<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------------
FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): September 12, 1997
WATERLINK, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-13041 34-1788678
(State or Other Commission File Number (IRS Employer Identification No.)
Jurisdiction of
Incorporation)
4100 Holiday Street, N.W., Suite 201, Canton, Ohio 44718
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (330) 649-4000
<PAGE> 2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Item 7 of Current Report on Form 8-K dated September 12, 1997 and filed on
September 26, 1997 is amended to include the financial statements of Mellegard
V.A. Maskiner AB and pro forma financial information of Waterlink, Inc. (the
"Company") as shown in the following index to financial statements:
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
(a) Historical Financial Statements of Mellegard V.A. Maskiner AB
<S> <C>
Report of Independent Auditors F-1
Balance Sheets at August 31, 1997 and 1996 F-2
Statements of Income for the two years ended August 31, 1997 F-3
Statements of Shareholders' Equity for the two years ended August 31, 1997 F-4
Statements of Cash Flows for the two years ended August 31, 1997 F-5
Notes to Financial Statements F-6
(b) Unaudited Pro Forma Condensed Consolidated Financial Data
Basis of Presentation F-10
Unaudited Pro Forma Condensed Consolidated Balance Sheet at June 30, 1997 F-11
Unaudited Pro Forma Consolidated Statement of Income for the year ended
September 30, 1996 F-12
Unaudited Pro Forma Consolidated Statement of Income for the nine months
ended June 30, 1997 F-13
Notes to Unaudited Pro forma Condensed Consolidated Financial Data F-14
( c) Exhibits
</TABLE>
Exhibit 23 - Consent of Independent Auditors
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.
WATERLINK, INC.
Dated: November 24, 1997 By: /s/ Michael J. Vantusko
---------------------------------
Michael J. Vantusko
Chief Financial Officer
<PAGE> 3
Report of Independent Auditors
Board of Directors
Mellegard VA Maskiner AB
We have audited the accompanying balance sheets of the Mellegard VA Maskiner AB
as of August 31, 1997 and 1996, and the related statements of income,
shareholders' equity and cash flows for each of the two years in the period
ended August 31, 1997. These financial statements, which are expressed in
Swedish Kronor, are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing standards
in Sweden which, in all material respects, conform to generally accepted
auditing standards in the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Mellegard VA Maskiner AB at
August 31, 1997 and 1996, and the results of its operations and cash flows for
the two years in the period ended August 31, 1997 in conformity with generally
accepted accounting principles in the United States.
ERNST & YOUNG AB
/s/ Torbjorn Hanson
Torbjorn Hanson
Stockholm, Sweden
November 21, 1997
F-1
<PAGE> 4
Mellegard VA Maskiner AB
Balance Sheets
<TABLE>
<CAPTION>
AUGUST 31,
1997 1996
------------------
ASSETS KSEK KSEK
<S> <C> <C>
Current assets:
Cash and cash equivalents 9,991 3,435
Accounts receivable, net 13,178 6,949
Inventories 6,324 4,305
Other current assets 1,230 2,394
------------------
Total current assets 30,723 17,083
Property and equipment:
Machinery, furniture and equipment 1,257 1,058
Less accumulated depreciation 824 639
------------------
433 419
Other assets 23 23
------------------
Total assets 31,179 17,525
==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable--trade 8,028 5,351
Accrued expenses 2,076 2,002
Customer deposits 1,043 2,153
Accrued income taxes 2,351 -
------------------
Total current liabilities 13,498 9,506
Deferred income taxes 1,056 413
Shareholders' equity:
Common stock 200 200
Restricted reserves 3,897 1,314
Retained earnings 12,528 6,092
------------------
Total shareholders' equity 16,625 7,606
------------------
Total liabilities and shareholders' equity 31,179 17,525
==================
</TABLE>
The accompanying notes are an integral part of these statements.
F-2
<PAGE> 5
Mellegard VA Maskiner AB
Statements of Income
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
1997 1996
-------------------------
KSEK KSEK
<S> <C> <C>
Net sales 61,803 52,204
Cost of sales 42,197 37,913
-------------------------
Gross profit 19,606 14,291
Selling, general and
administrative expenses 7,061 13,341
-------------------------
Operating income 12,545 950
Other income (expense):
Interest expense (4) (17)
Interest income 185 106
Other income (expense) 313 -
-------------------------
Income before income taxes 13,039 1,039
Provision for income taxes 3,577 303
-------------------------
Net income 9,462 736
=========================
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE> 6
Mellegard VA Maskiner AB
Statements of Shareholders' Equity
<TABLE>
<CAPTION>
Total
Number Common Restricted Retained Shareholders'
of shares Stock Reserves Earnings Equity
----------------------------------------------------------------
KSEK KSEK KSEK KSEK
<S> <C> <C> <C> <C> <C>
YEAR ENDED AUGUST 31, 1996
Balance at September 1, 1995 200 200 1,221 5,569 6,990
Net income 736 736
Transfer 93 (93) -
Distribution to shareholders (120) (120)
----------------------------------------------------------------
Balance at August 31, 1996 200 200 1,314 6,092 7,606
YEAR ENDED AUGUST 31, 1997
Net income 9,462 9,462
Transfer 2,583 (2,583) -
Distribution to shareholders (443) (443)
----------------------------------------------------------------
Balance at August 31, 1997 200 200 3,897 12,528 16,625
================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE> 7
Mellegard VA Maskiner AB
Statements of Cash Flows
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
1997 1996
--------------------------------
KSEK KSEK
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 9,462 736
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
Depreciation and amortization 185 179
Deferred income taxes 643 (47)
Changes in assets and liabilities:
Accounts receivable (6,229) (426)
Inventories (2,019) (1,607)
Other assets 1,164 868
Accounts payable 2,677 1,146
Accrued expenses and other 74 (1,727)
Customer deposits (1,110) 1,895
Accrued income taxes 2,351 (105)
--------------------------------
Net cash provided by operating activities 7,198 912
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment, net (199) (139)
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to shareholders (443) (120)
--------------------------------
Net increase in cash and cash equivalents 6,556 653
Cash and cash equivalents at beginning of year 3,435 2,782
--------------------------------
Cash and cash equivalents at end of year 9,991 3,435
================================
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE> 8
Mellegard VA Maskiner AB
Notes to Financial Statements
1. DESCRIPTION OF BUSINESS AND ORGANIZATION
Mellegard VA Maskiner AB ("Meva") operates in a single business segment,
specializing in the design and installation of fine screens and related
accessories for wastewater treatment applications. Meva's sales are made
predominately in Europe, with a concentration in the Scandinavian countries.
2. BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with
Swedish generally accepted accounting principles for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission located
in the United States of America. In the preparation of these financial
statements, there were no material differences between Swedish generally
accepted accounting principles and U.S. generally accepted accounting
principles.
3. ACCOUNTING POLICIES
REVENUE RECOGNITION
Sales are recorded when products are shipped.
FISCAL YEAR END
Meva's fiscal year ends on August 31. References in the footnotes to the years
1997 and 1996 refer to the fiscal years ended August 31, 1997 and 1996,
respectively.
CASH EQUIVALENTS
Meva considers all highly liquid investments with a maturity of three months or
less when purchased to be cash equivalents.
CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject Meva to concentrations of credit
risk consist principally of cash equivalents and trade receivables. Meva places
its cash equivalents with high quality financial institutions.
Meva grants credit to customers based on an evaluation of their financial
condition and collateral is generally not required. Losses from credit sales are
provided for in the financial statements and have been within management's
expectations. Approximately 30% of Meva's sales volume is derived from a single
German customer, and five customers comprise approximately 65% of the accounts
receivable balance.
F-6
<PAGE> 9
Mellegard VA Maskiner AB
Notes to Financial Statements (continued)
3. ACCOUNTING POLICIES (CONTINUED)
INVENTORIES
Inventories are valued at the lower of cost or market. Cost is determined using
the average cost method.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is valued at cost. Expenditures for repairs and
maintenance are charged to operations as incurred, while expenditures for
additions and improvements are capitalized. Depreciation is computed principally
using the straight-line method over the estimated useful lives of assets. The
useful lives range from 3 to 5 years for machinery, equipment and furniture.
RESTRICTED RESERVES
Under Swedish law, restricted reserves are not available for distribution but
are required to be held to meet statutory requirements.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
4. ACCOUNTS RECEIVABLE
Accounts receivable are stated net of allowances for doubtful accounts, KSEK 415
at August 31, 1997 and KSEK 75 at August 31, 1996. During 1996, Meva wrote off
approximately KSEK 6,300 of accounts receivable from a significant customer.
This amount is classified in the statement of income with selling, general and
administrative expense.
F-7
<PAGE> 10
Mellegard VA Maskiner AB
Notes to Financial Statements (continued)
5. INVENTORIES
Inventories consisted of the following:
AUGUST 31,
1997 1996
---------------------
KSEK KSEK
Raw material and supplies 2,391 1,901
Work in progress 1,887 1,473
Finished goods 2,046 931
---------------------
6,324 4,305
=====================
6. LEASES
Meva leases certain facilities under operating leases. Rent expense totaled KSEK
218 in 1997 and KSEK 196 in 1996. Aggregate future minimum lease payments under
noncancelable operating leases at August 31, 1997 totaled KSEK 867 and are
payable as follows: 1998--KSEK 260; 1999--KSEK 260; 2000--KSEK 260 and
2001--KSEK 87.
7. INCOME TAXES
The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
1997 1996
---------------------
KSEK KSEK
<S> <C> <C>
Current taxes 2,934 350
Deferred taxes 643 (47)
---------------------
Provision for income taxes 3,577 303
=====================
</TABLE>
The effective tax rate differs from the federal statutory rate as set forth in
the following reconciliation:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
1997 1996
---------------------
<S> <C> <C>
Swedish statutory income tax rate 28.0% 28.0%
Non-deductible expenses 0.2 1.2
Other (0.8) -
---------------------
Effective income tax rate 27.4% 29.2%
=====================
</TABLE>
F-8
<PAGE> 11
Mellegard VA Maskiner AB
Notes to Financial Statements (continued)
7. INCOME TAXES (CONTINUED)
The effect of temporary differences giving rise to deferred tax assets and
liabilities are as follows:
<TABLE>
<CAPTION>
AUGUST 31,
1997 1996
------ ------
KSEK KSEK
<S> <C> <C>
Deferred tax assets:
Accrued expenses 444 83
Deferred tax liabilities:
Accelerated tax deductions (1,500) (496)
------ ------
Net deferred tax liability (1,056) (413)
====== ======
</TABLE>
8. CONTINGENCIES
Meva is involved in certain legal actions arising in the ordinary course of
business. In the opinion of management, such litigation and claims will be
resolved without a material effect on Meva's financial position, cash flows or
results of operations.
9. EXCHANGE RATE DATA
The following table sets forth at the end of and for the periods indicated,
certain information concerning the closing, average, high and low exchange rates
for United States Dollars ("US$") as a ratio of Swedish Kronor ("SEK"). The
exchange rates used are those quoted by the Federal Reserve Bank of New York and
are the noon buying rates in New York City for cable transfers in foreign
currencies. On November 13, 1997, the closing ratio of United States Dollar per
Swedish Kronor was .133.
<TABLE>
<CAPTION>
AT AND FOR THE YEAR
ENDED AUGUST 31,
------------------------
<S> <C> <C>
1997 1996
Ratio of US$ per SEK
Exchange rate at end of period .125 .151
Average exchange rate during period .138 .148
Highest exchange rate during period .152 .152
Lowest exchange rate during period .125 .137
</TABLE>
F-9
<PAGE> 12
Waterlink, Inc. and Subsidiaries
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
BASIS OF PRESENTATION
The following Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1997 adjusts the Company's historical balance sheet to give effect to
the acquisition of Mellegard V.A. Maskiner AB ("Meva") as if it had occurred as
of June 30, 1997. The following Unaudited Pro Forma Consolidated Statements of
Income for the year ended September 30, 1996 and the nine months ended June 30,
1997 adjust the Company's historical statements of income to give effect to the
acquisitions completed in fiscal 1997 up to and including the acquisition of
Meva as if they had occurred as of October 1, 1995.
The pro forma financial statements have been derived in part from the historical
financial statements of Meva included elsewhere in this filing. Meva has an
August 31 fiscal year end. Therefore, the Consolidated Pro Forma Statements of
Income for the year ended September 30, 1996 and the nine months ended June 30,
1997 include Meva's operating results for the year ended August 31, 1996 and the
nine months ended May 31, 1997, respectively.
The financial information for Meva has been presented in accordance with United
States generally accepted accounting principles. The exchange rates used to
present such financial information are located on page F-9 of the enclosed
historical financial statements of Meva.
With regard to the Company, the operating results for the year ended September
30, 1996 were derived from page F-5 of the Company's Registration Statement on
Form S-1 (Registration Number 333-25249) which was declared effective as of
June 24, 1997. The Company's historical balance sheet and operating results as
of and for the nine months ended June 30, 1997 were derived from the Company's
Form 10-Q filed on August 12, 1997. The amounts in the column entitled "Fiscal
1997 Acquisitions" for the nine months ended June 30, 1997 were derived from
the historical financial statements of the following acquired companies for the
periods in fiscal 1997 prior to the respective acquisitions: Nordic Water
Products Group, acquired March 5, 1997; Bioclear Technology, Inc., acquired
June 27, 1997 and Lanco Environmental Products, Inc., acquired June 27, 1997.
The Unaudited Pro Forma Condensed Consolidated Financial Data has been prepared
by the Company's management. This pro forma data does not purport to represent
the Company's financial position or results of operations had the
aforementioned acquisitions been completed as of the beginning of the periods
indicated, or project the Company's results of operations at any future date or
for any future period. The Unaudited Pro Forma Condensed Consolidated Financial
Data should be read in conjunction with the Consolidated Financial Statements
and notes thereto included in the Company's Registration Statement on Form S-1
(Registration Number 333-25249) which was declared effective as of June 24,
1997.
F-10
<PAGE> 13
WATERLINK, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1997
<TABLE>
<CAPTION>
PRO FORMA
COMPANY MEVA (1) ADJUSTMENTS PRO FORMA
----------------- ----------------- ----------------- -----------------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 3,573 $ 1,294 $ (3,538) (2) $ 1,329
Accounts receivable 18,247 1,707 19,954
Inventories 6,498 819 7,317
Costs in excess of billings 9,155 - 9,155
Other current assets 442 159 601
----------------- ----------------- ----------------- -----------------
Total current assets 37,915 3,979 (3,538) 38,356
Property, plant and equipment, net 6,374 56 6,430
Other assets:
Goodwill and other intangibles, net 40,040 - 4,952 (2) 44,992
Other assets 2,321 3 2,324
----------------- ----------------- ----------------- -----------------
42,361 3 4,952 47,316
----------------- ----------------- ----------------- -----------------
Total assets $ 86,650 $ 4,038 $ 1,414 $ 92,102
================= ================= ================= =================
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 11,434 $ 1,040 $ 12,474
Accrued expenses 6,597 411 7,008
Billings in excess of cost 1,418 135 1,553
Other current liabilities 994 304 1,298
Current portion of long-term debt 2,387 - 2,387
----------------- ----------------- ----------------- -----------------
Total current liabilities 22,830 1,890 - 24,720
Long-term obligations:
Long-term debt 1,000 - $ 1,754 (2) 2,754
Convertible subordinated notes-
related parties - - 1,671 (2) 1,671
Other long-term liabilities 1,225 137 1,362
----------------- ----------------- ----------------- -----------------
2,225 137 3,425 5,787
Shareholders' equity 61,595 2,011 (2,011) (2) 61,595
----------------- ----------------- ----------------- -----------------
Total liabilities and shareholders' equity $ 86,650 $ 4,038 $ 1,414 $ 92,102
================= ================= ================= =================
</TABLE>
The accompanying notes are an integral part of these financial statements
F-11
<PAGE> 14
WATERLINK, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PRO FORMA
COMPANY MEVA ADJUSTMENTS PRO FORMA
----------------- ----------------- ----------------- -----------------
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net Sales $ 72,687 $ 7,790 $ 80,477
Cost of sales 44,685 5,658 50,343
----------------- ----------------- ----------------- -----------------
Gross profit 28,002 2,132 - 30,134
Selling, general and administrative
expenses 21,217 1,991 $ 29 (4) 23,237
Amortization 1,060 - 124 (5) 1,184
----------------- ----------------- ----------------- -----------------
Operating income 5,725 141 (153) 5,713
Other income (expense):
Interest expense (3,786) (2) (404) (6) (4,192)
Interest income and other items, net (17) 16 (1)
----------------- ----------------- ----------------- -----------------
Income before income taxes 1,922 155 (557) 1,520
Income taxes 827 45 (218) (7) 654
----------------- ----------------- ----------------- -----------------
Net income $ 1,095 $ 110 $ (339) $ 866
================= ================= ================= =================
Pro forma net income per share $ 0.16 $ 0.13
================= =================
Number of shares used to compute
pro forma per share data 6,756 6,756
================= =================
</TABLE>
The accompanying notes are an integral part of these financial statements
F-12
<PAGE> 15
WATERLINK, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
FISCAL
1997 PRO FORMA
COMPANY ACQUISITIONS(3) MEVA ADJUSTMENTS PRO FORMA
--------------- --------------- ----------------- ----------------- ---------
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net Sales $ 41,043 $16,201 $ 6,392 $ 2,462(3) $ 66,098
Cost of sales 25,076 10,002 4,325 1,926(3) 41,329
-------- ------- -------- ------- --------
Gross profit 15,967 6,199 2,067 536 24,769
Selling, general and administrative
expenses 12,613 5,174 616 17(4) 18,420
Special management compensation 2,630 - - 2,630
Amortization 434 23 - 476(5) 933
-------- ------- -------- ------- --------
Operating income 290 1,002 1,451 43 2,786
Other income (expense):
Interest expense (1,156) (119) - (1,692)(6) (2,967)
Interest income and other items, net 78 92 23 - 193
-------- ------- -------- ------- --------
Income (loss) before income taxes (788) 975 1,474 (1,649) 12
Income taxes (296) 192 413 (304)(7) 5
-------- ------- -------- ------- --------
Income (loss) before extraordinary item (492) 783 1,061 (1,345) 7
Extraordinary item, net of income taxes (385) - - - (385)
-------- ------- -------- ------- --------
Net income (loss) $ (877) $ 783 $ 1,061 $(1,345) $ (378)
======== ======= ======== ======= ========
Pro forma net income (loss) per share:
Income (loss) before extraordinary item $ (0.07) $ 0.00
Extraordinary item (0.06) (0.06)
-------- --------
$ (0.13) $ (0.06)
======== ========
Number of shares used to compute
pro forma per share data 6,920 6,920
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements
F-13
<PAGE> 16
Waterlink, Inc. and Subsidiaries
Notes to Unaudited Pro Forma Condensed Consolidated Financial Data
Unaudited Pro Forma Condensed Balance Sheet Adjustments
The Unaudited Pro Forma Condensed Consolidated Balance Sheet has been adjusted
to reflect the above as follows:
(1) To record the historical assets acquired and liabilities assumed in
connection with the acquisition of Meva.
(2) To reflect adjustments to assets acquired and liabilities assumed in
connection with the acquisition of Meva based on their estimated fair
values under the purchase method of accounting. The estimated combined
purchase price relating to the acquisition is $6,963,000, including
acquisition related expenses of approximately $125,000. The allocation
of the purchase price is preliminary and assumes the historical book
value of tangible assets approximates fair value. The actual allocation
will be based on management's final evaluation of such assets and
liabilities. Some portion of the excess of the purchase price over the
historical cost of net assets acquired may ultimately be allocated to
specific tangible and intangible assets and liabilities. The final
allocation of the purchase price and the resulting effect on net income
may differ significantly from the pro forma amounts included herein.
These pro forma adjustments are reflected as follows (in thousands of
dollars):
<TABLE>
<S> <C>
Decrease cash for cash portion of the acquisition price and
the payment of acquisition related expenses $ (3,538)
Increase goodwill for the excess of the purchase price over the
net assets acquired 4,952
Increase long-term debt for cash portion of acquisition price 1,754
Increase convertible subordinated notes-related parties to
reflect issuance of debt in connection with the acquisition 1,671
Decrease shareholders' equity to eliminate historical equity of Meva (2,011)
</TABLE>
Unaudited Pro Forma Consolidated Statements of Income Adjustments
The Unaudited Pro Forma Consolidated Statements of Income give effect to the
following adjustments:
(3) To recognize revenue on the percentage of completion method of
accounting at the Nordic Water Products Group.
(4) To adjust selling, general and administrative expenses for certain
adjustments in salaries and benefits to the former owners of Meva to
levels specified in the employment agreements entered into as part of
the business combination.
(5) To record amortization of goodwill to be recorded as a result of the
acquisition over a period of 40 years.
(6) To record interest expense relating to debt assumed to be issued and
cash assumed to be used in connection with the acquisition.
(7) To adjust income taxes to an effective rate of 43%.
F-14
<PAGE> 1
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 333-29911) pertaining to the Employee Stock Purchase Plan of
Waterlink, Inc.; 1997 Non-Employee Director Stock Option Plan of Waterlink,
Inc.; Waterlink, Inc. Amended and Restated 1995 Stock Option Plan, and the
Waterlink, Inc. 1997 Omnibus Incentive Plan of our report dated November 21,
1997, with respect to the financial statements of Mellegard VA Maskiner AB
included in Amendment No. 1 of the Waterlink, Inc. Current Report (Form 8-K/A)
dated September 12, 1997.
ERNST & YOUNG AB
/s/ Torbjorn Hanson
Torbjorn Hanson
Stockholm, Sweden
November 21, 1997
