SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 4, 1996
ISOLYSER COMPANY, INC.
____________________________________________________________________________
(Exact Name of Registrant as Specified in Its Charter)
Georgia
____________________________________________________________________________
(State or Other Jurisdiction of Incorporation)
0-24866 58-1746149
_____________________________ ____________________________________
(Commission File Number) (I.R.S. Employer
Identification No.)
4320 International Boulevard, N.W., Norcross, Georgia 30093
____________________________________________________________________________
(Address of Principal Executive Offices (Zip Code)
(770) 381-7566
____________________________________________________________________________
(Registrant's Telephone Number, Including Area Code)
____________________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS
Isolyser Company, Inc. hereby incorporates by reference the
News Releases filed with this Current Report on Exhibits 20.1,
20.2 and 20.3.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information:
Not applicable.
(c) Exhibits:
3.1 First Amendment to Amended and Restated Bylaws
20.1 News Release dated June 4, 1996 captioned
"Isolyser Announces Personnel Changes"
20.2 News Release dated June 24, 1996 captioned
"Isolyser Announces Adoption of Statutory
Corporate Takeover Provisions"
20.3 New Release dated July 24, 1996 captioned "Isolyer
Expands OREX Degradables Market Penetration"
<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.
ISOLYSER COMPANY, INC.
By: /s/ C. Fred Harlow
_______________________________
C. Fred Harlow, Chief Financial
Officer and Senior Vice President
Dated: July 29, 1996
EXHIBIT 3.1
<PAGE>
FIRST AMENDMENT
OF THE AMENDED AND RESTATED BYLAWS
OF ISOLYSER COMPANY, INC.
In accordance with Article 11 of the Corporation's Bylaws,
the Corporation hereby amends its Amended and Restated Bylaws by
adding a new Section 8.10 as follows:
8.10 Business Combinations with Interested
Stockholders. In accordance with Official
Code of Ga. Ann. Section 14-2-1133, this
Corporation has elected that all of the
requirements of Part 3 of Article 11 of the
Georgia Business Corporation Code shall be
applicable to this Corporation.
I hereby certify that the foregoing First Amendment was duly
adopted by the Corporation's Board of Directors on June 19, 1996.
/s/ Travis W. Honeycutt
______________________________________
TRAVIS W. HONEYCUTT, Secretary
EXHIBIT 20.1
<PAGE>
NEWS RELEASE
FOR IMMEDIATE RELEASE Contact: C. Fred Harlow
Chief Financial
Officer
(770) 381-7566
ISOLYSER ANNOUNCES PERSONNEL CHANGES
NORCROSS, Georgia (June 4, 1996) - Isolyser Company, Inc.
(Nasdaq/NM:OREX) today announced that Michael Sahady, executive
vice president of Isolyser and a member of the Company's Board of
Directors, has resigned both positions to pursue personal
interests. He will continue to be employed by the Company as a
special assistant to the president and chief executive officer,
although he will no longer serve as an executive of the Company
or on its Board of Directors.
Robert L. Taylor, chairman, president and chief executive
officer of Isolyser, said, "Mike Sahady has made a major
contribution to our Company. Fortunately, we will continue to
benefit from his counsel in his role as special assistant to me.
Our management infrastructure is strong, and we expect the
development of the Company to continue on an accelerated basis."
Isolyser, based in Norcross, Georgia, has developed and
manufactured OREX(C) Degradables(TM), a series of products made from
a thermoplastic, hot water soluble polymer that can be configured
into an array of products such as woven and non-woven fabrics,
film and thermoformed and extruded items. These products can be
dissolved after use, in hot water in a specially designed OREX
processor similar to a commercial washing machine, for safe
disposal through municipal sewer systems. The Company believes
that this line of products provides protection to the hospital
staff, patient and environment while providing cost-effective
solutions to the problems associated with waste reduction and
disposal.
EXHIBIT 20.2
<PAGE>
NEWS RELEASE
FOR IMMEDIATE RELEASE Contact: C. Fred Harlow
Chief Financial
Officer
(770) 381-7566
ISOLYSER ANNOUNCES ADOPTION OF STATUTORY
CORPORATE TAKEOVER PROVISIONS
NORCROSS, Georgia (June 4, 1996) - Isolyser Company, Inc.
(Nasdaq/NM:OREX) today reported that its Board of Directors had,
at its June 21, 1996 meeting, amended its Bylaws to make
applicable to Isolyser provisions authorized by the Georgia
Business Corporation Code relating to business combinations with
interested shareholders (the "Corporate Takeover Provisions").
Robert L. Taylor, chairman, president and chief executive
officer of Isolyser, commented "Isolyser's Board of Directors, as
a part of its overall planning for Isolyser during its recent
Board meeting, determined that it was in the best interest of
Isolyser and its shareholders to adopt the provisions of
Georgia's statute which provides to the Board of Directors
greater flexibility and authority to negotiate and seek to
achieve the best result for Isolyser and its shareholders in the
event of any unsolicited proposals to acquire or restructure
Isolyser."
The Corporate Takeover Provisions are designed to encourage
any person, before acquiring 10% of Isolyser's voting shares, to
negotiate with and seek approval of Isolyser's Board of Directors
concerning the terms of any contemplated business combination.
The Corporate Takeover Provisions prevent for five years certain
business combinations with an "interested shareholder" (as
defined in the statute) unless (i) prior to the time such
shareholder became an interested shareholder, Isolyser's Board
approved either the business combination or the transaction that
resulted in the interested shareholder becoming an interest
shareholder, (ii) in the transaction that resulted in the
shareholder becoming an interested shareholder, the interested
shareholder became the beneficial owner of at least that number
of shares (the "90% Share Amount") equal to 90% of the
outstanding voting shares of Isolyser excluding shares owned by
Isolyser's officers, directors, affiliates, subsidiaries and
certain employee stock plans, or (iii) subsequent to becoming an
interested shareholder, such shareholder acquired additional
shares resulting in the interested shareholder becoming the owner
of at least the 90% Share Amount and the business combination was
approved by a majority of the voting stock entitled to vote on
the business combination, excluding from such vote the voting
stock beneficially owned by the interested shareholder or by
Isolyser's officers, directors, affiliates, subsidiaries and
certain employee stock plans. The Corporate Takeover Provisions
may be repealed only by the affirmative vote of (i) two-thirds of
all directors who are unaffiliated with the interested
shareholder and (ii) a majority of all outstanding shares,
excluding those held by affiliates of an interested shareholder.
Shareholders of Isolyser who became interested shareholders prior
to the time of adoption of the Corporate Takeover Provisions are
not subject to such provisions.
Isolyser, based in Norcross, Georgia, has developed and
manufactured OREX(C) Degradables(TM), a series of products made from
a thermoplastic, hot water soluble polymer that can be configured
into an array of products such as woven and non-woven fabrics,
film and thermoformed and extruded items. These products can be
dissolved after use, in hot water in a specially designed OREX
processor similar to a commercial washing machine, for safe
disposal through municipal sewer systems. The Company believes
that this line of products provides protection to the hospital
staff, patient and environment while providing cost-effective
solutions to the problems associated with waste reduction and
disposal.
EXHIBIT 20.3
<PAGE>
FOR IMMEDIATE RELEASE Contact: C. Fred Harlow
Chief Financial
Officer
(770) 381-7566
ISOLYSER EXPANDS OREX(C) DEGRADABLES(TM)
MARKET PENETRATION
SECOND QUARTER HIGHLIGHTS
* Substantial increase in sales of OREX(C) products.
* OREX(C) fiber manufacturing equipment acquired.
* Revised Merger Agreement with Microtek Medical, Inc.
(Nasdaq/NM:MTMI)
* Reallowance of two OREX(C) patents.
* Distribution contract with Shared Services Healthcare to
market OREX(C) products to 1,273 hospitals.
* Three-year agreement with MedEcon of Louisville, Kentucky,
for the distribution of operating room towels and lap
sponges manufactured with OREX(C) Degradables(TM) material.
* 18-month distribution agreement with Amerinet, a St. Louis-
based group purchasing organization representing 1,669
hospitals throughout the United States.
* Distribution agreement with Purchase Connection, a wholly-
owned subsidiary of COHR, a Los Angeles-based health care
organization, operating seven regional sales and customer
service sites serving approximately 1,500 group purchasing
customers in 48 states.
NORCROSS, Georgia (July 24, 1996) Isolyser Company, Inc.
(Nasdaq/NM:OREX) today reported results for the second quarter
and six months ended June 30, 1996.
Net sales for the second quarter ended June 30, 1996,
reached $31.1 million, up 96% over 1995 second quarter net sales
of $15.9 million. Net loss for the second quarter was $569,000
or $0.02 per share, compared with net earnings of $27,000 for the
second quarter of 1995. Results for the second quarter of 1995
do not include the operations of White Knight Healthcare, Inc.,
acquired effective September 1, 1995.
Net sales for the first six months of 1996 were $62.1
million, up 122% over the comparable 1995 net sales of $28.0
million. Net loss was $946,000, or $0.03 per share, compared to
a net loss of $118,000, or $0.01 per share, a year ago.
Robert L. Taylor, president and chief executive officer of
Isolyser, said, "We are pleased that OREX(C) Degradables(TM) sales
continued to increase in the second quarter. In July 1996, we
acquired fiber manufacturing equipment which we expect will begin
commercial production in early 1997. We believe this equipment
will allow us to supplement our current supply of fiber materials
and reduce the overall cost for this critical raw material."
Progress to date in commercializing OREX(C) Degradables(TM)
includes offering over 225 OREX(C) catalog items (including both
sterile and non-sterile OREX(C) products), primarily in woven and
non-woven products; OREX(C) Degradables(TM) being purchased by 427
hospitals in procedure trays or packs; and 55 hospitals having
received OREX(C) processors, for a total of 88 hospitals having
received or contracted to receive processors.
The Company announced that shipments for OREX(C) Degradables(TM)
products in the second quarter of 1996 were $2.4 million
(compared with $1.6 million for the first quarter of 1996), which
was the second full quarter in which commercial quantities of
OREX(C) were available.
During the second quarter, the Company increased production
at its Arden and Abbeville OREX(C) plants to levels which fully
absorbed related production costs. However, the Company's
results of operations continue to be impacted by low profit
margins on OREX(C) Degradables(TM) products pending increased
utilization of the Company's existing manufacturing capacity and
the Company's second quarter production of more OREX(C)
Degradables(TM) towels than were sold in the quarter.
Mr. Taylor also said, "We are encouraged with our
performance in the second quarter. It has been a challenge to
develop manufacturing capacity and create demand simultaneously.
While we continue in our effort to improve our manufacturing and
sales, we now believe that most of the difficult start-up phase
is behind us and that enormous potential awaits the comprehensive
introduction of this very special product to the health care
marketplace as well as to other selected industries."
The Company recently announced the execution of a revised
definitive merger agreement under which Microtek Medical, Inc.
would become a wholly-owned subsidiary of Isolyser in a pooling-
of-interest transaction. The revised agreement adjusts the
exchange ratio in order that Microtek shareholders will continue
to receive $16.50 in value of Isolyser common stock for each
share of Microtek common stock, subject to adjustments. Both
Isolyser and Microtek will hold stockholders' meetings to approve
the transaction.
During the quarter, the Company announced that it received
notice from the United States Patent and Trademark Office of
intent to reallow two of the Company's patents concerning methods
of disposing of OREX(C) Degradables(TM) garments and like fabrics and
methods of disposing of OREX(C) Degradables(TM) packaging materials.
These patents were reallowed in response to reexamination
proceedings the Company had pending before the patent office.
With the issuance of the "notice of intent to issue a
reexamination certificate", the patent office has confirmed the
validity of these two patents and permitted Isolyser to prohibit
all others from disposing of fabrics and packaging in the United
States using the method claimed by such patents.
Also during the quarter, the Company announced an agreement
with Shared Services Healthcare, Inc. of Atlanta, Georgia,
pursuant to which Isolyser intends to market a variety of
products manufactured from its revolutionary hot water soluble
OREX(C) Degradables(TM) material. Shared Services Healthcare is a
group purchasing organization representing 1,273 hospitals
throughout the Southeast and Mid-Atlantic states.
Recently, the Company announced the signing of three
contracts which expanded the Company's market potential: A
three-year agreement with MedEcon of Louisville, Kentucky, for
the distribution of operating room towels and lap sponges
manufactured with OREX(C) Degradables(TM) material; an 18-month
agreement with Amerinet, a St. Louis-based group purchasing
organization representing 1,669 hospitals throughout the United
States; and an agreement with Purchase Connection, a wholly-owned
subsidiary of COHR, a Los Angeles-based health care organization,
which operates seven regional sales and customer service sites
serving approximately 1,500 group purchasing customers in 48
states.
Isolyser, based in Norcross, Georgia, has developed and
manufactured OREX(C) Degradables(TM), a series of products made from a
thermoplastic, hot water soluble polymer that can be configured
into an array of products such as woven and non-woven fabrics,
film and thermoformed and extruded items. These products can be
dissolved after use, in hot water in a specially designed OREX(C)
processor similar to a commercial washing machine, for safe
disposal through municipal sewer systems. The Company believes
that this line of products provides protection to the hospital
staff, patient and environment while providing cost-effective
solutions to the problems associated with waste reduction and
disposal.
ISOLYSER COMPANY, INC.
Unaudited Financial Highlights
(In thousands, except for share amounts)
OPERATIONS DATA:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
___________________________________________________________________________
1996 1995 1996 1995
___________________________________________________________________________
Net Sales $ 31,136 $ 15,886 $ 62,144 $ 28,041
Gross 7,763 4,069 14,891 6,694
profit
Loss from (805) (596) (1,793) (1,799)
operations
Net pre-tax (569) 93 (1,212) (207)
income (loss)
Net income (569) 27 (946) (118)
(loss)
Net loss (0.02) -- (0.03) (0.01)
per share
Weighted 30,679 25,758 30,590 25,113
shares
outstanding
1 Results for the first and second quarters of 1995 do not
include White Knight Healthcare, Inc. acquired effective
September 1, 1995.
2 Shares outstanding for the three and six months ended June
30, 1995, have been adjusted for a two-for-one stock
dividend paid on October 2, 1995.
BALANCE SHEET DATA:
JUNE 30, 1996 DECEMBER 31, 1995
________________ __________________
Cash and equivalents $ 33,807 $ 54,508
Other current assets 70,105 56,818
________________ __________________
Total current assets 103,912 111,326
Property and equipment, 66,689 58,447
net
Intangible assets, 36,301 37,830
net
Other assets 939 1,109
_______________ __________________
$ 207,841 $ 208,712
Current liabilities $ 19,643 $ 20,560
Long-term debt 9,346 9,822
Other liabilities 3,951 4,151
_______________ __________________
Other liabilities 32,940 34,533
Total liabilities 174,901 174,179
_______________ __________________
Shareholders' equity $ 207,841 $ 208,712
* * *
