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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) November 21, 1997 (November 20,
1997)
CULLIGAN WATER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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Delaware 51-0350629
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Culligan Parkway 60062
Northbrook, Illinois (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (847) 205-6000
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
On November 20, 1997, the Registrant announced results for the third quarter and
nine months ended October 31, 1997. Reflected in those results were charges
taken in the quarter consisting of a charge for merger and restructuring
expenses and a charge reflecting the write-off of certain goodwill. The merger
and restructuring charge of $9.5 million ($5.7 million, after tax) was taken in
connection with the acquisition of the water filtration business of Ametek in
August 1997 to reflect the integration and restructuring of the Registrant's
Ametek, Everpure, UltraPure, Consumer Markets and U.S. Water Products operations
and the restructuring of the Registrant's consumer products division to focus
principally on the DIY and hybrid retail markets. The merger and restructuring
charge reflects the costs of integrating and streamlining manufacturing, sales,
distribution, R&D and overhead functions in the rapidly growing point-of use
business. The goodwill charge of $20.2 million was a write-off of goodwill of
the Registrant's UltraPure operations as a result of improved technology
acquired in the acquisition of Ametek's water filtration operations and of in-
process research and development purchased in that acquisition.
A copy of the summary of results for the third quarter and nine months is
attached as Exhibit 99.1 hereto and is hereby incorporated herein in its
entirety by reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Summary of Results for the Third Quarter
and Nine Months ended October 31, 1997
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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.
CULLIGAN WATER TECHNOLOGIES, INC.
/s/ Edward A. Christensen
Date November 21, 1997 .....................................
Edward A. Christensen
Vice President, General Counsel and
Secretary
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Exhibit 99.1
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CULLIGAN WATER TECHNOLOGIES, INC.
EARNINGS SUMMARY
Three Months Ended Nine Months Ended
October 31, October 31,
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1997 1996 1997 1996
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 140,086 $ 97,104 $ 354,254 $ 272,416
Cost of goods sold 78,847 54,494 198,209 151,696
--------- --------- --------- ---------
Gross profit 61,239 42,610 156,045 120,720
Selling, general and administrative expenses 39,288 29,274 102,341 83,324
Merger and restructuring costs (a) 9,473 - 9,473 -
Goodwill write-off (a) 20,170 - 20,170 -
Amortization of goodwill 1,241 166 1,962 299
Amortization of other intangibles (b) 412 385 1,236 16,597
--------- --------- --------- ---------
Operating income (9,345) 12,785 20,863 20,500
Interest, net (2,347) (646) (4,412) (2,258)
Gain from disposition of investment in Anvil (c) - - 31,098 -
Gain from insurance settlement (d) - 100 - 1,980
Other, net (217) 796 1,534 1,885
--------- --------- --------- ---------
Income before income taxes, minority interest
and extraordinary item (11,909) 13,035 49,083 22,107
Income Taxes 2,993 5,084 27,092 14,743
Minority Interest 258 - 665 -
--------- --------- --------- ---------
Income (loss) before extraordinary item (15,160) 7,951 21,326 7,364
Extraordinary item for write-off of capitalized refinancing
costs (net of applicable tax benefit of $ 272) - - (422) -
--------- --------- --------- ---------
Net income (loss) $ (15,160) $ 7,951 $ 20,904 $ 7,364
========= ========= ========= =========
Income (loss) per share:
Income (loss) before extraordinary item $ (0.61) $ 0.37 $ 0.91 $ 0.35
Extraordinary item 0.00 0.00 (0.02) 0.00
--------- --------- --------- ---------
Net income (loss) per share $ (0.61) $ 0.37 $ 0.89 $ 0.35
========= ========= ========= =========
Weighted average shares outstanding (e) 24,979 21,310 23,377 21,163
========= ========= ========= =========
Impact of fair value adjustments attributable to the reorganization of former parent:
Impact on net income (loss) of reorganization amortization $ n/a $ n/a $ n/a $ (15,551)
========= ========= ========= =========
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(a) During the three month period ended October 31, 1997 the Company recorded a
charge for merger and restructuring expenses and a charge for the write-off
of certain goodwill. The merger and restructuring charge was taken in
connection with the acquisition of the water filtration business of Ametek
to reflect the integration and restructuring of the Company's Ametek,
Everpure, UltraPure, Consumer Markets and U.S. Water Products operations and
the restructuring of the Company's consumer products division to focus
principally on the DIY and hybrid retail markets. The charge (net of related
tax) of $5,712 reflects the costs of integrating and streamlining
manufacturing, sales, distribution, R&D and overhead functions in the
rapidly growing point-of-use business. The goodwill charge of $20,170 was a
write-off of goodwill of the Company's UltraPure operations as a result of
improved technology acquired in the acquisition of Ametek's water filtration
operations and of in-process research and development purchased in that
acquisition.
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<S> <C> <C> <C> <C>
(b) Amortization of other intangibles consists of:
Amortization of reorganization value in excess
of identifiable assets $ - $ - $ - $ 15,551
Amortization of other "fresh start" intangibles 325 325 975 975
Amortization of other intangibles 87 60 261 71
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$ 412 $ 385 $ 1,236 $ 16,597
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(c) On March 15, 1997, the Company disposed of its investment in Anvil Holdings,
Inc. for $50,897, which included the repayment of outstanding accrued
interest and dividends. The impact on earnings, net of related tax of
$12,203, was $18,895, or $0.81 per share, for the nine month period ended
October 31, 1997.
(d) Results for the three month and nine month periods ended October 31, 1996,
include a gain on an insurance settlement associated with the fire which
substantially destroyed the Company's facility in Belgium in July 1993. The
impact on earnings, net of tax, is $61, or $0.00 per share and $1,208, or
$0.06 per share for the three month and nine month periods respectively.
(e) Weighted average shares outstanding for the three month period ended October
31, 1997 excludes the effect of stock options as they were antidilutive. Had
the effect of stock options been included, the shares outstanding would have
been increased by 818 shares.
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