SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993
Commission File Number 0-1052
MILLIPORE CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2170233
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
80 Ashby Road, Bedford, MA 01730
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code 617-275-9200
Securities registered pursuant to Section 12(b) of the Act:
Name of exchange
Title of Class on which registered
COMMON STOCK, $1.00 PAR VALUE NEW YORK STOCK EXCHANGE, INC.
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of regulation S-K is not contained herein and will not be contained to
the best of registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of Form 10-K or any
amendment to this Form 10-K [ ]
As of January 31, 1994, the aggregate market value of the registrant's voting
stock held by non-affiliates of the registrant was approximately
$1,141,605,000 based on the closing price on that date on the New York Stock
Exchange.
As of February 25, 1994, 28,191,515 shares of the registrant's Common Stock
were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Document Incorporated into Form 10K
1993 Annual Report to Shareholders Parts I and II
(pages 33-51 only)
Definitive Proxy Statement Part III
dated March 18, 1994
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Item 1. Business.
The Company
Millipore Corporation was incorporated under the laws of Massachusetts
on May 3, 1954. Millipore and its subsidiaries operate in a single business
segment, the analysis, identification and purification of fluids using
separations technology. Business segment information is discussed in Note M
to the Millipore Corporation Consolidated Financial Statements (the
"Financial Statements") included in the Millipore Corporation Annual Report
to Shareholders for the year ended December 31, 1993 (the "Annual Report"),
which note is hereby incorporated herein by reference. Unless the context
otherwise requires, the terms "Millipore" or the "Company" mean Millipore
Corporation and its subsidiaries.
On November 11, 1993, Millipore announced that its Board of Directors
had approved a plan to focus the Company on its membrane business and to
divest operations of its Instrumentation Divisions (the Waters Chromatography
business and the non-membrane bioscience instrument business).
The description of Millipore's business contained herein treats both the
Waters Chromatography Business and the non-membrane bioscience business (the
"Instrumentation Divisions") as discontinued operations. These Divisions
with separate product lines with separate customers are accounted for as
discontinued operations. The Company expects to realize a net gain in 1994
upon the disposition of these businesses. Operations of the discontinued
Instrumentation Divisions subsequent to November 11, 1993 are set forth in
the Company's Balance Sheet and are not material to its financial position;
operations prior to that date are included in the Company's 1993 Consolidated
Statement of Income. For a description of Millipore's business which
includes no discontinued operations reference is made to the Company's Annual
Report on Form 10-K for the year ended December 31, 1992.
Millipore is a leader in the field of membrane separations technology.
The Company develops, manufactures and sells products which are used
primarily for the analysis and purification of fluids. The Company's
products are based on a variety of membranes and certain other technologies
and effect separations, principally through physical and chemical methods.
Millipore is an integrated multinational manufacturer of these products.
During 1993, approximately 62% of Millipore's net sales were made to
customers outside the Americas. For financial information concerning foreign
and domestic operations and export sales, see Note M to the Financial
Statements.
Products and Technologies
For analytical applications, the Company's products are used to gain
knowledge about a molecule, compound or micro-organism by detecting,
identifying and quantifying the relevant components of a sample. For
purification applications, the Company's products are used in manufacturing
and research operations to isolate and purify specific components or to
remove contaminants.
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The principal separation technologies utilized by the Company are based
on membrane filters, and certain chemistries, resins and enzyme immunoassays.
Membranes are used to filter either the wanted or the unwanted particulate,
bacterial, molecular or viral entities from fluids, or concentrate and retain
such entities (in the fluid) for further processing. Some of the Company's
newer membrane materials also use affinity, ion-exchange or electrical charge
mechanisms for separation.
Both analytical and purification products incorporate membrane and other
technologies. The Company's products include disc and cartridge filters and
housings of various sizes and configurations, filter-based test kits and
precision pumps and other ancillary equipment and supplies.
The Company has more than 3,000 products. Most of the Company's
products are listed in its catalogs and are sold as standard items, systems
or devices. For special applications, the Company assembles custom products,
usually based upon standard modules and components. In certain instances,
the Company also designs and engineers process systems specifically for the
customer.
Customers and Markets
The Company's continuing operations sells its products primarily to
customers in the following markets: pharmaceutical/biotechnology,
microelectronics, chemical and food and beverage companies; government,
university and private research and testing laboratories; and health care and
medical facilities. Within each of these markets, the Company focuses its
sales efforts upon those segments where customers have specific requirements
which can be satisfied by the Company's products.
Pharmaceutical/Biotechnology Industry. The Company's products are used
by the pharmaceutical/biotechnology industry in sterilization, including
virus reduction, and sterility testing of products such as antibiotics,
vaccines, vitamins and protein solutions; concentration and fractionation of
biological molecules such as vaccines and blood products; cell harvesting;
isolation and purification of compounds from complex mixtures and the
purification of water for laboratory use. The Company's membrane products
also play an important role in the development of new drugs, particularly
with respect to the mechanism through which they act. In addition, Millipore
has developed and is developing products for biopharmaceutical applications
in order to meet the separations requirements of the biotechnology industry.
Microelectronics Industry. The microelectronics industry uses the
Company's products to purify the liquids and gases used in the manufacturing
processes of semiconductors and other microelectronics components, by
removing particles and unwanted contaminating molecules.
Chemical Industry. This industry uses the Company's products for
purification of reagent grade chemicals, for monitoring in the industrial
workplace and of waste streams and in the purification of water for
laboratory use.
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Food and Beverage Industry. The Company's products are widely used by
the food and beverage industry in quality control and process applications
principally to monitor for microbiological contamination; to remove bacteria
and yeast from products such as wine and beer, in order to prevent spoilage,
and in producing pure water for laboratory use.
Universities and Government Agencies. Universities, government and
private and corporate research and testing laboratories, environmental
science laboratories and regulatory agencies purchase a wide range of the
Company's products. Typical applications include: purification of proteins;
cell culture, structure studies and interactions; concentration of biological
molecules; fractionation of complex molecular mixtures; and collection of
microorganisms. The Company's water purification products are used
extensively by these organizations to prepare high purity water for sensitive
assays and the preparation of tissue culture media.
Health Care and Medical Research. Customers in this field include
hospitals, clinical laboratories, medical schools and medical research
institutions who use the Company's products to filter particulate
and bacterial contaminants which may be present in intravenous solutions, and
its water purification products to produce high purity water.
Sales and Marketing
The Company sells its products within the United States primarily to end
users through its own direct sales force. The Company sells its products in
foreign markets through the sales forces of its subsidiaries and branches
located in more than 25 major industrialized and developing countries as well
as through independent distributors in other parts of the world. During
1993, the Company's marketing, sales and service forces consisted of
approximately 360 employees in the United States and 520 employees abroad.
The Company's marketing efforts focus on application development for
existing products and on new and differentiated products for other existing,
newly-identified and proposed customer uses. The Company seeks to educate
customers as to the variety of analytical and purification problems which may
be addressed by its products and to adapt its products and technologies to
separations problems identified by customers.
The Company believes that its technical support services are important
to its marketing efforts. These services include assistance in defining the
customer's needs, evaluating alternative solutions, designing a specific
system to perform the desired separation and training users.
Research and Development
In its role as a pioneer of membrane separations Millipore has
traditionally placed heavy emphasis on research and development. Research
and development activities include the extension and enhancement of existing
separations technologies to respond to new applications, the development of
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new membranes, and the upgrading of membrane based systems to afford the user
greater purification capabilities. Research and development efforts also
identify new separations applications to which disposable separations devices
would be responsive, and develop new configurations into which membrane and
ion exchange separations media can be fabricated to efficiently respond to
the applications identified. Instruments, hardware, and accessories are also
developed to incorporate membranes, modules and devices into total
separations systems. Introduction of new applications frequently requires
considerable market development prior to the generation of revenues.
Millipore performs substantially all of its own research and development and
does not provide material amounts of research services for others.
Millipore's research and development expenses in 1991, 1992 and 1993 with
respect to continuing operations were, $32,633,000, $32,953,000 and
$34,952,000 respectively.
When it believes it to be in its long-term interests, the Company will
license newly developed technology from unaffiliated third parties and/or
will acquire exclusive distribution rights with respect thereto.
Competition
The Company's continuing operations face intense competition in all of
its markets. The Company believes that its principal competitors include
Pall Corporation, Barnstead Thermolyne Corporation, Sartorius GmbH, and
Gelman, Inc. Certain of the Company's competitors are larger and have
greater resources than the Company. However, the Company believes that it
offers a broader line of products, making use of a wider range of separations
technologies and addressing a broader range of applications than any single
competitor.
While price is an important factor, the Company competes primarily on
the basis of technical expertise, product quality and responsiveness to
customer needs, including service and technical support.
Acquisitions, Restructuring, and Divestitures
On November 11, 1993 Millipore announced that its Board of Directors had
approved a plan to divest its Instrumentation Division (the Waters
Chromatography and non-membrane bioscience businesses) in order to focus the
Company on its membrane business. The Waters Chromatography business was
acquired in 1980. Growth in the analytical instrument market has been
limited in the past few years. In the years 1986-1988 the Company expanded
its MilliGen division in order to extend its analytical and chemical
capabilities into the bio-instrumentation and chemicals field. In 1990 this
business was consolidated into Millipore's then existing businesses, in order
to achieve better focus and meaningful economics. The Company believes that
the divestiture of its chromatography business along with that of its non-
membrane bioscience business, will enable Millipore to better serve its
membrane customers, improve operating performance and increase shareholder
value. It is anticipated that the divestiture of the Instrumentation
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Divisions will be completed in the first half of 1994 and is anticipated to
result in a net gain.
At the time of the 1990 consolidation of MilliGen, the Company took
certain other actions to improve profitability, these measures in total
resulted in a non-recurring charge in the fourth quarter of 1990 amounting to
$34,750,000. The Company took a further charge, with respect to the
restructuring of its Waters Chromatography Division, of $13,000,000 in the
first quarter of 1993.
In the five-year period prior to its November 11, 1993 announcement
concerning the sale of its Waters Chromatography and non-membrane bioscience
business, the Company undertook a number of initiatives to expand its
business into new markets within the field of analysis and purification. The
Company has made several small, strategic acquisitions to accelerate
technology and market development in its several divisions. These included
the acquisition of the Bio Image division of Kodak in 1989, Extrel
Corporation in February of 1992, and Immunosystems Incorporated in July of
1992.
In November of 1989, the Company sold its process water division for
approximately $54,000,000 in cash. Included in the transaction were the
worldwide facilities and equipment and other assets for developing,
manufacturing and marketing that division's complete line of water
purification products, other than its laboratory scale water business. Also
included were the Company's 18 service deionization branches located
throughout the continental United States. This transaction is the subject of
litigation brought by Eastern Enterprises (see "Legal Proceedings").
Other Information
In April, 1988, the Company adopted a shareholder rights plan (the
"Rights Plan") and declared a dividend to its shareholders of the right to
purchase (a "Right"), for each share of Millipore Common Stock owned, one
additional share of Millipore Common Stock at a price of $160 for each share.
The Rights Plan is designed to protect Millipore's shareholders from attempts
by others to acquire Millipore on terms or by using tactics that could deny
all shareholders the opportunity to realize the full value of their
investment. The Rights will be exercisable only if a person or group of
affiliated or associated persons acquires beneficial ownership of 20% or more
of the outstanding shares of the Company Common Stock or commences a tender
or exchange offer that would result in a person or group owning 20% or more
of the outstanding Common Stock. In such event, or in the event that
Millipore is subsequently acquired in a merger or other business combination,
each Right will entitle its holder to purchase, at the then current exercise
price, shares of the common stock of the surviving company having a value
equal to twice the exercise price.
Millipore has been granted a number of patents and licenses and has
other patent applications pending both in the United States and abroad.
While these patents and licenses are viewed as valuable assets, Millipore's
patent position is not of material importance to its operations.
Millipore also owns a number of trademarks, the most significant being
"Millipore."
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Millipore's products are made from a wide variety of raw materials which
are generally available in quantity from alternate sources of supply; as a
result, Millipore is not substantially dependent upon any single supplier.
Millipore's business is neither seasonal nor dependent upon a single or
limited group of customers.
Bringing the Company's facilities into compliance with federal, state
and local laws regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment has not, to date, had
a material effect upon Millipore's capital expenditures, earnings or
competitive position. (See "Legal Proceedings.")
As of December 31, 1993, Millipore's continuing operations employed
3,664 persons worldwide, of whom 1,938 were employed in the United States and
1,726 overseas.
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Executive Officers of Millipore
There follows a listing as of March 1, 1994 of the Executive Officers of
Millipore. All of the following individuals were elected to serve until the
Directors Meeting next following the 1994 Annual Stockholders Meeting.
First Elected:
To
An Present
Name Age Office Officer Office
John A. Gilmartin 51 Chairman of the Board 1980 1986
President and Chief (Chairman
Executive Officer of in 1987)
the Corporation
Geoffrey Nunes 63 Senior Vice President 1976 1980
General Counsel
Douglas A. Berthiaume 45* Senior Vice President 1985 1989
of the Corporation
Jack T. Johansen 51* Senior Vice President 1987 1989
of the Corporation
Glenda K. Burkhart 42 Vice President 1993 1993
of the Corporation
Douglas B. Jacoby 47 Vice President 1989 1989
of the Corporation
Michael P. Carroll 43 Vice President of the Corporation
Chief Financial Officer and
Treasurer 1992 1992
Dominique F. Baly 45 President Intertech - 1988
Division of Millipore
John E. Lary 47 Senior Vice President - 1993
and General Manager -
Americas Operation
Geoffrey D. Woodard 54 President of - 1989
Millipore's Analytical Group
* It is anticipated that Messrs. Berthiaume and Johansen will leave the
employ of the Company to head up the businesses to be divested, Waters
Chromatography and non-membrane bioscience respectively.
Mr. Gilmartin joined Millipore's finance department in 1978, was elected
Vice President and Chief Financial Officer in 1980, Senior Vice President in
1982, and to the additional position of President of the Membrane Division in
1985. In 1986, Mr. Gilmartin was elected President and Chief Executive
Officer of the Company and to the additional position of Chairman in 1987.
Mr. Nunes joined Millipore in 1976 as Vice President and General Counsel
and was elected a Senior Vice President in 1980.
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Mr. Berthiaume joined Millipore in 1980, was elected Vice President and
Chief Financial Officer in 1985, and as a Senior Vice President in 1989.
Dr. Johansen joined Millipore in 1987 as Vice President and was elected
a Senior Vice President in 1989.
Ms. Burkhart joined Millipore in 1993 as Corporate Vice President/Human
Resources. Prior to joining Millipore, she was a principal of Mass Burkhart,
a strategy consulting firm (1991-1993), responsible for organization
development and work force planning for Exxon Chemical (1989-1991), a
principal for Synectics, an organizational development consulting firm (1987-
1989), and a consultant for Bain and Co., a strategy consulting firm (1985-
1987).
Mr. Jacoby joined Millipore in 1975. After serving in various sales and
marketing capacities, Mr. Jacoby became Director of Marketing for the
Millipore Membrane Products Division in 1983 and in 1985, he assumed the
position of General Manager of the Membrane Pharmaceutical Division. Since
1987, Mr. Jacoby has been responsible for the Company's process membrane
business. Mr. Jacoby was elected a Corporate officer in December, 1989.
Mr. Carroll joined Millipore in 1986 as Vice President/Finance for the
Membrane Products Division following a ten-year career in the general
practice audit division of Coopers and Lybrand. In 1988, Mr. Carroll assumed
the position of Vice President of Information Systems (worldwide) and in
December of 1990, he became the Vice President of Finance for the Company's
Waters Chromatography Division. Mr. Carroll was elected to his current
position in February, 1992.
Mr. Baly joined Millipore, S.A. (France) in 1972. For at least five
years prior to relocating to the U.S. to assume his current position as
President of the Millipore Intertech Division in 1988, Mr. Baly held
positions of increasing sales and marketing responsibility within Millipore's
European operations including Vice President/General Manager of the Millipore
Products Division (1986-1987) and the Waters Chromatography Division (1984-
1985).
Mr. Lary is Senior Vice President and General Manager of the Americas
Operation, a position he has held since May, 1993. For the ten years prior
to that time, he served as Senior Vice President of the Membrane Operations
Division of Millipore.
Mr. Woodard joined Millipore (U.K.) Ltd. (England) in 1976 and for the
next seven years served in product management and marketing positions in
Europe. In 1983, he was named Director of Marketing for Millipore Europe,
and, in 1985, he relocated to the U.S. to assume the position of Director of
Product Management for the Membrane Products Division. He continued in this
position until 1986 when he became Vice President and General Manager of the
Laboratory Products Division. In 1989 Mr. Woodard became President of the
Membrane Analytical Group.
Messrs. Baly, Lary and Woodard were first listed as executive officers
in the Company's Annual Report on Form 10-K for 1989, the year it was
determined they met the Securities and Exchange Commission's definition of
"executive officer".
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Item 2. Properties.
Millipore owns in excess of 1.6 million square feet of facilities
located in the United States, Europe and Japan. The following table
identifies the principal properties owned by Millipore and describes the
purpose, floor space and land area of each.
Sq.Ft.
of Floor Land
Location Facility Space Area
Bedford, Executive Offices, research, 346,000 32 acres
Mass. pilot production & warehouse
Milford,* Manufacturing, research, 410,000 31 acres
Mass. office & warehouse
Cidra, Manufacturing, warehouse
Puerto Rico and office 134,000 36 acres
Jaffrey, Manufacturing, warehouse 169,000 32 acres
N.H. and office
Pittsburgh,* Manufacturing, research 55,000 7 acres
PA and office
Molsheim, Manufacturing, warehouse 165,200 20 acres
France and office
Yonezawa, Manufacturing and warehouse 156,300 7 acres
Japan
Taunton,* Manufacturing 32,000 12 acres
Mass.
Cork, Manufacturing 83,000 20 acres
Ireland
St. Quentin Office and research 50,000 5 acres
France
_____________________________________
* It is anticipated that these properties will be sold in connection with the
divestiture of the Waters Chromatography and non-membrane bioscience
businesses.
In addition to the above properties, Millipore has entered into a long
term lease for premises abutting its Bedford facility. This lease makes
75,000 square feet of building available to Millipore and contains rights of
first refusal and options with respect to the purchase of the premises by
Millipore. During 1988 Millipore entered into a 10-year lease for a building
of 130,000 square feet located in Burlington, Massachusetts, approximately 5
miles from its Bedford headquarters. This lease contains a single 5-year
extension option. In 1991, the Company entered into two long term lease
arrangements. The first was a sublease of a 130,000 square foot office
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building located in Marlborough, Massachusetts. This lease expires at the
end of 1995 and Millipore has obtained from the owner an option to lease
these premises for an additional five years. This facility is being used as
the consolidated headquarters for all the Company's U. S. sales and support
operations. It is anticipated that the Company will vacate these premises in
1994 and will not exercise its renewal option. The second lease arrangement
is a 15-year lease with renewal options for an aggregate of 20 years, as well
as a purchase option covering a 134,000 square foot building which is
adjacent to the Company's Bedford facility and will be used for expansion
purposes, initially the consolidation of the Company's Process System
Division (part of the Membrane Process Group).
In addition to its foregoing properties, Millipore currently leases
various manufacturing, sales, warehouse, and administrative facilities
throughout the world. Such leases expire at different times through 2017.
The rented space aggregate is approximately 1,050,000 square feet and cost
was approximately $8,068,000 in 1993. No single lease, in the opinion of
Millipore, is material to its operations.
Millipore is of the opinion that all the facilities owned or leased by
it are well maintained, appropriately insured, in good operating condition
and suitable for their present uses.
Item 3. Legal Proceedings.
Millipore has been sued in the Superior Court for Middlesex County,
Massachusetts by Eastern Enterprises and its subsidiary, Ionpure
Technologies, Inc. ("Ionpure"), alleging misrepresentations made in
conjunction with the sale by Millipore of its Process Water Division to
Ionpure in November of 1989. The Company believes it has adequate and
complete defenses to this litigation and intends to vigorously defend the
action. Although the Company is unable to predict with certainty the outcome
of the lawsuit, its ultimate disposition is not expected to have a material
adverse effect on Millipore's financial condition.
Millipore has been notified in nine instances that the United States
Environmental Protection Agency ("EPA") has determined that a release or a
substantial threat of a release of hazardous substances (a "Release") as
defined in Section 101 of the Comprehensive Environmental Response
Compensation and Liability Act of 1980 ("CERCLA") as amended by the Superfund
Amendments and Reauthorization Act of 1986 (SARA) (the so-called "Superfund"
law) has occurred at certain sites to which chemical wastes generated by the
manufacturing operations of Millipore or one of its divisions may have been
sent. These notifications typically also allege that Millipore may be a
responsible party under CERCLA with respect to any remedial action needed to
control or prevent any such Release. Under CERCLA the EPA may undertake
remedial action in response to a Release and responsible parties may by
liable, without regard to fault or negligence, for costs incurred. As a
result it is possible, although highly unlikely given the large number and
size of financially solvent corporations participating at each site who have
been similarly notified, that the Company might be liable for all of the
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costs incurred in such a cleanup. In each instance Millipore knows that it
is only one of many companies and entities which received such notification
and who may likewise be held liable for any such remedial costs. In 1992,
the EPA unexpectedly proposed settlements for several of these sites. Based
on those proposed settlements and all other information available to
management, the Company recorded a provision of $5,800,000 against cost of
sales which, in management's best estimate, when combined with previously
established reserves, will be sufficient to satisfy all known claims by the
EPA. In seven separate instances involving a total of ten such sites; the
Company has entered into consent decrees; paid approximately $13.9 million;
and received partial releases. The aggregate of any future potential
liabilities is not expected to have a material adverse effect on Millipore's
financial condition.
Item 4. Submission of Matters to a Vote of Security Holders.
This item is not applicable.
PART II
Item 5. Market for Millipore's Common Stock, and Related Stockholder
Matters.
The information called for by this item is set forth under the caption
"Millipore Stock Prices" on page 51 of Millipore's Annual Report to
Shareholders for the year ended December 31, 1993, which information is
hereby incorporated herein by reference.
Item 6. Selected Financial Data.
The information called for by this item is set forth under the caption
"Millipore Corporation Eleven Year Summary of Operations" on pages 48 and 49
of Millipore's Annual Report to Shareholders for the year ended December 31,
1993, which information is hereby incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The information called for by this item is set forth under the caption
"Management's Discussion and Analysis" on pages 33 and 34 of Millipore's
Annual Report to Shareholders for the year ended December 31, 1993, which
information is hereby incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The information called for by this item is set forth on pages 35 to 47
and under the caption "Quarterly Results (Unaudited)" on page 50 of
Millipore's Annual Report to Shareholders for the year ended December 31,
1993, which information is hereby incorporated herein by reference.
Item 9. Disagreements on Accounting and Financial Disclosure.
This item is not applicable.
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PART III
Item 10. Directors and Executive Officers of Millipore.
The information called for by this item with respect to registrant's
directors and compliance with Section 16(a) of the Securities Exchange Act of
1934 as amended is set forth under the caption "Management and Election of
Directors--Nominees for Election as Directors" on pages 2 - 8 of Millipore's
definitive Proxy Statement, dated March 18, 1994, for Millipore's Annual
Meeting of Stockholders to be held on April 21, 1994, which information is
hereby incorporated herein by reference.
Information called for by this item with respect to registrant's
executive officers is set forth under "Executive Officers of Millipore" in
Item 1 of this report.
Item 11. Executive Compensation.
The information called for by this item is set forth under the caption
"Management and Election of Directors-Executive Compensation" on pages 8 -
17 of Millipore's definitive Proxy Statement, dated March 18, 1994, for
Millipore's Annual Meeting of Stockholders to be held on April 21, 1994,
which information is hereby incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information called for by this item is set forth under the caption
"Ownership of Millipore Common Stock" on page 18 of Millipore's definitive
Proxy Statement, dated March 18, 1994, for Millipore's Annual Meeting of
Stockholders to be held April 21, 1994, which information is hereby
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
The information called for by this item is set forth under the caption
"Management and Election of Directors - Executive Compensation" on pages 2 -
8 and 12 - 17 of Millipore's definitive Proxy Statement, dated March 18,
1994, for Millipore's Annual Meeting of Stockholders to be held on April 21,
1994, which information is hereby incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements
The financial statements set forth on pages 35 through 47, the Report of
Independent Accounts on Page 47 and the Quarterly Results (Unaudited) set
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forth on page 50 of Millipore's Annual Report to Shareholders for the year
ended December 31, 1993, are hereby incorporated herein by reference. Filed
as part of this report are:
(1) Report of Independent Accountants on the Financial Statement
Schedules included in Form 10-K Annual Report.
(2) Consent of Independent Accountants relating to the incorporation of
their report on the Consolidated Financial Statements and their report on the
Financial Statement Schedules into Registrant's Securities Act Registration
Nos. 2-72124, 2-85698, 2-91432, 2-97280, 33-37319, 33-37323 and 33-11-790 on
Form S-8 and Securities Act Registration Nos. 2-84252, 33-9706, 33-20792, 33-
22196, 33-47213 on Form S-3.
2. Financial Statement Schedules
Schedule V Property, Plant and Equipment - Consolidated
Schedule VI Accumulated Depreciation of Property, Plant and
Equipment - Consolidated
Schedule VIII Valuation and Qualifying Accounts
Schedule IX Short-term Borrowings
Schedule X Supplementary Income Statement Information
All Schedules other than those listed above have been omitted because
they are not applicable or not required under Regulation S-X.
Items 5 through 8 and Item 14 (a) (1) of this Annual Report on Form 10-K
incorporate only the indicated portions of Pages 33 through 51 of Millipore's
Annual Report to Shareholders for the year ended December 31, 1993; no other
portion of such Annual Report to Shareholders shall be deemed to be
incorporated herein or filed with the Commission.
For purposes of complying with the amendments to the rules governing
Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the
undersigned registrant hereby undertakes as follows, which undertaking shall
be incorporated by reference into registrant's Registration Statements on
Form S-8 Nos.: 2-72124; 2-85698; 2-91432; 2-97280; 33-37319; 33-37323 and 33-
11-790:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (The "Act") may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange commission such
indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has
Page 14
<PAGE>
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Page 15
<PAGE>
3. Exhibits:
A. Incorporated by Reference
Document Incorporated Referenced Document on
file with the Commission
(3) Amendment to Restated Articles Form 10-K Report for
of Organization dated May 22, year ended 12/31/87
1987 and By Laws and Form 10-K Report
for year ended 12/31/90
respectively
(4) Indenture dated as of March 30, Registration Statement
1988, relating to the issuance on Form S-3 (No.
of $100,000,000 principal amount 33-20792); and a
of Registrant's 9.20% Notes Due Form T-1 (No.
1998 22-18144)
(10) Millipore's various employee benefit and executive compensation
plans and arrangements are incorporated herein by reference to the
indicated documents filed with the Commission:
Document Referenced Document on File
Incorporated with the Commission:
Shareholder Rights Agreement Form 8-K Report for April, 1988
dated as of April 15, 1988
between Millipore and The
First National Bank of Boston
Long Term Restricted Stock Form 10-K Report for the year
(Incentive) Plan for Senior ended December 31, 1984.
Management
1985 Combined Stock Option Form 10-K Report for the year
Plan ended December 31, 1985
Supplemental Savings and Form 10-K Report for the year
Retirement Plan for Key ended December 31, 1984.
Salaried Employees of
Millipore Corporation
Long Term Performance Plan Form 10-K Report for the year
for Senior Executives ended December 31, 1984.
Executive Termination Form 10-K Report for the year
Agreement ended December 31, 1984.
B. The following Exhibits are filed herewith:
(10) Executive "Sale of Business" Incentive Termination Agreements
(2)
(11) Computation of Per Share Earnings
(13) Annual Report to Shareholders, December 31, 1993
Page 16
<PAGE>
(21) Subsidiaries of Millipore
(23) Consents of Experts (see page 21 hereto)
(24) Power of Attorney
(b) On November 30, 1993 the Company filed a Current Report on Form 8-K
reporting on our November 11, 1993 event, the issuance of its press
release announcing plans to divest its Waters Chromatography business
and exit its non-membrane bioscience business. Said Report contained
the following Company financial statements:
(i) Consolidated Statements of Income (Restated) for the nine months
ended September 30, 1993 and September 30, 1992.
(ii) Consolidated Statements of Income (Restated) for each of the first
three quarters of 1993 and the nine months ended September 30,
1993.
(iii) Consolidated Statements of Income (Restated) for each quarter of
1992 and for the full year ended December 31, 1992.
(iv) Consolidated Statements of Income (Restated) for each quarter of
1991 and for the full year ended December 31, 1991.
(v) Consolidated Balance Sheet (Restated) as of September 30, 1993 and
December 31, 1992.
Page 17
<PAGE>
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.
MILLIPORE CORPORATION
Geoffrey Nunes
By /s/ Geoffrey Nunes
Senior Vice President
Dated: March 25, 1994
Page 18
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacity and on the dates indicated.
SIGNATURE TITLE DATE
JOHN A. GILMARTIN* Chairman, President, February 10, 1994
John A. Gilmartin Chief Executive Officer,
and Director
/s/ Michael P. Carroll Vice President February 10, 1994
Michael P. Carroll Chief Financial Officer
Treasurer
CHARLES D. BAKER* Director February 10, 1994
Charles D. Baker
______________________ Director February 10, 1994
Samuel C. Butler
MARK HOFFMAN* Director February 10, 1994
Mark Hoffman
GERALD D. LAUBACH* Director February 10, 1994
Gerald D. Laubach
STEVEN MULLER* Director February 10, 1994
Steven Muller
THOMAS O. PYLE* Director February 10, 1994
Thomas O. Pyle
JOHN F. RENO* Director February 10, 1994
John F. Reno
JAMES L. VINCENT* Director February 10, 1994
James L. Vincent
WARREN E. C. WACKER* Director February 10, 1994
Warren E. C. Wacker
*By /s/ Geoffrey Nunes
Attorney-in-Fact
Geoffrey Nunes
Page 19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Our report on the consolidated financial statements of Millipore Corporation
has been incorporated by reference in this Form 10-K from Page 47 of the 1993
Annual Report to Shareholders of Millipore Corporation. In connection with
our audits of such financial statements, we have also audited the related
financial statement schedules listed in the index (Item 14 (a)2 - Financial
Statement Schedules) on Page 14 of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND
Boston, Massachusetts
January 24, 1994, except as
to the information presented
in Note F, for which the date
is March 3, 1994
Page 20
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of Millipore Corporation on Form S-8 (File Nos. 2-91432, 2-72124, 2-85698, 2-
97280, 33-37319, 33-37323, 33-11-790), and on Form S-3 (File Nos. 2-84252, 33-
9706, 33-22196, 33-20792, 33-47213) of our report dated January 24, 1994, except
as to the information presented in Note F, for which the date is March 3, 1994,
on our audits of the consolidated financial statements and financial statement
schedules of Millipore Corporation as of December 31, 1993 and 1992, and for the
years ended December 31, 1993, 1992, and 1991, which report is incorporated by
reference in this Annual Report on Form 10-K.
COOPERS & LYBRAND
Boston, Massachusetts
March 24, 1994
Page 21
<PAGE>
<TABLE>
Millipore Corporation
Schedule V - Property Plant, and Equipment - Consolidated
(In Thousands)
<CAPTION>
Balance Other Chgs. Balance
Beginning Additions RetirementsDebit and/or at End
of Period at Cost or Sales (Credit) (a) of Period
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
Land $ 6,939 $ 0 $ 0 $ 27 $ 6,966
Leadhold improvements 11,669 237 (307) 4,509 16,108
Buildings and improvements 104,041 684 (678) 4,007 108,054
Production and other equipment 183,179 9,347 (5,136) 18,817 206,207
Construction in progress 35,352 15,717 (99) (30,339) 20,631
Property, plant, and
equipment $341,180 $25,985 $(6,220) $(2,979) $357,966
Year Ended December 31, 1992
Land $ 7,181 $ 0 $ 0 $ (242) $ 6,939
Leasehold improvements 11,638 1,397 (780) (586) 11,669
Buildings and improvements 101,093 3,107 (11) (148) 104,041
Production and other equipment 179,936 9,933 (8,899) 2,209 183,179
Construction in progress 29,159 26,550 (5,383) (14,974) 35,352
Property, plant, and
equipment $329,007 $40,987 $(15,073) $(13,741) $341,180
Year Ended December 31, 1991
Land $ 7,051 $ 103 $ (129) $ 156 $ 7,181
Leasehold improvements 7,484 2,385 (913) 2,682 11,638
Buildings and improvements 86,957 3,514 (2,937) 13,559 101,093
Production and other equipment 156,682 15,085 (8,423) 16,592 179,936
Construction in progress 36,933 23,814 0 (31,588) 29,159
Property, plant, and
equipment $295,107 $44,901 $ (12,402) $ 1,401 $329,007
(a)Represents the reclassification of construction in progress to depreciable
assets and the impact on the translation of property, plant and equipment
of changes in the value of foreign currencies relative to the United
States dollar.
</TABLE>
<TABLE>
Page 22
<PAGE>
Millipore Corporation
Schedule VI - Accumulated Depreciation of Property, Plant, and Equipment -
Consolidated
(In Thousands)
<CAPTION>
Balance Other Chgs. Balance at
Beginning Additions Retirement Debit and/or End of
of Period at Cost or Sales (Credit) Period
(a) (b)
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
Leashold improvements $ 6,571 $ 1,848 $ (264) $ (163) $ 7,992
Buildings and improvements 31,314 4,550 (642) (224) 34,998
Production and other equipment 108,225 17,377 (3,798) (1,723) 120,081
Accumulated depreciation of
property, plant, and equipment$146,110 $ 23,775 $(4,704) $(2,110) $163,071
Year Ended December 31, 1992
Leasehold improvements $ 5,493 $ 1,721 $ (240) $ (403) $ 6,571
Buildings and improvements 27,087 4,347 (11) (109) 31,314
Production and other equipment 102,323 17,439 (7,741) (3,796) 108,225
Accumulated depreciation of
property, plant, and equipment$134,903 $ 23,507 $(7,992) $(4,308) $146,110
Year Ended December 31, 1991
Leasehold improvements $ 4,968 $ 1,335 $ (734) $ (76) $ 5,493
Buildings and improvements 24,579 3,384 (1,204) 328 27,087
Production and other equipment 92,218 16,186 (6,223) 142 102,323
Accumlated depreciation of
property, plant, and equipment$121,765 $ 20,905 $(8,161) $ 394 $134,903
(a)Property, plant, and equipment is generally depreciated over the
following useful lives: buildings and improvements, 33 years:
production and other equipment, 10 years: leasehold improvements, the
lives of the related leases.
(b)Represents the impact on the translation of property, plant, and
equipment of changes in the value of foreign currencies relative to the
United States dollar.
</TABLE>
Page 23
<PAGE>
<TABLE>
Millipore Corporation
Schedule VIII - Valuation and Qualifying Accounts
(In Thousands)
<CAPTION>
Column A Column B Column C Column D Column E
Balance at Additions Deductions Balance at
Beginning of Charged to Costsfrom End of
Period and Expenses Reserve Period
Allowance for doubtful accounts
(deducted from related asset
account in the consolidated
balance sheet):
<S> <C> <C> <C> <C>
Year ended December 31, 1993 $1,752 $1,825 $(514) $3,063
Year ended December 31, 1992 $2,387 $ 325 $(960) $1,752
Year ended December 31, 1991 $2,182 $ 354 $(149) $2,387
</TABLE>
Page 24
<PAGE>
<TABLE>
Millipore Corporation
Schedule IX - Short Term Borrowings
(In Thousands)
<CAPTION>
Weighted Avg Max. Amt. Avg. Amt. Weight Avg.
Balance at Interest Rate Outstanding Outstanding Interest Rate
End of at End of During the During the During the
Period Period Period Period Period
<S> <C> <C> <C> <C> <C>
Year ended
December 31, 1993 $ 51,420 4.5% $129,332 $ 94,465(a) 4.3%(b)
Year ended
December 31, 1992 $112,064 4.7% $182,439 $132,696(a) 5.1%(b)
Year ended
December 31, 1991 $ 91,339 6.5% $114,913 $ 93,390(a) 7.1%(b)
(a) Computed on a month-end basis
(b) Computed on a quarter-end basis
</TABLE>
Page 25
<PAGE>
Millipore Corporation
Schedule X - Supplementary Income Statement Information
(In Thousands)
Charged to Costs
and Expenses
Year ended December 31,
Item 1993 1992 1991
Maintenance and Repairs * * *
Depreciation and Amortization
of intangible assets, preoperating
costs and similar deferrals * * *
Taxes, other than payroll
and income taxes * * *
Royalties * * *
Advertising costs $ 7,447 $ 5,950 $ 5,368
* Less than 1% of total sales
Page 26
<PAGE>
- ------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT
OF
MILLIPORE CORPORATION
For the Fiscal Year Ended December 31, 1993
****************
EXHIBITS
****************
- ----------------------------------------------------------------
Page 27
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description Tab No.
(10) Executive "Sales of Business" 1
Incentive Termination
Agreements (2)
(11) Computation of Per Share Earnings 2
(13) Annual Report to Shareholders,
December 31, 1993 3
(21) Subsidiaries of Millipore 4
(23) Consents of Experts
(see page 21 hereto)
(24) Power of Attorney 5
Page 28
<PAGE>
Exhibit (10)
M E M O R A N D U M
TO: Jack Johansen
FROM: John Gilmartin
SUBJECT: Proposal Initialed By Us On 11-11-93
DATE: November 22, 1993
The proposal initialed by us on November 11, 1993 concerning the conditions
of your future employment with Millipore (severance, commission on the sale
of the bioscience businesses, etc.) is amended by replacing Section B with
the revised Section B set forth below. Its last paragraph is also amended to
reflect the agreed upon definition of the "Business" also as set forth below.
Please initial this memorandum to confirm your agreement with these
ammendments.
B. Commission on Sale of the Business:
Millipore will pay a **** commission on the net cash proceeds to Millipore
from the sale or other disposition of the "Business" (see definition below).
"Net cash proceeds" shall mean the proceeds received by Millipore, in the
form of cash or immediately marketable securities, from the sale or other
disposition of the "Business", reduced by the amount of cash advanced by
Millipore to the "Business" between December 1, 1993 and the closing date of
such sale or other disposition, further reduced by transactional costs. In
the event that the "Business" is included as part of a transaction involving
the sale of the Waters Chromatography Division, then "Net cash proceeds" will
be construed to equal $20,000,000 for purposes of calculating the commission
payment, or a reasonable amount less than $20,000,000 if some but not all
assets assigned to the "Business" are included in such a transaction.
It is agreed that commission payments will be distributed according to the
table below, in part to you personally and in part to a pool (the "pool") for
the benefit of other employees of the "Business". You will determine, with
the prior approval of Geoffrey Nunes, the list of your colleagues who are
employed in the "Business" who will participate in the pool.
To JTJ To Pool
On the first $20,000,000 of net cash proceeds **** ****
On the next $10,000,000 of net cash proceeds **** ****
On net cash proceeds in excess of $30,000,000 **** ****
Commission payments to you will be made on or within thirty days following
the closing date of the sale or other disposition of the "Business".
Payments from the pool to participating employees will be offset against any
retention bonuses agreed to by Millipore in their cases. If, when all
retention bonuses for pool participants have been funded from pool proceeds,
there are excess proceeds remaining in the pool ("excess proceeds"), then
such excess proceeds will be distributed to participants within thirty days
following the final accounting thereof. Should you and Geoffrey Nunes decide
to include one or more individuals as participants in the pool who are not
entitled to retention bonuses, an amount of money ("non-bonus credits") will
be included for their benefit along with other participants' retention
bonuses in determining the divisor used to calculate individual participant's
percentage shares of excess proceeds. Each participant's share will be
determined as follows: participant's retention bonus or non-bonus credits
divided by the sum of retention bonuses and non-bonus credits for all partici
pants, expressed as a percent and multiplied by the total of excess proceeds.
Only Millipore employees in good standing the closing date will be eligible
to share in these commission payments.
Last Paragraph
As used above, "Business" shall mean that entity to be called Biosearch
comprised of the existing biosynthesis business, the existing ConSep/MemSep
business, and the proposed Time of Flight business, and any other businesses
which John Gilmartin agrees to add.
/s/Jack T. Johansen
Proposal - Jack T. Johansen 11-11-93
A. Severance:
Should your employment by Millipore cease for whatever reason (except
termination for cause) at any time during the period from the date of this
agreement until two years thereafter, you will be entitled to:
1. An amount equal to two times your then current annual salary, paid in a
lump sum on the effective date of termination (the "Termination Date"), if
your separation from Millipore is in conjunction with your assuming a full-
time position in a Business (as defined below) that has been spun off from,
or disposed of by, Millipore. Otherwise, you will be engaged as a consultant
to Millipore, at your then current salary for a period of 24 months from and
after the Termination Date (the "Consulting Period"). The amount of
consultation required of you will not interfere with your full time
engagement in pursuit of other business activities generally or in the
conduct of a full scale job search.
2. During the Consulting Period we will provide you with all of your
existing medical and insurance benefits (excluding short-term disability).
Although you will not be eligible to participate in Millipore's Cash Profit
Sharing Plan (or its replacement) during the Consulting Period, you will be
eligible to participate in contributions allocated under the Participation
Plan for such period. You will also be provided with the services of an
outplacement firm at Millipore's sole expense.
3. If your separation from Millipore is in conjunction with your assuming a
full-time position in a Business that has been spun off from, or disposed of
by, Millipore, Millipore Management will recommend to the Board of Directors
that the vesting schedule for all stock options held by you be accelerated to
the effective date of such spin off or disposition and that all restrictions
on restricted shares be waived as of that date. You will then be allowed 12
months from that date to exercise any or all stock options.
If your separation from Millipore does not involve your assuming a full-time
position in a Business spun off from, or disposed of by, Millipore, then the
vesting of your stock options and maturing of restrictions on your restricted
stock will continue during the Consulting Period, and you will be allowed to
exercise any or all vested options during that time.
You will continue to participate in Millipore's stock option distributions
during the period prior to your separation in a business as usual fashion.
B. Commission on Sale of Businesses:
Millipore will pay a commission on the net cash proceeds to Millipore from
the sale or other disposition of Bioscience assets under your management.
"Net cash proceeds" shall mean the proceeds received by Millipore, in the
form of cash or immediately marketable securities, of a sale(s) or other
disposition, reduced by the amount of cash advanced by Millipore to the
Business(es) in question between December 1, 1993 and the closing date(s) of
such sale or other disposition (each, a "Closing Date") and further reduced
by transactional costs. In the event that the Bioscience assets under your
management are included as part of a transaction involving the sale of the
Waters Chromatography Division, then "Net cash proceeds" will be construed to
equal $20,000,000 for purposes of calculating the commission payment, or a
reasonable amount less than $20,000,000 if some but not all Bioscience assets
under your management are included in such a transaction.
The following commission schedule will apply. The commission will be payable
on the respective Closing Date. It is understood that 50% of such commission
amounts will be distributed to you personally while the remaining 50% will be
distributed to a group of your senior colleagues employed in the business.
Such payments to your senior colleagues will be offset against any retention
bonuses that may be agreed to by Millipore in their cases. You will
determine, with the prior approval of John Gilmartin, the list of such senior
colleagues. Only Millipore employees in good standing on a Closing Date will
be eligible to share in these commission payments.
On the first $10,000,000 of net cash proceeds ****
On the second $10,000,000 of net cash proceeds ****
On the third $10,000,000 of net cash proceeds ****
On net cash proceeds in excess of $30,000,000 ****
C. Additional Consideration:
For your part, and as additional consideration for the incentives and
benefits set forth above, if the Board of Directors determines to pursue the
courses of action contemplated herein, you agree as follows:
1) As of a date to be agreed among you, John Gilmartin, and Geoff Woodard, to
assume executive and operating responsibility for the "Business";
2) To structure the "Business" for divestiture;
3) To develop with Millipore's investment bankers, its other independent
advisors, and its Deal Coordinator, appropriate sell book(s) or other
offering documents;
4) To coordinate all selling activities with, and cooperate in whatever
support activities may reasonably be required by, Millipore's investment
bankers, its other independent advisors, and its Deal Coordinator, in
satisfying the information needs of prospective investors; and
5) To use your good faith efforts to operate the Business until the
Termination Date (or until the earlier sale or other disposition of the
Business) in a manner so as to ensure that the Business sold, or
otherwise disposed of on a Closing Date, is structured, resourced, and
performing as represented during negotiations, except that you will not
be responsible for any representations made by the Deal Coordinator or
other representative of Millipore to third parties without your
knowledge and consent thereof.
As used above, "Business" shall mean, individually and collectively, those
portions of Millipore's Bioscience businesses as agreed to by you and Geoff
Woodard with John Gilmartin's approval.
/s/Jack T. Johansen
November 5, 1993
Mr. Douglas A. Berthiaume
Waters Chromatography Division of
Millipore Corporation
34 Maple Street
Milford, MA 01757
Dear Mr. Berthiaume:
As you know, Millipore Corporation is contemplating the sale or other
disposition of The Waters Chromatography Division. Respecting that this
course creates an uncertain future for individual members of the WCD
management team and challenges them as a group to extraordinarily high levels
of professionalism and exertion during the period leading up to the
completion of a transaction, the incentive compensation arrangements and
other considerations described below will be effective immediately upon
Millipore's Board of Director's final approval of Management's proposal to
divest The Waters Chromatography Division.
Incentive Compensation:
As a participating WCD management team member, you will share in the proceeds
of the incentive pools described below. You must be a Millipore employee at
the closing date or have been terminated other than for cause to be eligible
to participate and share in the incentive pools.
Successful Transaction Incentive:
Subject only upon (B) below.
(A) Millipore will pay you as your share of a Successful Transaction
Incentive Pool **** of a total pool of $5 million if you remain in the employ
of the business for a period of six months subsequent to the closing date or
earlier when and if terminated by the new owner.
(B) If in the judgment of Douglas Berthiaume, it proves necessary to expand
participation in the Successful Transaction Pool beyond the currently
contemplated **** participants, then the amount payable in (A) can be reduced
as follows.
1. The first expanded participation beyond the current **** participants
**** will require Douglas Berthiaume's Successful Transaction Incentive to be
reduced by up to ****. If further expanded participation is required, then
all participants with the exception of **** and Douglas Berthiaume will have
their incentive reduced equally to fund the increased participation. Douglas
Berthiaume's incentive will be reduced a further $2.00 for each $1.00
reduction by the other participants. In no event will this condition operate
to reduce the Successful Transaction Incentive to **** below ****.
Price-Based Incentive Pool 1:
Subject only to (B) below.
(A) Millipore will pay you as your share of a "Price-Based Incentive" Pool,
no later than thirty (30) days following the closing date, **** of a total
pool calculated by subtracting ****
from the actual sales price of Waters Chromatography Division or ****,
whichever is lower, and multiplying the difference by 10%.
(B) If in the judgment of Douglas Berthiaume, it proves necessary to expand
participation in the Price Based Incentive beyond the currently contemplated
**** participants, then the amount payable in (A) can be reduced as follows:
1. The first expanded participation beyond the **** participants **** will
require Douglas Berthiaume's Price Based Incentive to be reduced by up to
****. If further expanded participation is required, then all participants
with the exception of **** and Douglas Berthiaume will have their incentive
reduced equally to fund the increased participation. Douglas Berthiaume's
incentive will be reduced a further $2.00 for each $1.00 reduction by the
other participants. In no event will this condition operate to reduce the
Price Based Incentive to **** by more than **** should they otherwise qualify
under (A).
Price-Based Incentive Pool 2:
Millipore will pay into a separate pool (Price-Based Incentive Pool #2), no
later than 30 days following the closing date **** of the amount by which the
actual selling price or ****, whichever is lower, exceeds ****. This pool
will be distributed to participating WCD Management Team Members based solely
on the judgment of Douglas Berthiaume.
Stock Options and Restricted Shares:
As a WCD management team member employed in good standing on the closing
date, Millipore Management will recommend to the Board of Directors that the
vesting schedule for all stock options held by you be accelerated to the
closing date and that all restrictions on restricted shares be waived as of
that date. You will be allowed twelve months from the closing date to
exercise any or all stock options. WCD managers and key employees will
participate in Millipore's stock option and restricted stock distributions
for 1993 in a business as usual fashion.
Severance Benefits:
As a WCD management team member, if you are involuntarily separated from the
company prior to the close, you will be afforded severance benefits (or not,
should they be terminated for cause) according to the customary policies and
practice of Millipore Corporation. WCD management team members whose
services are required by the new owner following the closing date will not be
eligible for severance benefits from Millipore Corporation. However,
Millipore Management will use its best efforts to ensure that the new owner
will provide reasonable severance provision should employment be terminated
after the closing date.
Change in Scope of the Transaction:
If, prior to the closing date, the Board of Directors decides to pursue a
transaction materially different from that contemplated here, this agreement
will be voided and WCD management team members covered by this agreement will
receive retention and other transaction-related rewards no less lucrative
than those
afforded other Millipore managers and key employees involved in that
transaction.
Possible Longer Time to Transition:
In weighing the relative merits of alternative offers to acquire the
business to be divested, Millipore Management will take into account the
financial (and other) advantages of a divestiture which provides for
continued sharing of space, organizations and other assets, subsequent to a
closing.
For your part and as additional consideration for the incentive compensation
set forth above, you agree to apply your best efforts to:
1. Structure the business for sale as a stand-alone concern.
2. Develop with the investment bankers a sell book that attractively and
fairly describes the business we are selling.
3. Coordinate all selling efforts with and cooperate in whatever support
activities may be required by Millipore's investment bankers.
4. Operate the WCD business for the period 4Q93 through the closing date
in a manner so as to ensure that the business actually delivered to the new
owner is structured, resourced, and performing as represented during
negotiations.
/s/Douglas A. Berthiaume
/s/John A. Gilmartin
****Information redacted, considered to be confidential by registrant.
Application for confidential treatment has been filed with Commission.
<TABLE>
Millipore Corporation
Exibit 11
Computation of Earnings Per Share
(In Thousands Except Per Share Data)
<CAPTION>
Years Ended December 31,
Calculation of shares: 1993 1992 1991
<S> <C> <C> <C>
Weighted average of shares
outstanding during the year 27,951 (b) 28,242 (b) 28,294 (b)
Shares outstanding from
assumed exercise of stock option 970 1,476 1,519
(Treasury Method) (873) (1,268) (1,184)
Weighted average shares and
common stock equivalents
outstanding during the year 28,048 (a) 28,450 (a) 28,629 (a)
Additional shares assumed
exercised with full dilution 0 0 0
Weighted average of shares
used in calculation of fully
diluted earnings per share $ 28,048(a) $ 28,450(a) $ 28,629(a)
Net Income $ 34,603 $33,183 $54,565
Earnings per common share as
reported in the Consolidated
Financial Statements $ 1.24 $ 1.17 $ 1.93
Primary earnings per common share$ 1.23(a) $ 1.16(a) $ 1.91(a)
Net fully diluted earnings
per common share $ 1.23(a) $ 1.16(a) $ 1.91(a)
(a)These calculations are submitted in accordance
with Securities Exchange Act of 1934 Release N.
9083 although not required by APB No. 15 because
they result in dilutions of less than 3%.
(b)Represents weighted average of shares
outstanding used in the earnings per share
calculations. Common stock equivalents for 1993,
1992, and 1991 were not included in the weighted
average share computation as they were less than
3% dilutive.
</TABLE>
Exhibit (13)
Management's Discussion and Analysis
General
On November 11, 1993, the Company's Board of Directors
approved a plan to divest operations of the Company's
Instrumentation Divisions, which serve primarily
chromatography and bioscience markets. These divisions,
which represented separate product lines with separate
customers, are accounted for as discontinued operations.
The Company expects to realize a net gain in 1994 upon
disposition of these divisions. The consolidated statement
of income in 1993 includes the results of discontinued
operations through November 11, 1993. The loss from
discontinued operations during this period includes the
impact of a $13.0 million restructuring charge recorded in
the first quarter of 1993. The following discussion on
results of operations applies to continuing operations.
Results of Operations
Consolidated net sales increased 4 percent in 1993 to $445
million. Sales growth rates, measured both in local
currencies and in U.S. dollars, are summarized in the table
below.
Sales growth rates Sales growth rates
measured in local currencies measured in U.S. dollars
1993 1992 1991 1993 1992 1991
Americas 6% (1%) 5% 6% (1%) 5%
Europe 4% 9% 5% (7%) 12% 4%
Asia/Pacific 10% (6%) 17% 18% (2%) 25%
Consolidated 6% 1% 8% 4% 3% 9%
Sales growth in the Americas in 1993 was 6 percent following
a decline of 1 percent in 1992, as sales to microelectronics
and biotechnology customers grew faster in 1993 than in
1992. Sales of the Company's laboratory water products were
also strong in 1993. In Europe, sales growth slowed to 4
percent following a strong 1992. Sales growth was impeded
by increased competition and a recessionary environment,
particularly in the laboratory and laboratory water markets.
Also, sales of large process systems were lower in 1993 than
in 1992. Sales in Japan grew 2 percent in 1993 following a
decline of 11 percent in 1992, as sales growth was adversely
impacted by a weak Japanese economy, particularly in the
microelectronics market. Sales growth in the balance of
Asia continued to be strong in 1993 led by strong sales to
the microelectronics customers in Korea. Foreign currency
exchange rates had a 2 percent net unfavorable impact on sales
growth in 1993, compared to a 2 percent net favorable impact in
1992 and a 1 percent net favorable impact in 1991. Though a weaker
dollar will benefit, and a stronger dollar will affect
adversely, future operations, the Company is unable to
predict future currency movements and to quantify their
effect on income. The Company sells a wide range of
products in many worldwide industrial markets. Price
changes and inflation have not significantly affected the
comparability of sales during the past three years.
Gross Margins were 56.5 percent in 1993, 54.2 percent in
1992, and 53.1 percent in 1991. Excluding the charges for
EPA settlements and the accrual of costs associated with
increasing the efficiency of our manufacturing operations in
1992, margins in 1992 were 56.3 percent. The slight
improvement in margins in 1993 was primarily due to
continued cost reduction activities in the Company's
manufacturing operations.
Selling, General and Administrative (S,G&A) expenses,
excluding the effects of foreign exchange grew 6 percent in
1993, 10 percent in 1992 and 11 percent in 1991. The
Company continued its focus on cost control in 1993 in light
of lower sales growth rates, as headcount levels were flat
in 1993 compared to 1992.
Research and Development Expenses (R&D) increased by 6
percent in 1993, following a marginal increase in 1992 and
an increase of 10 percent in 1991. The Company continued to
fund all major programs in 1993.
The Loss on Sale of Business reflects the loss taken on the
sale of the Company's environmental testing business
Resource Analysts Inc. (RAI) in 1992. The business was sold
because it no longer fit with the Company's long-term
strategic goals.
Net Interest Expense in 1993 was slightly higher than in
1992 and 1991, primarily due to higher net borrowings during
the first half of 1993 and slightly lower capitalized
interest on facilities projects. Overall, effective
interest rates in 1993 were slightly lower than in 1992 and
1991.
The Provision for Income Taxes was 22.5 percent of pre-tax
income in 1993, as compared to 22.5 percent in 1992 and 28.9
percent in 1991. The Company continues to benefit from low
tax rates in Puerto Rico and tax incentives attributable to
its U.S. export operations.
Page 33
<PAGE>
Extraordinary Loss on Early Extinguishment of Debt reflects
the after tax cost recorded by the Company in the fourth
quarter to pre-pay it's $100 million note, which bore
interest at 9.2 percent and was callable in 1995. In March
1994, the Company issued a new $100 million note bearing
interest at 6.78 percent.
Earnings Per Share for the past three years include a number
of charges resulting from either specific transactions or
adoption of new accounting pronouncements. Earnings per
share from continuing operations adjusted for these events
are summarized as follows:
1993 1992 1991
Earnings from continuing
operations after accounting
changes and charges $1.62 $1.07 $1.27
Adoption of new Accounting
Pronouncements:
SFAS #106 Charges
- cumulative impact - .19 -
SFAS #109 Charges - - .11
Charges .13 .34 -
Earnings from continuing
operations before accounting
changes and charges $1.75 $1.60 $1.38
The charge in 1993 resulted from the early extinguishment of
the Company's long-term debt. The charges in 1992 resulted
from providing for the settlement of all known environmental
disputes with the Environmental Protection Agency (EPA), the
sale of the Company's environmental testing business (RAI),
and an additional charge taken to cover costs of increasing
the efficiencies of our manufacturing operations.
Legal Proceedings
The potential settlement amount of all environmental claims
against all participants at hazardous waste ("Superfund")
sites in which the Company has been named a potential
responsible party by the EPA is significant. It is
unlikely, however, that the Company's share of these costs
will have a material impact on the financial condition of
the Company. The Company is only one of many potentially
responsible parties named at each site. Additionally, in
certain instances the Company believes that its insurance
will cover a portion of the costs incurred. In 1992, the
EPA unexpectedly proposed settlements for several of these
sites. Based on these proposed settlements and all other
information available to management, the Company recorded a
provision of $5.8 million against cost of sales in 1992,
which, in management's best estimate, will be sufficient to
satisfy all known claims by the EPA. No individual
settlement to date has had a material impact on the
Company's financial condition.
Capital Resources and Liquidity
In 1993, the Company generated $34 million of cash from
continuing operations, compared to using $14 million in 1992
and $6 million in 1991. Cash provided by operations
continues to be the Company's primary source of funding
working capital requirements and capital expenditures. In
1993, cash flow from continuing operations, net of working
capital requirements, was $73 million compared to $47
million in 1992. The improved cash flow from continuing
operations in 1993 was primarily driven by a $15 million
decrease in spending on inventory in 1993.
Capital expenditures by continuing operations were
significantly lower in 1993 than in 1992 and 1991 as the
Company spent less on facility expansions. The Company
expects capital expenditures in 1994 to be comparable with
1993. At December 31, 1993 the Company had no significant
commitments for capital expenditures.
The Company has $41 million of cash and short-term
investments on hand at the end of 1993, which along with the
Company's strong financial position, provides a high degree
of flexibility in financing future requirements. In
addition, the Company prepaid it's $100 million note
callable in 1995 and secured a new $100 million note due in
2004.
Dividends
The quarterly dividend was increased in the second quarter
of 1993 from $0.13 to $0.14 per share. Dividends paid in
1993 were $15.1 million.
Page 34
<PAGE>
Consolidated Statements of Income
Millipore Corporation
Year ended December 31
(In thousands except per share data) 1993 1992 1991
Net sales $ 445,366 $ 427,188 $415,075
Cost of sales 193,575 195,462 194,557
Gross profit 251,791 231,726 220,518
Selling, general and
administrative expenses 145,647 142,701 129,593
Research and development expenses 34,952 32,953 32,633
Operating income 71,192 56,072 58,292
Loss on sale of business - (2,415) -
Interest income 4,069 6,888 6,182
Interest expense (12,038) (14,692) (13,984)
Income from continuing
operations before income taxes 63,223 45,853 50,490
Provision for income taxes 14,225 10,317 14,570
Income from continuing operations before
extraordinary item and cumulative effect of
change in accounting principle 48,998 35,536 35,920
Earnings (loss) from discontinued
operations (10,851) 2,715 18,645
Income before extraordinary item and
cumulative effect of change in accounting
principle 38,147 38,251 54,565
Extraordinary item - loss on early
extinguishment of debt 3,544 - -
Cumulative effect of change in accounting
for postretirement benefits other
than pensions - 5,068 -
Net income $ 34,603 $ 33,183 $ 54,565
Income per share
Income from continuing operations$ 1.75 $ 1.26 $ 1.27
Net income per common share $ 1.24 $ 1.17 $ 1.93
Weighted average common
shares outstanding 27,951 28,242 28,294
The accompanying notes are an integral part of the consolidated financial
statements.
Page 35
<PAGE>
Consolidated Balance Sheets
Millipore Corporation
December 31
(In thousands) 1993 1992
Assets
Current assets:
Cash $2,140 $1,915
Short-term investments 38,502 68,536
Accounts receivable (less allowance for
doubtful accounts of $3,063 in 1993
and $1,752 in 1992) 99,655 94,627
Inventories 65,187 72,279
Other current assets 12,790 13,915
Net current assets of discontinued operations 138,687 147,480
Total current assets 356,961 398,752
Property, plant and equipment, net 194,895 195,070
Intangible assets (less accumulated amortization
of $1,169 in 1993 and $911 in 1992) 2,769 1,670
Other assets 48,332 45,957
Net long-term assets of discontinued operations 99,647 106,194
Total assets $702,604 $747,643
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable and current portion of long-term debt $51,420 $112,064
Accounts payable and accrued expenses 57,505 51,465
Dividends payable 3,921 3,633
Accrued retirement plan contributions 2,547 2,706
Accrued and deferred income taxes payable 4,894 5,431
Total current liabilities 120,287 175,299
Long-term debt 102,047 103,240
Other liabilities 19,116 16,269
Commitments and contingent liabilities - -
Shareholders' equity:
Common stock, par value $1.00 per share, 80,000 shares
authorized. 28,344 shares issued
as of December 31, 1993 and 1992 28,344 28,344
Additional paid-in-capital 16,803 16,524
Retained earnings 434,988 416,563
Translation adjustments (7,624) 4,028
472,511 465,459
Less: Treasury stock at cost, 341 and 370 shares as of
December 31, 1993 and 1992, respectively 11,357 12,624
Total shareholders' equity 461,154 452,835
Total liabilities and shareholders' equity $702,604 $747,643
The accompanying notes are an integral part of the consolidated financial
statements.
Page 36
<PAGE>
<TABLE>
Consolidated Statements of Shareholders' Equity
Millipore Corporation
Year ended December 31, 1991, 1992 and 1993
(In thousands)
<CAPTION>
Additional Total
Common Stock Paid-in Retained Translation Treasury Stock Shareholders'
Shares Par Value Capital Earnings Adjustments Shares Cost Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
January 1, 1991 28,344 $28,344 $14,219 $360,954 $24,984 (107) $(1,493) $427,008
Net income 54,565 54,565
Cash dividends
declared,
$0.47 per share (13,098) (13,098)
Treasury stock
acquired (391) (15,938) (15,938)
Stock options
exercised (3,517) 384 13,444 9,927
Employees' stock
purchase plan
proceeds (330) 45 1,621 1,291
Incentive plan
awards 69 69 2,366 2,435
U.S. tax benefit
from stock plan
activity 1,524 1,524
Translation
adjustments (3,218) (3,218)
Balance at
December 31, 1991 28,344 $28,344 $15,743 $398,643 $21,766 0 $0 $464,496
Net income 33,183 33,183
Cash dividends
declared,
$0.51 per share (14,376) (14,376)
Treasury stock
acquired (484) (16,777) (16,777)
Stock options
exercised (889) 111 4,033 3,144
Employees' stock
purchase plan
proceeds 2 3 120 122
U.S. tax
benefit from
stock
plan activity 781 781
Translation
adjustments (17,738) (17,738)
Balance at
December 31, 1992 28,344 $28,344 $16,524 $416,563 $4,028 (370) $(12,624)$452,835
Net income 34,603 34,603
Cash dividends
declared,
$0.55 per share (15,396) (15,396)
Treasury stock
acquired (112) (3,427) (3,427)
Stock options
exercised (899) 104 3,468 2,569
Employees' stock
purchase plan
proceeds (32) 10 353 321
Incentive plan
awards 161 22 721 882
Stock Awards (12) 5 152 140
U.S. tax benefit
from stock plan
activity 279 279
Translation
adjustments (11,652) (11,652)
Balance at
December 31, 1993 28,344 $28,344 $16,803 $434,988 $(7,624) (341) $(11,357)$461,154
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 37
<PAGE>
Consolidated Statements of Cash Flows
Millipore Corportion
Year ended December 31
(In thousands) 1993 1992 1991
Cash Flows From Operating Activities:
Net income $34,603 $33,183 $54,565
Adjustments to reconcile net income to
net cash provided by continuing operations
Net loss (income) from discontinued
operations 10,851 (2,715) (18,645)
Depreciation and amortization 23,775 23,507 20,905
Deferred income tax provision (1,745) 225 10,731
Extraordinary item-loss on
extinguishment of debt 3,544 - -
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable (5,440) 8,348 (10,939)
Decrease (increase) in inventories 6,398 (8,269) 2,250
Decrease (increase) in other current assets 763 1,276 (2,251)
(Increase) in other assets (1,981) (16,003) (5,181)
Increase (decrease) in accounts payable
and accrued expenses 3,740 (2,475) (5,608)
(Decrease) increase in accrued retirement plan
contributions (104) 600 (12)
(Decrease) increase in accrued
income taxes payable (1,002) (2,111) 3,474
Increase - Other 53 11,898 585
Net cash provided by continuing operations 73,455 47,464 49,874
Net cash provided by discontinued operations 8,708 4,691 9,842
Net cash provided by operating activities 82,163 52,155 59,716
Cash Flows From Investing Activities:
Additions to property, plant and equipment, net (24,469) (33,906) (40,660)
Net investing activities of
discontinued operations (9,357) (11,018) (7,668)
Net cash used for investing activities (33,826) (44,924) (48,328)
Cash Flows From Financing Activities:
Treasury stock acquired (3,427) (16,777) (15,938)
Issuance of treasury stock under stock plans 3,912 3,266 13,653
(Decrease) increase in short-term debt (59,887) 20,137 26,548
(Decrease) in long-term debt (1,222) (2,988) (1,320)
Dividends paid (15,108) (14,093) (12,814)
Net cash (used for) provided by financing
activities (75,732) (10,455) 10,129
Effect of foreign exchange rates on cash and
short-term investments (2,414) (2,765) (442)
Net (decrease) increase in cash and short-term
investments (29,809) (5,989) 21,075
Cash and short-term investments on January 1 70,451 76,440 55,365
Cash and short-term investments on
December 31 $ 40,642 $ 70,451 $ 76,440
The accompanying notes are an integral part of the consolidated financial
statements.
Page 38
<PAGE>
Notes to Consolidated Financial Statements
(In thousands except per share data)
Note A - Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly owned. All material
intercompany balances and transactions have been eliminated.
Translation of Foreign Currencies
For most of the Company's foreign subsidiaries, assets and liabilities are
translated at exchange rates prevailing on the balance sheet date, revenues
and expenses are translated at average exchange rates prevailing during the
period, and elements of shareholders' equity are translated at historical
rates. Any resulting translation gains and losses are reported separately in
shareholders' equity. For the Company's subsidiary in Brazil, where
inflation is very high, the translation is the same except that inventories,
cost of sales, property, plant and equipment, and depreciation are
translated at historical rates. Resulting translation gains and losses for
this subsidiary are included in income. Net losses from foreign currency
transactions and translations of $867 in 1993, $1,767 in 1992, and $715 in
1991 were included in selling, general and administrative expenses.
Short-term Investments
Short-term investments consist primarily of government securities and
certificates of deposit and are carried at cost plus accrued interest, which
approximates market value.
Inventories
The Company values all of its inventories at the lower of cost or market,
principally on a last-in, first-out (LIFO) basis. The remaining inventories
are valued on a first-in, first-out (FIFO) basis.
Property, Plant and Equipment
Property, plant and equipment is recorded at cost. Expenditures for
maintenance and repairs are charged to expense while the costs of
significant improvements are capitalized. Depreciation on assets acquired
before January 1, 1989 generally is provided using accelerated methods over
the estimated useful lives of the assets. Assets acquired after January 1,
1989 primarily are depreciated using straight-line methods. Upon retirement
or sale, the cost of assets disposed and the related accumulated
depreciation are eliminated and related gains or losses reflected in income.
Intangible Assets
Intangible assets consist primarily of licenses. Intangible assets are
amortized on a straight-line basis over appropriate periods not exceeding 10
years.
Income Taxes
In 1992, the Company adopted the provisions of SFAS #109 "Accounting for
Income Taxes." As discussed more fully in Note H, deferred income taxes
under SFAS #109 are determined on the liability method. The Company
provides deferred income taxes on the unremitted earnings of foreign and
Puerto Rican subsidiaries which are expected to be repatriated.
Treasury Stock
Treasury stock is recorded at its cost on the date acquired and is relieved
at its weighted average cost upon reissuance. The excess of the cost over
proceeds of treasury stock reissued is charged to retained earnings.
Net Income Per Common Share
Net income per common share is calculated by dividing the net income for the
period by the weighted average number of common shares outstanding for the
period.
Postretirement Benefits Other Than Pensions
In 1992, the Company adopted the provisions of SFAS #106 "Employers'
Accounting for Postretirement Benefits Other than Pensions." This new
standard, discussed more fully in Note L requires that the expected cost of
retiree health benefits be expensed during the years employees render
service rather than the Company's prior practice of recognizing these costs
on a cash basis.
Reclassifications
Certain reclassifications have been made to prior years' financial
statements to conform with the 1993 presentation.
Page 39
<PAGE>
Note B - Discontinued Operations
On November 11, 1993, the Company's Board of Directors approved a plan to
divest operations of the Company's Instrumentation Divisions, which serve
primarily chromatography and bioscience markets. The operating results of
these businesses, which have been classified as discontinued operations in
the accompanying consolidated financial statements, are summarized as
follows:
1993 1992 1991
through
11/11/93
Net sales $279,303 $349,813 $346,314
Pre-tax income (loss) $(14,001) $5,632 $26,226
Provision (credit)
for income taxes (3,150) 1,267 7,581
Cumulative effect of change
in accounting for post-
retirement benefits - 1,650 -
Net income (loss) $ (10,851) $ 2,715 $ 18,645
Earnings (loss) per share $ (0.38) $ 0.10 $ 0.66
The operating results for 1993 are for the period ended November 11, 1993,
the date the divestiture plan was approved. In the first quarter of 1993,
the Company recorded a restructuring charge of $13.0 million to cover costs
associated with reorganizing and restructuring the Company's chromatography
division into more market-focused customer-oriented business units. The
restructuring charge covered the cost of severance and other personnel
related items resulting from the reorganization.
The operating results from November 11, 1993 to the date of divestiture will
be deferred until the divestiture is completed. The Company expects to
realize a net gain in 1994 upon the sale of these businesses.
Net current and long-term assets of discontinued operations consist primarily
of accounts receivable, inventory, property, plant and equipment,
intangibles, and accounts payable, and have been classified separately in the
accompanying consolidated balance sheets.
Note C - Inventories
Inventories at December 31 consisted of the following:
1993 1992
Raw materials $ 18,782 $ 17,778
Work in process 7,852 9,004
Finished goods 38,553 45,497
$ 65,187 $ 72,279
The value of inventories determined using the LIFO cost method was $47,097 or
72 percent of the total at December 31, 1993 and $50,793 or 70 percent of the
total at December 31, 1992. If these inventories had been valued using the
FIFO cost method, they would have been $48,847 at December 31, 1993 and
$53,244 at December 31, 1992.
Note D - Property, Plant and Equipment
Property, plant and equipment at December 31 consisted of the following:
1993 1992
Land $ 6,966 $ 6,939
Leasehold improvements 16,108 11,669
Buildings and improvements 108,054 104,041
Production and other equipment 206,207 183,179
Construction in progress 20,631 35,352
357,966 341,180
Less: accumulated depreciation and
amortization 163,071 146,110
$ 194,895 $ 195,070
Page 40
<PAGE>
Note E - Notes Payable and Current Portion of Long-term Debt
Short-term borrowings and related lines of credit at December 31 are
summarized as follows:
1993 1992
Notes payable and current portion of
long-term debt:
Notes payable $ 50,802 $111,489
Current portion of long-term debt 618 575
$ 51,420 $112,064
Unused lines of credit $240,755 $192,347
Average amount outstanding at month-end
during the year $94,465 $132,696
Maximum month-end amount outstanding
during the year $129,332 $182,439
Weighted average interest rate during the year 4.3% 5.1%
Weighted average interest rate at year-end 4.5% 4.7%
Notes payable generally consist of renewable, uncollateralized borrowings
under lines of credit that are denominated in various currencies and bear
interest at prevailing rates.
Note F - Long-term Debt
Long-term debt at December 31 consisted of the following:
1993 1992
Notes payable with interest rates
of 9.2% due in 1998 $100,000 $100,000
Other notes payable with average interest of 5.9% in
1993 and 7.0% in 1992, due through 2005 2,665 3,815
102,665 103,815
Less: Current portion (618) (575)
Long-term debt $102,047 $103,240
In the fourth quarter of 1993, the Company entered into an agreement to
retire the $100,000 notes payable before their call date of March 30, 1995.
Accordingly, the Company recorded an extraordinary charge of $5,906 ($3,544
net of income taxes or $0.13 per share) in December, 1993 to reflect the cost
of extinguishing the notes. In March, 1994, the Company issued $100,000 of
6.78% notes due in 2004. Interest is payable semi-annually on these notes
beginning in September 1994.
Long-term debt, including current portion and after consideration of the
events discussed above, matures as follows:
Year ended December 31, 1994 $ 618
Year ended December 31, 1995 562
Year ended December 31, 1996 454
Year ended December 31, 1997 247
Year ended December 31, 1998 249
Years subsequent to December 31, 1998 100,535
Certain notes contain covenants relating to maintenance of current asset
levels, cash dividends and limitations on long-term debt. The Company is in
compliance with all such covenants.
The Company capitalized interest costs associated with the construction
of certain assets of $1,301 in 1993, $1,561 in 1992, and $1,645 in 1991.
Interest paid on debt during 1993, 1992, and 1991 amounted to $13,356,
$16,637, and $15,263, respectively.
The Company had partially hedged its foreign currency net asset exposure
by entering into a currency swap which was to mature in 1995. Under the
terms of the original swap, the Company exchanged $100,000 of dollar debt
service obligations for foreign obligations of 9,936,000 yen and 33,193 DM.
The Company's foreign currency obligations had an effective weighted average
interest rate of 6.02 percent in 1993. The effects of foreign currency
exchange rate fluctuations resulting from these swap agreements are included
in translation adjustments and in transaction gains/losses. Unrealized
losses on these swap agreements of $8,020 at December 31, 1993 and $92 at
December 31, 1992 are included in other assets in the consolidated balance
sheets.
In January, 1994, the Company closed out the yen denominated swap and
simultaneously exchanged $80,000 of dollar debt service obligation for a yen
denominated obligation of 8,760,000 yen, which bears interest at a rate of
4.49 percent. The swap matures in 2004.
Page 41
<PAGE>
Note G - Foreign Exchange
In the fourth quarter of 1992, the Company entered into forward exchange
contracts to reduce the impact of foreign currency fluctuations on certain
transactions in 1993. A gain of $2.3 million was realized on these contracts
and was recorded in cost of sales in 1993. In the fourth quarter of 1993,
the Company has again entered into forward exchange contracts to reduce the
impact of foreign currency fluctuations on certain transactions. The gains
or losses on these contracts will be included in income when the operating
revenues and expenses related to the underlying transactions are recognized.
Contracts open at December 31, 1993, aggregating $85,000, have an unrealized
gain of $1,000. All open contracts have maturities which do not exceed
fifteen months.
Note H - Income Taxes
The Company has provided for income taxes on both continuing and
discontinued operations according to the provisions of SFAS #109 "Accounting
for Income Taxes" which the Company adopted in 1992. Data related to the
provisions for income taxes are summarized as follows:
1993 1992 1991
Domestic and foreign income before income taxes:
Domestic $16,690 $27,077 $51,530
Foreign 32,532 24,408 25,186
49,222 51,485 76,716
Less: (income) loss from discontinued
operations 14,001 (5,632) (26,226)
Income from continuing operations before
income taxes $63,223 $45,853 $50,490
Domestic and foreign provisions for income taxes:
Domestic $(2,781) $ 2,842 $ 8,589
Foreign 13,356 8,242 13,063
State 500 500 499
11,075 11,584 22,151
Less: portion applied to discontinued
operations 3,150 (1,267) (7,581)
$14,225 $10,317 $14,570
Current and deferred components of the provision
for income taxes:
Current $12,820 $11,359 $11,420
Deferred (1,745) 225 10,731
$11,075 $11,584 $22,151
Components of the deferred income tax provisions:
Intercompany and inventory-related
transactions $(2,241) $2,542 $545
Unremitted foreign earnings - - (802)
Depreciation (1,232) (111) 530
Costs related to business dispositions- - 438
Restructuring charge - 576 8,813
Provision for postretirement benefits other
than pensions (419) (555) -
Other 2,147 (2,227) 1,207
$(1,745) $ 225 $10,731
Summary of the differences between the Company's consolidated effective
tax rate and the United States statutory federal income tax rate:
U.S. statutory income tax rate 35.0% 34.0% 34.0%
Puerto Rico tax rate benefits (11.9) (9.8) (8.0)
Excess foreign over U.S. tax rate 5.6 - 6.4
State income tax, net of federal income tax
benefit .7 .6 .4
Foreign Sales Corporation income
not taxed (4.6) (4.1) (2.8)
U.S. tax credits - - (1.8)
Other (2.3) 1.8 .7
Effective tax rate applicable
to operations 22.5% 22.5% 28.9%
Page 42
<PAGE>
Net deferred tax assets result from temporary differences in the recognition
of revenues and expenses for financial statement and income tax purposes.
Components of the net deferred tax assets are as follows:
1993 1992
Intercompany and inventory $18,698 $16,457
related transactions
Postretirement benefits other
than pensions 4,435 4,016
Tax credits (including foreign tax
credits on unremitted earnings) 21,800 17,640
U.S. net operating loss
carryforwards 14,001 12,000
Other, net 1,248 (4,183)
60,182 45,930
Valuation allowance (19,390) (15,526)
Net deferred tax asset $ 40,792 $ 30,404
Net deferred tax assets are classified in other assets in the balance sheet.
The valuation allowance is provided primarily against foreign tax credits
which can be utilized against future taxable income in the United States
after the utilization of other carryforwards and expire no later than 1996.
The reduction in tax expense attributable to tax exemptions on the Company's
operations in Puerto Rico was $5,843 in 1993, $5,035 in 1992, and $6,275 in
1991 or $.21, $.18, and $.22 per share, respectively. Tax exemptions
relating to these operations are effective through 2004. Income taxes paid
during 1993, 1992, and 1991 were $15,185, $18,634 ,and $10,753 respectively.
Note I - Legal Proceedings
The Company has been notified in a number of instances that the
United States Environmental Protection Agency (EPA) has determined
that a release or a substantial threat of a release of hazardous
substances (Release) as defined in Section 101 of the Comprehensive
Environmental Response Compensation and Liability Act of 1980 as
amended by the Superfund Amendments and Reauthorization Act of 1986
(the so-called "Superfund" law) has occurred at certain sites to
which chemical wastes generated by the manufacturing operations of
the Company have been sent. These notifications typically also
allege that the Company may be a responsible party under the law
with respect to any remedial action needed to control or prevent any
such Release. Under the law the EPA may undertake remedial action
and responsible parties may be liable, without regard to fault or
negligence, for all costs incurred. In several of these instances
the EPA has issued a proposal for remedial action it considers
necessary to protect the environment. In each instance the Company
was only one of a large number of corporations and entities which
received such notification, and anticipates that any ultimate
liability for remedial costs will be shared by others. In 1992,
the EPA unexpectedly proposed settlements for several of these
sites. Based on those proposed settlements and all other
information available to management, the Company recorded a
provision of $5,800 against cost of sales which, in management's
best estimate will be sufficient to satisfy all know claims by the
EPA. The Company has paid a total of $13,900 to date to satisfy
environmental claims. The aggregate of further potential
liabilities is not expected to have a material adverse effect on the
Company's financial condition.
Eastern Enterprises has filed a lawsuit against the Company
alleging misrepresentations made in connection with its 1989
purchase of the Company's Process Water Division. The Company
believes it has meritorious defenses against all claims. Although
the Company is unable to predict with certainty the outcome of this
matter, its ultimate disposition is not expected to have a material
adverse effect on the Company's financial condition.
Note J - Leases
Lease agreements cover sales offices, warehouse space, computers and
automobiles. These leases have expiration dates through 2026.
Certain land and building leases contain renewal options for periods
ranging from five to ten years and purchase options at fair market
value. Rental expense was $10,878 in 1993, $8,880 in 1992, and
$7,706 in 1991. At December 31, 1993 future minimum rents payable
under noncancelable leases with initial terms exceeding one year
were as follows:
1994 $10,615
1995 9,056
1996 6,851
1997 6,146
1998 5,142
1999 - 2026 48,617
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Note K - Stock Plans
Stock Option Plan
Under the Company's Combined Stock Option Plan, stock options to purchase
Millipore common stock may be granted to employees. The plan provides that
the option price per share may not be less than the fair market value of the
stock at the time the option is granted and that options must expire not
later than 10 years from the date of grant. Plan data are summarized as
follows:
1993 1992 1991
Option shares:
Outstanding at beginning of period 2,431 2,207 2,136
Issued during period 516 510 527
Exercised during period (100) (111) (384)
Canceled during period (127) (175) (72)
Outstanding at end of period 2,720 2,431 2,207
Exercisable at end of period 1,536 1,254 1,073
Shares available for granting of options
at end of period 879 270 604
Average price of outstanding options
at end of period $33.34 $32.70 $32.14
Average price of exercised options
during the period $24.51 $28.22 $25.95
Shares available include 1,000 shares authorized by the Board of Directors in
December, 1993 subject to shareholder approval at the Annual Meeting in
April, 1994.
Non-Employee Director Stock Option Plan
In 1990, a stock option plan for Non-Employee Directors was approved by the
Company's shareholders. Under this plan, stock options to purchase up to 100
shares of Millipore common stock may be granted to non-employee directors of
the Company. The plan provides that the option price per share may not be
less then the fair market value of the stock at the time the option is
granted. At December 31, 1993, 59 options have been issued and 54 are
outstanding.
Employees' Stock Purchase Plan
Under the Company's Employees' Stock Purchase Plan, all employees of the
Company and its subsidiaries who have 90 days continuous service prior to the
beginning of the plan year, May 1, may purchase shares of Millipore common
stock by payroll deduction. The purchase price per share during the plan year
is the lesser of the fair market value of the common stock at the time of
purchase or on May 1.
In 1993, 1992, and 1991 shares issued under the plan were 10, 3, and 45,
respectively. As of December 31, 1993, 117 shares of Millipore common stock
were available for sale to employees under the plan.
Incentive Plan for Senior Management
Under this plan, Millipore common stock is awarded to key members of senior
management at no cost to them. The stock cannot be sold, assigned,
transferred or pledged during a restriction period which is normally four
years. Shares are subject to forfeiture should employment terminate during
the restriction period.
The stock issued under the plan is recorded at its fair market value on the
award date; the related deferred compensation is amortized to selling,
general and administrative expenses over the restriction period. At the end
of 1993, 1992, and 1991, 133, 114, and 160 shares, respectively, were
outstanding under the plan. Plan expense was $833 in 1993, $924 in 1992, and
$1,159 in 1991. As of December 31, 1993, 78 shares of Millipore common stock
were available for future awards under this plan.
Note L - Employee Retirement Plans
Participation and Savings Plan
The Millipore Corporation Employees' Participation and Savings Plan
(Participation and Savings Plan), maintained for the benefit of all full-time
U.S. employees, combines both a defined contribution plan (Participation
Plan) and an employee savings plan (Savings Plan). Contributions to the
Participation Plan are allocated among the U.S. employees of the Company who
have completed at least two years of continuous service on the basis of the
compensation they received during the year for which the contribution is
made. The Savings Plan allows employees with one year of continuous service
to make certain tax-deferred voluntary contributions which the company
matches with a 25 percent contribution (50 percent contribution for employees
with 10 years of service). Total expense under the Participation and Savings
Plan was $8,679 in 1993, $8,520 in 1992, and $8,143 in 1991.
Retirement Plan
The Company's Retirement Plan for Employees of Millipore Corporation
(Retirement Plan) is a defined benefit plan for all U.S. employees which
provides benefits to the extent that assets of the Participation Plan,
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described above, do not provide guaranteed retirement income levels.
Guaranteed retirement income levels are determined based on years of service
and salary level as integrated with Social Security benefits. Employees are
eligible under the Retirement Plan after one year of continuous service and
are vested after 5 years of service. For accounting purposes, the Company
uses the projected unit credit method of actuarial valuation. The actuarial
method for funding purposes is the entry age normal method. The Company
contributes annually to the Retirement Plan, subject to Internal Revenue
Service and ERISA funding limitations. No contributions were required for
1993 and 1992.
The following table summarizes the funded status of the plan and amounts
reflected in the Company's consolidated balance sheets at December 31. The
projected benefit obligation was calculated using discount and investment
return rates of 7.5 percent in 1993 and 8 percent in 1992, and a salary
progression rate of 6 percent in both years. Plan assets are invested
primarily in common stock, mutual funds and money market funds.
1993 1992
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including
vested benefits of $2,804 on December 31, 1993 and
$1,813 on December 31, 1992 $ 2,983 $ 1,919
Projected benefit obligation for service
rendered to date $(5,003) $(3,434)
Plan assets at fair value 5,663 5,225
Plan assets in excess of projected
benefit obligation 660 1,791
Unrecognized net actuarial loss 3,069 1,653
Unrecognized prior service cost 413 448
Unrecognized net asset being amortized
over 16.7 years (747) (831)
Prepaid pension cost included in
financial statements $ 3,395 $ 3,061
Net pension income includes the following components
Service cost $ 393 $ 323
Interest cost (358) (260)
Return on plan assets 430 393
Amortization and deferral (131) (46)
Net pension income $ 334 $ 410
Postretirement Benefits Other Than Pensions
The Company sponsors several unfunded defined benefit postretirement plans
covering all U.S. employees. The plans provide medical and life insurance
benefits and are, depending on the plan, either contributory or non-contribu-
tory. As discussed in Note A, the Company adopted the provisions of SFAS #106
"Employers' Accounting for Postretirement Benefits Other Than Pensions" effect-
ive January 1, 1992. In adopting this standard, the Company recorded in the
first quarter of 1992, a one-time, non-cash charge against earnings from con-
tinuing operations of $7,678 before taxes and $5,068 after taxes, or $.19 per
share.
Net periodic postretirement benefit cost included the following components:
1993 1992
Service cost-benefits attributed to service
during the year $ 754 $ 834
Interest cost on accumulated postretirement
benefit obligation 787 800
Net amortization and deferral (15) -
Net periodic postretirement benefit cost $ 1,526 $ 1,634
Summary information on the Company's plans as of December 31 is as follows:
1993 1992
Accumulated postretirement benefit obligation:
Retirees and dependents $ (3,520) $ (3,702)
Fully eligible active plan participants (478) (368)
Other active plan participants (8,171) (7,743)
Accrued postretirement benefit cost (12,169) (11,813)
Unrecognized gain from past experience different
from that assumed and from changes in assumptions (361) -
Accrued postretirement benefit obligation $(12,530) $(11,813)
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The discount rate used in determining the accumulated postretirement benefit
obligation was 7.5 percent as of December 31, 1993 and 8 percent as of
December 31, 1992. The assumed health care cost trend rate used in measuring
the accumulated postretirement benefit obligation was 12 percent in 1993,
declining gradually to 6 percent through the year 2003 and remaining level
thereafter.
If the health care cost trend rate assumptions were increased by 1 percent,
the accumulated postretirement benefit obligation as of December 31, 1993
would be increased by $2,336 while the aggregate of the service and interest
cost components of net periodic postretirement benefit cost for 1993 would be
increased by $343.
Note M - Business Segment Information
Industry Segments
The Company operates in one industry segment. Using primarily membrane
technology, the Company develops, manufactures and markets products used for
analysis and purification.
Geographical Segments
The Company operates in the geographical segments indicated in the table
below. Sales are reflected in the segment from which the sales are made. The
Americas segment includes North and South America. The European region
includes Western and Central Europe, Russia, the Middle East and Africa. The
Asia/Pacific region includes Japan, Korea, Taiwan, Hong Kong, China, South-
east Asia and Australia. Transfer sales between geographical areas are
generally made at a discount from list price. Operating profits for each
geographical segment exclude general corporate expenses. Identifiable assets
consist of those assets utilized within each respective geographic segment
and exclude cash and short-term investments, which are classified as
corporate assets.
Americas Europe Pacific Eliminations Total
1993
Sales:
Unaffiliated
customers $168,800 $145,485 $128,840 $443,125
Unaffiliated export:
Pacific customers 977 977
European customers 1,264 1,264
Total unaffiliated 171,041 145,485 128,840 445,366
Transfer between areas 85,438 24,513 6,162 (116,113) -
Total sales $256,479 $169,998 $135,002 $(116,113) $445,366
Operating profits $ 23,180 $ 36,902 $ 27,731 $ 87,813
General corporate expenses (16,621)
Interest expense, net (7,969)
Income from continuing
operations before income taxes $ 63,223
Identifiable assets $280,941 $138,326 $127,302 $(122,941) $423,628
Corporate assets 40,642
Net current assets of
discontinued operations 138,687
Net long term assets of
discontinued operations 99,647
Total assets $702,604
1992
Sales:
Unaffiliated
customers $159,458 $154,200 $108,923 $422,581
Unaffiliated export:
Pacific customers 908 908
European customers 3,699 3,699
Total unaffiliated 164,065 154,200 108,923 427,188
Transfer between areas 80,944 23,391 7,360 (111,695) -
Total sales $245,009 $177,591 $116,283 $(111,695) $427,188
Operating profits $ 23,715 $ 40,962 $ 7,186 $ 71,863
General corporate expenses (15,791)
Interest expense, net (7,804)
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Loss on sale of business(2,415) (2,415)
Income from continuing
operations before income taxes $ 45,853
Identifiable assets $268,819 $178,224 $102,035 $(125,560) $423,518
Corporate assets 70,451
Net current assets of
discontinued operations 147,480
Net long term assets of
discontinued operations 106,194
Total assets $747,643
1991
Sales:
Unaffiliated
customers $162,182 $135,140 $110,115 $407,437
Unaffiliated export:
Pacific customers 1,943 1,943
European customers 5,695 5,695
Total unaffiliated 169,820 135,140 110,115 415,075
Transfer between areas 76,293 18,901 5,787 (100,981) -
Total sales $246,113 $154,041 $115,902 $(100,981) $415,075
Operating profits $ 49,101 $ 16,619 $ 9,820 $ 75,540
General corporate expenses (17,248)
Interest expense, net (7,802)
Income from continuing
operations before income taxes $ 50,490
Identifiable assets $253,071 $214,509 $ 97,975 $(136,293) $429,262
Corporate assets 76,440
Net current assets of
discontinued operations 140,364
Net long term assets of
discontinued operations 99,593
Total assets $745,659
Report of Independent Accountants
To the Shareholders and Directors of Millipore Corporation:
We have audited the accompanying consolidated balance sheets of Millipore
Corporation as of December 31, 1993 and 1992, and the related consolidated
statements of income, shareholders' equity, and cash flows for each of the
three years in the period ended December 31, 1993. These financial statements
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. 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 consolidated financial position of Millipore
Corporation at December 31, 1993 and 1992, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1993 in conformity with generally accepted accounting
principles.
As discussed in Notes A, H and L to the consolidated financial statements,
the Company changed its method of accounting for postretirement benefits
other than pensions and its accounting for income taxes in 1992.
Boston, Massachusetts Coopers & Lybrand
January 24, 1994, except as to the
information presented in Note F, for which the date
is March 3, 1994
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Eleven-year Summary of Operations
Millipore Corporation
(In thousands except per share)
1993 1992 1991 1990 1989 1988
Net sales $445,366 $427,188 $415,075 $380,983 $365,825 $347,267
Cost of sales 193,575 195,462 194,557 170,049 165,979 161,613
Gross profit 251,791 231,726 220,518 210,934 199,846 185,654
Selling, general and
administrative
expenses 145,647 142,701 129,593 117,214 115,951 116,636
Research and devel-
opment expenses 34,952 32,953 32,633 29,538 28,756 22,336
Restructuring charge - - - 17,103 - -
Operating income 71,192 56,072 58,292 47,079 55,139 46,682
Other income/loss, net - (2,415) - - 3,149 -
Interest income 4,069 6,888 6,182 6,723 3,914 3,450
Interest expense (12,038) (14,692) (13,984) (10,418) (8,543) (6,543)
Income from continuing
operations before
income taxes 63,223 45,853 50,490 43,384 53,659 43,589
Provision for income
taxes excluding non-
recurring tax benefit 14,225 10,317 14,570 13,629 11,619 10,955
Nonrecurring benefit - - - - - -
Income from continuing
operations 48,998 35,536 35,920 29,755 42,040 32,634
Earnings (loss) from
discontinued
operations (10,851) 2,715 18,645 (6,678) 10,462 22,751
Income before
extraordinary item
and cumulative effect
of change in
accounting principle 38,147 38,251 54,565 23,077 52,502 55,385
Extraordinary item-loss
on early extinguishment
of debt 3,544 - - - - -
Cumulative effect of
change in accounting for
postretirement benefits - 5,068 - - - -
Net income $34,603 $33,183 $54,565 $23,077 $52,502 $55,385
Net income per common share:
Income from continuing
operations $1.75 $1.26 $1.27 $1.05 $1.48 $1.15
Net income per
common share 1.24 1.17 1.93 0.82 1.85 1.96
Cash dividends declared
per share 0.55 0.51 0.47 0.43 0.39 0.35
Average common shares
and equivalents 27,951 28,242 28,294 28,307 28,323 28,329
Financial Data
Working Capital $236,674 $223,453 $250,064 $227,219 $251,486 $251,825
Total assets 702,604 747,643 745,659 688,651 615,038 547,997
Long-term obligations 102,047 103,240 106,306 107,517 106,147 105,946
Shareholders' equity $461,154 $452,835 $464,496 $427,008 $403,827 $362,800
The Company adopted SFAS #109 "Accounting for Income Taxes" during 1992 and
restated tax provisions in 1991, 1990 and 1986.
1984 earnings per share include a $.15 per share non-recurring tax benefit
from the reversal of all deferred taxes provided on DISC income prior to 1984.
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Eleven-year Summary of Operations (continued)
(In thousands except per share) 1987 1986 1985 1984 1983
Net sales $298,728 $251,212 $202,411 $193,190 $171,730
Cost of sales 138,587 117,997 99,427 97,048 85,631
Gross profit 160,141 133,215 102,984 96,142 86,099
Selling, general and
administrative expenses 98,730 87,058 66,409 62,777 57,579
Research and development
expenses 19,742 16,756 15,132 15,407 14,033
Restructuring charge - - - - -
Operating income 41,669 29,401 21,443 17,958 14,487
Other income/loss, net - - - - -
Interest income 2,234 3,066 3,403 4,145 3,129
Interest expense (3,432) (3,762) (3,300) (3,136) (3,355)
Income from continuing
operations before
income taxes 40,471 28,705 21,546 18,967 14,261
Provision for income taxes
excluding nonrecurring
tax benefit 10,040 10,538 5,357 5,121 3,824
Nonrecurring benefit - - - (4,002) -
Income from continuing
operations 30,431 18,167 16,189 17,848 10,437
Earnings (loss) from
discontinued operations 17,993 14,797 15,541 12,645 10,227
Income before extraordinary
item and cumulative effect
of change in accounting
principle 48,424 32,964 31,730 30,493 20,664
Extraordinary item-loss on
early extinguishment of debt - - - - -
Cumulative effect of change in accounting
for postretirement benefits - - - - -
Net income $48,424 $32,964 $31,730 $30,493 $20,664
Net income per common share:
Income from continuing
operations $1.07 $0.65 $0.59 $0.65 $0.38
Net income per common share 1.71 1.18 1.15 1.11 0.76
Cash dividends declared per share0.31 0.27 0.24 0.22 0.20
Average common shares and
equivalents 28,344 27,931 27,632 27,552 27,270
Financial Data
Working Capital $168,594 $165,421 $146,334 $121,075 $107,102
Total assets 452,387 369,414 326,903 283,517 259,700
Long-term obligations 6,378 12,094 13,446 10,630 10,545
Shareholders' equity $327,604 $283,547 $244,607 $214,289 $192,886
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Quarterly Results (Unaudited)
The Company's unaudited quarterly results are summarized below.
(In thousands, except per share data)
First Second Third Fourth
quarter quarter quarter quarter Year
1993
Net sales $105,189 $114,613 $111,854 $113,710 $445,366
Cost of sales 45,140 49,271 49,587 49,577 193,575
Gross profit 60,049 65,342 62,267 64,133 251,791
Selling, general and
administrative expenses 36,555 36,946 36,424 35,722 145,647
Research and development
expenses 8,587 9,010 8,652 8,703 34,952
Operating income 14,907 19,386 17,191 19,708 71,192
Interest (expense), net (2,217) (2,083) (1,968) (1,701) (7,969)
Income from continuing
operations before
income taxes 12,690 17,303 15,223 18,007 63,223
Provision for income taxes 2,855 3,893 3,425 4,052 14,225
Income from continuing
operations 9,835 13,410 11,798 13,955 48,998
Loss from discontinued
operations (9,083) (579) (1,189) - (10,851)
Extraordinary item - loss on early
extinguishment of debt - - - 3,544 3,544
Net income $ 752 $ 12,831 $ 10,609 $ 10,411 $ 34,603
Per share information
Income from continuing
operations $0.35 $0.48 $0.42 $0.50 $1.75
Net income $0.03 $0.46 $0.38 $0.37 $1.24
Weighted average common shares
outstanding 27,983 27,946 27,921 27,954 27,951
1992
Net sales $110,290 $108,300 $104,600 $103,998 $427,188
Cost of sales 49,268 52,829 45,534 47,831 195,462
Gross profit 61,022 55,471 59,066 56,167 231,726
Selling, general and
administrative expenses 34,837 35,868 35,608 36,388 142,701
Research and development
expenses 8,373 8,246 8,241 8,093 32,953
Operating income 17,812 11,357 15,217 11,686 56,072
Loss on sale of business - (2,415) - - (2,415)
Interest (expense), net (1,720) (1,785) (2,026) (2,273) (7,804)
Income from continuing
operations before
income taxes 16,092 7,157 13,191 9,413 45,853
Provision for income taxes 3,620 1,610 2,969 2,118 10,317
Income from continuing
operations 12,472 5,547 10,222 7,295 35,536
Earnings (loss) from discontinued
operations 1,149 (705) 2,735 (464) 2,715
Income before cum. effect of
change in accounting
principle 13,621 4,842 12,957 6,831 38,251
Cum. effect of change in
accounting for postretirement
benefits other than pensions 5,068 - - - 5,068
Net income $ 8,553 $ 4,842 $ 12,957 $ 6,831 $33,183
Per share information
Income from continuing
operations $0.44 $0.20 $0.36 $0.26 $1.26
Net income $0.30 $0.17 $0.46 $0.24 $1.17
Weighted average common shares
outstanding 28,360 28,292 28,207 28,108 28,242
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Investor Information
Registrar and Transfer Agent
The First National Bank of Boston
Shareholders Services Division
P.O. Box 644
Boston, Massachusetts 02102-0644
Annual Meeting
The Annual Meeting of Shareholders of Millipore Corporation will be held
at our Bedford Massachusetts Facility (80 Ashby Road) on Thursday, April
21, 1994 at 11 a.m.
Dividend Reinvestment
An automatic dividend reinvestment program is available to shareholders.
A descriptive brochure and authorization card are available on request.
Reports
In addition to our Annual Report, each shareholder will receive copies
of our three Quarterly Reports.
Form 10-K is filed annually with the Securities and Exchange Commission
and is now available on request from the Company. All inquiries should
be directed to:
John S. Glass
Director of Investor Relations
Millipore Corporation
80 Ashby Road
Bedford, Massachusetts 01730
(617) 275-9200
Common Stock
Millipore's Common Stock is traded on the New York Stock Exchange. Our
symbol is MIL. Stock price information is shown below.
Millipore Stock Prices
Stock price data from the New York Stock Exchange is based on high and
low sales prices. There were approximately 3,985 shareholders of record
as of December 31, 1993.
Range of Stock Prices Dividends Declared
Per Share
1993 1992 1993 1992
High Low High Low
First Quarter $35.50 $25.88 $42.00 $34.25 $0.13 $0.12
Second Quarter 32.38 26.50 39.50 33.00 0.14 0.13
Third Quarter 34.25 29.75 34.25 27.13 0.14 0.13
Fourth Quarter 40.25 32.75 38.00 30.00 0.14 0.13
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Exhibit (21)
SUBSIDIARIES OF MILLIPORE CORPORATION
Pursuant to Item 601, Paragraph 22, clause (ii) of Regulation S-K,
the following list excludes subsidiaries who conduct no business
operations or which have no significant assets.
COMPANY JURISDICTION
Millipore Asia Ltd. Delaware
Millipore Cidra, Inc. Delaware
Millipore Intertech, (V.I.), Inc. U.S. Virgin Is.
Millipore International Holding Company B.V. Netherlands
Millipore Japan Company L.L.C. Delaware
Millipore S.A./N.V. Belgium
Millipore (Canada) Ltd. Canada
Millipore (U.K.) Ltd. United Kingdom
Millipore S.A. France
Millipore Ireland B.V. Netherlands
Millipore GmbH West Germany
Millipore S.p.A. Italy
Millipore A.B. Sweden
Millipore A.G. Switzerland
Millipore A/S Denmark
Millipore Australia Pty. Ltd. Australia
Millipore GesmbH Austria
Millipore Iberica S.A. Spain
Millipore S.A. de C.V. Mexico
Millipore I.E.C., Ltda. Brazil
Millipore OY Finland
Millipore B.V. The Netherlands
Millipore Korea Ltd. Korea
Millipore China Ltd. Hong Kong
Millipore of New Hampshire, Inc. New Hampshire
Millicorp, Inc. Delaware
Minerva Insurance Corp. Ltd. Bermuda
Nihon Millipore Limited Japan
Biosyntech Biochemische
Synthesetechnik Gmbh Germany
Millipore Investment Holdings Ltd. Delaware
Sterimatics Corporation Massachusetts
Immunosystems Incorporated Maine
Waters Investments Limited Delaware
Waters Puerto Rico, Inc. Delaware
Extrel Corporation Pennsylvania
Extrel FTMS, Inc. Delaware
Biosearch, Inc. Massachusetts
Milliscope, Inc. Delaware
Millipore AS Norway
MSUB Ltd United Kingdom
Shallford Entity SDN BHD Malaysia
Exhibit (24)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Directors and
Officers of Millipore Corporation (the "Corporation"), do hereby constitute
and appoint John A. Gilmartin and Geoffrey Nunes and each of them
individually, their true and lawful attorneys and agents to execute on behalf
of the Corporation the Form 10-K Annual Report of the Corporation for the
fiscal year ended December 31, 1993, and all such additional instruments
related thereto which such attorneys and agents may deem to be necessary and
desirable to enable the Corporation to comply with the requirements of the
Securities Exchange Act of 1934, as amended, and any regulations, orders, or
other requirements of the United States Securities and Exchange Commission
thereunder in connection with the preparation and filing of said Form 10-K
Annual Report, including specifically, but without limitation of the
foregoing, power and authority to sign the names of each of such Directors
and Officers on his behalf, as such Director or Officer, as indicated below
to the said Form 10-K Annual Report or documents filed or to be filed as a
part of or in connection with such Form 10-K Annual Report; and each of the
undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue thereof.
SIGNATURE TITLE DATE
/s/ John A. Gilmartin Chairman, President February 10, 1994
John A. Gilmartin Chief Executive Officer
and Director
/s/ Charles D. Baker Director February 10, 1994
Charles D. Baker
____________________ Director February ____, 1994
Samuel C. Butler
/s/ Mark Hoffman Director February 10, 1994
Mark Hoffman
/s/ Gerald D. Laubach Director February 10, 1994
Gerald D. Laubach
<PAGE>
Power of Attorney
Page 2
SIGNATURE TITLE DATE
/s/ Steven Muller Director February 10, 1994
Steven Muller
/s/ Thomas O. Pyle Director February 10, 1994
Thomas O. Pyle
/s/John F. Reno Director February 10, 1994
John F. Reno
/s/ James L. Vincent Director February 10, 1994
James L. Vincent
/s/ Warren E. Wacker Director February 10, 1994
Warren E.C. Wacker
