<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM 8-K/A
Filed pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
DATE OF REPORT: APRIL 12, 1999
O. I. CORPORATION
(Exact name of registrant as specified in its charter)
OKLAHOMA
(State of Incorporation)
0-6511 73-0728053
(Commission file number) (IRS Employer Identification No.)
151 GRAHAM ROAD, BOX 9010 77842-9010
COLLEGE STATION, TEXAS (Zip Code)
(Address of principal executive offices)
(409) 690-1711
-------------------------------------------
(Registrant's Telephone Number, including area code)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits, or other portions of its Current Report on Form 8-K Dated
February 12, 1999 as set forth the pages attached hereto:
(List all such items, financial statements, exhibits or other portions
amended)
1. Amendment of "Item 7.A Financial Statements of Business
Acquired", to read in its entirety as enclosed.
2. Amendment of "Item 7.B Unaudited Pro Forma Combined Financial
Information", to read in its entirety as enclosed.
3. Amendment of "Item 7.C" to read in its entirety as enclosed.
This document contains 23 pages.
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF GENERAL ANALYSIS CORPORATION
Independent Auditor's Report
Consolidated Balance Sheets as of June 30, 1998 and 1997
Consolidated Statement of Changes in Stockholders'
(Deficiency) for the years ended June 30, 1998 and 1997
Consolidated Statements of Operations for the years ended June
30, 1998 and 1997
Consolidated Statements of Cash Flows for the years ended June
30, 1998 and 1997
Notes to Consolidated Financial Statements
Unaudited Consolidated Balance Sheet as of December 31, 1998
Unaudited Consolidated Statement of Operations for the six
months ended December 31, 1998
(b) UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Introduction
Unaudited Pro Forma Combined Balance Sheet at December 31,
1998
Unaudited Pro Forma Combined Statement of Income for the year
ended December 31, 1998
Notes to Unaudited Pro Forma Combined Financial Statements
(c) EXHIBITS
2.1 Asset Purchase Agreement between O.I. Corporation and
General Analysis Corporation, dated as of January 20,
1999.
2.2 First Amendment to the Asset Purchase Agreement,
dated as of January 27, 1999.
23.1 Consent of Schwartz & Hofflich LLP
99.1 Press release of O.I. Corporation regarding
acquisition of General Analysis Corporation, dated as
of January 28, 1999.
<PAGE> 3
INDEPENDENT AUDITOR'S REPORT
The Board of Directors
General Analysis Corporation
Norwalk, Connecticut
We have audited the accompanying consolidated balance sheets of General Analysis
Corporation as of June 30, 1998 and 1997, and the related consolidated
statements of operations, shareholders' (deficiency), and cash flows for the
years then ended. 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 did not audit the financial
statements of G.A.C. Europe Limited and G.A.C. Asia-Pacific PTE, Ltd.,
wholly-owned subsidiaries, for the year ended June 30, 1998 and 1997, which
statements as of June 30, 1998, reflect total assets of $26,697 and $52,481,
respectively, and total revenues of $102,628 and $127,124, respectively, for the
year then ended. Those statements were audited by other auditors whose reports
have been furnished to us, and our opinion, insofar as it relates to data
included for G.A.C. Europe Limited and G.A.C. Asia-Pacific PTE, Ltd., is based
solely on the report of the other auditors.
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 from
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 and the reports of other auditors
provides a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of General Analysis Corporation as of June
30, 1998 and 1997, and the consolidated results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that General
Analysis Corporation will continue as a going concern. As more fully described
in Note 1, the Company has incurred recurring operating losses and has a working
capital deficiency. In addition, the Company has not complied with certain loan
agreements with its bank. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. (Management's plans in regard
to these matters are described in Note 1).
Schwartz & Hofflich LLP
October 31, 1998
<PAGE> 4
GENERAL ANALYSIS CORPORATION
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30,
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,000 $ 90,000
Accounts receivable - trade
(net of allowance of $16,000 and $4,000) 565,000 974,000
Inventories 664,000 1,019,000
Prepaid expenses and other current assets 42,000 56,000
------------ ------------
TOTAL CURRENT ASSETS 1,277,000 2,139,000
Property and equipment, net 153,000 200,000
Other assets, net 16,000 52,000
------------ ------------
TOTAL ASSETS $ 1,446,000 $ 2,391,000
============ ============
LIABILITIES AND STOCKHOLDERS' (DEFICIENCY)
CURRENT LIABILITIES
Notes payable $ 825,000 $ 925,000
Accounts payable and accrued expenses 885,000 899,000
Deferred revenue 543,000 416,000
Deferred compensation 333,000 180,000
------------ ------------
TOTAL CURRENT LIABILITIES 2,586,000 2,420,000
DEFERRED COMPENSATION, NONCURRENT 0 78,000
------------ ------------
TOTAL LIABILITIES 2,586,000 2,498,000
------------ ------------
STOCKHOLDERS' (DEFICIENCY)
Common stock, no par value: 1,000,000 shares authorized,
909,400 and 804,400 issued and outstanding in 1998 and 1997 2,223,000 2,222,000
Accumulated deficit (3,262,000) (2,236,000)
Foreign currency translation adjustment (98,000) (90,000)
Treasury stock, at cost (3,000) (3,000)
------------ ------------
TOTAL STOCKHOLDERS' (DEFICIENCY) (1,140,000) (107,000)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) $ 1,446,000 $ 2,391,000
============ ============
</TABLE>
See independent auditor's report and notes to consolidated financial statements
2
<PAGE> 5
GENERAL ANALYSIS CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' (DEFICIENCY)
FOR THE YEARS ENDED JUNE 30, 1998 AND 1997
<TABLE>
<CAPTION>
Foreign
Currency
Number Accumulated Translation Treasury
of Shares Amount Deficit Adjustment Stock
------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
BALANCE, JULY 1, 1996 804,400 $ 2,222,000 $ (2,000,000) $ (72,000) $ (3,000)
Net loss (236,000)
Foreign currency translation
adjustment (18,000)
------------- -------------- -------------- --------------- --------------
BALANCE, JUNE 30, 1997 804,400 2,222,000 (2,236,000) (90,000) (3,000)
Sale of common stock 105,000 1,000
Net loss (1,026,000)
Foreign currency translation
adjustment (8,000)
------------- -------------- -------------- --------------- --------------
BALANCE, JUNE 30, 1998 909,400 $ 2,223,000 $ (3,262,000) $ (98,000) $ (3,000)
============= ============== ============== =============== ==============
</TABLE>
See independent auditor's report and notes to consolidated financial statements
3
<PAGE> 6
GENERAL ANALYSIS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30,
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
REVENUES
Equipment sales $ 2,482,000 $ 3,980,000
Field support sales 1,389,000 1,500,000
------------ ------------
TOTAL REVENUES 3,871,000 5,480,000
------------ ------------
COST OF SALES
Cost of equipment sales 1,307,000 1,562,000
Cost of field support sales 1,277,000 1,111,000
------------ ------------
TOTAL COST OF SALES 2,584,000 2,673,000
------------ ------------
GROSS PROFIT 1,287,000 2,807,000
------------ ------------
OPERATING EXPENSES
Selling 1,238,000 1,754,000
General and administrative 373,000 499,000
Research and development 646,000 745,000
------------ ------------
TOTAL OPERATING EXPENSES 2,257,000 2,998,000
------------ ------------
LOSS FROM OPERATIONS (970,000) (191,000)
OTHER INCOME (EXPENSES)
Interest income 0 2,000
Interest expense (70,000) (69,000)
Foreign currency gains 19,000 26,000
------------ ------------
Loss before provision for income taxes (1,021,000) (232,000)
Provision for income taxes 5,000 4,000
------------ ------------
NET LOSS $ (1,026,000) $ (236,000)
============ ============
</TABLE>
See independent auditor's report and notes to consolidated financial statements
4
<PAGE> 7
GENERAL ANALYSIS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30,
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS $ (1,026,000) $ (236,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 75,000 84,000
Changes in operating assets and liabilities:
Accounts receivable, trade 409,000 (193,000)
Inventories 355,000 134,000
Prepaid expenses and other current assets 14,000 27,000
Deferred tax assets (1,332,000) (783,000)
Accounts payable and accrued expenses (14,000) 97,000
Deferred compensation 75,000 0
Deferred revenue 127,000 21,000
Deferred tax liability 1,332,000 783,000
------------ ------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 15,000 (66,000)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (47,000) (51,000)
Other assets 36,000 2,000
Book value of assets disposed of 3,000 0
------------ ------------
NET CASH (USED) BY INVESTING ACTIVITIES (8,000) (49,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Unrelated party repayments (100,000) 0
Unrelated party borrowings 0 100,000
Proceeds from issuance of common stock 1,000 0
------------ ------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (99,000) 100,000
Effect of exchange rate changes on cash 8,000 18,000
------------ ------------
Net increase (decrease) in cash and cash equivalents (84,000) 3,000
Cash and cash equivalents at beginning of year 90,000 87,000
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 6,000 $ 90,000
============ ============
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
Interest paid $ 65,000 $ 75,000
============ ============
Taxes paid $ 5,000 $ 2,000
============ ============
</TABLE>
See independent auditor's report and notes to consolidated financial statements
5
<PAGE> 8
GENERAL ANALYSIS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
NOTE 1 - BASIS OF PRESENTATION
General Analysis Corporation and its subsidiaries (the "Company")
are engaged in the manufacture, sale and rental of proprietary
infrared analytical instruments primarily for use as continuous
monitoring systems in the beverage and environmental/industrial
processing industries. The Company sells primarily in the United
States, Canada, Latin America, Europe and Asia. The following is a
summary of its significant accounting principles:
Consolidation
The consolidated financial statements include the accounts of
General Analysis Corporation and its wholly owned foreign
subsidiaries, G.A.C. Europe Limited and G.A.C. Asia-Pacific PTE,
Ltd. (Singapore). All significant intercompany accounts and
transactions have been eliminated. Diatrac Holdings, Inc., a 35%
owned affiliate is a development stage company that is accounted
for by the equity method. During 1998, the investment in Diatrac
Holdings, Inc. was written off.
In November of 1997, G.A.C. Europe Limited terminated its
operations, in the United Kingdom.
Going concern
The Company has incurred recurring operating losses, has a working
capital deficiency and has not complied with certain loan
agreements with banks (see Note 5). These conditions raise
substantial doubt about the Company's ability to continue as a
going concern. The Company has implemented a cost-cutting program
and is actively pursuing new sales opportunities in the United
States and abroad. Management believes the Company's most likely
source of liquidity will be the sale of one of its product lines or
a complete sale of the Company. To that end, management is actively
negotiating the sale of the Company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period.
Revenue recognition
Revenue from equipment sales is recognized at the date of shipment.
Deferred revenue represents equipment rental, service contract and
warranty revenues and is recognized over the term of the applicable
agreement.
Cash equivalents
Cash and cash equivalents include cash on hand and investments that
are readily convertible to cash and have original maturities of
three months or less from the date acquired.
6
<PAGE> 9
GENERAL ANALYSIS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Inventories
Inventories are stated at the lower of cost or market determined on
the first-in, first-out method.
Property and equipment
Rental equipment, furniture and equipment are recorded at cost net
of accumulated depreciation. Depreciation is computed using
straight-line and accelerated methods over the assets estimated
useful lives, which range from four to seven years.
Other assets
Other assets include organization costs and patents which are
amortized on a straight-line basis over five and seventeen years.
Income taxes
The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes". This statement provides for a liability approach
under which deferred income taxes are provided based upon enacted
tax laws and rates applied to the periods in which the taxes become
payable.
Fair value
Cash and cash equivalents, accounts receivable and accounts
payable: The carrying amounts reported in the balance sheet for
cash and cash equivalents, accounts receivable and accounts payable
approximate their fair value.
Foreign Translation
The Company's functional currency is the U.S. dollar. The
Functional currencies of the foreign subsidiaries is both the
British pound and the Singapore dollar. The monetary assets and
liabilities of the foreign entities have been remeasured at the
respective exchange rates as of June 30, 1998 and 1997. Nonmonetary
items were remeasured at historical rates. Income and expense
accounts were remeasured at the average rates in effect during the
year. Previous remeasurement adjustments were recognized in the
year of occurrence and are included as a component of stockholders'
equity.
NOTE 3 - INVENTORIES
Inventories consist of the following at June 30,:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Raw materials $ 422,000 $ 543,000
Work-in-process 240,000 196,000
Finished goods 90,000 288,000
------------ ------------
$ 752,000 $ 1,027,000
Less, allowance
for obsolescence and slow moving (88,000) (8,000)
------------ ------------
$ 664,000 $ 1,019,000
============ ============
</TABLE>
7
<PAGE> 10
GENERAL ANALYSIS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following at June 30,:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Rental equipment $ 249,000 $ 245,000
Furniture and equipment 433,000 545,000
------------ ------------
682,000 790,000
Accumulated depreciation (529,000) (590,000)
------------ ------------
$ 153,000 $ 200,000
============ ============
</TABLE>
Depreciation expense amounted to $75,000 and $83,000 for the years
ended June 30, 1998 and 1997, respectively.
NOTE 5 - NOTES PAYABLE
Notes payable to a bank ($650,000) are pursuant to a $150,000 line
of credit and a $500,000 line of credit, both of which were payable
on demand. At this time, the Company is unable to repay the
outstanding amounts under these lines of credit and is in default,
on these loan amounts. Borrowings under these facilities are
secured by a lien on all the Company's assets. Interest rates
ranged from 6.69% to 9%. See Note 11 in connection with notes
payable to related parties.
NOTE 6 - STOCK OPTION PLANS
The Company has stock option plans that provide for granting of
options to officers, directors and employees, at a price that
approximates the fair market value of the stock on the date of the
grant.
Options granted under a 1993 Stock Option Plan are exercisable
cumulatively in four equal annual installments beginning one year
after the date of grant. Options must be exercised within five
years of the date of grant.
At June 30, 1998, the Company has reserved 49,000 shares of the
Company's common stock to be issued under stock option plans.
8
<PAGE> 11
GENERAL ANALYSIS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
NOTE 6 - STOCK OPTION PLANS (cont.)
Following is a summary of transactions for shares under option:
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Outstanding, beginning of year $ 16,000 $ 16,000
Granted 0 0
Exercised 0 0
Canceled 12,000 0
------------ ------------
Outstanding, end of year (at prices ranging from
$10 to $12.50 share) 4,000 16,000
============ ============
Exercisable, end of year $ 3,000 $ 11,000
============ ============
</TABLE>
NOTE 7 - DEFERRED COMPENSATION
During fiscal 1989, the Company entered into an agreement with the
former President of the Company which specified certain payments be
made in the event of termination of his employment, provided he
does not subsequently compete with the Company as defined in the
agreement. The payments will continue for five years and are based
on the date employment ceases and the then current salary level.
Payments under such agreement commenced on July 1, 1994.
NOTE 8 - INCOME TAXES
The provision for income taxes consisted of the following for the
years ended June 30:
<TABLE>
<CAPTION>
1998 1997
--------------------------------- ---------------------------------
Current Deferred Total Current Deferred Total
<S> <C> <C> <C> <C> <C> <C>
United States:
Federal $ 0 $ 0 0 $ 0 $ 0 0
State 5,000 0 5,000 4,000 0 4,000
--------- --------- --------- --------- --------- ---------
$ 5,000 $ 0 $ 5,000 $ 4,000 $ 0 $ 4,000
========= ========= ========= ========= ========= =========
</TABLE>
No taxes are due or payable in foreign jurisdictions.
Net operating loss carryforwards of $2,058,000 in the United States
expire in 2013. Net operating loss carryforwards, related to G.A.C.
Asia -Pacific PTE, Ltd. (Singapore) and G.A.C. Europe Limited of
$627,000 and $236,000, respectively, at June 30, 1998, do not
expire.
9
<PAGE> 12
GENERAL ANALYSIS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
NOTE 8 - INCOME TAXES (cont.)
Significant components of the Company's deferred tax liabilities
and assets at June 30 are as follows:
<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
Deferred tax assets:
Deferred compensation $ 136,000 $ 103,000
Deferred revenue 22,000 22,000
R & D tax credit carryforward 99,000 99,000
Other 0 0
Benefits of net operating losses - Domestic 843,000 403,000
Benefits of net operating losses - Singapore 169,000 131,000
Benefits of net operating losses - UK 63,000 25,000
------------- -------------
Deferred tax assets 1,332,000 783,000
Less, valuation allowance for deferred tax assets 1,332,000 783,000
------------- -------------
Net deferred tax assets 0 0
------------- -------------
Net $ 0 $ 0
============= =============
</TABLE>
NOTE 9 - DEFINED CONTRIBUTION PLAN
The Company sponsors a defined contribution plan covering
substantially all full-time employees in the United States. The
Company matches employee contributions of up to 6% of compensation
at a rate of 25%. Expenses recognized under the plan approximated
$8,151 and $11,000, respectively, for the years ended June 30, 1998
and 1997.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
The Company leases principally all of its facilities under
noncancellable operating leases for varying periods. Leases that
expire generally are expected to be renewed or replaced by other
leases.
At June 30, 1998 future minimum rental payments applicable to these
noncancellable leases were as follows:
<TABLE>
<S> <C>
1999 $ 8,500
============
</TABLE>
Rent expense for the years ended June 30, 1998 and 1997 was
$139,000 and $186,000, respectively.
10
<PAGE> 13
GENERAL ANALYSIS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
NOTE 11 - RELATED PARTY TRANSACTIONS
The Company leases office space from a corporation controlled by a
stockholder of the Company. Rental payments to such corporation
aggregated $108,000 and $91,000 for the years ended June 30, 1998
and 1997, respectively. The lease agreement expired November 30,
1996 and the Company is presently on a month to month basis.
As of June 30, 1998 and 1997 the Company is obligated on a note to
a former officer in the amount of $175,000. The note bears interest
at the rate of 8.25% per annum and is payable on demand.
NOTE 12 - YEAR 2000 (UNAUDITED)
Like other business organizations and individuals around the world,
the Company could be adversely affected if the computer systems it
uses and those used by the Company's vendors and other service
providers do not properly process date-related information and data
from and after January 1, 2000. This is commonly known as the "Year
2000 issue". Management has assessed its computer systems not to be
year 2000 complaint and is taking steps to obtain new software and
hardware that is year 2000 complaint.. In addition, management is
assessing the systems compliance of its vendors and providers.
Based on the information available to management, the Company's
vendors and service providers are taking steps that they believe
are reasonably designed to address the Year 2000 issue with respect
to the computer systems, that they use. At this time, however,
there can be no assurance that these steps will be sufficient, and
the failure of a timely completion of all necessary procedures
could have a material adverse effect on the Company's operations.
Management will continue to monitor the status of its exposure to
this issue.
11
<PAGE> 14
GENERAL ANALYSIS CORPORATION
Unaudited Consolidated Balance Sheet
December 31, 1998
(In thousands)
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 12
Accounts receivable 383
Inventories 595
Other current assets 25
---------
Total current assets 1,015
Property, plant and equipment, net 125
Other assets 14
Total assets $ 1,154
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 854
Notes payable 825
Deferred compensation 333
Accrued liabilities 273
---------
Total current liabilities 2,285
---------
Deferred income taxes 0
---------
Commitments and contingencies
Stockholders' equity:
Common stock 2,223
Foreign currency translation adjustment (100)
Treasury stock (3)
Retained earnings (3,251)
---------
Net stockholders' equity (1,131)
---------
Total liabilities and stockholders' equity $ 1,154
=========
</TABLE>
<PAGE> 15
GENERAL ANALYSIS CORPORATION
Unaudited Consolidated Statement of Operations
For the six months ended December 31, 1998
(In thousands)
<TABLE>
<S> <C>
Net revenue $ 1,796
Cost of revenue 936
---------
Gross profit 860
Selling, general & administrative expenses 626
Research and development expenses 182
---------
Operating income (loss) 52
Other income(expense)
Interest income 0
Interest expense (37)
Other income 0
---------
Income (loss) before income taxes 15
Provision for income taxes 0
---------
Net income $ 15
=========
</TABLE>
<PAGE> 16
O.I. CORPORATION AND GENERAL ANALYSIS CORPORATION
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma financial information, including the notes
thereto, give effect to the acquisition of General Analysis Corporation (GAC) by
O. I. Corporation (O.I.) and should be read in conjunction with the O.I. 1998
Annual Report on Form 10-K as filed with the Securities and Exchange Commission
and the GAC financial statements included within this report on Form 8-K.
The pro forma combined financial results are based on the purchase method of
accounting. The unaudited pro forma consolidated condensed balance sheet at
December 31, 1998, assumes the acquisition was consummated as of December 31,
1998 and the unaudited pro forma consolidated condensed statement of income
assumes the acquisition was consummated as of the beginning of the period
presented.
The pro forma data is presented for informational purposes only and is not
necessarily indicative of the operating results or financial position that would
have occurred had the acquisition been consummated at the dates indicated, nor
is such data necessarily indicative of future operating results or financial
position. There is no assurance that similar results will be achieved in the
future.
<PAGE> 17
O.I. CORPORATION AND GENERAL ANALYSIS CORPORATION
Unaudited Pro Forma Combined Balance Sheet
December 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Historical Pro
---------------------------- Adjustments Forma
O. I. GAC (Note 1) Combined
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,537 $ 12 $ (261)(a) $ 1,288
Investments 2,772 0 0 2,772
Accounts receivable 3,361 383 0 3,744
Investment in sales-type leases 459 0 0 459
Inventories 4,917 595 (276)(b) 5,236
Deferred income tax assets 538 0 0 538
Other current assets 302 25 (25)(d) 302
------------ ------------ ------------ ------------
Total current assets 13,886 1,015 (562) 14,339
Property, plant and equipment, net 3,620 125 (82)(c) 3,663
Investment in sales-type leases, net of current 576 0 0 576
Other assets 747 14 1,083 (e) 1,844
Total assets $ 18,829 $ 1,154 $ 439 $ 20,422
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 1,198 $ 854 $ 0 $ 2,052
Notes payable 0 825 (825)(f) 0
Deferred compensation 0 333 (333)(g) 0
Accrued liabilities 2,659 273 466 (h) 3,398
------------ ------------ ------------ ------------
Total current liabilities 3,857 2,285 (692) 5,450
------------ ------------ ------------ ------------
Deferred income taxes 228 0 0 228
------------ ------------ ------------ ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock 0 0 0 0
Common stock 410 2,223 (2,223)(i) 410
Additional paid-in capital 4,374 0 0 4,374
Foreign currency translation adjustment 0 (100) 100 (i) 0
Treasury stock (3,328) (3) 3 (i) (3,328)
Retained earnings 13,288 (3,251) 3,251 (i) 13,288
------------ ------------ ------------ ------------
Net stockholders' equity 14,744 (1,131) 1,131 14,744
------------ ------------ ------------ ------------
Total liabilities and stockholders' equity $ 18,829 $ 1,154 $ 439 $ 20,422
============ ============ ============ ============
</TABLE>
<PAGE> 18
O.I. CORPORATION AND GENERAL ANALYSIS CORPORATION
Unaudited Pro Forma Combined Statement of Income
Twelve months ended December 31, 1998
(In thousands)
<TABLE>
<CAPTION>
Historical
----------------------------
Adjustments Pro Forma
O.I. GAC (Note 1) Combined
<S> <C> <C> <C> <C>
Net revenue $ 23,684 $ 3,628 $ 0 $ 27,312
Cost of revenue 12,765 2,265 0 15,030
------------ ------------ ------------ ------------
Gross profit 10,919 1,363 0 12,282
Selling, general & administrative expenses 7,093 1,292 97(j) 8,482
Research and development expenses 1,458 566 0 2,024
------------ ------------ ------------ ------------
Operating income (loss) 2,368 (495) (97) 1,776
Other income(expense)
Interest income 436 0 0 436
Interest expense 0 (75) 75(k) 0
Other income 55 0 0 55
------------ ------------ ------------ ------------
Income (loss) before income taxes 2,859 (570) (22) 2,267
Provision for income taxes (1,037) (5) 8(l) (1,034)
------------ ------------ ------------ ------------
Net income $ 1,822 $ (575) $ (14) $ 1,233
============ ============ ============ ============
Weighted average number of shares, basic 3,560,818 3,560,818
Basic earnings per share $ 0.51 $ 0.35
============ ============
Weighted average number of shares, diluted 3,641,434 3,641,434
Diluted earnings per share $ 0.50 $ 0.34
============ ============
</TABLE>
<PAGE> 19
O.I. CORPORATION AND GENERAL ANALYSIS CORPORATION
Notes to Unaudited Pro Forma Combined Balance Sheet and
Combined Statement of Income
NOTE 1: PRO FORMA ADJUSTMENTS
The unaudited pro forma combined balance sheet and combined statement
of income have been prepared to reflect the acquisition of certain assets of GAC
by O.I. for an aggregate price of approximately $1,840,000. The purchase price
is comprised of $260,634 from available cash resources and assumed liabilities.
Pro forma adjustments are made to reflect:
(a) cash consideration paid by O.I. in connection with the
acquisition;
(b) the portion of inventory of GAC not acquired by O.I. and the
portion reclassed from PP&E to conform to the O.I.
presentation in the accompanying unaudited proforma financial
statements;
(c) the portion of inventory of GAC reclassified to conform to the
O.I. presentation in the accompanying unaudited proforma
financial statements;
(d) the portion of prepaid assets of GAC not acquired by O.I;
(e) the estimated intangibles and goodwill incurred in the GAC
acquisition, with a useful life ranging from 5 to 15 years.
The purchase price allocation is preliminary. Thus, as
additional information concerning the value of assets acquired
and liabilities assumed becomes known, adjustments will be
made to the purchase price allocation;
(f) liabilities discounted by certain creditors with the remaining
balance paid by O.I. in connection with the acquisition;
(g) liabilities not assumed by O.I.;
(h) liabilities to be paid by O.I. in connection with the
acquisition;
(i) to eliminate GAC stockholders' equity accounts;
(j) increased amortization expense for intangibles related to the
acquisition of GAC, amortized over a period of 5 to 15 years;
(k) reduced interest expense resulting from the payment of debt in
connection with the acquisition;
(l) the tax effect of the aforementioned pro forma adjustments
based on the consolidated O.I. Corporation tax rate.
<PAGE> 20
NOTE 2: GAC HISTORICAL INFORMATION
The historical financial statements of GAC at December 31, 1998 include an
inventory write-down of $350,000, $175,000 of which is included in cost of sales
and $175,000 of which is included in R&D expense. The inventory write-downs are
expected to be unusual and nonrecurring because of their magnitude and because
O.I. Corporation is only purchasing such inventory that it believes is usable in
the normal course of business. However, the elimination of such adjustments is
not permitted under the rules for preparation of pro forma financial
information.
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
O.I. CORPORATION
---------------------------------------
(Registrant)
Date: April 12, 1999 /s/ Julie A. Wright
---------------------------------------
Julie A. Wright, Controller
<PAGE> 22
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
2.1 Asset Purchase Agreement between O.I. Corporation and General
Analysis Corporation, dated as of January 20, 1999.
2.2 First Amendment to the Asset Purchase Agreement, dated as of
January 27, 1999.
23.1 Consent of Schwartz & Hofflich LLP
99.1 Press release of O.I. Corporation regarding acquisition of
General Analysis Corporation, dated as of January 28, 1999.
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 33-24505 and No. 33-26209 and No. 33-66822) of O. I.
Corporation of our opinion dated October 31, 1998 relating to the financial
statements of General Analysis Corporation for the twelve months ended June 30,
1998 and 1997 appearing within Item 7(a) of O. I. Corporation's Current Report
on Form 8-K dated April 12, 1999.
Schwartz & Hofflich LLP
