<PAGE>
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: December 3, 1997
STAODYN, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 0-8350 84-0684224
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(State or other jurisdiction (Commission file number) (IRS Employer
of incorporation) Identification No.)
1225 Ken Pratt Boulevard, Longmont, Colorado 80501
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(Address of principal executive office)
(303) 772-3631
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(Registrant's telephone number,
including area code)
Not applicable
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(Former name or former address,
if changed since last report)
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Item 5. Other Events
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On December 2, 1997, Staodyn, Inc. issued the Press Release attached
hereto as Exhibit A.
Item 7. Financial Statements and Exhibits
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(a) Financial Statements - Not applicable
(b) Pro Forma Financial Information - Not applicable
(c) Exhibits:
Exhibit A Press Release - "Rehabilicare and Staodyn Announce
Definitive Agreement to Merge"
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.
STAODYN, INC.
By: /s/Michael J. Newman
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Michael J. Newman
Vice President - Finance & Administration
Date: December 3, 1997
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EXHIBIT A
[LOGO OF STAODYN APPEARS HERE] PRESS RELEASE
FOR IMMEDIATE RELEASE
REHABILICARE AND STAODYN ANNOUNCE
DEFINITIVE AGREEMENT TO MERGE
December 2, 1997 - New Brighton, Minnesota and Longmont, Colorado - U.S.A. -
Rehabilicare Inc. (NASDAQ-REHB) and Staodyn, Inc. (NASDAQ-SDYN) announced today
that they have signed a definitive agreement to merge, forming an international
electromedical pain management and rehabilitation company with combined revenues
of over $30 million. Under the terms of the agreement, each share of Staodyn
common stock will be exchanged for .829 shares of Rehabilicare common stock. The
transaction is valued at approximately $23 million at the December 1 closing
price of Rehabilicare common stock. The transaction is expected to be accounted
for as a pooling-of-interests and to be treated as a tax-free exchange. It is
subject to approval by the shareholders of both companies, and other customary
closing conditions. Completion is expected during the first quarter of calendar
1998, which is Rehabilicare's third fiscal quarter.
David B. Kaysen, President and CEO of Rehabilicare, said that Rehabilicare
anticipates that the merger will be accertive to earnings per share in
Rehabilicare's first full fiscal year ending June 30, 1999 after the merger.
Rehabilicare also estimates that it will incur one-time charges and related
adjustments of approximately $2.5-3.5 million in the period immediately
following the merger representing transaction costs and other costs related to
the merger, Mr. Kaysen added.
Rehabilicare designs, manufactures and provides electromedical pain management
and rehabilitation products and services used for clinical, home health care and
occupational medicine applications. Staodyn also develops electrotherapy devices
and accessories. Its core business consists of TENS (Transcutaneous Electrical
Nerve Stimulation) devices used for the relief of chronic and acute pain, NMES
(Neuromuscular Electrical Stimulation) devices used in physical therapy and
sports medicine for muscle reeducation and rehabilitation, and PDCS (Pulsed
Direct Current Stimulation) devices used in sports medicine and wound care to
promote healing of soft tissue injuries.
Staodyn is headquartered in Longmont, Colorado and has a patient support group
located in Tampa, Florida. They employ over 175 individuals in the two sites.
The company's products are sold in the U.S. through a national sales
organization and through wholesale DME (Durable Medical Equipment) dealers.
Internationally, Staodyn products are distributed in Canada and western Europe
through a network of medical product distributors. Staodyn's unaudited revenues
for the fiscal year ended November 30, 1997 are approximately $21 million.
"We expect the combination of our two organizations to produce numerous benefits
for our patients, health care providers and other customers as well as for all
of our shareholders," Mr. Kaysen stated. Mr. Kaysen went on to say, "The
combination of these two organizations creates a powerful entity with the
necessary critical mass to have a substantial impact on our industry.
continued...
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We will have an extremely broad product line of high quality TENS and NMES units
as well as the largest line of specialty rehabilitation products in the
industry. Rehabilicare's IFII and GVII units are focused on the rehabilitation
market while our CTDx is aimed at the large market for repetitive stress
injuries of the wrist and elbow. Rehabilicare's newest product, the OrthoDx is
being marketed into the very large post-surgical knee market. Staodyn's SporTX
is a tremendous product for a wide range of sports related injuries. By
combining this broad line of electrotherapy devices with an extensive family of
accessories, our new organization will be able to serve a large and growing
marketplace."
John R South, President and CEO of Staodyn, Inc. said, "The merger of Staodyn
into Rehabilicare will help to realize the full potential of these two strong
business organizations, while advancing the capacity of both organizations to
service our marketplace with high quality and innovative products."
Mr. Kaysen will remain President and CEO of the combined organization, with the
corporate headquarters to be located in New Brighton, Minnesota. In addition,
Bayne Gibson and Fred Ayers, currently board members of Staodyn, will be joining
the board of Rehabilicare.
Statements in this press release which are not historical facts are forward-
looking statements as that term is defined in the Private Securities Litigation
Reform Act of 1995. The words of phrases "anticipates," "estimates," "expect,"
or expressions of a similar nature denote forward-looking statements. Those
statements are subject to considerable risks and uncertainties, including the
risk that shareholder approval of the merger might not be obtained or that other
contingencies set forth in the merger agreement are not satisfied, the
substantial risks inherent in combining two publicly held corporations without
losing personnel, sales channels or customers, and the risks associated with
the ongoing businesses of each of the constituent corporations, as outlined in
their filings (including their 10-KSB filings) with the Securities and Exchange
Commission.
Contact: David B. Kaysen, President and CEO, 612-638-0419, or W. Glen Winchell,
Vice President of Finance and CFO, 612-638-0428 both of Rehabilicare, John R.
South, President and CEO, 303-772-3631, or Michael J. Newman; Vice President-
Finance, 303-772-3631 of Staodyn
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