SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report (Date of earliest event reported): March 7, 1997.
INTERMAGNETICS GENERAL CORPORATION
(Exact name of registrant as specified in its charter.)
Commission File Number 1-11344
New York 14-1537454
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 Old Niskayuna Road,
Latham, New York 12110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (518) 782-1122
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Item 5. Other Events
Intermagnetics General Corporation (the "Company") had revenues for its third
quarter ended February 23, 1997 of $18,163,000 compared to revenues of
$21,205,000 for the comparative period last year. Earnings for the 1997 period
were $24,000 (no per share amount) compared to $725,000 ($0.06 per share) for
the period last year. The reasons for the decline in revenues and earnings for
the 1997 period are discussed below as are the following four recent events:
(1) the expected acquisition for cash and stock, as early as the week of March
10, of a privately-owned, profitable manufacturer and distributor of
accessories used in Magnetic Resonance Imaging ("MRI") devices, (ii) the
entering into a long-term non-exclusive sales arrangement with Pennzoil
Products Company ("Pennzoil") for the Company's FRIGC FR-12 refrigerant in
place of the previously existing exclusive sales contract with Pennzoil; (iii)
the agreement of AlliedSignal, Inc. Refrigerants to manufacture that product
domestically, providing the Company for the first time with a substantial
domestic source of the product; and (iv) the Company's entering an extension
through December, 2000 of its long-term supply agreement with Philips Medical
Systems Nederlands B.V. ("Philips") pursuant to which the Company supplies
Philips with superconductive MRI magnet systems of various field strengths for
incorporation in Philip's proprietary MRI systems.
Except for the portion of this Item 5 under the heading "Acquisition", the
remainder of this Item 5 consists of four press releases issued concurrently
by the Company on March 7, 1997.
Corporate Revenues and Earnings
The statements contained in this report which are not historical fact are
"forward-looking statements" that involve various important assumptions, risks,
uncertainties and other factors which could cause actual results for its
current fiscal year and beyond to differ materially from those expressed in
such forward-looking statements. These important factors include, without
limitation, the assumptions, risks, and uncertainties set forth in this report
and the Company's other securities filings.
Intermagnetics General Corporation (AMEX:IMG) announced today that revenues
for the third quarter were $18,163,000, down 14% from $21,205,000 in
the previous year's third quarter. For the first nine months of the current
fiscal year, revenues were $64,366,000, off 3% from $66,256,000 in the
comparable period last year.
Earnings for the quarter declined from $725,000 ($0.06 per share) last year to
$24,000 (no per share amount) in the current year. For the nine month period,
earnings amounted to $1,904,000, or $0.15 per share, up 7% from last year's
level of $1,783,000, or $0.15 per share (exclusive of non-operating gains on
the sale of marketable securities). Including the gain on sale of securities,
earnings for last year's nine month period were $2,575,500, or $0.21 per share.
The decline in earnings for the current quarter is due primarily to lower
levels of sales and to increases in marketing as well as research and
development expenses. Sales declines were experienced in wire products and
refrigeration products, due generally to lower demand for such products. Gross
margin as a percentage of sales improved from 25% in last year's quarter to
26.5% in the third quarter of the current year.
In an unrelated development, the Company announced that it had signed a Letter
of Intent and is in the process of finalizing a definitive agreement to acquire
a manufacturer of accessories used in MRI medical imaging systems. The to be
acquired privately held company is expected to add several million dollars of
profitable sales as well as expand Intermagnetics' product lines. Commenting
on the pending acquisition, Carl H. Rosner, President and CEO stated, "We
expect to complete this acquisition and announce details as early as next week.
In addition to the obvious advantages of broadening our product and customer
bases, we expect this acquisition to provide benefits to the commercialization
and versatility of our recently announced IMiG-MRI<trademark> systems, targeted
for sale to the medical and industrial markets." Finally, the Company has
provided an additional $1,000,000 of funding in the form of convertible debt to
Surrey Medical Imaging Systems, Ltd., located in England.
Acquisition.
The Company has reached an agreement in principle to acquire a privately-owned,
profitable manufacturer and distributor (the "Target") of accessories for use
in Magnetic Resonance Imaging ("MRI") devices, for cash and stock in a deal
valued at $12.0 million. The parties anticipate that the acquisition could be
completed as early as the week of March 10, 1997.
The acquisition is subject to several conditions, including negotiation of a
definitive acquisition agreement and approval of the final transaction by the
respective boards of directors. While the Company remains optimistic that it
will complete the acquisition, there can be no assurances that the parties will
reach a definitive agreement or otherwise meet the various contingencies to
which the deal is subject.
Refrigerants - Pennzoil.
Intermagnetics General Corporation (AMEX:IMG) and its wholly-owned subsidiary
InterCool Energy Corporation (ICE) announced today that the September 20, 1995
Master Distributor Agreement with Pennzoil Products Company (Pennzoil) of
Houston, Texas has been modified to change Pennzoil's status from an exclusive
to a non-exclusive distributor for FRIGC<reg-trade-mark> FR-12<trademark>
refrigerant. The distributorship covers the territory of North America,
including the U.S., Canada and Mexico.
InterCool Energy Corporation now plans to expand both the mobile and stationary
distribution networks to meet the growing demand for an environmentally and
cost effective alternative to ozone-layer damaging R-12, commonly known as
FREON.
Carl H. Rosner, President of Intermagnetics said, "This change towards a
multiplicity of distributors is another step toward achieving our goal of mass
distribution of FRIGC FR-12. We believe it will enable InterCool to open new
mobile air conditioning channels of distribution and at the same time increase
our penetration of stationary market opportunities. With Pennzoil continuing
as our lead distributor and the expansion of our distributor network, we are
confident that our EPA accepted FR-12 refrigerant will become the industry
quality standard as an R-12 (FREON) direct replacement refrigerant for many
mobile and stationary air conditioning and refrigeration systems, on the basis
of it being the most cost effective, efficient and environmentally acceptable
product.
Refrigerants - AlliedSignal
Intermagnetics General Corporation (AMEX:IMG) announced today that its
subsidiary InterCool Energy Corporation (ICE), working through Schenectady
International, Inc. (SII), has established an agreement with AlliedSignal Inc.
(NYSE:ALD) in which AlliedSignal will manufacture FRIGC<reg-trade-mark> FR-
12<trademark> refrigerant for InterCool distribution into the North American
mobile air conditioning market.
Robert Carr, Vice President of Schenectady International (SII), a multinational
chemical company and contracted supplier of FRIGC FR-12 for InterCool, stated
that SII is pleased to have facilitated the multi-million dollar FR-12
manufacturing agreement for InterCool with AlliedSignal. " Additionally, Carr
said, "We believe that there will be a significant demand for FRIGC FR-12 this
cooling season given the escalating price of FREON <reg-trade-mark> R12, and are
pleased to have found a reliable domestic source."
The alliance calls for AlliedSignal Inc., a world leader in the production and
supply of environmentally safer CFC substitutes for refrigeration, air
conditioning, foam insulation, sterilization and precision cleaning
applications, to begin the immediate production of FRIGC FR-12 at its ISO
9002/QS-9000 plant in Louisiana, for ready availability in the Spring and
Summer of 1997 and beyond.
"We are delighted and very pleased about this initial agreement with
AlliedSignal to manufacture FRIGC FR-12 for ICE. The agreement ensures a
continuous, high quality product supply from a major domestic refrigerant
manufacturer," said Carl H. Rosner, President and CEO of Intermagnetics.
AlliedSignal Inc. is an advanced technology and manufacturing company serving
customers worldwide with aerospace and automotive products, chemicals, fibers,
plastics and advanced materials. The Morris Township, New Jersey-based
AlliedSignal is among the largest 75 companies on the Fortune 500 list, and it
is one of the 30 companies included in the Dow Jones Industrial Average.
Schenectady International is a privately owned industrial chemical
manufacturer, based in Schenectady, New York, with three United States
manufacturing facilities, and 11 manufacturing plants in 10 countries elsewhere
in the world. Its products are used in adhesives, rubber goods, coatings,
electronics, plastics, detergents and automotive applications.
Magnetic Products - Philips
Intermagnetics General Corporation (AMEX:IMG) announced today that it had
agreed with Philips Medical Systems (PMS) to extend the long-term MRI Magnet
Supply Agreement through December, 2000. The extended agreement will make
possible new product introductions of the "family" of compact light-weight
internally shielded magnets developed successfully under the original term of
the agreement. The new product introductions are intended to continue the
market leadership and growth position established by PMS, in offering its
customers the lowest life-cycle cost MRI systems based upon the present
"family" of MRI magnet systems.
Intermagnetics' sales of MRI magnet products grew from approximately $19
Million in Fiscal Year 1993 to over $40 Million in Fiscal Year 1996.
Carl H. Rosner, Intermagnetics President and CEO, stated, "We are pleased with
this vote of confidence in Intermagnetics by Philips. We look forward to
continuing the excellent long-term business relationships that began in 1986 by
working with Philips to expand our mutually beneficial growth of our respective
businesses into the next century."
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
INTERMAGNETICS GENERAL CORPORATION
Date: May 7, 1996 By: /s/Carl H. Rosner
Carl H. Rosner
President
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<CAPTION>
INTERMAGNETICS GENERAL CORPORATION
Consolidated Statements of Income
(Dollars in Thousands, Except Share and Per Share Amounts)
(Unaudited).
Three Months Ended Nine Months Ended
February February February February
23, 1997 25, 1996 23, 1997 25, 1996
<S> <C> <C> <C> <C>
Net sales $17,325 $20,022 $61,955 $62,492
Other revenue 838 1,183 2,411 2,443
Realized gain on sale of available for
sale securities 1,321
Total revenue 18,163 21,205 64,366 66,256
Costs and expenses:
Cost of products sold 12,730 15,012 43,839 46,441
Product research and development 1,304 1,150 4,500 3,635
Marketing, general and administrative 3,465 3,048 11,433 9,285
Interest and other expense 515 569 1,585 1,968
Equity in net loss of unconsolidated 111 220 34 637
affiliate
18,125 19,999 61,391 61,966
Income before income taxes 38 1,206 2,975 4,290
Provision for income taxes 14 481 1,071 1,715
NET INCOME $24 $725 $1,904 $2,575 (A)
PER PRIMARY SHARE $0.00 $0.06 $0.15 $0.21 (A)
Primary shares 12,142,274 12,591,265 12,291,419 12,253,627
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NOTE: Primary shares and earnings per share have been adjusted to reflect a 2%
stock dividend distributed
August 22, 1996
(A) Includes approximately $792, or $0.06 per share of after tax gain on sale
of marketable securities.
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<TABLE>
<CAPTION>
INTERMAGNETICS GENERAL CORPORATION
Condensed Consolidated Balance Sheets
(Dollars in Thousands)
Feb 23 May 26
1996 1996
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and short-term investments $14,672 $18,696
Trade accounts receivable 18,438 20,587
Costs and estimated earnings in
excess of billings on uncompleted contracts 1,848 2,094
Inventories 26,060 24,857
Prepaid expenses and other 1,911 1,581
TOTAL CURRENT ASSETS 62,929 67,815
PROPERTY, PLANT AND EQUIPMENT, net 27,547 26,376
INVESTMENTS AND INTANGIBLE AND OTHER ASSETS 15,066 18,206
105,542 112,397
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $255 $2,277
Accounts payable 4,196 5,806
Salaries, wages and related items 2,365 2,373
Customer advances and deposits 403 539
Product warranty reserve 1,002 1,100
Accrued income taxes 430 1,203
Other liabilities and accrued expenses 1,216 875
TOTAL CURRENT LIABILITIES 9,867 14,173
LONG-TERM DEBT, less current portion 29,152 29,364
DEFERRED INCOME TAXES 373 1,564
SHAREHOLDERS' EQUITY 66,150 67,296
105,542 112,397
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