SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 8-K/A
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 13, 2000
Packard BioScience Company
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
333-24001 06-0676652
(Commission File Number) (IRS Employer Identification No.)
800 Research Parkway, Meriden, Connecticut 06450
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 238-2351
<PAGE>
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
Item 7 (a) and (b) on page 2 of the current report on Form 8-K dated October 13,
2000 are amended in their entirety as follows:
a) Financial Statements of Business Acquired. The following pages contain the
statement of net assets sold of GSL Lumonics Inc.'s Life Sciences Business,
as of June 30, 2000 (unaudited) and December 31, 1999 and 1998 as well as
the related statements of net sales, cost of sales and direct operating
expenses for the six months ended June 30, 2000 and 1999 (unaudited) and
the years ended December 31, 1999 and 1998 and the notes thereto. In
addition, the report of GSL Lumonics Inc.'s Life Sciences Business
independent auditors, pertaining to the periods ending December 31, 1999
and 1998, is included herein.
<PAGE>
GSI Lumonics Inc. - Life Sciences Business
Financial Statements
December 31, 1999 and 1998
With Independent Auditors Report
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
GSI Lumonics Inc.
We have audited the accompanying statements of net assets sold of GSI Lumonics
Inc.'s Life Sciences Business as of December 31, 1999 and 1998 and the
statements of net sales, cost of sales and direct operating expenses for the
years then ended. These statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these statements
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As described in Note 1, the accompanying statements were prepared in accordance
with the Asset Purchase Agreement between GSI Lumonics Inc. and Packard
BioScience Company dated August 19, 2000 and consummated on October 2, 2000 for
the sale of GSI Lumonics Inc.'s Life Sciences Business to Packard BioScience
Company, and for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the current report on Form
8-K of Packard BioScience Company. These statements are not intended to be a
complete presentation of the assets, liabilities, revenue and expenses of GSI
Lumonics Inc.'s Life Sciences Business.
In our opinion, these statements present fairly, in all material respects, the
net assets sold of GSI Lumonics Inc.'s Life Sciences Business as of December 31,
1999 and 1998 and the net sales, cost of sales and direct operating expenses for
the years then ended, pursuant to the Asset Purchase Agreement described in Note
1, in conformity with accounting principles generally accepted in the United
States.
Ernst & Young LLP
Chartered Accountants
Ottawa, Canada
October 25, 2000
<PAGE>
<TABLE>
<CAPTION>
GSI Lumonics Inc. - Life Sciences Business
Statement of Net Assets Sold
[in thousands of U.S. dollars]
As of As of
June 30, December 31,
-------- --------------------
2000 1999 1998
------------------------------------------------------------------------------------------------------
[unaudited]
<S> <C> <C> <C>
ASSETS
Current
Accounts receivable, less allowance of
$23 [1999 - $24, 1998 - $16] $4,469 $5,027 $1,397
Inventories [note 3] 2,396 2,421 900
------------------------------------------------------------------------------------------------------
Total current assets 6,865 7,448 2,297
------------------------------------------------------------------------------------------------------
Property, plant and equipment, net of accumulated
amortization of $244 [1999 - $158, 1998 - $92] 413 207 83
Intangible assets, net of accumulated amortization
of $207 [1999 - $124, 1998 - $nil] [note 2] 827 910 --
------------------------------------------------------------------------------------------------------
Total assets 8,105 8,565 2,380
------------------------------------------------------------------------------------------------------
LIABILITIES
Accounts payable 568 1,090 78
Accrued warranty expenses 368 240 82
Accrued compensation expenses 523 483 77
Deferred revenue and other accrued expenses 469 333 157
------------------------------------------------------------------------------------------------------
Total current liabilities 1,928 2,146 394
------------------------------------------------------------------------------------------------------
Commitments and contingencies [note 5]
------------------------------------------------------------------------------------------------------
Net assets sold $6,177 $6,419 $1,986
------------------------------------------------------------------------------------------------------
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GSI Lumonics Inc. - Life Sciences Business
Statements of Net Sales, Cost of Sales and Direct Operating Expenses
[in thousands of U.S. dollars]
Six months Year ended
ended June 30, December 31,
----------------------- ----------------------
2000 1999 1999 1998
------------------------------------------------------------------------------------------------------
[unaudited]
<S> <C> <C> <C> <C>
Net sales $7,769 $4,453 $13,790 $8,027
Cost of sales 3,814 2,187 6,091 2,886
------------------------------------------------------------------------------------------------------
Gross profit 3,955 2,266 7,699 5,141
------------------------------------------------------------------------------------------------------
Direct Operating expense
Research and development 2,379 1,354 2,973 1,865
Selling, general and administrative 2,312 1,371 3,021 2,125
Amortization of technology and
other intangibles [note 2] 83 41 124 --
Acquired in-process research and
development [note 2] -- 4,100 4,100 --
------------------------------------------------------------------------------------------------------
Total direct operating expenses 4,774 6,866 10,218 3,990
------------------------------------------------------------------------------------------------------
Excess (deficiency) of net sales
over (under) cost of sales and
direct operating expenses $ (819) $(4,600) $(2,519) $1,151
------------------------------------------------------------------------------------------------------
See accompanying notes
</TABLE>
<PAGE>
1. BACKGROUND AND BASIS OF PRESENTATION
The accompanying statements have been prepared in accordance with accounting
principles generally accepted in the United States for the purpose of presenting
the net assets sold of the Life Sciences Business ("Life Sciences") of GSI
Lumonics Inc. ("GSI Lumonics") pursuant to the Asset Purchase Agreement (the
"Agreement") entered into as of August 19, 2000 and consummated as of October 2,
2000 ("Closing Date") between GSI Lumonics and Packard BioScience Company (the
"Buyer") and its net sales, cost of sales and direct operating expenses.
Pursuant to the Agreement, GSI Lumonics sold to the Buyer certain assets
including accounts receivable, inventories, property, plant and equipment and
intangible assets for proceeds of $40,000,000 cash and 4,571,429 shares of the
Buyer's common stock. The Buyer is to also assume certain liabilities pursuant
to the Agreement.
Life Sciences was a separately managed product line in the GSI Lumonics'
Billerica facility, Massachusetts. Life Sciences manufactures laser-based
microarray scanners and related analytical software used to read and interpret
gene expression experiments. Major customers for these products include
universities, research laboratories, and Government agencies. The business'
principal markets are in the United States, Japan and Germany.
Historically, GSI Lumonics did not maintain Life Sciences as a separate business
unit and external financial statements have not been prepared. Therefore, the
accompanying statements are derived from the historical accounting records of
Life Sciences and present the net assets sold as of June 30, 2000, December 31,
1999 and 1998, and the statement of net sales, cost of sales and direct
operating expenses for the six months ended June 30, 2000 and 1999 and for the
years ended December 31, 1999 and 1998. A statement of cash flows is not
presented as Life Sciences did not maintain a cash balance, all cash flow
activities were funded by GSI Lumonics and a statement of cash flows is not
prepared at this reporting level. These statements are not intended to be a
complete presentation of Life Sciences' financial position, results of
operations and cash flows. The historical operating results may not be
indicative of the results of operations of Life Sciences going forward due to
changes in the business by the Buyer and the omission of various indirect
operating expenses.
The statements of net sales, cost of sales and direct operating expenses include
all revenues and expenses directly attributable to Life Sciences products. Cost
of sales includes material cost, direct labor and an allocation of factory
overhead. Direct operating expenses consist principally of research and
development, selling, general and administrative expenses, amortization and
in-process research and development costs. Some selling, general and
administrative expenses have been allocated to Life Sciences on various bases,
including the basis of relative sales of Life Sciences to other sales of GSI
Lumonics, personnel and estimated time spent on Life Sciences. The statements do
not include corporate general and administrative expenses, interest, income
taxes or any other corporate expense allocations. Since Life Sciences was not a
separate business unit, GSI Lumonics had never segregated indirect operating
cost information relative to Life Sciences for external financial reporting
purposes. Accordingly, it is not practical to isolate or allocate such indirect
operating costs to Life Sciences. In the opinion of management of Life Sciences,
such allocations are reasonable.
The interim financial information at June 30, 2000 and for the six months ended
June 30, 2000 and 1999 is unaudited but includes all adjustments and accruals
which management considers necessary for a fair presentation of the net assets
sold of Life Sciences at such date and the net sales, cost of sales and direct
operating expenses for the six month periods presented. The results for interim
periods are not necessarily indicative of results to be expected for the year or
any future periods.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of estimates -
The preparation of these statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the audit report date, and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Inventories -
Inventories, which include materials and conversion costs, are stated at the
lower of cost (primarily first-in, first-out) or market.
Financial instruments -
Financial instruments include accounts receivable, accounts payable and accrued
liabilities. The carrying values of the business' financial instruments
approximate their fair value.
Fixed assets -
Fixed assets are stated at cost. The declining-balance and straight-line methods
determine depreciation over the estimated useful lives of the assets, generally
3 to 10 years. Depreciation expense, included in selling, general and
administration expenses on the statement of net sales, cost of sales and direct
operating expenses, for the six-month periods ended June 30, 2000 and 1999 and
for the years ended December 31, 1999 and 1998 was $86,000, $26,000, $66,000 and
$48,000, respectively.
Intangibles -
On March 22, 1999, GSI Lumonics completed a merger of equals with General
Scanning Inc., Watertown, Massachusetts, a leading manufacturer of laser systems
and components. The merger transaction was accounted for as a purchase. The
aggregate purchase price was allocated to General Scanning's net identifiable
assets, based on estimated fair values, including the net assets of Life
Sciences Business as follows:
1. Acquired technology of $624,000 results from an allocation of an appraisal
of General Scanning intangible assets and is being amortized on a straight
line basis over its useful life of 60 months;
2. Assembled workforce of $268,000 results from an allocation of an appraisal
of General Scanning intangible assets and is being amortized on a straight
line basis over a 10 year period;
3. Trademark and trade name of $142,000 results from an allocation of an
appraisal of General Scanning intangible assets and is being amortized on a
straight line basis over a 10 year period;
Acquired in-process research and development of $4,100,000 arising on the
acquisition charged against income in 1999 results from an allocation of an
appraisal of General Scanning intangible assets.
Revenue recognition -
Revenue is generally recognized at the time of shipment or when services are
provided. Estimated potential product liability and warranty costs are accrued,
based on the Company's experience, when revenue is recognized.
<PAGE>
Foreign currency translation -
Assets and liabilities of foreign operations are translated from foreign
currencies into U.S. dollars at the exchange rate in effect at the period-end.
Revenues and expenses are translated at the average exchange rate in effect for
the period. Foreign exchange gains or losses are recorded in the corporate
ledger at GSI Lumonics and, as such, no segregation of these items is presented
for product line foreign currency statements. As the foreign exchange gains and
losses are not tracked on a product line basis and are not as a result of direct
expenses incurred for the product line, they are not presented in the statement
of net sales, cost of sales and direct operating expenses.
Stock based compensation -
The Life Sciences Group has elected to continue to apply APB 25 in accounting
for its stock option plans, valuing the compensation expense using the intrinsic
value method (note 10).
Recent pronouncements -
In December 1999, the Securities and Exchange Commission (the "SEC") issued
Staff Accounting Bulletin (the "SAB") No.101, Revenue Recognition in Financial
Statements, which was amended in March 2000 by SAB 101A, and in June 2000 by SAB
101B. The SAB summarizes certain of the SEC staff views in applying generally
accepted accounting principles to revenue recognition in financial statements.
This SAB is effective beginning the fourth fiscal quarter of fiscal 2000. We
believe this bulletin will not have a significant impact on our reported sales.
<TABLE>
<CAPTION>
3. INVENTORIES
Inventories consist of the following:
June 30, December 31, December 31,
2000 1999 1998
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Raw materials $1,918 $2,027 $603
Work-in-process 75 -- 173
Finished goods 403 394 124
------------------------------------------------------------------------------------------------------
Total inventories $2,396 $2,421 $900
------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
4. PROPERTY, PLANT AND EQUIPMENT
June 30, December 31, December 31,
2000 1999 1998
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cost:
Machinery and equipment $388 $315 $142
Leasehold improvements 19 17 --
Furniture and fixtures 155 -- --
Software 87 33 33
Tooling 8 -- --
------------------------------------------------------------------------------------------------------
Total cost 657 365 175
Accumulated depreciation (244) (158) (92)
------------------------------------------------------------------------------------------------------
Net property, plant and equipment $413 $207 $ 83
------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
5. COMMITMENTS AND CONTINGENCIES
Legal proceedings and disputes -
GSI Lumonics Inv. V. BioDiscovery Inc. On December 10, 1999, GSI Lumonics filed
suit in the United States District Court for the District of Massachusetts
seeking a declaration that its QuantArray Microarray Analysis Software does not
infringe any copyright owned by BioDiscovery, Inc. or its president.
BioDiscovery, Inc. is a manufacturer of microarray quantification software under
the name ImaGene(C). On December 21, 1999, BioDiscovery's president responded to
GSI Lumonics' action for declaratory judgment by filing a separate suit in the
United States District Court for the Southern District of California, alleging
that GSI Lumonics reverse engineered his software, and also sued for copyright
infringement. In the Massachusetts action, the court denied BioDiscovery's
president's motion to dismiss and scheduled a trial for May 2000. In April 2000,
shortly before the trial was scheduled to begin, BioDiscovery's president
abandoned his copyright infringement claim and consented to the entry of a
default judgment in favor of GSI Lumonics. In the California action the court,
in September 2000, allowed a motion by GSI Lumonics to dismiss BioDiscovery's
president's complaint insofar as it alleged any reverse engineering, reverse
compiling or copying of ImaGene(C). The Company believes the remaining
California claims are without merit.
Risks and uncertainties -
At June 30, 2000 one customer represented 17% of accounts receivable [December
31, 1999-16%; December 31, 1998-nil]. Sales to this customer for the six months
ended June 30, 2000 represented 16% of total sales [six months ended June 30,
1999-18%; year ended December 31, 1999-14%; year ended December 31, 1998-nil].
Credit risk, with respect to trade receivables, is minimized because of the
diversification of the business' sales and its growing customer base worldwide.
6. TRANSITION SERVICES AGREEMENT
GSI Lumonics and the Buyer entered into a Transition Services Agreement whereby
GSI Lumonics agreed to provide certain administrative and transitional services
to the Buyer for an agreed price until March 31, 2001.
7. SUBLEASE AGREEMENT
On the Closing Date, GSI Lumonics and the Buyer entered into a Sublease
Agreement whereby GSI Lumonics has agreed to lease premises to the Buyer, for an
agreed price, until June 30, 2001.
8. RELATED PARTY TRANSACTIONS
Life Sciences recorded purchases from other product lines of GSI Lumonics during
the six month period ended June 30, 2000 of $301,000, [for the year ended
December 31, 1999-$321,000; 1998-$180,000] at amounts and terms approximately
equivalent to third party transactions. Transactions with other divisions of GSI
Lumonics are at a normal trade terms.
9. SEGMENT INFORMATION
Life Sciences manufactures laser-based microarray scanners and related
analytical software used to read and interpret gene expression experiments.
Major customers for these products include universities, research laboratories,
and Government agencies. The business' principal markets are in the United
States, Japan and Germany. Life Sciences has one reportable segment.
<PAGE>
Geographic segment information -
Life Sciences attributes revenues to geographic areas on the basis of the
customer location. Long-lived assets are attributed to geographic areas in which
Company assets reside and all such assets reside in the United States.
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
2000 1999 1999 1998
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues from external customers:
North America $4,093 $2,987 $8,342 $7,095
Europe 1,674 509 2,062 208
Japan 2,002 957 3,386 724
------------------------------------------------------------------------------------------------------
Total $7,769 $4,453 $13,790 $8,027
------------------------------------------------------------------------------------------------------
</TABLE>
10. SUBSEQUENT EVENT
Employee compensation -
Employees of GSI Lumonics who are being transferred to the Buyer participated in
share option plans depending on their original date of employment. The first
plan dated 1992 involved General Scanning employees, the second dated 1995 was
for GSI Lumonics employees. Employees transferred to the Buyer may have options
under both plans, depending on the date of employment and options granted.
GSI Lumonics accelerated the vesting of the options for all employees that were
being transferred to the Buyer in the purchase and sale agreement [note 1]. This
arrangement allows all options outstanding for the employees as of October 1,
2000 to vest immediately. Each employee will then have thirty days for options
granted under the 1992 plan and sixty days for options granted under the 1995
plan to exercise these options.
As at September 30, 2000, Life Science employees held accelerated, unvested
options entitling them to acquire 50,124 at a weighted average exercise price of
$6.25 per share and the business will incur incremental stock based compensation
of $514,000.
<PAGE>
-----------------------
b) Pro Forma Financial Information. The following pages contain the unaudited
pro forma statement of net assets of Packard BioScience Company and GSI
Lumonics Inc.'s Life Sciences Business as of June 30, 2000 and the
unaudited consolidated statements of income (loss) of Packard BioScience
Company and GSI Lumonics Inc.'s Life Sciences Business for the six months
ended June 30, 2000 and for the year ended December 31, 1999.
The following unaudited pro forma statements of net assets and statements of
income (loss) of Packard BioScience Company (the "Company") and GSI Lumonics
Inc.'s Life Sciences Business ("GSLI") were prepared to illustrate the estimated
effects of the acquisition by the Company of GSLI on the statement of net assets
as of June 30, 2000 and on the statements of income (loss) during the six months
ended June 30, 2000 and the year ended December 31, 1999. The pro forma
statements do not purport to represent what the Company's financial position or
results of operations would have been if the acquisition in fact had occurred on
the dates or at the beginning of the periods indicated or to project the
Company's financial position or results of operations for any future date or
period.
The pro forma adjustments are based upon available information and upon a
valuation performed, including the value assigned to acquired in-process
research and development, that the Company believes are reasonable in the
circumstances. The pro forma statements and accompanying notes should be read in
conjunction with the respective historical financial statements of the Company
(included in its 1999 Annual Report on Form 10-K) and GSLI, including the notes
thereto, included elsewhere in this Form 8-K/A.
<PAGE>
<TABLE>
<CAPTION>
Packard Bioscience Company
Unaudited Pro Forma Statement of Net Assets
As of June 30, 2000
(Dollars in thousands)
Historical Historical Pro Forma Pro Forma
Packard GSLI Adjustments Packard
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents $46,565 $0 ($21,700) $24,865
Accounts receivables, net 46,185 4,469 0 50,654
Inventories, net 35,147 2,396 0 37,543
Deferred income taxes 5,332 0 0 5,332
Other current assets 7,317 0 0 7,317
--------------- ------------- -------------- ---------------
Total Current Assets 140,546 6,865 (21,700) 125,711
--------------- ------------- -------------- ---------------
Property, plant and equipment, at cost 54,365 657 (244) 54,778
Less: Accumulated depreciation (23,342) (244) 244 (23,342)
--------------- ------------- -------------- ---------------
31,023 413 0 31,436
--------------- ------------- -------------- ---------------
Goodwill, net 42,489 0 90,479 132,968
Deferred financing costs, net 4,646 0 0 4,646
Other assets 10,581 827 (827) 10,581
--------------- ------------- -------------- ---------------
57,716 827 89,652 148,195
--------------- ------------- -------------- ---------------
$229,285 $8,105 $67,952 $305,342
=============== ============= ============== ===============
LIABILITIES
Notes payable $4,313 $0 $0 $4,313
Current portion of long-term debt 817 0 0 817
Accounts payable and accrued liabilities 34,092 1,459 0 35,551
Deferred income 14,066 469 0 14,535
--------------- ------------- -------------- ---------------
53,288 1,928 0 55,216
--------------- ------------- -------------- ---------------
Long-term debt, less current portion 154,551 0 20,000 174,551
--------------- ------------- -------------- ---------------
Deferred income taxes 4,880 0 (4,235) 645
--------------- ------------- -------------- ---------------
Other noncurrent liabilities 3,490 0 0 3,490
--------------- ------------- -------------- ---------------
Minority interest in equity of subsidiaries 2,367 0 0 2,367
--------------- ------------- -------------- ---------------
Commitments and contingencies
Net assets 10,709 6,177 52,187 69,073
--------------- ------------- -------------- ---------------
$229,285 $8,105 $67,952 $305,342
=============== ============= ============== ===============
The accompanying notes are an integral part of these
unaudited pro forma financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Packard Bioscience Company
Unaudited Pro Forma Statement of Income (Loss)
For The Six Months Ended June 30, 2000
(Dollars in thousands)
Historical Historical Pro Forma Pro Forma
Packard GSLI Adjustments Packard
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $122,956 $7,769 $0 $130,725
Cost of sales 62,281 3,814 0 66,095
-------------- ------------- ------------- --------------
Gross profit 60,675 3,955 0 64,630
Research and development costs 17,572 2,379 0 19,951
Selling, general and administrative costs 40,559 2,312 2,262 45,133
Amortization of technology and other intangibles 0 83 (83) 0
-------------
-------------- ------------- --------------
Income (loss) from operations 2,544 (819) 2,179 (454)
Interest expense, net (9,916) 0 (1,400) (11,316)
Foreign exchange transaction gains 131 0 0 131
-------------- ------------- ------------- --------------
Loss before income taxes, minority interest
and extraordinary items (7,241) (819) (3,579) (11,639)
Benefit from income taxes 2,535 0 1,807 4,312
Minority interest in income of subsidiaries (66) 0 0 (66)
-------------- ------------- ------------- --------------
Loss before extraordinary items (4,772) (819) (1,772) (7,363)
Extraordinary items, net of income taxes 567 0 0 567
-------------- ------------- ------------- --------------
Net loss ($4,205) ($819) ($1,772) ($6,796)
============== ============= ============= ==============
Weighted average shares outstanding 57,626
==============
Basic and diluted loss per share ($0.12)
==============
The accompanying notes are an integral part of these
unaudited pro forma financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Packard Bioscience Company
Unaudited Pro Forma Statement of Income (Loss)
For The Year Ended December 31, 1999
(Dollars in thousands)
Historical Historical Pro Forma Pro Forma
Packard GSLI Adjustments Packard
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $264,892 $13,790 $0 $278,682
Cost of sales 143,652 6,091 0 149,743
-------------- ------------- ------------- --------------
Gross profit 121,240 7,699 0 128,939
Research and development costs 30,109 2,973 0 33,082
Selling, general and administrative costs 62,151 3,021 4,524 69,696
Amortization of technology and other intangibles 0 124 (124) 0
Write-off of acquired in-process research
and development 0 4,100 (4,100) 0
-------------- ------------- ------------- --------------
Income (loss) from operations 28,980 (2,519) (300) 26,161
Interest expense, net (22,679) 0 (2,800) (25,479)
Foreign exchange transaction gains 683 0 0 683
-------------- ------------- ------------- --------------
Income before income taxes and minority interest 6,984 (2,519) (3,100) 1,365
Provision for (benefit from) income taxes (7,436) 0 2,501 (4,935)
Minority interest in loss of subsidiaries 254 0 0 254
-------------- ------------- ------------- --------------
Net loss ($198) ($2,519) ($599) ($3,316)
============== ============= ============= ==============
Weighted average shares outstanding 50,375
==============
Basic and diluted loss per share ($0.07)
==============
The accompanying notes are an integral part of these
unaudited pro forma financial statements.
</TABLE>
<PAGE>
Packard BioScience Company
Notes to Pro Forma Consolidated Financial Statements
Note 1. Basis of Presentation
The pro forma information presented is theoretical in nature and not necessarily
indicative of future consolidated results of operations of Packard BioScience
Company (the "Company") or the consolidated results of operations which would
have resulted had the Company acquired a certain net assets of GSI Lumonics
Inc.'s Life Sciences Business ("GSLI") during the periods presented. The pro
forma consolidated financial statements reflect the effects of the GSLI
acquisition, assuming that the acquisition and related events occurred as of
January 1, 1999, for purposes of the unaudited pro forma statements of income
(loss) for the six months ended June 30, 2000, and the year ended December 31,
1999, and as of June 30, 2000, for purposes of the unaudited pro forma statement
of net assets as of June 30, 2000.
The historical Packard financial information included in the accompanying pro
forma financial statements was taken from the Company's previously filed Form
10-Q for the period ended June 30, 2000, and its Form 10-K for the year ended
December 31, 1999. The historical GSLI information is included elsewhere herein.
The historical GSLI statements of income (loss) include all revenues and
expenses directly attributable to GSLI's products. Cost of sales includes
material cost, direct labor and an allocation of factory overhead. Some selling,
general and administrative expenses have been allocated to GSLI on various
bases, including the basis of relative sales of GSLI to other sales of GSI
Lumonics Inc., personnel and estimated time spent on GSLI. The statements do not
include corporate general and administrative expenses, interest, income taxes or
any other corporate expense allocations. Since GSLI was not a separate business
unit, GSI Lumonics Inc. had never segregated indirect operating cost information
relative to GSLI for external financial reporting purposes. Accordingly, it is
not practical to isolate or allocate such indirect operating costs to GSLI. In
the opinion of management of GSLI, such allocations are reasonable.
Note 2. Pro Forma Adjustments
o The purchase price of GSLI consisted of the following (in thousands):
Cash $ 40,000
Company common stock 66,299
Legal and other fees 1,700
Total consideration $107,929
The Company issued 4,571,429 shares of common stock to GSLI in connection
with the acquisition. The value assigned to the stock was determined in
accordance with generally accepted accounting principles.
o The purchase price was allocated based upon an independent appraisal as
follows:
Tangible net assets $ 5,350
In-process research and
development 12,100
Goodwill 90,479
Total $107,929
<PAGE>
The Company will write-off the value assigned to the acquired in-process
research and development in the fourth quarter of 2000 as it had not
reached technological feasibility as of the date acquired. This write-off
is not reflected in the accompanying pro forma statements of income (loss)
as it is nonrecurring in nature.
o Borrowings required to fund the cash portion of the acquisition are
reflected in the accompanying pro forma financial statements along with
interest expense thereon and the related income tax effect. In addition,
the use of available cash to fund a portion of the cash requirement is
reflected in the pro forma financial statements along with a corresponding
reduction in interest income thereon and the related income tax effect.
o Historical non-recurring items included in the GSLI financial statements
have been eliminated from the pro forma financial information.
o The effect of the acquisition on pro forma income taxes is reflected in the
accompanying financial statements, including the impact of the difference
in value assigned to goodwill for income tax purposes versus financial
reporting purposes.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
Packard BioScience Company
----------------------------------------------
(Registrant)
By /s/ Emery G. Olcott
----------------------------------------------
Emery G. Olcott
Chairman of the Board and
Chief Executive Officer
By /s/ Ben D. Kaplan
----------------------------------------------
Ben D. Kaplan
Vice President and Chief Financial Officer
By /s/ David M. Dean
----------------------------------------------
David M. Dean
Corporate Controller
Date: November 13, 2000
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
23 Consent of Independent Chartered Accountants
