-----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, Ll5M9iPfUMcsGKdYO1Ao96DYdERfGrQFT0LMOBYL8vyTe03tH5VsFARbTCrdypLx Kd2SsG8PcRVqq3w7Rf7NMA== 0000950116-03-002692.txt : 20030515 0000950116-03-002692.hdr.sgml : 20030515 20030515104145 ACCESSION NUMBER: 0000950116-03-002692 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030514 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERMAGNETICS GENERAL CORP CENTRAL INDEX KEY: 0000351012 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FABRICATED METAL PRODUCTS [3490] IRS NUMBER: 141537454 STATE OF INCORPORATION: NY FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11344 FILM NUMBER: 03701688 BUSINESS ADDRESS: STREET 1: 450 OLD NISKAYUNA RD STREET 2: PO BOX 461 CITY: LATHAM STATE: NY ZIP: 12110-0461 BUSINESS PHONE: 5187821122 MAIL ADDRESS: STREET 1: 450 OLD NISKAYUNA ROAD STREET 2: PO BOX 461 CITY: LATHAM STATE: NY ZIP: 12110-0461 8-K 1 eight-k.txt =============================================================================== 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): May 14, 2003 Intermagnetics General Corporation ----------------------------------------------------------------- (Exact Name of Registrant Specified in Charter) New York 001-11344 14-1537454 ---------------- ------------------- -------------------- (State or Other (Commission File (I.R.S. Employer Jurisdiction of Number) Identification No.) Incorporation) Old Niskayuna Road, P.O. Box 461, Latham, New York 12110-0461 ---------------------------------------------- -------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (518) 782-1122 --------------- Not Applicable ---------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ================================================================================ Item 7. Financial Statements and Exhibits. The following exhibits are furnished pursuant to Item 9: Exhibit 99.1 Intermagnetics General Corporation Press Release, dated May 14, 2003, relating to Earnings Guidance with respect to the Fourth Quarter of the Fiscal Year Ending May 25, 2003 and Preliminary Earnings Guidance with respect to Fiscal Year 2004. Exhibit 99.2 Press Release of Intermagnetics General Corporation, dated May 14, 2003, announcing Modifications to Supply Agreement with Philips Medical Systems. Exhibit 99.3 Text of Conference Call Presentation to be held May 15, 2003 by Intermagnetics General Corporation relating to Fourth Quarter 2003 and Fiscal Year 2004 Guidance and Modification of Supply Agreement with Philips Medical Systems. Item 9. Regulation FD Disclosure. On May 14, 2003, Intermagnetics General Corporation issued a Press Release announcing, among other matters, earnings guidance with respect to the fourth quarter of its fiscal year ending May 25, 2003 and preliminary earnings guidance with respect to fiscal year 2004. A copy of the Press Release is furnished with this Current Report on Form 8-K as Exhibit 99.1. Also, on May 14, 2003, Intermagnetics General Corporation issued a press release announcing that it had reached an agreement with Philips Medical Systems to modify and extend the existing Supply Contract between Intermagnetics and Philips. A copy of that Press Release is furnished as Exhibit 99.2 to this Current Report on Form 8-K. Intermagnetics General Corporation has scheduled a conference call to be held May 15, 2003 to discuss the earnings guidance provided in the Press Release furnished as Exhibit 99.1, and certain matters relating to the modification and extension of its Supply Agreement with Philips Medical Systems, announced in the Press Release furnished as Exhibit 99.2. The text for the conference call is furnished with this Current Report as Exhibit 99.3. The information contained in this Current Report and in the Press Releases and text furnished as, respectively, Exhibits 99.1, 99.2, and 99.3 hereto should not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act') or otherwise subject to the liability of that section, nor shall they be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing. 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. Intermagnetics General Corporation By: /s/ Michael K. Burke ------------------------------- Michael K. Burke Executive Vice President and Chief Financial Officer Dated: May 15, 2003 EXHIBIT INDEX Exhibit Number Description -------------- ----------- Exhibit 99.1 Intermagnetics General Corporation Press Release, dated May 14, 2003, relating to Earnings Guidance with respect to the Fourth Quarter of the Fiscal Year Ending May 25, 2003 and Preliminary Earnings Guidance with respect to Fiscal Year 2004. Exhibit 99.2 Press Release of Intermagnetics General Corporation, dated May 14, 2003, announcing Modifications to Supply Agreement with Philips Medical Systems. Exhibit 99.3 Text of Conference Call Presentation to be held May 15, 2003 by Intermagnetics General Corporation relating to Fourth Quarter 2003 and Fiscal Year 2004 Guidance and Modification Supply Agreement with Philips Medical Systems. EX-99 3 ex99-1.txt EXHIBIT 99.1 FOR IMMEDIATE RELEASE Contact: Michael Burke Nasdaq:IMGC Exec. VP & CFO Contact: Cathy Yudzevich IR Specialist (518) 782-1122 INTERMAGNETICS REAFFIRMS 2003 EXPECTATIONS, PROVIDES INITIAL GUIDANCE FOR FISCAL 2004 o Enhanced Contract With Major Customer Expands Long-Term Revenue Potential o 'Marconi' Opportunity Expected To Contribute Additional Magnet Sales Beginning In FY04, Potential Of More Than $20 Million Annually By Fiscal 2006 o Decision To Broaden Responsibility Of Magnet Supply-Chain Management Expected To Result In A One-Time Lowering Of Sales, Earnings During Q1, Followed By Ramp Up To Enhanced Run Rate During FY04 o Long-Term Annual Earnings Growth Target Of 10%-15% Maintained LATHAM, N.Y., May 14, 2003--Intermagnetics General Corporation (Nasdaq:IMGC) today reaffirmed expected earnings for the fourth quarter of the current fiscal year ending May 25, 2003, of $0.25 to $0.26 per diluted share. Glenn Epstein, chairman and chief executive officer, noted that overall FY04 earnings growth is still expected despite an anticipated drop in first-quarter MRI magnet deliveries as a result of the conscious decision to strategically realign supply-chain responsibilities between Intermagnetics and its major customer, Philips Medical Systems. Intermagnetics and Philips recently extended and enhanced their exclusive supplier agreement. "The newly amended contract provides improved longer-term visibility on revenues for many years to come," Epstein said. "We expect incremental revenue increases to result from our capturing of the 'Marconi' volume in addition to anticipated gains from ongoing ramping of 3.0T magnet demand, commercial introduction of our proprietary high-field open magnets, continued development of new MRI procedures and applications and the underlying growth characteristics of the overall MRI market. "This new contract provides strong underpinning to our confidence that Intermagnetics can achieve our stated goal of long-term earnings growth of 10 percent to 15 percent on an annualized basis over the next five years and beyond," Epstein said. "This target focuses on sustainable long-term opportunities, so short-term trade-offs will occasionally be appropriate and necessary. -More- "After the planned decrease in the upcoming quarter to adjust for our new commitment to broader supply-chain management, we expect incremental revenue increases that will begin in fiscal 2004 and that have the potential to exceed $20 million annually by FY2006. This is a result of our capturing new sales related to Philips' acquisition of Marconi Medical Systems. In addition, other initiatives are expected to generate further growth within our MRI business segment. "However, the initial net effect of our decision to enter into this enhanced strategic agreement is that we expect the upcoming quarter to result in minimal profitability followed quickly by run-rates that are expected to be in line with our long-term goals," Epstein said. "We expect the anticipated abnormally low first quarter will result in the upcoming 2004 fiscal year being below our stated long-term targets, but will position the company for above-average growth rates in subsequent years. "Another key benefit of this revised contractual relationship is that we have also agreed to collaborate with our major customer on a wider range of development activities, possibly evolving into other product or service areas that would be of incremental benefit to Intermagnetics," Epstein said. Expect Ongoing Improvements In All Three Segments "We see solid near- and longer-term prospects for both of our core operating segments and our emerging Energy Technology segment at SuperPower, said Epstein. "The MRI segment should see increased sales of its recently introduced, powerful 3.0 Tesla superconducting MRI magnet," he said. Additionally, Intermagnetics' new high-field 1.0T open magnet design is expected to enter commercial delivery levels around 2005, depending on product introduction decisions made by the MR system producers with which Intermagnetics has relationships. According to industry experts, the overall global MRI market is projected to grow in the range of 9 percent to 10 percent annually for the foreseeable future. This growth rate could increase with the introduction of newly configured MRI systems and new applications in neurological and cardiology diagnostic procedures. The Instrumentation segment is expected to remain profitable and contribute increasingly to overall operations during fiscal 2004, Epstein said. "We are projecting near-term improvements with no reliance on recovery in the semiconductor market, although we are well positioned to capitalize on that when it occurs," he added. "Rather, our outlook is based on anticipated strength within our core industrial vacuum markets." The Energy Technology segment also is expected to contribute increasing revenues during fiscal 2004 that could be quite meaningful when compared to prior years. "We expect government contract revenues and revenues from the Albany superconducting cable project to ramp significantly during the year," Epstein stated. "Additionally, we are on track toward our stated goal of producing commercially viable second-generation superconducting cable and related devices for electric power transmission and distribution by mid-decade." -More- Solid Long-Term Growth Outlook "Overall, we remain comfortable with attaining our long-term goals, both in terms of revenue and income as well as our benchmarks for operating improvements," Epstein said. "Intermagnetics continues to build on a solid infrastructure of proven, sophisticated operations and talented executives and staff. We expect to continue delivering new technology and products to both existing and prospective customers, resulting in attractive revenue and earnings growth for the foreseeable future." Intermagnetics will discuss this news release during a conference call on May 15, 2003, beginning at 11 a.m. EDT. The call will be broadcast live and archived over the Internet through the company's web site www.igc.com under the Investor Relations section. The domestic dial-in number for the live call is (877) 282-2315 - conference 144101. The international dial-in number is (703) 871-3016 - - conference 144101. The company will also make available a digital replay beginning May 15, 2003, at 2:00 p.m. EDT through midnight May 17, 2003, by dialing (703) 925-2533 and requesting conference 144101. Intermagnetics (www.igc.com), drawing on the financial strength, operational excellence and technical leadership in its core businesses of Magnetic Resonance Imaging and Instrumentation has become a prominent participant in superconducting applications for Energy Technology. The company has a more than 30-year history as a successful developer, manufacturer and marketer of superconducting materials, radio-frequency coils, magnets and devices utilizing low- and high-temperature superconductors and related cryogenic equipment. Intermagnetics derives current revenues primarily from applications within magnetic resonance imaging for medical diagnostics and cryogenic applications for vacuum and related processes. The company is at the forefront in the development of high-temperature superconductor-based applications that would provide increased capacity and reliability for transmission and distribution of electric power. Through its own research and development programs and in conjunction with industry and other partners, Intermagnetics is committed to further commercialization of applied superconductivity and cryogenic systems for a broad range of applications. ### Safe Harbor Statement: The statements contained in this press release that are not historical fact are "forward-looking statements" which involve various important assumptions, risks, uncertainties and other factors. These include, without limitation, the assumptions, risks, and uncertainties set forth here as well as in the company's Annual Report on Form 10-K including but not limited to: (1) the company's ability to meet the performance and quality requirements of its customers, particularly with respect to new products, and maintain gross margin levels through continued production cost reductions and manufacturing efficiencies, (2) our largest customer's ability to maintain and grow its share of the market for MRI systems, including its new "Enterprise" system, (3) continued improvement in order trends from the Instrumentation segment and (4) the company's ability to invest sufficient resources in and obtain third-party funding for its HTS development efforts and to avoid the potential adverse impact of competitive emerging patents. Except for the company's continuing obligation to disclose material information under federal securities law, the company is not obligated to update its forward-looking statements even though situations may change in the future. The company qualifies all of its forward-looking statements by these cautionary statements. EX-99 4 ex99-2.txt EXHIBIT 99.2 FOR IMMEDIATE RELEASE Contact: Glenn Epstein Nasdaq:IMGC Chairman & CEO Contact: Cathy Yudzevich IR Specialist (518) 782-1122 INTERMAGNETICS ANNOUNCES EXPANDED STRATEGIC AGREEMENT WITH PHILIPS MEDICAL SYSTEMS o Intermagnetics' Exclusive Supply Contract Expanded To Include Magnets For Philips' 'Enterprise' MRI Systems o Company Sees Potential For Up To $20 Million In Additional Sales Annually Once Fully Integrated o Companies Extend Term Of Commercial 'Umbrella' Agreement To Seven Years o Strategic Collaboration Expanded To Include Potential Supply Of Additional Products LATHAM, N.Y., May 14, 2003--Intermagnetics General Corporation (Nasdaq: IMGC) today announced that it has reached an agreement with Philips Medical Systems to extend and expand their exclusive supply agreement. Under terms of the contract, Intermagnetics will be sole supplier of superconducting-based actively shielded magnets for the full range of Philips' commercial magnetic resonance imaging (MRI) systems, including the supply of magnets for Philips' recently introduced "Enterprise" MRI systems, which have been added to Philips' product line following its acquisition of the former Marconi Medical Systems. Once fully implemented, the new agreement could result in an additional $20 million annually in magnet sales for Intermagnetics. The companies have extended their strategic relationship by adding two years to the front end of the contract term, making it a seven-year pact in its initial period. The agreement names Intermagnetics as the exclusive supplier of superconducting magnets for Philips' commercial MRI systems and gives Intermagnetics the exclusive right to develop superconducting magnets for any new Philips' MRI offering. After the initial seven-year contract, the agreement returns to a rolling five-year contract. "Our long-standing association with Philips, which was expanded and formalized in a rolling 'evergreen' five-year exclusive supply agreement in 1999, has evolved into a true strategic relationship," said Glenn H. Epstein, chairman and chief executive officer of Intermagnetics. "We pursue the MRI market in partnership with Philips, and we will continue working closely to develop new applications and products in addition to enhancing our efficiency and cost-effectiveness." -More- Under the new agreement, the two companies will actively explore additional MRI product opportunities that would draw on Intermagnetics' technical and operational strengths that mutually benefit both Intermagnetics and Philips. Epstein also noted that, as part of the agreement, Intermagnetics will institute a system of flexible vendor-managed inventory in which the company will take a broader responsibility for responding to Philips' magnet system delivery requirements. "While the implementation of this will result in a short-term `non-recurring' decrease in Intermagnetics' revenues during the first quarter of fiscal 2004, we expect medium and longer-term gains overall for Intermagnetics," Epstein said. "By enhancing our commitment to cost controls and further improving our response to end-user needs, we believe we increase overall competitiveness and ultimately benefit Intermagnetics and its shareholders." Intermagnetics will discuss this news release during a conference call on May 15, 2003, beginning at 11 a.m. EDT. The call will be broadcast live and archived over the Internet through the company's web site www.igc.com under the Investor Relations section. The domestic dial-in number for the live call is (877) 282-2315 - conference 144101. The international dial-in number is (703) 871-3016 - - conference 144101. The company will also make available a digital replay beginning May 15, 2003, at 2:00 p.m. EDT through midnight May 17, 2003, by dialing (703) 925-2533 and requesting conference 144101. Intermagnetics (www.igc.com), drawing on the financial strength, operational excellence and technical leadership in its core businesses of Magnetic Resonance Imaging and Instrumentation has become a prominent participant in superconducting applications for Energy Technology. The company has a more than 30-year history as a successful developer, manufacturer and marketer of superconducting materials, radio-frequency coils, magnets and devices utilizing low- and high-temperature superconductors and related cryogenic equipment. Intermagnetics derives current revenues primarily from applications within magnetic resonance imaging for medical diagnostics and cryogenic applications for vacuum and related processes. The company is at the forefront in the development of high-temperature superconductor-based applications that would provide increased capacity and reliability for transmission and distribution of electric power. Through its own research and development programs and in conjunction with industry and other partners, Intermagnetics is committed to further commercialization of applied superconductivity and cryogenic systems for a broad range of applications. ### Safe Harbor Statement: The statements contained in this press release that are not historical fact are "forward-looking statements" which involve various important assumptions, risks, uncertainties and other factors. These include, without limitation, the assumptions, risks, and uncertainties set forth here as well as in the company's Annual Report on Form 10-K including but not limited to: (1) the company's ability to meet the performance and quality requirements of its customers, particularly with respect to new products, and maintain gross margin levels through continued production cost reductions and manufacturing efficiencies, (2) our largest customer's ability to maintain and grow its share of the market for MRI systems, (3) market acceptance and commercial success of our customer's "Enterprise" system, and (4) the company's ability to implement and manage a flexible vendor managed inventory system. Except for the company's continuing obligation to disclose material information under federal securities law, the company is not obligated to update its forward-looking statements even though situations may change in the future. The company qualifies all of its forward-looking statements by these cautionary statements. EX-99 5 ex99-3.txt EXHIBIT 99.3 Exhibit 99.3 - ------------ Intermagnetics General Corporation - ---------------------------------- Michael K. Burke: Call Notes - ----------------------------- May 15, 2003 Good morning everyone. Opening: Reaffirm Q4 2003 As announced in our earlier press release, with our 2003 fiscal year end of May 25th being just about a week away from closing, we are today reaffirming that our earnings expectation is anticipated to be about $0.25 to $0.26 per diluted share for the fourth quarter of the current fiscal year. We expect to achieve this result because we successfully controlled spending while maintaining appropriate reinvestment into our core product development efforts and continuing business development activities. It's founded off a base gross margin, as a percentage of sales, of about 40% for the quarter. In addition, for the quarter we anticipate generating net operating cash flow of better than $20 million, which is expected to bring year-end cash balances to greater than $85 million. As a result of this expected fourth quarter performance, we anticipate achieving a return on net operating assets approaching our long-term goal of 50% and continued working capital efficiencies, as measured by sales, of less than 15%. Background: Contract/Philips Relationship As you all know from our various filings in the past, Intermagnetics has a long-term supply contract to provide all of Philips Medical Systems superconducting-based actively shielded magnet requirements for their MRI systems on an exclusive basis. As evidenced by this contract our strategic relationship has expanded and strengthened and will continue to do so along with the introduction of new MRI procedures and applications as Intermagnetics has the exclusive right to develop superconducting magnets for any new Philips' MRI offering during the term of this contract. Benefits: Long-term relationship reaffirmed There are many benefits for Intermagnetics in this new contract. Firstly, the initial contract term is now 7-years versus the previous term of 5-years. In addition, after the first two years of the 7-year contract it will automatically continue to renew each year for five years subject to its detailed terms and conditions. In effect a perpetual rolling five year contract. Intermagnetics will now begin assuming the supply requirements of the Marconi line associated with Philips acquisition of that business back in the year 2001. This represents incremental volume for Intermagnetics that we expect to commence during our upcoming fiscal year 2004; which begins this June. The phase-in of this volume will begin to ramp up through Fiscal Year 2005 and we expect to see full production during Fiscal Year 2006. By that year, we are projecting that the potential incremental volume benefiting Intermagnetics could reach $20 million on an annual basis. And finally, we have agreed to collaborate on a wide range of development activities, possibly evolving into other products or service areas that would be of further incremental benefit to Intermagnetics. Impact: Revenue, working capital impact, 1st quarter v. 4th quarter, GAAP effect. As a result of Intermagnetics' agreement to provide rapid response delivery to its customers and the resulting increased reliance upon Intermagnetics' balance sheet to support the program, over the upcoming first quarter of our fiscal 2004, Philips will first utilize existing magnet inventory they currently have on-hand. As a result, revenue associated with magnet sales to Philips will temporarily decline and we anticipate will result in minimal earnings for Intermagnetics for the first quarter of fiscal 2004. However, we then expect revenue and associated earnings for Intermagnetics will increase over the remainder of the fiscal year, with anticipated acceleration in the second-half of the year. To put the upcoming year into context, this transition to expanded supply chain management by Intermagnetics and its associated resetting of production flow logistics will have an impact of about a $12.0 million to $15.0 million reduction to our first quarter revenue. Therefore, Intermagnetics earnings in the first quarter may be just above breakeven. We then expect earnings over the balance of the fiscal year to return to more recent historical levels. Furthermore, with the planned incremental volumes discussed before, we expect to achieve significant growth during the second-half of the fiscal year 2004. We therefore set the stage for year-on-year performance that remains consistent with our long-term growth objectives. In the context of Reg-G and the rigors all public companies must mange themselves to, on this conference call I am going to speak to GAAP results as it pertains to our upcoming Fiscal Year 2004 performance. Now, as you may recall, during the second quarter of our fiscal year 2003 we had one-time charges associated with the disposition of certain securities that were held for sale, which was partially offset by a favorable settlement of a long-standing trade litigation, which when combined resulted in a net charge to GAAP earnings in that second quarter of about $0.06 per diluted share. Therefore, as we look to the fiscal year 2004, we anticipate our reported revenue to be slightly improved over Fiscal Year 2003 with the resulting GAAP reported earnings in fiscal 2004 expected to increase within our target range of 10 to 15 percent over the prior year GAAP performance. As a result of our proven historical ability to aggressively manage our working capital, on an annualized basis for Fiscal Year 2004 we anticipate continued achievement of our long-term objectives of 15% working capital efficiencies; as measured by working capital to sales. And given our cost effective inventory management capabilities, we anticipate inventory balances by year end to remain consistent with our annualized increase in revenue. In addition, we anticipate continued achievement of a high Return on Net Operating Assets, near our long-term target of 50%; as measured by NOP to NOA. And finally, we expect to continue to generate positive net operating cash flow for the year, with continuing positive trends over our expected fiscal year 2003 cash flow performance. Conclusion: Long-term benefits. In conclusion, despite the reduced first quarter performance, we do anticipate growth in revenue for fiscal 2004, with increased earnings over the prior year to be within our long-term target objective of between 10% to 15% as measured on a GAAP basis. That concludes my prepared remarks. [End] -----END PRIVACY-ENHANCED MESSAGE-----