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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 21, 2000
SEROLOGICALS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-26126 58-2152225
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(State of other (Commission file number) (IRS Employer
jurisdiction) Identification No.)
780 Park North Blvd.
Suite 110
Atlanta, Georgia 30021
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(Address of Principal executive offices) (Zip code)
Registrant's telephone number, including area code: (404) 296-5595
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On August 21, 2000, Serologicals Corporation and certain of its
subsidiaries ("Serologicals") sold substantially all of the long-term
assets of its Seramed Inc. subsidiary and related companies
(collectively, "Seramed"). Serologicals retained substantially all of
the working capital of Seramed. The sales price was $21.4 million
cash, which included the acquisition of certain components of working
capital totaling $1.1 million. The sale was made pursuant to an Asset
Purchase and Sale Agreement dated May 31, 2000, between Serologicals
and Aventis Bio-Services, Inc.
A copy of the press release issued by Serologicals on August 21,
2000 is attached hereto as Exhibit 99.1, and is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits
a) Financial statements of businesses acquired:
Not applicable
b) Pro forma financial information:
The required pro forma financial information is filed
herein.
c) Exhibits
Exhibit No. Description
2.1 Asset Purchase and Sale
Agreement dated May 31, 2000,
by and between Serologicals and
Aventis Bio-Services, Inc.
(Exhibit 2.1 to the Company's
Quarterly Report on Form 10-Q for
the period ended June 25, 2000 is
hereby incorporated by reference).
99.1 Press Release dated
August 21, 2000.
Serologicals Corporation
Pro Forma Consolidated Financial Statements of Serologicals Corporation
The following unaudited pro forma condensed consolidated financial
statements give effect to the sale of substantially all of the long-
term assets of Seramed, which occurred on August 21, 2000.
Serologicals retained substantially all of the working capital of
Seramed upon completion of the transaction. The unaudited pro forma
condensed consolidated statements of income were prepared as if the
sale had occurred as of the beginning of the periods presented (i.e.
December 28, 1998, the first day of Serologicals' fiscal year) and the
unaudited pro forma condensed balance sheet was prepared as if the sale
occurred as of June 25, 2000. These statements do not purport to
represent what the results of operations or financial position of
Serologicals would actually have been if the sale had occurred on the
dates referred to above or to be indicative of the future results of
operations or financial position of Serologicals. The unaudited pro
forma condensed consolidated financial statements should be read
together with the audited financial statements and notes thereto as
included in the Serologicals Corporation 1999 Annual Report on Form
10-K and the unaudited Quarterly Reports on Form 10Q for the periods
ended June 25, 2000 and March 26, 2000.
Serologicals Corporation
Pro Forma Condensed Consolidated Balance Sheet - Unaudited
June 25, 2000
($ in thousands)
ASSETS: (1)
Serologicals Pro Forma (1)
as Reported Adjustments Pro Forma
------------ ---------- ---------
Current Assets:
Cash and cash equivalents $ 2,136 $ 2,600 $ 4,736
Trade accounts receivable, net 25,640 - 25,640
Inventories 31,245 (1,106) 30,139
Other current assets 5,807 - 5,807
------- ------ ------
Total current assets 64,828 1,494 66,322
Property and equipment, net 32,707 (4,259) 28,448
Goodwill, net 38,283 (10,892) 27,391
Other, net 10,732 (3,780) 6,952
------- ------- -------
Total Assets $ 146,550 $ (17,437) $ 129,113
======= ====== =======
LIABILITIES AND STOCKHOLDERS EQUITY:
Current Liabilities:
Current maturities of
long-term debt and capital
lease obligations $ 2,553 $ - $ 2,553
Accounts payable 4,705 - 4,705
Accrued liabilities 9,991 1,392 (4) 11,383
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Total current liabilities 17,249 1,392 18,641
Long term debt and capital lease
obligations, less current
maturities 20,591 (18,800) (2) 1,791
Other liabilities 304 - 304
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Total Liabilities 38,144 (17,408) 20,736
Stockholders' Equity:
Common stock 259 - 259
Additional paid in capital 95,880 - 95,880
Retained earnings 32,631 (29) (5) 32,602
Accumulated other comprehensive
Income (364) - (364)
Less: Treasury stock at cost (20,000) - (20,000)
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Total Stockholders' Equity 108,406 (29) 108,377
------- ------ -------
Total Liabilities and
Stockholders' Equity $ 146,550 $ (17,437) $ 129,113
======= ======= =======
Serologicals Corporation
Pro Forma Condensed Consolidated Statement of Income (Loss) - Unaudited
For the Twelve Months Ended December 26, 1999
($ in thousands, except share and per share amounts)
(1) (1)
Serologicals Pro Forma
as Reported Adjustments Pro Forma
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Net Sales $ 129,744 $ (61,604) $ 68,140
Costs and expenses:
Cost of sales 94,157 (59,283) 34,874
Selling, general and
administrative expenses 18,041 (202) 17,839
Other expense, net 4,513 (2,914) 1,599
Interest expense, net 543 (486) (2) 57
Special charges 33,969 (24,873) (3) 9,096
Income (loss) before ------- ------- ------
income taxes (21,479) 26,154 4,675
Provision (benefit) for
income taxes (6,017) 7,546 (2) 1,529
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Net income (loss) $ (15,462) $ 18,608 $ 3,146
======== ======= ========
Net income (loss) per
common share:
Basic $ (0.65) $ 0.78 $ 0.13
Diluted $ (0.65) $ 0.78 $ 0.13
Weighted average shares:
Basic 23,617,489 - 23,617,489
Diluted 23,617,489 1,020,530 (5) 24,638,019
Serologicals Corporation
Pro Forma Consolidated Statement of Income - Unaudited
For the Six Months Ended June 25, 2000
($ in thousands, except share and per share amounts)
(1)
Serologicals Pro Forma (1)
as Reported Adjustments Pro Forma
------------ ----------- ----------
Net Sales $ 78,232 $ (38,228) $ 40,004
Costs and expenses:
Cost of sales 56,320 (37,105) 19,215
Selling, general and
administrative expenses 10,879 (286) 10,593
Other expense, net 1,546 (853) 693
Interest expense, net 886 (799)(2) 87
Special charges 1,761 (1,761)(3) -
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Income before income taxes 6,840 2,576 9,416
Provision for income taxes 2,462 927 (2) 3,389
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Net income $ 4,378 1,649 $ 6,027
======= ======= =======
Net income per common share:
Basic $ 0.19 $ 0.07 $ 0.26
Diluted $ 0.19 $ 0.07 $ 0.26
Weighted average shares:
Basic 22,956,246 - 22,956,246
Diluted 23,428,237 - 23,428,237
Serologicals Corporation
Notes to Pro Forma Condensed Consolidated Financial Statements
1. These unaudited pro forma financial statements present results of
operations as if the sale of Seramed occurred as of December 28,
1998 (the first day of Serologicals' fiscal year) and present
financial position as if the sale occurred on June 25, 2000. The
pro forma adjustments include the elimination of the operating
results of Seramed for the periods presented, as well as additional
adjustments described below. The gross cash proceeds from the
sale totaled $21.4 million, which included the acquisition of
certain components of working capital totaling $1.1 million.
2. Debt Repayment and Interest Costs
The pro forma financial statements reflect, for the periods
presented, the interest savings resulting from the repayment of
debt using the net cash proceeds of approximately $18.8 million
from the divestiture of Seramed. Serologicals would have reported
net interest expense of $87,000 for the first half of 2000 and
$57,000 for 1999 assuming the cash proceeds were used to pay down
the outstanding bank borrowings. The tax effect of the reduction
in interest expense was additional tax expense of $288,000 for the
first six months of 2000 and $159,000 for the year ended December
26, 1999.
3. Special Charges
The pro forma adjustment to "Special charges" for the year
ended December 26, 1999 represents the elimination of a $24.9 million
asset impairment charge recorded for Seramed to write down the
goodwill balance related to Seramed. The pro forma adjustment to
"Special charges" for the six months ended June 25, 2000 represents
the elimination of an additional asset impairment charge related to
Seramed, as well as costs associated with the divestiture of
Seramed.
4. Liabilities
In connection with the sale, Serologicals recorded liabilities
totaling approximately $1.4 million for certain costs related to
the transaction, including legal fees, investment banking fees,
costs of tail liability insurance, and other costs. In accordance
with Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of", $1.1 million of this total was
recognized as a reduction to the carrying amount of the assets
being sold during the second quarter of 2000.
5. Loss on Sale
The pro forma balance sheet reflects a charge to retained earnings
of $29,000 representing the net loss on the sale of Seramed, Inc.
The opening retained earnings balance includes a $24.9 million pre-
tax charge recorded during 1999 to write down the assets of the
business to estimated fair market value, as well as a $1.8 million
pretax charge recorded during the first half of 2000, of which
$276,000 represented a write-down of the assets to fair value less
cost to sell, with the balance representing additional costs
associated with the divestiture.
6. Earnings per share
The diluted earnings per share calculation includes the following
adjustments for the year ended December 26, 1999: (i) weighted
shares outstanding include the dilutive effect of an additional
1,020,000 common stock equivalents that were originally excluded
from the calculation as the effect of the additional shares would
have been anti-dilutive due to the net loss incurred, and (ii) net
income is increased by adding back $16,000 (net of tax) of interest
expense on convertible notes that are assumed to be converted to
common stock.
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.
Serologicals Corporation
(Registrant)
Date: August 31, 2000 By: /s/ Peter J. Pizzo, III
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Peter J. Pizzo, III
Vice President, Finance and
Chief Financial Officer
