SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
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): June 17, 1999
THE SPECTRANETICS CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 0-19711 84-0997049
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification No.)
96 Talamine Court, Colorado Springs, CO 80907
(Address of Principal Executive Offices) (Zip Code)
(719) 633-8333
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
1
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 17, 1999, The Spectranetics Corporation completed the sale of its
wholly-owned industrial subsidiary, Polymicro Technologies, Inc., to affiliates
of Keystone Capital, Inc. for $15 million in cash. The purchase price was
determined through arm's length negotiations between the parties to the
transaction. The buyer will provide certain products and technologies to the
Company pursuant to a supply agreement.
A copy of the press release dated June 18, 1999, which was issued by the
Company relating to the transaction described above is attached hereto as
Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro forma financial information.
See pro forma financial statements as shown beginning on page 4.
(c) Exhibits.
The following exhibits are filed with this report or incorporated by
reference to other filings:
2.1 Merger Agreement dated as of May 24, 1999 between the Company and
affiliates of Keystone.(1)
99.1 Press release dated June 18, 1999.
(1) Incorporated by reference to exhibit previously filed by the Company on
Form 8-K, filed on June 4, 1999.
2
<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.
Dated: July 2, 1999
THE SPECTRANETICS CORPORATION
By: /s/ Joseph A. Largey
-------------------------------------
Joseph A. Largey
President and Chief Executive Officer
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<PAGE>
THE SPECTRANETICS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On June 17, 1999, the Company completed the sale of its wholly-owned industrial
subsidiary, Polymicro Technologies, Inc. (PTI) to affiliates of Keystone
Capital, Inc. for $15 million in cash. The buyer will provide certain products
and technologies to the Company pursuant to a supply agreement.
The unaudited pro forma consolidated balance sheet as of March 31, 1999 and
unaudited pro forma consolidated statements of operations for the year ended
December 31, 1998 and the three months ended March 31, 1999 are presented
herein. The unaudited pro forma consolidated balance sheet has been prepared
assuming that the sale of Polymicro Technologies, Inc. occurred on March 31,
1999. The unaudited pro forma consolidated statements of operations presented
herein have been prepared assuming that the sale of PTI occurred on January 1,
1998.
The unaudited pro forma financial data is based on management's best estimate of
the effects of the disposition. Pro forma adjustments are based on currently
available information; however, the actual adjustments will be based on more
precise information. It is possible that the actual adjustments could differ
from those presented in the unaudited pro forma consolidated financial
statements.
The unaudited pro forma consolidated statements of operations for the twelve
months ended December 31, 1998, and the three months ended March 31, 1999, are
not necessarily indicative of the results of operations that actually would have
been achieved had the sale of PTI been consummated as of the dates indicated or
that may be achieved in the future. The unaudited pro forma consolidated
financial statements should be read in conjunction with the accompanying notes.
4
<PAGE>
THE SPECTRANETICS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
MARCH 31, 1999
<TABLE>
<CAPTION>
Consolidated Polymicro Pro Forma
March 31, 1999 Disposition March 31, 1999
ASSETS -------------- ----------- --------------
Current assets:
<S> <C> <C> <C>
Cash & short-term investments $ 9,790 $ 14,475 (1) $ 24,265
Accounts receivable 4,668 (1,452)(5) 3,216
Inventories 3,072 (589)(5) 2,483
Other current assets 370 (45)(5) 325
------------------------------------------------
Total current assets 17,900 12,389 30,289
Net property & equipment 5,348 (2,263)(5) 3,085
Goodwill and other intangible assets 3,852 (2,540)(5) 1,312
Other assets 157 -- 157
TOTAL ASSETS $ 27,257 $ 7,586 $ 34,843
===============================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable & accrued liabilities:
Deferred revenue $ 1,258 $ -- $ 1,258
Accounts payable 1,414 (434)(5) 980
Accrued liabilities 3,342 (548)(5) 2,794
Taxes Payable -- 172 (2) 172
Current portion of long term notes 938 -- 938
Current portion of capital lease 75 (4) 71
------------------------------------------------
Total current liabilities 7,027 (814) 6,213
Long-term liabilities:
Unearned Discount - USSC 1,752 -- 1,752
Note payable 1,118 -- 1,118
Deferred rent, PTI 5 (5)(5) --
Capital lease obligation 65 (5)(5) 60
------------------------------------------------
Total long-term liabilities 2,940 (10) 2,930
Stockholders' equity:
Common stock 23 -- 23
Additional paid-in capital 91,103 -- 91,103
Other comprehensive loss (121) -- (121)
Accumulated deficit (73,715) 8,410 (3) (65,305)
------------------------------------------------
Total stockholders' equity 17,290 8,410 25,700
TOTAL LIABILITIES AND
================================================
AND STOCKHOLDERS' EQUITY $ 27,257 $ 7,586 $ 34,843
================================================
</TABLE>
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See accompanying notes to unaudited pro forma financial statements.
<PAGE>
THE SPECTRANETICS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Polymicro Pro Forma Pro Forma
Consolidated Disposition Adjustments Totals
------------ ----------- ----------- ------
<S> <C> <C> <C> <C>
REVENUES $ 27,784 $ (9,219) $ 18,565
TOTAL COST OF SALES 12,872 (4,876) 7,996
----------------------------------------------------------------------
GROSS MARGINS 14,912 (4,343) 10,569
----------------------------------------------------------------------
GROSS MARGIN % 54% 47% 57%
Marketing and sales 9,984 (1,013) 8,971
General and administrative 4,584 (950) 3,634
Research and development 2,899 (704) 2,195
Amortization of intangibles 802 (802) (6) --
----------------------------------------------------------------------
TOTAL OPERATING EXPENSES 18,269 (3,469) 14,800
----------------------------------------------------------------------
OPERATING INCOME (LOSS) (3,357) (874) (4,231)
OTHER INCOME (EXPENSE)
Interest income 213 -- 213
Interest expense (190) 13 (177)
Other, net 59 -- 59
----------------------------------------------------------------------
82 13 -- 95
----------------------------------------------------------------------
NET LOSS FROM
CONTINUING OPERATIONS (3,275) (861) -- (4,136)
Non-recurring charges 0 0 (260)(4) (260)
Gain on sale of discontinued operations,
net of taxes of $172 8,410 (3) 8,410
----------------------------------------------------------------------
NET INCOME (LOSS) $ (3,275) $ (861) $ 8,150 $ 4,014
======================================================================
Net Loss from Continuing Operations
per Share-basic and diluted $ (0.17) $ (0.22)
============ ============
Weighted Average Common Shares
Outstanding - basic and diluted 19,018,147 19,018,147
============ ============
</TABLE>
6
See accompanying notes to unaudited pro forma financial statements.
<PAGE>
THE SPECTRANETICS CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
Polymicro Pro Forma
Consolidated Disposition Totals
------------ ----------- ---------
<S> <C> <C> <C> <C>
REVENUES $ 7,077 $ 3,007 $ 4,070
TOTAL COST OF SALES 2,981 1,426 1,555
---------------------------------------------------------------
GROSS MARGINS 4,096 1,581 2,515
---------------------------------------------------------------
GROSS MARGIN % 58% 53% 62%
Marketing and sales 2,491 327 2,164
General and administrative 1,296 317 979
Research and development 1,048 261 787
Amortization of intangibles 200 200 (6) --
---------------------------------------------------------------
TOTAL OPERATING EXPENSES 5,035 1,105 3,930
---------------------------------------------------------------
OPERATING INCOME (LOSS) (939) 476 (1,415)
OTHER INCOME (EXPENSE)
Interest income 54 -- 54
Interest expense (49) -- (49)
Other, net 9 (3) 12
---------------------------------------------------------------
14 (3) -- 17
---------------------------------------------------------------
NET INCOME (LOSS) $ (925) $ 473 $ -- $ (1,398)
===============================================================
Net Loss per Share-basic and diluted $ (0.04) $ (0.07)
============ ============
Weighted Average Common Shares
Outstanding - basic and diluted 20,566,667 20,566,667
============ ============
</TABLE>
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See accompanying notes to unaudited pro forma financial statements.
<PAGE>
THE SPECTRANETICS CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A brief description of each pro forma adjustment is provided below and is
cross-referenced to the unaudited pro forma condensed consolidated financial
statements contained herein.
(1) Represents proceeds received from the sale, net of selling costs.
(2) Relates to estimated income taxes due on the sale, assuming a 2% effective
tax rate.
(3) Relates to the gain recorded on the sale, net of taxes.
(4) Relates to non-recurring transaction and severance charges directly
attributable to the transaction.
(5) Represents the net assets of the subsidiary being disposed of.
(6) Amortization of remaining intangibles is included in cost of sales.
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<PAGE>
EXHIBIT INDEX
Exhibits
2.1 Merger Agreement dated as of May 24, 1999 between the Company and
affiliates of Keystone(1).
99.1 Press release dated June 18, 1999.
(1) Incorporated by reference to exhibit previously filed by the Company on
Form 8-K, filed on June 4, 1999.
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EXHIBIT 99.1
[LETTERHEAD]
SPECTRANETICS
SPECTRANETICS COMPLETES SALE OF INDUSTRIAL SUBSIDIARY
FOR $15 MILLION IN CASH
SPECTRANETICS TO FOCUS RESOURCES ON CORE MEDICAL BUSINESS
COLORADO SPRINGS, COLORADO - June 18, 1999 - The Spectranetics Corporation
(NASDAQ: SPNC), developer, manufacturer and marketer of devices and technologies
for interventional cardiovascular therapy, announced the completion today of the
sale of the Company's wholly owned industrial subsidiary, Polymicro
Technologies, Inc., to affiliates of Keystone Capital, Inc. for $15 million in
cash.
Joseph A. Largey, Spectranetics' President and Chief Executive Officer, said the
transaction affords Spectranetics the opportunity to intensify its focus on its
core medical device business, which is driven by sales of single-use catheters
for a growing number of cardiovascular procedures that involve the Company's
excimer laser technology. He said that Spectranetics will use the proceeds of
the sale for general corporate purposes, including sales, marketing and clinical
initiatives for new products and applications.
Polymicro, located in Phoenix, Arizona, manufactures drawn silica glass products
for industrial, aerospace and medical uses with an emphasis on the analytical
instrument market. Keystone Capital, Inc. is a private equity investment
advisory firm based near Chicago, Illinois.
Spectranetics is a medical device company engaged in the development,
manufacturing, marketing and distribution of its technology for interventional
cardiovascular therapy. The Company's CVX-300(R) excimer laser system is the
only excimer laser system approved by the FDA for multiple cardiovascular
procedures. The technology has been designed for use in multiple cardiovascular
applications, including coronary angioplasty and the removal of pacemaker and
ICD leads. The Company is also developing additional applications for its
excimer laser technology in restenosed stents and peripheral vascular
applications.
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