<PAGE>
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) December 9, 1997
UNITED STATES FILTER CORPORATION
--------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-10728 33-0266015
-------------- ----------- --------------
(State of other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation or
other organization)
40-004 Cook Street, Palm Desert, California 92211
------------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (760) 340-0098
--------------
Not Applicable
-------------------------------
(Former name or former address,
if changed from last report)
<PAGE>
Item 7 of the Registrant's Current Report on Form 8-K/A dated December 9, 1997
and Item 7 of the Registrant's Current Report on Form 8-K/A dated January 16,
1998 are hereby amended as set forth below. The exhibits referenced therein are
not amended hereby.
As previously reported on a Current Report on Form 8-K dated December 9, 1997,
United States Filter Corporation (the "Company") acquired approximately 96% of
the outstanding ordinary shares (the "Memtec Shares") of Memtec Limited
("Memtec") on December 9, 1997, pursuant to a tender offer. Beneficial ownership
of the remaining Memtec Shares of the remaining shares was acquired on
February 5, 1998. The total purchase price for all Memtec Shares was
approximately $399.6 million in cash.
As previously reported on a Current Report on Form 8-K dated January 16, 1998,
the Company acquired all of the outstanding common stock of The Kinetics Group,
Inc. ("Kinetics") effective December 31, 1998 in exchange for 5,803,803 shares
of common stock, par value $.01 per share, of the Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(B) PRO FORMA FINANCIAL INFORMATION
Unaudited Pro Forma Combined Balance Sheet as of September 30, 1997;
Unaudited Pro Forma Combined Statement of Operations for the years
ended March 31, 1997 and for the six months ended September 30, 1997;
Unaudited Pro Forma Combined Statement of Operations for the years
ended March 31, 1996 and 1995; and
Notes to Unaudited Pro Forma Combined Financial Information.
(C) EXHIBITS
23.1 Consent of Independent Auditors
23.2 Consent of Price Waterhouse
23.3 Consent of Ernst & Young LLP
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
UNITED STATES FILTER CORPORATION
By: /s/ KEVIN L. SPENCE
--------------------------
Kevin L. Spence
Executive Vice President
Date: March 4, 1998
<PAGE>
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined financial information presents the
Pro Forma Combined Balance Sheet at September 30, 1997, giving effect to the
acquisitions of Memtec (which was accounted for as a purchase as described
below) and of Kinetics (which was accounted for as a pooling of interests as
described below) as if they had been consummated on that date. Also presented
are the Pro Forma Combined Statements of Operations for the fiscal year ended
March 31, 1997 and the six months ended September 30, 1997, giving effect to the
acquisitions of Memtec and Kinetics as if each of such acquisitions had been
consummated as of the beginning of the respective periods presented. The
Company's fiscal year ends on March 31, Memtec's fiscal year ends on June 30
and Kinetics' fiscal year ends on September 30. The Pro Forma Combined
Statement of Operations for the year ended March 31, 1997 combines the results
of the Company for such year with the results of Memtec for the year ended June
30, 1997 and the results of Kinetics for the year ended September 30, 1997. The
Pro Forma Combined Statement of Operations for the six months ended September
30, 1997 combines the results of each of the Company, Memtec and Kinetics for
such six month period.
Since the acquisition of Kinetics was accounted for as a pooling of interests,
Pro Forma Combined Statements of Operations for the years ended March 31, 1996
and 1995 are also presented. The Pro Forma Combined Statements of Operations for
each of these years combines the results of the Company for the years ended
March 31, 1996 and 1995 with the results of Kinetics for the years ended
September 30, 1996 and 1995, respectively. The Pro Forma Combined Statements of
Operations for these years are in effect a restatement of the historical
statements of operations of each of the Company and Kinetics and accordingly do
not include the results of Memtec, which acquisition was accounted for as a
purchase.
The pro forma data is based on the historical combined statements of the
Company, Memtec and Kinetics giving effect to the Memtec acquisition under the
purchase method of accounting, the Kinetics acquisition under the pooling of
interests method of accounting and to the assumptions and adjustments (which the
Company believes to be reasonable) described in the accompanying Notes to
Unaudited Pro Forma Combined Financial Information. Under the purchase method of
accounting, assets acquired and liabilities assumed will be recorded at their
estimated fair value at the date of acquisition. Under the pooling of interests
method of accounting, the recorded assets and liabilities of the separate
entities become the recorded assets and liabilities of the combined entity. The
pro forma adjustments set forth in the following unaudited pro forma combined
financial information are estimated and may differ from the actual adjustments
when they become known; however, no material differences are anticipated by the
Company.
The following unaudited pro forma combined financial information does not
reflect certain cost savings that the Company believes may be realized following
the Memtec and Kinetics acquisitions. Such cost savings are expected to be
realized primarily through the elimination of certain overhead expenses and
geographic overlap and the implementation of strict cost controls and
standardized operating procedures. Additionally, the Company believes that such
acquisitions will enable it to realize increased operating efficiencies and
economies of scale including enhanced purchasing power and increased asset
utilization.
<PAGE>
The pro forma data is provided for comparative purposes only. It does not
purport to be indicative of the results that actually would have occurred if the
acquisitions of Memtec and Kinetics had been consummated on the dates indicated
or that may be obtained in the future. The unaudited pro forma combined
financial information should be read in conjunction with the notes thereto, the
audited consolidated financial statements and notes thereto of Memtec and
Kinetics, incorporated herein by reference and the Company's Consolidated
Financial Statements and related Notes thereto, incorporated herein by
reference.
<PAGE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
As of September 30, 1997
----------------------------------------------------------------------------
Historical Pro Forma
------------------------------------- ------------------------------------
Adjustments
Increase
Company Memtec Kinetics (Decrease) Notes Combined
---------- -------- -------- ---------- ---------- ----------
Current Assets: (in thousands)
<S> <C> <C> <C> <C> <C> <C>
Cash $ 32,622 $ 21,142 $ 8,907 $ 62,671
Short-term investments 483 - - 483
Accounts receivable, net 618,256 46,371 91,925 756,552
Cost and estimated earnings in excess
of billings on uncompleted contracts 121,494 - 22,773 144,267
Inventories 303,960 48,401 2,718 355,079
Prepaid expenses 13,677 - 891 14,568
Deferred taxes 38,969 4,844 14,563 58,376
Other current assets 41,247 8,530 - 49,777
---------- -------- -------- ----------
Total current assets 1,170,708 129,288 141,777 1,441,773
---------- -------- -------- ----------
Property, plant and equipment, net 597,987 96,248 22,847 717,082
Investment in leasehold interests, net 22,916 - - 22,916
Cost in excess of net assets of
businesses acquired, net 903,982 57,519 - 961,501
Other assets 109,373 19,459 4,611 (11,231) a(i) 122,212
---------- -------- -------- ----------
$2,804,966 $302,514 $169,235 $3,265,484
========== ======== ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 278,233 $ 13,679 $ 36,758 $ 328,670
Accrued liabilities 272,633 29,533 36,200 338,366
Current portion of long-term debt 10,699 3,447 1,150 15,296
Billings in excess of costs and estimated
earnings on uncompleted contracts 58,012 - 19,258 77,270
Other current liabilities 43,997 567 4,856 49,420
---------- -------- -------- ----------
Total current liabilities 663,574 47,226 98,222 809,022
---------- -------- -------- ----------
Notes payable 6,346 - 33,770 388,364 a(ii) 428,480
Long-term debt, excluding current portion 60,521 75,032 19,178 154,731
Convertible subordinated debentures 554,000 - - 554,000
Deferred taxes 13,110 5,017 677 18,804
Other liabilities 43,679 6,853 408 50,940
---------- -------- -------- ----------
Total liabilities 1,341,230 134,128 152,255 2,015,977
---------- -------- -------- ----------
Preferred stock - - 10,088 (10,088) a(iii) -
Shareholders' equity:
Common stock 929 20,047 8 (19,997) a(iii),a(iv) 987
Additional paid-in capital 1,384,570 157,210 13,692 (147,172) a(iii),a(iv) 1,408,300
Currency translation adjustment (34,579) (10,552) - 10,552 a(iv) (34,579)
Retained earnings (accumulated deficit) 112,816 1,681 (6,808) (232,890) a(iv),a(v) (125,201)
---------- -------- -------- ----------
Total shareholders' equity 1,463,736 168,386 6,892 1,249,507
---------- -------- -------- ----------
$2,804,966 $302,514 169,235 $3,265,484
========== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of these pro forma combined
financial data.
<PAGE>
UNAUDITED COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Fiscal Year Ended March 31, 1997
--------------------------------------------------------------------------------------
Historical Pro Forma
----------------------------------------- -----------------------------------------
Adjustments
Increase
Company Memtec Kinetics (Decrease) Notes Combined
----------- ----------- ----------- ----------- ----------- -----------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Revenues $1,376,601 $ 243,616 $387,805 $2,008,022
Cost of sales 1,026,248 155,638 350,367 1,532,253
----------- ----------- ----------- -----------
Gross profit 350,353 87,978 37,438 475,769
Selling, general and
administrative expenses 261,859 72,702 54,331 388,892
Merger and Restructuring expenses 5,581 1,677 - 7,258
----------- ----------- ----------- -----------
267,440 74,379 54,331 396,150
----------- ----------- ----------- -----------
Operating income 82,913 13,599 (16,893) 79,619
Other income (expense):
Interest expense (22,585) (5,613) (3,924) (22,991) b(i) (55,113)
Interest and other income 3,350 816 328 4,494
----------- ----------- ----------- -----------
(19,235) (4,797) (3,596) (50,619)
Income before income tax expense 63,678 8,802 (20,489) 29,000
Income tax expense 17,481 1,306 (6,800) (6,323) b(ii) 5,664
----------- ----------- ----------- -----------
Net income $ 46,197 $ 7,496 $(13,689) $ 23,336
=========== =========== =========== ===========
Net income per common share $ 0.77 $ 0.35
=========== ===========
Net income per common share
excluding certain charges $ 0.83 c c $ 0.77
=========== ===========
Weighted average number of
shares outstanding 60,324 66,127
=========== ===========
The accompanying notes are an integral part of these pro forma combined financial data.
</TABLE>
<PAGE>
Pro Forma Combined Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended September 30, 1997
----------------------------------------------------------------------------
Historical Pro Forma
----------------------------------- ------------------------------------
Adjustments
Increase
Company Memtec Kinetics (Decrease) Notes Combined
---------- ------ -------- ------------ ----- ---------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> C>
Revenues $1,289,722 $130,095 $227,404 $1,647,221
Cost of sales 971,117 81,100 205,585 1,257,802
---------- -------- -------- ----------
Gross profit 318,605 48,995 21,819 389,419
Selling, general and
administrative expenses 234,676 37,974 31,392 304,042
Merger and restructuring
expenses - 2,714 - 2,714
---------- -------- -------- ----------
234,676 40,688 31,392 306,756
---------- -------- -------- ----------
Operating income 83,929 8,307 (9,573) 82,663
---------- -------- -------- ----------
Other income (expense):
Interest expense (18,389) (2,767) (2,787) (11,496) b (i) (35,439)
Interest and other income 1,087 39 136 1,262
---------- -------- -------- ----------
(17,302) (2,728) (2,651) (34,177)
---------- -------- -------- ----------
Income before income tax
expense 66,627 5,579 (12,224) 48,486
Income tax expense 21,357 2,631 (3,748) (3,690) b (ii) 16,550
---------- -------- -------- ----------
Net income $ 45,270 $ 2,948 $ (8,476) $ 31,936
========== ======== ======== ==========
Net income per common share $ 0.55 $ 0.36
========== ==========
Net income per common share
excluding certain charges $ 0.55 $ 0.51
========== ==========
Weighted average number of
shares outstanding 82,968 88,771
========== ==========
</TABLE>
The accompanying notes are an integral part of these pro forma combined
financial data.
<PAGE>
<TABLE>
<CAPTION>
UNAUDITED COMBINED STATEMENT OF OPERATIONS
FISCAL YEAR ENDED MARCH 31, 1996
------------------------------------------------------------------------
Historical Pro Forma
------------------------- -------------------------------------------
Adjustments
Increase
Company Kinetics (Decrease) Notes Combined
-------- -------- --------------- --------- ----------
(In thousands, except per share data)
<S> <C> <C> <C>
Revenues $812,322 $278,423 $1,090,745
Cost of sales 606,226 230,747 836,973
-------- -------- ----------
Gross profit 206,096 47,676 253,772
Selling, general and
administrative expenses 160,714 31,673 192,387
-------- -------- ----------
Operating income 45,382 16,003 61,385
-------- -------- ----------
Other income (expense):
Interest expense (15,212) (1,068) (16,280)
Interest and other income 4,979 944 5,923
-------- -------- ----------
(10,233) (124) (10,357)
-------- -------- ----------
Income before income tax expense 35,149 15,879 51,028
Income tax expense 13,182 7,147 20,329
-------- -------- ----------
Net income $ 21,967 $ 8,732 $30,699
======== ======== ==========
Net income per common share $0.49 $0.61
======== ==========
Weighted average number of
shares outstanding 43,688 49,491
======== ==========
The accompanying notes are an integral part of these pro forma combined financial data.
</TABLE>
<PAGE>
UNAUDITED COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Fiscal Year Ended March 31, 1995
--------------------------------------------------------------------------------
Historical Pro Forma
--------------------------- -----------------------------------------------
Adjustments
Increase
Company Kinetics (Decrease) Notes Combined
----------- ----------- ------------- ----------- -----------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Revenues $600,832 $229,933 $830,765
Cost of sales 463,959 194,875 658,834
----------- ----------- -----------
Gross profit 136,873 35,058 171,931
Selling, general and
administrative expenses 108,826 22,384 131,210
----------- ----------- -----------
Operating income 28,047 12,674 40,721
----------- ----------- -----------
Other income (expense):
Interest expense (8,058) (749) (8,807)
Interest and other income 1,280 331 1,611
----------- ----------- -----------
(6,778) (418) (7,196)
----------- ----------- -----------
Income before income tax expense 21,269 12,256 33,525
Income tax expense 6,002 2,902 8,904
----------- ----------- -----------
Net income $ 15,267 $ 9,354 $ 24,621
=========== =========== ===========
Net income per common share $ 0.49 $ 0.67
=========== ===========
Weighted average number of
shares outstanding 29,763 35,566
=========== ===========
The accompanying notes are an integral part of these pro forma combined financial data.
</TABLE>
<PAGE>
Notes To Unaudited Pro Forma Combined Financial Information
a. The Pro Forma Combined Balance Sheet has been prepared to reflect the
acquisition of Memtec under the purchase method of accounting. Including
transaction costs estimated at approximately $13.0 million, the equity
purchase price for Memtec was approximately $399.6 million in cash. The
estimated net book value, as adjusted, of Memtec and the estimated fair
value of its net assets as of the closing date is assumed to be $168.4
million. The purchase price was allocated to the assets of Memtec based on
their estimated respective fair value. In connection with the acquisition of
Memtec, the Company acquired certain in-process research and development
projects that had not reached technological feasibility and that had no
alternative future uses. Such projects were valued using a risk adjusted
cash flow model under which expected future cash flows were discounted,
taking into account risks related to existing and future markets and
assessments of the life expectancy of such projects. The estimated value of
such in-process research and development projects was $231.2 million at
September 30, 1997 ($299.5 million at the closing date of December 9, 1997)
and was recorded as a charge to retained earnings in the accompanying Pro
Forma Combined Balance Sheet.
The Pro Forma Combined Balance Sheet has been prepared to reflect the
acquisition of Kinetics under the pooling of interests method of accounting.
The Company acquired all of the outstanding capital stock of Kinetics in
exchange for 5,803,803 shares of the Company's Common Stock (0.5824 shares
of the Company's Common Stock for each outstanding share of Kinetics common
stock). Pursuant to the pooling of interest method of accounting, the
recorded assets and liabilities of each of the Company and Kinetics have
been recorded as the assets and liabilities of the combined entity.
The Pro Forma Combined Balance Sheet has been adjusted as follows:
(i) To eliminate the recorded investment in Memtec of $11.2 million for
the purchase of Memtec shares prior to the Memtec Offer.
(ii) To record the incurrence of $388.4 million of indebtedness under the
Senior Credit Facility with an assumed effective interest rate of
5.92%. Such indebtedness was incurred to fund the purchase of a
portion of the Memtec Shares and to pay certain related fees and
expenses.
(iii) To reflect the conversion of Kinetics preferred stock into Kinetics
common stock. Such conversion increased Kinetics common equity
account and additional paid-in capital account by $50,000 and $10.0
million, respectively.
(iv) To eliminate the equity of Memtec.
(v) To record the impact on retained earnings for the charge of $231.2
million related to the purchase of in-process research and
development projects.
<PAGE>
b. For the fiscal year ended March 31, 1997, the historical results of
operations of Memtec reflects its operations for the twelve months ended
June 30, 1997 and the historical results of operations of Kinetics reflects
its operations for the twelve months ended September 30, 1997. The pro forma
data for the six months ended September 30, 1997 combines the results of
each of the Company, Memtec and Kinetics for such six month period.
The Pro Forma Combined Statements of Operations give effect to the following
adjustments:
<TABLE>
<CAPTION>
Fiscal Year Ended Six Months Ended
March 31, 1997 September 30, 1997
(in thousands)
<S> <C> <C>
(i) To adjust interest expense related
to indebtedness of $388.4 million
incurred under the Senior Credit
Facility to finance the acquisition
of a portion of the Memtec Shares
and to pay certain related fees and
expenses. Interest on such indebtedness
is assumed to be at an effective rate
of 5.92% per annum $ (22,991) $ (11,496)
========= =========
(ii) To adjust the provision for income
taxes to reflect the income tax effect
of the pro forma adjustments $ (6,323) $ (3,690)
========= =========
</TABLE>
<PAGE>
c. During the fiscal year ended March 31, 1997, the Company recorded merger
expenses of $5.6 million related to the acquisition of Davis Water & Waste
Industries, Inc. ("Davis"). Such expenses consisted primarily of investment
banking fees, printing fees, stock transfer fees, legal fees, accounting
fees, governmental filing fees and certain other costs related to existing
Davis pension plans and change of control payments.
During the fiscal year ended June 30, 1997 and the six months ended
September 30, 1997, Memtec recorded restructuring expenses of $1.7 million
and $2.7 million, respectively. Such restructuring expenses related to
employee terminations and asset write-downs at Memtec's French operations.
The restructuring was performed to focus Memtec's French operations on
global brands and away from non-core businesses.
During the fiscal year ended September 30, 1997 and the six months ended
September 30, 1997, Kinetics recorded non-recurring charges of $32.8 million
and $17.3 million, respectively. During the fiscal year ended September 30,
1997, Kinetics recorded in cost of sales non-recurring charges of $26.0
million related to certain unreimbursed project costs, $24.8 million of
which were for Asian-based customers including $20.0 million for a single
project for an Asian-based customer. Additional non-recurring charges during
the fiscal year ended September 30, 1997 of $6.8 million were included in
Kinetics' selling, general and administrative expenses. These charges
related to increases in Kinetics allowance for doubtful accounts, the write-
off of certain receivables, the write-down of certain assets and the
establishment of certain accruals. During the six months ended September 30,
1997, Kinetics recorded in cost of sales non-recurring charges of $13.7
million related to unreimbursed project costs, $13.4 million of which were
for Asian-based customers including $10.3 million for a single project for
an Asian based customer. Additionally, during the six months ended September
30, 1997, Kinetics recorded non-recurring charges in selling, general and
administrative expenses of $3.6 million related to increases in Kinetics
allowance for doubtful accounts, the write-off of certain receivables, the
write-down of certain assets and the establishment of certain accruals.
Excluding the effects of each of the charges identified above, gross profit,
operating income, net income and net income per common share for the fiscal
year ended March 31, 1997 and the six months ended September 30, 1997 would
have been:
Pro Forma
----------------------------
(in thousands, except per
share data)
Fiscal Year Ended March 31, 1997:
Gross Profit $501,769
Operating income 119,706
Net income 50,746
Net income per common share 0.77
Fiscal Year Ended March 31, 1997:
Gross Profit $403,102
Operating income 102,682
Net income 45,369
Net income per common share 0.51
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders
of United States Filter Corporation:
We consent to the incorporation by reference on Form 8-K/A dated December 9,
1997 of United States Filter Corporation of our report dated June 6, 1997,
relating to the consolidated balance sheets of United States Filter Corporation
as of March 31, 1996 and 1997, and the related consolidated statements of
income, shareholders' equity and cash flows for each of the years in the three-
year period ended March 31, 1997, which report appears in the Annual Report Form
10-K of United States Filter Corporation for the fiscal year ended March 31,
1997.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
Orange County, California
March 3, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF PRICE WATERHOUSE
We hereby consent to the incorporation by reference in this Form 8-K/A of United
States Filter Corporation of our report dated September 25, 1997 relating to the
consolidated balance sheets of Memtec Limited at June 30, 1997 and 1996 and the
related consolidated statements of income, cash flows and of shareholder's
equity for each of the three years in the period ended June 30, 1997, which
appears on page F-2 of the Form 8-K/A of United States Filter Corporation dated
February 6, 1998.
/s/ PRICE WATERHOUSE
Price Waterhouse
Sydney
March 4, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference in the Current Reports on Form
8-K/A dated December 9, 1997 and January 16, 1998, as amended effective March 4,
1998, of United States Filter Corporation of our report dated January 16, 1998,
with respect to the financial statements of The Kinetics Group, Inc. included in
the Current Report on Form 8-K/A dated February 6, 1998 of United States Filter
Corporation, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG, LLP
Ernst & Young, LLP
Walnut Creek, California
March 3, 1998
