10-Q 1 j3442_10q.htm 10-Q SECURITIES AND EXCHANGE COMMISSION

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

 

FORM 10–Q

 

 

 

 

 

ý   Quarterly Report Pursuant to Section 13 or 15 (d)

of the Securities Exchange Act of 1934

For Quarter Ended March 31, 2002

 

 

 

 

 

OR

 

 

 

 

 

o   Transition Report Pursuant to Section 13 or 15 (d)

of the Securities Exchange Act of 1934

For the transition period from           to          

 

 

 

 

 

Commission File No.  1-12714

 

 

OSMONICS, INC
(Exact name of registrant as specified in its charter)

 

Minnesota

 

41–0955759

(State or other jurisdiction of

 

(I.R.S. Employer

Incorporation or organization)

 

Identification Number)

 

 

 

5951 Clearwater Drive, Minnetonka, MN

 

55343

(Address of principal executive offices)

 

(Zip Code)

 

 

 

Registrant’s telephone number, including area code  (952) 933–2277

 

N/A

Former name, former address and former
fiscal year, if changed since last report

 

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 at least the past 90 days.

 

Yes ý   No o

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  At April 30, 2002, 14,551,309 shares of the issuer’s Common Stock, $0.01 par value, were outstanding.

 

 

1



 

OSMONICS, INC.

 

INDEX

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

 

ITEM I. 

FINANCIAL STATEMENTS

 

 

 

 

 

Consolidated Statements of Operations –
For the Three Months Ended March 31, 2002 and 2001

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets –
March 31, 2002 and December 31, 2001

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows -
For the Three Months Ended March 31, 2002 and 2001

 

 

 

 

 

 

 

 

 

Notes to Consolidated Financial Statements -

 

 

 

 

ITEM II.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

 

 

 

 

 

 

ITEM III.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

ITEM 6. 

EXHIBITS AND REPORTS ON FORM 8-K

 

 

 

SIGNATURES

 

 

 

 

1



 

ITEM I – FINANCIAL STATEMENTS

 

OSMONICS, INC.

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands Except Per Share Data)

 

(UNAUDITED)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2002

 

2001

 

Sales

 

$

53,179

 

$

53,302

 

 

 

 

 

 

 

Cost of sales

 

36,691

 

35,604

 

 

 

 

 

 

 

Gross profit

 

16,488

 

17,698

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

Selling, general
and administrative

 

10,642

 

11,409

 

 

 

 

 

 

 

Research, development
and engineering

 

1,740

 

1,829

 

 

 

 

 

 

 

Income from operations

 

4,106

 

4,460

 

 

 

 

 

 

 

Other income (expense)

 

(153

)

(259

)

 

 

 

 

 

 

Income from continuing
operations before income taxes

 

3,953

 

4,201

 

 

 

 

 

 

 

Income taxes

 

1,304

 

1,470

 

 

 

 

 

 

 

Net income

 

$

2,649

 

$

2,731

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

Net income — basic

 

$

0.18

 

$

0.19

 

Net income — assuming dilution

 

$

0.18

 

$

0.19

 

 

 

 

 

 

 

Average shares outstanding

 

 

 

 

 

Basic

 

14,531

 

14,419

 

Assuming dilution

 

14,837

 

14,465

 

 

 

2



 

OSMONICS, INC.

CONSOLIDATED BALANCE SHEETS

(In Thousands Except Share Data)

 

 

 

 

 

(UNAUDITED)

 

 

 

 

 

March 31,

 

December 31,

 

 

 

2002

 

2001

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

1,296

 

$

 

Marketable securities

 

56

 

52

 

Trade accounts receivable, net of

 

 

 

 

 

allowance for doubtful accounts of

 

 

 

 

 

$1,203 in 2002, and $963 in 2001

 

35,758

 

34,890

 

Inventories

 

31,590

 

32,094

 

Deferred tax assets

 

4,799

 

4,867

 

Other current assets

 

1,524

 

2,041

 

Total current assets

 

75,023

 

73,944

 

 

 

 

 

 

 

Property and equipment, at cost

 

 

 

 

 

Land and land improvements

 

5,539

 

5,366

 

Building

 

30,706

 

30,830

 

Machinery and equipment

 

77,618

 

76,282

 

 

 

113,863

 

112,478

 

Less accumulated depreciation

 

(55,117

)

(53,314

)

 

 

58,746

 

59,164

 

 

 

 

 

 

 

Goodwill

 

42,829

 

42,829

 

Intangible assets

 

3,478

 

3,575

 

Other assets

 

3,933

 

5,286

 

Total assets

 

$

184,009

 

$

184,798

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

$

12,694

 

$

11,860

 

Notes payable and current portion
of long–term debt

 

12,297

 

13,619

 

Other accrued liabilities

 

16,223

 

16,710

 

Total current liabilities

 

41,214

 

42,189

 

 

 

 

 

 

 

Long–term debt

 

17,749

 

20,449

 

Deferred income taxes

 

6,807

 

6,763

 

Shareholders’ equity

 

 

 

 

 

Common stock, $0.01 par value

 

 

 

 

 

Authorized –– 50,000,000 shares

 

 

 

 

 

Issued ––  2002: 14,543,578 and
2001: 14,523,579 shares

 

145

 

145

 

Capital in excess of par value

 

24,943

 

24,701

 

Retained earnings

 

94,286

 

91,637

 

Other comprehensive income

 

(1,135

)

(1,086

)

Total shareholders’ equity

 

118,239

 

115,397

 

Total liabilities and shareholders’ equity

 

$

184,009

 

$

184,798

 

 

 

3



 

OSMONICS, INC.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

 

(UNAUDITED)

 

 

 

Three Months Ended

 

 

 

March  31,

 

 

 

2002

 

2001

 

Cash flows from operations:

 

 

 

 

 

Net income

 

$

2,649

 

$

2,731

 

Non–cash items included in net income:

 

 

 

 

 

Depreciation and amortization

 

2,069

 

2,533

 

Deferred income taxes

 

110

 

(29

)

Gain on sale of investments

 

 

(972

)

Gain on sale of property and equipment

 

(17

)

 

Changes in assets and liabilities

 

 

 

 

 

(net of business acquisitions)

 

 

 

 

 

Accounts receivable

 

(838

)

(136

)

Inventories

 

504

 

(121

)

Other current assets

 

517

 

(1,718

)

Accounts payable and accrued liabilities

 

347

 

(1,440

)

 

 

 

 

 

 

Net cash provided by (used in) operations

 

5,341

 

848

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Maturities and sales of investments

 

 

2,088

 

Purchase of property and equipment

 

(1,619

)

(1,721

)

Proceeds from sale of property and equipment

 

99

 

6

 

Proceeds from sale of closed facility

 

1,698

 

 

Other

 

(392

)

615

 

 

 

 

 

 

 

Net cash (used in) provided by investing activities

 

(214

)

988

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Payments of notes payable and current debt

 

(1,322

)

(557

)

Payments of long-term debt

 

(2,700

)

(750

)

Issuance of common stock

 

242

 

228

 

 

 

 

 

 

 

Net cash (used in) provided by financing activities

 

(3,780

)

(1,079

)

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

(51

)

(222

)

Increase in cash and cash equivalents

 

1,296

 

535

 

Cash and cash equivalents –
beginning of year

 

 

21

 

Cash and cash equivalents –
end of quarter

 

$

1,296

 

$

556

 

 

 

4



 

OSMONICS, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

 

Note 1 — Consolidated Financial Statements

 

The accompanying unaudited condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

 

Operating results for the three months ended March 31, 2002, are not necessarily indicative of the results that may be expected for the full year 2002.

 

These statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report to shareholders and Form 10-K for the year ended December 31, 2001.

 

The Company has the following components of comprehensive income:

 

 

 

Three Months Ended March 31,

 

 

 

2002

 

2001

 

Net income

 

$

2,649

 

$

2,731

 

Other comprehensive income (loss):

 

 

 

 

 

Foreign currency translation adjustments

 

(51

)

(222

)

Unrealized gains/(losses) on securities

 

2

 

(390

)

Other comprehensive income (loss)

 

(49

)

(612

)

Comprehensive income

 

$

2,600

 

$

2,119

 

 

 

In the fourth quarter 2001, the Company recorded special charges of $1,100 related to the closure of the Company’s Syracuse, New York manufacturing facility and $600 in corporate restructuring.  For the three months ended March 31, 2002, the Company expended $209 for workforce reductions and $6 for facility closing/consolidation costs.  The remaining $1,175 is anticipated to be expended by December 31, 2002.

 

5



 

 

Note 2 — Goodwill and Other Intangible Assets — Adoption of Statement 142

 

In the first quarter of fiscal 2002, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which eliminated the amortization of purchased goodwill and other intangibles with indefinite useful lives.  Upon adoption of SFAS No. 142, the Company is required to perform an initial impairment test of its goodwill within the first six months of 2002.  The Company expects to complete the analysis in the second quarter of 2002.  Under SFAS No. 142, goodwill will be tested for impairment at least annually and more frequently if an event occurs which indicates the goodwill may be impaired.

 

Included in intangible assets on the Company’s Consolidated Balance Sheet is the following:

 

 

 

March 31

 

December 31

 

 

 

2002

 

2001

 

Amortizable intangible assets:

 

 

 

 

 

 

 

 

 

 

 

Patents

 

$

2,801

 

$

2,695

 

Accumulated amortization

 

(705

)

(653

)

 

 

2,096

 

2,042

 

 

 

 

 

 

 

Supply agreement

 

1,449

 

1,449

 

Accumulated amortization

 

(145

)

(72

)

 

 

1,304

 

1,377

 

 

 

 

 

 

 

Other

 

1,339

 

1,413

 

Accumulated amortization

 

(1,261

)

(1,257

)

 

 

78

 

156

 

Total

 

$

3,478

 

$

3,575

 

 

 

Intangible amortization expense for the first quarter ended March 31, 2002 was $114 and is estimated to be $550 for the year 2002.  Intangible amortization expense for each of the subsequent four calendar years is estimated at $400 to $500.

 

6



 

 

A reconciliation of previously reported net income and earnings per share to the amounts adjusted for the exclusion of goodwill amortization net of the related income tax effect follows:

 

 

 

Three months ended March 31,

 

 

 

2002

 

2001

 

Reported net income

 

$

2,649

 

$

2,731

 

Add back: Goodwill amortization net of tax

 

 

344

 

Adjusted net income

 

$

2,649

 

$

3,075

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

Reported net income

 

$

0.18

 

$

0.19

 

Goodwill amortization net of tax

 

 

0.02

 

Adjusted net income

 

$

0.18

 

$

0.21

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

Reported net income

 

$

0.18

 

$

0.19

 

Goodwill amortization net of tax

 

 

0.02

 

Adjusted net income

 

$

0.18

 

$

0.21

 

 

 

 

Note 3 Inventories

 

 

 

March 31

 

December 31

 

 

 

2002

 

2001

 

Inventories consist of the following:

 

 

 

 

 

 

 

 

 

 

 

Finished goods

 

$

9,585

 

$

9,353

 

Work in process

 

11,646

 

9,415

 

Raw materials

 

12,008

 

14,958

 

 

 

33,239

 

33,726

 

Adjustments to reduce inventories

 

 

 

 

 

of $11,438 and $9,487 to the last-

 

 

 

 

 

in, first-out method

 

(1,649

)

(1,632

)

 

 

$

31,590

 

$

32,094

 

 

 

7



 

 

Note 4 — Segment Information

 

The Company designs, manufactures and markets equipment, systems and components used in the processing and handling of fluids.  The Company reports financial results for three operating segments that are based on the three major market segments in which the Company conducts business.

 

Effective January 1, 2002, the Company transferred certain products and product lines between the Process Water and Household Water operating segments to more closely align customers, markets and sales efforts.  All amounts included have been adjusted for the transfers.

 

The Filtration and Separations segment includes products such as filter cartridges, membrane elements, membranes, instruments and laboratory products. The Process Water segment includes products such as pumps, housings, controls, reverse osmosis/ultrafiltration (RO/UF) machines, ozonators and water treatment systems used for industrial, commercial and municipal applications. The Household Water segment includes products such as valves, controls and home reverse osmosis membranes and filters used for the residential water purification and water softening market segments. Each segment is currently supported by several manufacturing facilities, a sales force and various corporate functions. The segments do not have separate accounting, administration or research and development functions.

 

The reportable segment information for the three months ended March 31, 2002 and 2001 are as follows:

 

 

 

Third Quarter Ended

 

 

 

March 31,

 

 

 

2002

 

2001

 

Sales:

 

 

 

 

 

Filtration and Separations

 

$

21,194

 

$

22,099

 

Process Water

 

17,325

 

18,256

 

Household Water

 

14,660

 

12,947

 

Net Sales

 

53,179

 

53,302

 

Gross Profit:

 

 

 

 

 

Filtration and Separations

 

7,357

 

8,896

 

Process Water

 

4,954

 

4,985

 

Household Water

 

4,177

 

3,817

 

Gross Profit

 

16,488

 

17,698

 

Operating Income:

 

 

 

 

 

Filtration and Separations

 

1,554

 

3,422

 

Process Water

 

1,100

 

625

 

Household Water

 

1,452

 

413

 

Operating Income

 

$

4,106

 

$

4,460

 

 

Management does not report the balance sheet or any cash-generating measurements by such segments.

 

8



 

 

ITEM II.         MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

                        CONDITION AND RESULTS OF OPERATIONS

 

                        (Dollars in thousands, except share data)

 

 

As an aid to understanding the Company’s operating results, the following table shows the percentage of sales that each income statement item represents for the three months ended March 31, 2002 and 2001.

 

 

 

Percent of Sales

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2002

 

2001

 

Sales

 

100.0

%

100.0

%

Cost of sales

 

69.0

 

66.8

 

Gross profit

 

31.0

 

33.2

 

 

 

 

 

 

 

Selling, general and administrative

 

20.0

 

21.4

 

Research, development and engineering

 

3.3

 

3.4

 

Special charges

 

 

 

Operating expenses

 

23.3

 

24.8

 

 

 

 

 

 

 

Income from operations

 

7.7

 

8.4

 

Other income (expense)

 

(0.3

)

(0.5

)

Income from continuing

 

 

 

 

 

operations before income taxes

 

7.4

 

7.9

 

Income taxes

 

(2.4

)

(2.8

)

 

 

 

 

 

 

Net income

 

5.0

%

5.1

%

 

 

SALES

 

Sales for the first quarter ended March 31, 2002 of $53,179 were flat with sales for the first quarter of 2001.  The first quarter 2002 Filtration & Separations, Process Water and Household Water segment sales were 40%, 33% and 27% of total sales, respectively.  Globally, international sales increased to 37% of total Osmonics sales in the first three months of 2002 compared to 34% for the full year 2001.  The international sales growth was primarily attributed to the Euro/Africa market while the Asia/Pacific and Americas markets remained consistent with year 2001 levels.

 

9



 

 

GROSS MARGIN

 

Gross margin for the first quarter of 2002 was 31.0% versus 33.2% for the corresponding period in 2001.  The first quarter 2002 decrease in gross margins was primarily due to an unfavorable sales mix of replaceable products and pricing pressures in the Filtrations and Separations segment.  In addition, the Household Water segment gross margins decreased primarily due to an unfavorable mix of valve product shipments.  Gross margin improvements in the Process Water segment were primarily due to continued benefits from prior period cost reductions and standardization of product lines.

 

Energy costs in California during the first quarter of 2002 approximated the levels experienced during the same period in 2001.  Raw material costs in the first three months of 2002 remained comparable to costs incurred during Year 2001.

 

OPERATING EXPENSES

 

Operating expenses decreased to 23.3% of sales in the first quarter of 2002 compared to 24.8% in the first quarter of 2001.  This reduction was primarily due to the adoption of SFAS 142 and the associated cessation of goodwill amortization in 2002 (see Note 2).  First quarter 2001 operating expenses included $529 (1.0% of net sales) of goodwill amortization.  In addition, the Year 2001 restructurings and continued consolidation of administrative services contributed to the decrease.

 

OTHER INCOME (EXPENSE)

 

Other income (expense) includes interest income, interest expense, gains on asset sales and other miscellaneous items.  This expense decreased by $106 in the first quarter of 2002 versus the same period for 2001. The decrease is the result of a $555 reduction in net interest expense to $206 in the first quarter 2002 from $761 in the first quarter of 2001.  Foreign currency exchange, primarily related to business transactions of the Company’s French subsidiary, was a gain of $26 in the first quarter 2002 compared to a loss of $431 in the first quarter 2001.  A $972 pretax gain ($0.04 per diluted share) was recognized on the sale of marketable securities in the first quarter of 2001.  There were no sales of marketable securities in the first quarter of 2002.

 

INCOME TAXES

 

The effective tax rate for the first quarter of 2002 was 33.0% based on the forecast for the full year.  This rate compares to the 35.0% in the same period of 2001 and the 34% rate for the full year 2001.  The first quarter of 2002 tax rate reduction is primarily related to the adoption of SFAS 142 and the cessation of goodwill amortization (see Note 2).  This resulted in the elimination of a permanent tax difference.

 

 

10



 

 

NET INCOME

 

Net income for the quarter ended March 31, 2002 was $2,649 compared to $2,731 for the quarter ended March 31, 2001.  Net income per diluted share for the quarter was $0.18 compared to $0.19 for the same period last year.

 

REVIEW OF INDUSTRY SEGMENTS

 

As discussed in Note 4 to the consolidated financial statements, the Company reports financial results for three operating segments that are based on the three major market segments in which the Company conducts business.  Certain financial results for the three months ended March 31, 2002 and 2001 are presented below as a percentage of net sales by segment:

 

 

 

First Quarter Ended

 

 

 

March 31,

 

 

 

2002

 

2001

 

Filtration and Separations:

 

 

 

 

 

Sales

 

100.0

%

100.0

%

Gross Profit

 

34.7

 

40.3

 

Operating Income

 

7.3

 

15.5

 

 

 

 

 

 

 

Process Water:

 

 

 

 

 

Sales

 

100.0

%

100.0

%

Gross Profit

 

28.6

 

27.3

 

Operating Income

 

6.3

 

3.4

 

 

 

 

 

 

 

Household Water:

 

 

 

 

 

Sales

 

100.0

%

100.0

%

Gross Profit

 

28.5

 

29.5

 

Operating Income

 

9.9

 

3.2

 

 

 

Filtration and Separations

Net sales in the Filtration and Separations segment decreased 4.1% in the first quarter ended March 31, 2002 compared to the same period in 2001.  This decrease was attributed to recessionary pressures in industrial filtration and slower than planned start-up of new WasteWizard alternative sales channels.  Gross margin for the first quarter of 2002 was 34.7% versus 40.3% for the corresponding period in 2001.  This decrease was primarily the result of an unfavorable sales mix of replaceable products and pricing pressures.  Operating income margins for the first quarter of 2002 was 7.3% versus 15.5% for the corresponding period in 2001.  The operating income margin decrease was primarily related to reduced gross margins and a $329 (6.0%) increase in operating expenses.

 

 

11



 

 

Process Water

Net sales in the Process Water segment decreased 5.1% in the first quarter ended March 31, 2002 compared to the same period in 2001.  This decrease was primarily the result of lower capital equipment shipments to the power industry.  Gross margin for the first quarter of 2002 was 28.6% versus 27.3% for the corresponding period in 2001.  This increase was primarily due to continued benefits from prior period cost reductions and standardization of product lines.  Operating income margins for the first quarter of 2002 improved to 6.3% versus 3.4% for the corresponding period in 2001.  The operating income margin improvement was primarily related to a $506 (11.6%) reduction in operating expenses and improved gross margins.

 

Household Water

Net sales in the Household Water segment increased 13.2% in the first quarter ended March 31, 2002 compared to the same period in 2001.  This increase was attributed to increased sales to nearly all of the Company’s OEM customers.  Gross margin for the first quarter of 2002 was 28.5% versus 29.5% for the corresponding period in 2001.  This decrease was primarily due to an unfavorable mix of valve product shipments and pricing pressures in the International markets.  Operating income margins for the first quarter of 2002 was 9.9% versus 3.2% for the corresponding period in 2001.  The operating income margin improvement was primarily related to increased net sales and a $679 (19.9%) reduction in operating expenses.

 

This Segment incurred approximately $100 in one-time costs included in cost of sales associated with the movement of manufacturing activities from its Syracuse, New York facility that is scheduled to be closed in July 2002.  Additional and increased costs are anticipated to be incurred in the second quarter as the production moves are completed.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of March 31, 2002, the Company had cash, cash equivalents and marketable securities of $1,352 versus $52 at December 31, 2001.  The current ratio at March 31, 2002 was 1.82 versus 1.75 at year-end 2001.

 

The Company’s long-term and current debt decreased $4,022 from $34,068 at December 31, 2001 to $30,046 at March 31, 2002.  The Company’s borrowing outstanding against its $24,000 revolving line of credit decreased to $8,000 as of March 31, 2002 compared to $9,500 as of December 31, 2001.

 

The Company believes that its current cash and investments position, its cash flow from operations, and amounts available from bank credit will be adequate to meet its anticipated cash needs for working capital, capital expenditures, and potential acquisitions during the foreseeable future.

 

 

12



 

 

ITEM III.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Information about market risks for the three months ended March 31, 2002 does not differ materially from that discussed in our Annual Report on Form 10-K for 2001.

 

 

PRIVATE SECURITIES LITIGATION REFORM ACT

 

The Private Securities Litigation Reform Act provides a “safe harbor” for forward-looking statements. Certain information included in this Form 10-Q and other materials filed or to be filed with the Securities and Exchange Commission (as well as information included in statements made or to be made by the Company) contains statements that are forward looking.  Such statements may relate to plans for future expansion and acquisitions, the anticipated costs for relocation of certain manufacturing processes, business development activities, capital spending, financing, or the effects of regulation and competition.  Such information involves important risks and uncertainties that could significantly affect results in the future.  Such results may differ from those expressed in any forward-looking statements made by the Company.  These risks and uncertainties include, but are not limited to, the ability to realize backlog sales orders, those relating to product development activities, the inability to accurately estimate the costs of relocation of certain manufacturing processes, dependence on existing management, global economic and market conditions, and changes in federal or state laws.  Investors are referred to the discussion of certain risks and uncertainties associated with forward looking statements contained in the Company’s report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2001.

 

 

OSMONICS, INC.

 

PART II

 

OTHER INFORMATION

 

 

 

Item 6.          EXHIBITS AND REPORTS ON FORM 8-K

 

(a)                During the quarter ended March 31, 2002 the Registrant did not file a Form 8-K report.

 

13



 

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.

 

 

 

     Dated:  May 13, 2002

 

 

 

 

 

OSMONICS, INC.

 

 

 

(Registrant)

 

 

 

 

 

 

/s/

Keith B. Robinson

 

 

 

Keith B. Robinson

 

 

 

Chief Financial Officer

 

 

 

 

 

/s/

D. Dean Spatz

 

 

 

D. Dean Spatz

 

 

 

Chief Executive Officer

 

 

 

 

 

 

14