743 0 73,743 --------- ----- -------- --- -------- Gross margin 58,528 1,661 56,867 0 56,867 Product research and development 9,541 (11) 9,530 9,530 Marketing, general and administrative 27,255 (1,071) 26,184 26,184 Amortization of intangible assets 3,094 3,094 3,094 --------- ----- -------- --- -------- 39,890 (1,082) 38,808 0 38,808 --------- ----- -------- --- -------- Operating income 18,638 579 18,059 0 18,059 Interest and other income 1,374 1,374 1,374 Interest and other expense (1,986) (6) (1,992) (1,992) --------- ----- -------- --- -------- Income before income taxes 18,026 573 17,441 0 17,441 Provision for income taxes 6,959 221 6,738 0 6,738 --------- ----- -------- --- -------- NET INCOME $ 11,067 $ 352 $ 10,703 $ 0 $ 10,703 ========= ===== ======== === ======== Net Income per Common Share: Basic $ 0.72 $ 0.70 ========= ======== Diluted $ 0.67 $ 0.65 ========= ======== Shares: Basic 15,363,208 15,363,208 Diluted 16,495,029 16,495,029
Note 1 Effective October 24, 2001 the Company sold substantially all assets and certain liabilities associated with the manufacture, sale and distribution of low temperature superconducting (LTS) wire and tape. The purchase consideration was arrived at by arms length negotiation and consisted of $30,087,264 in cash paid on October 24 and an additional $4,000,000 payable two years from the closing. The note is non-interest bearing and has been discounted to reflect the present value. In addition, Intermagnetics can earn up to $4,000,000 as a performance payment if it attains specified levels of LTS wire purchases over the next two years. Under the Agreement, the parties must make certain post-closing calculations with respect to inventory levels, accounts payable and accounts receivable, which will result an adjustment to the purchase price. Additionally, Intermagnetics agreed to place approximately $320,000 in escrow for repairs to the IGC-AS manufacturing facility. These payments, notes and adjustments are expected to bring the total sale price (excluding any performance payment) to approximately $33,500,000. Note 2 Delete divested entity Note 3 No Pro Forma adjustments required. Note 4 In connection with the Pro Forma Condensed Consolidated Balance Sheets for the period ended August 26, 2001, the following transactions give effect to the sale of the assets and liabilities of IGC Advanced Superconductors by the Company as if the transaction occurred on August 26, 2001: 4.1 Cash received as partial consideration for the business. 4.2 Discounted promissory note received as partial consideration for the business. 4.3 Accrued income taxes related to gain on transaction net of capital loss carryforward. 4.4 Expenses directly related to the divestiture including accelerated vesting of stock options. 4.5 Purchase price less expenses of transaction and taxes on gain. Item 7. (c) Exhibits. The following Exhibits are filed with this Form 8-K. Exhibit No. Description - ----------- ----------- 2.1 Purchase Agreement dated October 4, 2001 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTERMAGNETICS GENERAL CORPORATION Date: November 8, 2001 By: /s/ Glenn H. Epstein ---------------------------------------- Glenn H. Epstein President and Chief Executive Officer Exhibit Index Exhibit - ------- 2.1 Purchase Agreement dated October 4, 2001