SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
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 11, 1998
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.)
650 Engineering Drive, Norcross, Georgia 30092
(Address of Principal Executive Offices (Zip Code)
(770) 582-6363
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 11, 1998, Isolyser Company, Inc. ("Isolyser"), together with
certain of its wholly-owned subsidiaries (collectively, the "Company"), disposed
of (1) its Arden and Charlotte, North Carolina OREX manufacturing facilities,
(2) the industrial division of White Knight Healthcare, Inc., (3) substantially
all of the assets of SafeWaste Corporation, and (4) certain PVA fiber. These
assets were purchased by Thantex Holdings, Inc. or certain of its affiliates.
Neither Thantex Holdings, Inc. nor any of the affiliated purchaser entities were
or are "affiliates" of Isolyser within the meanings of the Securities Act of
1933, as amended. In connection with such disposition of assets, Isolyser also
contracted to sell its Abbeville, South Carolina OREX manufacturing facility and
subsequently consummated such sale on October 14, 1998. The purchase price
payable for the assets, exclusive of the Abbeville plant, was $13.4 million, and
the purchase price for the Abbeville plant was $8.0 million. In connection with
the sale of the Arden plant and Abbeville plant, the Company also received 20%
of the shares of the corporation which acquired such plants.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
1) Financial Statements of Businesses Acquired:
Not applicable.
(b) Pro Forma Financial Information:
The following unaudited pro forma financial information included
on pages PF-1 to PF-5 are filed as part of this current report:
Item
Introduction PF-1
Unaudited Pro Forma Condensed Consolidated Balance Sheet
as of June 30, 1998 PF-2
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1997 PF-3
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the Six Months Ended June 30, 1998 PF-4
-----
(c) Exhibits:
2.1* Asset Purchase Agreement dated August 11, 1998, between
White Knight Healthcare, Inc. and Thantex Holdings, Inc.
2.2* Asset Purchase Agreement dated August 11, 1998, between
SafeWaste Corporation and SafeWaste, Inc.
2.3* Arden Plant Agreement dated August 11, 1998, between
Isolyser Company, Inc., Thantex Holdings, Inc. and Thantex
Specialties, Inc.
2.4* Barmag Agreement dated August 11, 1998, between Isolyser
Company, Inc. and Thantex Holdings, Inc.
2.5* PVA Agreement dated August 11, 1998, between Isolyser
Company, Inc. and Thantex Holdings, Inc.
2.6* Abbeville Plant Agreement dated August 11, 1998, between
Isolyser Company, Inc., Thantex Specialties, Inc. and
Thantex Holdings, Inc.
- ----------------------------
*All exhibits were previously filed as a part of the Current Report on Form 8-K
filed with the SEC on August 24, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be duly signed on its behalf by the
undersigned hereunto duly authorized.
ISOLYSER COMPANY, INC.
By: /s/ Peter A. Schmitt
Peter A. Schmitt, Executive Vice President
and Chief Financial Officer
Dated: October 23, 1998
<PAGE>
PRO FORMA UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated balance sheet of
the Company as of June 30, 1998 gives effect to the disposition by the Company
of (1) its Arden and Charlotte, North Carolina OREX manufacturing facilities,
(2) the industrial division of White Knight Healthcare, Inc., (3) substantially
all of the assets of SafeWaste Corporation, (4) certain PVA fiber and (5) its
Abbeville, South Carolina OREX manufacturing facility (collectively, the
"Divestitures") as if such Divestitures had occurred on June 30, 1998. The
following unaudited pro forma condensed consolidated statements of operations of
the Company for the year ended December 31, 1997, and the six months ended June
30, 1998, gives effect to the Divestitures as if such Divestitures had occurred
on January 1, 1997. The pro forma financial information should be read in
conjunction with the historical consolidated financial statements of the Company
and the related notes thereto appearing in the Company's Annual Report on Form
10-K for the year ended December 31, 1997 and quarterly report on Form 10-Q for
the period ended June 30, 1998 previously filed with the Securities and Exchange
Commission. Certain prior period amounts set forth in the pro forma combined
financial information has been adjusted for comparative purposes. The pro forma
financial information is not necessarily indicative of the results that would
have been reported had such divestitures occurred at the dates specified, nor is
it necessarily indicative of future results.
PF-1
<PAGE>
ISOLYSER COMPANY, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS ACTUAL PRO FORMA PRO FORMA JUNE 30,
JUNE 30, 1998 ADJUSTMENTS 1998
<S> <C> <C> <C>
------------------- ------------------ --------------------
Current assets
Cash and cash equivalents $ 7,923 - $ 7,923
Accounts receivable, net 16,010 - 16,010
Inventories, net 27,311 - 27,311
Prepaid expenses and other assets 1,435 - 1,435
Net assets held for sale 31,015 $ (22,573)(1) 8,442
------------------- ------------------ --------------------
Total current assets 83,694 (22,573) 61,121
------------------- ------------------ --------------------
Property and equipment 31,538 - 31,538
Less accumulated depreciation (12,588) - (12,588)
------------------- ------------------ --------------------
Property and equipment net 18,950 - 18,950
------------------- ------------------ --------------------
Intangibles and other assets, net 30,562 3,319(2) 33,881
=================== ================== ====================
$ 133,206 $ (19,254) $ 113,952
=================== ================== ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long term debt $ 2,715 - $ 2,715
Accounts payable 7,424 - 7,424
Bank overdraft 282 - 282
Accrued expenses 4,333 - 4,333
------------------- ------------------ --------------------
Total current liabilities 14,754 - 14,754
------------------- ------------------ --------------------
Long term debt 42,107 $ (21,452)(3) 20,655
Other liabilities 262 2,198(4) 2,460
------------------- ------------------ --------------------
Total liabilities 57,123 (19,254) 37,869
------------------- ------------------ --------------------
Shareholders' equity
Common stock 40 - 40
Additional paid-in capital 203,165 - 203165
Accumulative Deficit (126,291) - (126,291)
Cumulative translation adjustment (97) - (97)
Unearned shares restricted to employee stock
ownership plan (300) - (300)
------------------- ------------------ --------------------
76,517 76,517
Treasury shares, at cost (434) - (434)
------------------- ------------------ --------------------
Total shareholders' equity 76,083 - 76,083
------------------- ------------------ --------------------
$ 133,206 $ (19,254) $ 113,952
=================== ================== ====================
</TABLE>
PF-2
<PAGE>
ISOLYSER COMPANY, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
ACTUAL PRO FORMA PRO FORMA
YEAR ENDED ADJUSTMENTS (5) YEAR ENDED
DECEMBER 31, 1997 DECEMBER 31, 1997
--------------------- -------------------- -------------------------
<S> <C> <C> <C>
Net sales $ 159,939 $ 16,911 $ 143,028
Cost of goods sold 142,093 21,493 120,600
--------------------- -------------------- -------------------------
Gross profit (loss) 17,846 (4,582) 22,428
Operating expenses:
Selling & marketing 26,505 2,031 24,474
General & administrative 16,917 929 15,988
Research & development 2,601 - 2,601
Impairment loss 57,310 33,253 24,057
Amortization of intangibles 3,847 361 3,486
--------------------- -------------------- -------------------------
Total operating expenses 107,180 36,574 70,606
--------------------- -------------------- -------------------------
Loss from operations (89,334) (41,156) (48,178)
Interest income 555 6 550
Interest expense (3,926) (2,297)(6) (1,629)
Loss in joint venture (44) (44) -
--------------------- -------------------- -------------------------
Loss before income tax provision and cumulative (92,749) (43,492) (49,257)
effect of change in accounting principle
354 - 354
Income tax provision
--------------------- -------------------- -------------------------
$ (93,103) (43,492) $ (49,611)
Loss before cumulative effect of change in
accounting principle
--------------------- -------------------- -------------------------
$ (800) $ - $ (800)
Cumulative effect of change in accounting
principle
--------------------- -------------------- -------------------------
Net loss $ (93,903) $ (43,492) $ (50,411)
--------------------- -------------------- -------------------------
Net loss per common share-Basic and Diluted $ (2.37) $ (1.11) $ (1.26)
===================== ==================== =========================
Weighted average number of common shares 39,273 39,273 39,273
outstanding
===================== ==================== =========================
</TABLE>
PF-3
<PAGE>
ISOLYSER COMPANY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
ACTUAL PRO FORMA PRO FORMA
SIX MONTHS ENDED ADJUSTMENTS (5) SIX MONTHS ENDED
JUNE 30, 1998 JUNE 30, 1998
<S> <C> <C> <C> <C>
Net sales $ 80,104 $ 8,731 $ 71,373
Cost of goods sold 60,720 7,952 52,768
--------------------- -------------------- -------------------------
Gross profit 19,384 779 18,605
Operating expenses:
Selling & marketing 12,409 890 11,519
General & administrative 7,418 548 6,870
Research & development 1,803 - 1,803
Impairment loss 5,300 5,300 -
Amortization of intangibles 1,048 5 1,043
--------------------- -------------------- -------------------------
Total operating expenses 27,978 6,743 21,235
--------------------- -------------------- -------------------------
Loss from operations (8,594) (5,964) (2,630)
Interest income 171 2 169
Interest expense (1,971) (1,250)(6) (721)
Gain in joint venture 13 13 -
--------------------- -- -------------------------
--------------------
Loss before income tax expense (10,381) (7,199) (3,182))
166 - 166
Income tax expense
-------------------- -------------------------
---------------------
$ (10,547) $ (7,199) $ (3,348)
Net loss
===================== ==================== =========================
$ (0.26) $ (0.18) $ (0.08)
Net loss per common share-Basic and Diluted
===================== ==================== =========================
Weighted average number of common shares
outstanding 39,824 39,824 39,824
===================== ==================== =========================
</TABLE>
PF-4
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) To eliminate assets acquired by Thantex Holdings, Inc. or its affiliates.
(2) To record the value of the Company's 20% interest in the company formed to
own and operate the Arden, North Carolina and Abbeville, South Carolina
manufacturing facilities. Such amount has been determined by reference to
the Company's preliminary estimate of the underlying equity value, and is
subject to revision upon the Company's finalizing such value.
(3) Assumes the net proceeds from the Divestitures were used to repay
outstanding borrowings under the Company's credit agreement.
(4) To record the liability created by the PVA fiber sale agreement accounted
for as product financing arrangement under FASB Statement 49.
(5) To eliminate operating results of the disposed assets.
(6) Reflects a reduction of interest expense as a result of the repayment of
outstanding borrowings under the Company credit agreement.
PF-5
