SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report: June 11, 1999
HAUSER, INC.
(Exact name of Registrant as specified in its charter)
Colorado (State or other jurisdiction of incorporation)
0-17174 (Commission File Number)
84-0926801 (I.R.S. Employer Number)
5555 Airport Boulevard
Boulder, Colorado 80301
(Address of principal executive office)
(303) 443-4662 (Registrant's telephone number, including area code)
<PAGE>
Item 2. Acquisition or Disposition of Assets
Pursuant to an Agreement and Plan of Merger dated December 8, 1998 (the
"Merger Agreement"), Hauser, Inc., a Colorado corporation ("Hauser") completed
a merger on June 11, 1999, with three subsidiaries (collectively the
"Contributed Subsidiaries") of Zuellig Group N.A., Inc. ("ZGNA") and Zuellig
Botanicals, Inc. ("ZBI"). Two subsidiaries of ZGNA, Wilcox Drug Company,
Inc., a Delaware corporation, and ZetaPharm, Inc., a New York corporation, and
one subsidiary of ZBI, Zuellig Botanical Extracts, Inc., a Delaware
Corporation, merged with three wholly-owned subsidiaries of Hauser which were
created for the purpose of the merger. The Contributed Subsidiaries were the
surviving corporations and became wholly-owned subsidiaries of Hauser as a
result of the merger. There was no prior relationship between ZGNA, ZBI, the
Contributed Subsidiaries and Hauser or any of its officers or directors or
their associates.
In consideration for the stock of the Contributed Subsidiaries, Hauser
shareholders authorized the issuance a total of 10,061,394 shares of common
stock to ZGNA and ZBI, which shares constitute 49% of the outstanding shares
of the Company. As part of the merger, Volker Wypyszyk, President of ZGNA,
became a Co-Chief Executive Officer with Dean P. Stull, and Hauser's Board of
Directors was increased from six to nine directors comprised of three
continuing Hauser directors, three ZGNA representatives and three new
independent directors.
The manner of the merger, a description of the businesses of the Contributed
Subsidiaries, further details about the consideration Hauser paid in the
merger, the determination of the amount of such consideration, and further
information about the terms of the merger transaction are contained in the
Definitive Proxy Statement filed on May 11, 1999. The description of the
Merger Agreement, which is filed as an exhibit to the Definitive Proxy
Statement, does not purport to be complete and is qualified in its entirety by
the express terms and provisions of the Merger Agreement.
Item 5. Other Events
On June 11, 1999, Hauser secured financing from Wells Fargo Bank, NA to
provide a $35 million line of credit and a $10 million fixed asset line in
support of the merged companies. Hauser will assume approximately $21 million
of the Contributed Subsidiaries' bank debt.
On June 11, 1999, Hauser's shareholders approved a reverse split of Hauser's
common stock with an exchange ratio of 4 to 1. The reverse stock split was
necessary to meet the NASDAQ minimum bid price on the closing date of the
merger for listing of Hauser's stock on the NASDAQ National Market System and
became effective as of the close of business June 11, 1999.
Item 7. Financial Statements and Exhibits
The required financial statements of the businesses acquired pursuant to the
merger described above and the pro forma financial information relative to the
acquired businesses as required by Item 2 will be filed by amendment not later
than 60 days after June 26, 1999.
(c) Exhibits
Exhibit Index:
Exhibit 2.1 - Agreement and Plan of Merger
Incorporated by reference as Exhibit 2.1 to Form 10-Q dated October 31, 1998,
and amended as Appendix B to Definitive Proxy Statement dated May 11, 1999
Exhibit 2.2 - Form of Agreement Regarding Employees
Incorporated by reference as Exhibit 2.2 to Form 10-Q dated October 31, 1998
Exhibit 2.3 - Form of Escrow Agreement
Incorporated by reference as Exhibit 10.2 to Form 10Q-A dated January 31, 1999
Exhibit 2.4 - Form of Governance Agreement
Incorporated by reference as Exhibit 2.4 to Form 10-Q dated October 31, 1998,
and amended as Appendix C to the Definitive Proxy Statement dated May 11, 1999
Exhibit 2.5 - Inventory Purchase Agreement
Incorporated by reference as Exhibit 2.5 to Form 10Q dated October 31, 1998
Exhibit 2.6 - Agreement for Option to Acquire Powders Business
Incorporated by reference as Exhibit 2.6 to Form 10-Q dated October 31, 1998
Exhibit 2.7 - Registration Rights Agreement
Incorporated by reference as Exhibit 2.7 to Form 10-Q dated October 31, 1998
Exhibit 2.8 - Sourcing Agreement dated June 11, 1998
Incorporated by reference as Exhibit 2.8 to Form 10-Q dated October 31, 1998
Exhibit 2.9 - Press Release announcing the closing of the Merger dated June
14, 1999
<PAGE>
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.
HAUSER, INC.
By: /s/Ralph L. Heimann
Chief Financial Officer
<PAGE>
EXHIBIT 2.9
FOR IMMEDIATE RELEASE CONTACT: Suzanne Brink
Boulder, Colorado Investor Relations Specialist
June 14, 1999 (303) 443-4662
HAUSER ANNOUNCES COMPLETION OF MERGER,REVERSE SPLIT, AND YEAR-END RESULTS
Hauser (NASDAQ:HAUS) announces it has completed its merger with subsidiaries
of the Zuellig Group N.A. (ZGNA), including Zuellig Botanical Extracts, Inc.,
Wilcox Drug Company, Inc. (known as Wilcox Natural Products) and ZetaPharm,
Inc., creating an integrated U.S. supplier of herbal extracts, botanical raw
materials and related products. As part of the merger, shareholders approved
a reverse stock split. Hauser's Board of Directors authorized a 1 for 4
reverse split* and the issuance of 10,061,394 shares of common stock to ZGNA.
The vote took place at a special meeting of Hauser shareholders in Boulder,
Colorado on June 11, 1999.
The reverse stock split was implemented in order to satisfy NASDAQ's listing
requirement. As of June 14, 1999, a "D" will be appended to the HAUS symbol
and remain for several weeks to inform investors about the split.
Hauser's total revenues for the fiscal year ended April 30, 1999 were
$36,265,421, a 13% increase over revenues of $32,037,528 in fiscal 1998. Net
loss for the year ended April 30, 1999, was $(29,736,106), or $(2.84)* per
share, as compared to a net loss of $(3,134,009), or $(.30)* per share in
fiscal year 1998. Net loss for fiscal 1999 included a one-time charge of
$25.6 million, or $2.45* per share, taken in the third quarter ended January
31, 1999, for the write-down of paclitaxel inventory and other related assets.
Excluding this one-time write-down, the net loss would have been $(4,136,106)
or $(.39)* per share.
The company also announced operating results for its fiscal fourth quarter,
ended April 30, 1999. Revenues were $10,329,848, an 8% decrease compared to
revenues of $11,275,412 in the fourth quarter of fiscal 1998. Hauser's net
loss for the fourth quarter was $(2,483,411), or $(.24)* per share. The net
loss in the fourth quarter of fiscal 1998 was $(1,238,914), or $(.12)* per
share.
The attached table shows the share and per share information both before and
after the reverse split.
Revenues and earnings for the fourth quarter and for fiscal year 1999 were
impacted by a soft market for herbal products, higher manufacturing costs
related, in part, to lack of high quality raw materials, and a shift in
product mix. Dean P. Stull, Chairman of the Board and co-CEO of Hauser, Inc.,
said, "Although we are disappointed in our year-end results, we are eager to
integrate our organizations and we look forward to improved conditions in the
nutritional supplement market. We expect to achieve financial synergies from
the merger in raw material sourcing, as well as sales and marketing strength.
These areas are vital to improving our profitability." Volker Wypyszyk,
Hauser's President and co-CEO, stated, "We are pleased to
finalize the merger so we can begin operating as a single company. Not only
does this greatly expand our business capabilities but also allows us to
better serve the growing needs of our customers."
Hauser has secured financing from Wells Fargo Bank, NA to provide a $35
million line of credit and a $10 million fixed asset line in support of the
merged companies. Hauser will assume approximately $21 million of the
acquired subsidiaries' bank debt.
Hauser, a customer connected SM company, headquartered in Boulder, Colorado,
develops, manufactures and markets superior natural products and offers
unsurpassed technical services.
* Share and per share information is presented before the effect of the
reverse split.
# # #
The statements made above, which are not historical, are forward-looking
statements. The actual results of Hauser may vary materially from the forward-
looking statements made above because of important factors such as the risk
that the integration of the two merged organizations will be disruptive to the
operations of Hauser, the risk that Hauser will have difficulty in eliminating
its paclitaxel business, the risk that Hauser will not be successful in
securing funding to expand operations, the risk that new products will not be
developed on time or meet market expectations, the risk that management will
not be successful at gaining or retaining market share or controlling
operating expenses and product costs, the risk of increased governmental
regulation, and the risk that pricing and other competitive pressures
worldwide will cause margins to erode significantly. Additional information
concerning factors that could cause actual results to differ materially from
those in the forward-looking statements made above is contained in Hauser's
disclosure documents to be on file with the U.S. Securities and Exchange
Commission, including its Form 10-K for the year ended April 30, 1998, its
Form 10-Q for the quarter ended January 31, 1999, and its Schedule 14 A
Information in the Proxy Statement.
<PAGE>
<TABLE>
RECAP OF OPERATING RESULTS
Fourth quarter ended April 30, Year ended April 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Total revenues $10,329,848 $11,275,412 $36,265,421 $32,037,528
Gross margin 565,176 3,245,244 (12,433,832)<F1> 7,496,525
Research and development 457,401 435,953 1,593,880 2,229,843
Sales and marketing 611,546 757,201 2,732,057 2,390,602
General and administrative 1,799,356 1,649,444 6,648,404 6,021,622
Product warranty - 1,500,000 - 1,500,000
Write-off of assets - - 5,900,000 -
Loss from operations (2,303,127) (1,097,354) (29,308,173)<F2> (4,645,542)
Interest income
(expense), net (180,284) (141,560) (427,933) 631,810
Loss before taxes (2,483,411) (1,238,914) (29,736,106) (4,013,732)
Net loss $(2,483,411) $(1,238,914) $(29,736,106) $(3,134,009)
Loss per share - basic and
diluted - Pre-split $ (0.24) $ (0.12) $ (2.84) $ (0.30)
Loss per share - basic and
diluted - Post-split $ (0.95) $ (0.47) $ (11.36) $ (1.20)
Weighted average shares
outstanding -
Pre-split 10,472,063 10,444,320 10,468,658 10,439,800
Weighted average shares
outstanding -
Post-split 2,618,016 2,611,080 2,617,165 2,609,950
<FN>
<F1>Includes inventory write-off of $19,700,000
<F2>Includes inventory and asset write-down of $25,600,000
</FN>
</TABLE>
<TABLE>
CONDENSED BALANCE SHEETS
April 30,1999 April 30, 1998
<S> <C> <C>
Cash and cash equivalents $ 3,610,825 $ 2,081,796
Restricted cash 567,032 139,346
Accounts receivable, net 6,812,444 9,090,005
Inventories, current 15,700,357 10,111,688
Other current assets 2,606,402 2,295,909
Total current assets 29,297,060 23,718,744
Property and equipment, net 16,571,066 22,344,618
Inventories, non-current - 14,787,837
Deposits 1,953,041 4,013,992
Other non-current assets 2,082,370 3,428,390
Total non-current assets 4,035,411 22,230,219
Total assets $49,903,537 $68,293,581
Accounts payable $ 2,953,559 $ 1,764,294
Current portion of debt 6,750,342 1,911,498
Other current liabilities 8,877,189 3,371,356
Total current liabilities 18,581,090 7,047,148
Long-term debt 486,596 692,733
Common stock and paid-in-capital 58,893,016 58,874,759
Retained earnings (deficit) (28,057,165) 1,678,941
Total stockholders' equity 30,835,851 60,553,700
Total liabilities and
stockholders' equity $49,903,537 $68,293,581
</TABLE>
