<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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): MAY 21, 1998
----------------
CULLIGAN WATER TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 1-11402 22-3059335
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
</TABLE>
<TABLE>
<S> <C>
ONE CULLIGAN PARKWAY, NORTHBROOK, ILLINOIS 60062-6209
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (847) 205-6000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 5. OTHER EVENTS.
As previously reported on a Current Report on Form 8-K dated February 10,
1998, Culligan Water Technologies, Inc., a Delaware corporation (the
"Company"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") dated as of February 9, 1998 by and among the Company, United
States Filter Corporation, a Delaware corporation ("U.S. Filter") and Palm
Water Acquisition Corp., a Delaware corporation and a wholly owned subsidiary
of U.S. Filter ("Merger Sub"). Pursuant to the Merger Agreement, Merger Sub
will be merged with and into the Company, and holders of the Company's Common
Stock, par value $.01 per share, will be entitled to receive shares of Common
Stock, par value $.01 per share, of U.S. Filter, at the exchange ratio
provided in the Merger Agreement. Set forth below is the following pro forma
financial information with respect to the transaction contemplated by the
Merger Agreement.
<TABLE>
<S> <C>
Unaudited Pro Forma Combined Balance Sheet as of December 31, 1997........ F-4
Unaudited Pro Forma Combined Statements of Operations for the year ended
March 31, 1997
and the nine months ended December 31, 1997.............................. F-5
Unaudited Pro Forma Combined Statements of Operations for the years ended
March 31, 1996 and 1995 and the nine months ended December 31, 1996...... F-7
Notes to Unaudited Pro Forma Combined Financial Information............... F-10
</TABLE>
2
<PAGE>
SIGNATURE
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.
Date: May 21, 1998 By: /s/ Edward A. Christensen
_________________________________
Edward A. Christensen
Vice President
3
<PAGE>
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
On February 10, 1998, the Company announced that it had signed the Merger
Agreement with U.S. Filter providing, among other things, for the acquisition
by a wholly owned subsidiary of U.S. Filter of all outstanding shares of the
Company. Effective December 2, 1997, the Company acquired Protean for
approximately $174.5 million in cash and effective August 1, 1997, the Company
acquired Ametek for approximately $155.0 million in the Company's common stock
and cash in lieu of fractional shares. On December 9, 1997, U.S. Filter
acquired approximately 96% of the outstanding shares (the "Memtec Shares") of
Memtec Limited ("Memtec") pursuant to a tender offer. The remaining Memtec
Shares were acquired on February 5, 1998. The total purchase price for all
Memtec Shares was approximately $397.2 (including estimated transaction costs
of $10.6 million) and was allocated to the assets and liabilities of Memtec
based upon their respective fair values. The value of developed technology was
approximately $64.4 million and is being amortized on a straight-line basis
over 25 years. The value of other intangible assets including patents,
trademarks, license and distribution fees was approximately $7.3 million, and
is being amortized over periods ranging from 5 to 12 years. U.S. Filter also
acquired from Memtec certain in-process research and development projects that
had not reached technological feasibility and that had no alternative future
use. Such projects were valued by an independent appraiser using a risk
adjusted cash flow model under which expected future cash flows were
discounted, taking into account risks related to existing and future markets
and assessments of the life expectancy of such projects. The estimated market
value of such in-process research and development projects was $299.5 million
and was expensed at the acquisition date. The allocation of the purchase price
of Memtec is final and is not expected to change materially subsequent to
December 31, 1997. During the fiscal year ended March 31, 1997, U.S. Filter
completed several significant acquisitions that were accounted for as
purchases including the acquisitions of The Utility Supply Group, Inc.
("USG"), WaterPro Supplies Corporation ("WaterPro"), the Systems and
Manufacturing Group ("WSMG") of Wheelabrator Technologies Inc. and the
businesses of the Process Equipment Division ("PED") of United Utilities Plc,
which were completed on October 25, 1996, October 28, 1996, December 2, 1996
and January 6, 1997, respectively.
U.S. Filter acquired all of the common stock of The Kinetics Group, Inc.
("Kinetics") as of December 31, 1997 in exchange for 5,803,803 shares of U.S.
Filter's Common Stock, par value $.01 per share. The acquisition of Kinetics
was accounted for as a pooling of interests and accordingly all U.S. Filter
historical consolidated financial information has been restated to include
Kinetics. In restating the historical consolidated financial data for this
transaction, the historical results of U.S. Filter for the fiscal year ended
March 31, 1997 were combined with the historical results of Kinetics for the
fiscal year ended September 30, 1997; the historical results of U.S. Filter
for the year ended March 31, 1996 were combined with the historical results of
Kinetics for the year ended September 30, 1996; and the historical results of
U.S. Filter for the year ended March 31, 1995 were combined with the
historical results of Kinetics for the year ended September 30, 1995.
Accordingly, results of Kinetics for the six month period ended September 30,
1994 (including revenue of $85.4 million and net income of $3.9 million) are
not included in the combined results of operations of U.S. Filter presented
herein. Concurrent with U.S. Filter's merger with Kinetics, Kinetics year end
was recast to March 31. Thus, results for Kinetics as of and for the nine
months ended December 31, 1997 are included in the Company's results as of and
for the nine months ended December 31, 1997. Accordingly, Kinetics' results
for the six months ended September 30, 1997 (including revenue of $227.4
million and a net loss of $8.5 million) are included in both the restated
historical results for the fiscal year ended March 31, 1997 and the results
for the nine months ended December 31, 1997.
The following pro forma data is based on the historical combined statements
of U.S. Filter (as restated for the acquisition of Kinetics accounted for as a
pooling of interests), Memtec, the Company, Protean, Ametek, USG, WaterPro,
WMSG and PED giving effect to (i) the Company's acquisition by U.S. Filter
under the pooling of interests method of accounting, (ii) the Memtec, USG,
WaterPro, WMSG and PED acquisitions under the purchase method of accounting,
(iii) the Company's acquisitions of Protean and Ametek under the purchase
method of accounting and (iv) the assumptions and adjustments (which the
Company believes to be reasonable and in accordance with US generally accepted
accounting principles ("US GAAP")) described in the accompanying Notes to
Unaudited Pro Forma Combined Financial Information. Under the pooling of
interests
F-1
<PAGE>
method of accounting, the recorded assets and liabilities of the separate
entities become the recorded assets and liabilities of the combined entity.
Under the purchase method of accounting, assets acquired and liabilities
assumed will be recorded at their estimated fair value at the date of
acquisition. The pro forma adjustments set forth in the following unaudited
pro forma combined financial information are estimated and may differ from the
final adjustments. Any such final adjustments, including adjustments to
purchase price allocations, are not anticipated to have a material effect to
the financial position as reflected on the Unaudited Pro Forma Combined
Balance Sheet as of December 31, 1997.
The following unaudited pro forma combined financial information presents
the Unaudited Pro Forma Combined Balance Sheet at December 31, 1997 giving
effect to the acquisitions of the Company and Protean by U.S. Filter as if
they had been consummated on that date. The Company's fiscal year ends January
31, Memtec's fiscal year ends on June 30, U.S. Filter's fiscal year ends on
March 31, Protean's fiscal year ends on March 31 and Ametek's fiscal year ends
on December 31. The Unaudited Pro Forma Combined Balance Sheet combines the
balance sheet of U.S. Filter as of December 31, 1997, the balance sheet of the
Company as of October 31, 1997 and the balance sheet of Protean as of
September 30, 1997. The assets and liabilities of Kinetics, Memtec, USG,
WaterPro, WMSG and PED are included in U.S. Filter's historical balance sheet
at December 31, 1997 as these acquisitions were consummated on or before
December 31, 1997. The assets and liabilities of Ametek are included in the
Company's historical balance sheet as of October 31, 1997 as the Company's
acquisition of Ametek was consummated on August 1, 1997.
The unaudited pro forma combined financial information also presents the
Unaudited Pro Forma Combined Statements of Operations for the fiscal year
ended March 31, 1997, giving effect to the acquisitions of Memtec, the
Company, Protean, Ametek, USG, WaterPro, WSMG and PED as if each of the
acquisitions had been consummated as of the beginning of the earliest period
presented. The Unaudited Pro Forma Combined Statement of Operations for the
fiscal year ended March 31, 1997, combines (i) the results of the U.S. Filter
(as restated for the acquisition of Kinetics which was accounted for as a
pooling of interests) and Protean for such fiscal year, (ii) the results of
Memtec for their fiscal year ended June 30, 1997, (iii) the results of the
Company for their fiscal year ended January 31, 1997 (iv) the results of
Ametek for their fiscal year ended December 31, 1996 (v) the results of USG
for the period beginning on April 1, 1996 and ending immediately prior to U.S.
Filter's acquisition of USG on October 25, 1996, (vi) the results of WaterPro
for the period beginning on April 1, 1996 and ending immediately prior to U.S.
Filter's acquisition of WaterPro on October 28, 1996, (vii) the results of
WSMG for the period beginning on April 1, 1996 and ending immediately prior to
U.S. Filter's acquisition of WSMG on December 2, 1996, and (vii) the results
of PED for the period beginning on April 1, 1996 and ending immediately prior
to U.S. Filter's acquisition of PED on January 6, 1997. Results for USG,
WaterPro, WSMG and PED after they were acquired by U.S. Filter to March 31,
1997 are included in U.S. Filter's historical results for the fiscal year
ended March 31, 1997.
The Unaudited Pro Forma Combined Statement of Operations for the nine months
ended December 31, 1997 combines (i) the results of U.S. Filter for such
period, (ii) the results of Memtec for the period beginning on April 1, 1997
and ending immediately prior to Memtec being acquired by U.S. Filter on
December 9, 1997, (iii) the results of the Company for the nine months ended
October 31, 1997, (iv) the results of Protean for the nine months ended
September 30, 1997 and (v) the results of Ametek for the period beginning
February 1, 1997 and ending immediately prior to Ametek being acquired by the
Company on August 1, 1997. Results for Memtec for the period from the date
Memtec was acquired by U.S. Filter to December 31, 1997 are included in U.S.
Filter's historical results. Results of Kinetics, which was acquired on
December 31, 1997 and was accounted for as a pooling of interests, for the
nine months ended December 31, 1997 are included in U.S. Filter's historical
results. Results for USG, WaterPro, WSMG and PED for the nine months ended
December 31, 1997 are included in U.S. Filter's historical results as these
business were owned by U.S. Filter for the entire nine month period. Results
for Ametek for the period from the date Ametek was acquired by Culligan to
October 31, 1997 are included in the Company's historical results.
Results of operations for Memtec for the three months ended June 30, 1997
including revenue of $67.8 million and net income of $0.7 million are included
in the Unaudited Pro Forma Combined Statements of
F-2
<PAGE>
Operations for the fiscal year ended March 31, 1997 and for the nine months
ended December 31, 1997. Results of operations for Ametek including revenue of
$6.4 million and net income of $0.7 million for the month ended January 31,
1997 are not included in either the Unaudited Pro Forma Combined Results of
Operations for the fiscal year ended March 31, 1997 or the nine months ended
December 31, 1997. Results of operations for Protean for the three months
ended March 31, 1997 including revenue of $38.9 million and net income of $6.0
million are included in the Unaudited Pro Forma Combined Statements of
Operations for the fiscal year ended March 31, 1997 and for the nine months
ended December 31, 1997.
It is anticipated that the acquisition of the Company by U.S. Filter will be
accounted for as a pooling of interests and the estimated costs to effect the
transaction of $35-$40 million will be expensed as incurred. Accordingly,
Unaudited Pro Forma Combined Statements of Operations for the years ended
March 31, 1996 and 1995 and the nine months ended December 31, 1996 are also
presented. The Unaudited Pro Forma Combined Statements of Operations for the
years ended March 31, 1996 and 1995 combines the results of U.S. Filter for
such fiscal years with the results of the Company for their fiscal years ended
January 31, 1996 and 1995, respectively. The Unaudited Pro Forma Combined
Statement of Operations for the nine months ended December 31, 1996 combines
the results of U.S. Filter (as restated for the acquisition of Kinetics
accounted for as a pooling of interests) for the nine months ended December
31, 1996 with the results of the Company for the nine months ended October 31,
1996. The Unaudited Pro Forma Combined Statements of Operations for the years
ended March 31, 1996 and 1995, respectively, and the nine months ended
December 31, 1996 are in effect a restatement of the historical operations of
each of U.S. Filter and the Company and accordingly do not include the results
of Memtec, Protean, Ametek, USG, WaterPro, WSMG and PED, which were
acquisitions accounted for as purchases.
The historical financial statements of Protean and PED were prepared in
accordance with UK generally accepted accounting principles ("UK GAAP"), which
differs in certain respects from US GAAP. The historical PED Financial
Statements included in the unaudited combined financial information have been
restated to reflect PED's financial position and results of operations in
accordance with US GAAP. The pro forma adjustments contain certain adjustments
necessary to reflect Protean's historical financial statements in accordance
with US GAAP. Certain reclassifications have been made to the historical
financial statements of Protean to conform with U.S. Filter's presentation.
The following Unaudited Pro Forma Combined Financial Information does not
reflect certain cost savings that U.S. Filter believes may be realized
following the Kinetics, Memtec, the Company, USG, WaterPro, WMSG and PED
acquisitions as well as the Company's acquisitions of Protean and Ametek. Such
cost savings are expected to be realized primarily through the elimination of
certain overhead expenses and geographic overlap and the implementation of
strict cost controls and standardized operating procedures. Additionally, U.S.
Filter believes that such acquisitions will enable it to realize increased
operating efficiencies and economies of scale including enhanced purchasing
power and increased asset utilization.
The pro forma data is provided for illustrative purposes only. It does not
purport to be indicative of the results that actually would have occurred if
the acquisitions of Kinetics, Memtec, the Company, USG, WaterPro, WMSG and
PED, as well as the Company's acquisitions of Protean and Ametek, had been
consummated on the dates indicated or that may be obtained in the future. The
unaudited pro forma combined financial information should be read in
conjunction with the notes thereto.
F-3
<PAGE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 (NOTE a)
------------------------------------------------------------------
HISTORICAL PRO FORMA
------------------------------ -----------------------------------
ADJUSTMENTS
INCREASE
U.S. FILTER CULLIGAN PROTEAN (DECREASE) NOTES COMBINED
----------- -------- ------- ----------- ------------ ----------
(IN THOUSANDS)
ASSETS
------
<S> <C> <C> <C> <C> <C> <C>
Current assets:
Cash................... $ 57,821 $ 8,992 $ 7,177 $ 73,990
Restricted cash........ -- 143,968 -- (143,968) a(i) --
Short-term
investments........... 904 -- -- 904
Accounts receivable,
net................... 739,587 113,904 25,654 879,145
Cost and estimated
earnings in excess of
billings on
uncompleted
contracts............. 205,427 -- -- 205,427
Inventories............ 350,968 63,486 22,323 436,777
Prepaid expenses....... 19,893 6,499 6,377 (1,175) a(ii) 31,594
Deferred taxes......... 82,246 10,775 -- 93,021
Other current assets... 28,257 -- -- 28,257
----------- -------- ------- ----------
Total current
assets.............. 1,485,103 347,624 61,531 1,749,115
----------- -------- ------- ----------
Property, plant and
equipment, net........ 761,147 125,109 15,086 508 a(iii),a(iv) 901,850
Investment in leasehold
interests, net........ 22,424 -- -- 22,424
Cost in excess of net
assets of businesses
acquired, net......... 978,271 219,031 -- 143,994 a(v) 1,341,296
Other assets........... 113,837 101,005 -- (28,436) a(vi),a(vii) 186,406
----------- -------- ------- ----------
$ 3,360,782 $792,769 $76,617 $4,201,091
=========== ======== ======= ==========
<CAPTION>
LIABILITIES AND
SHAREHOLDERS' EQUITY
--------------------
<S> <C> <C> <C> <C> <C> <C>
Current liabilities:
Accounts payable....... $ 304,890 $ 36,658 $38,205 $ 379,753
Accrued liabilities.... 410,245 19,052 -- 429,297
Current portion of
long-term debt........ 25,464 11,126 -- 36,590
Billings in excess of
costs and estimated
earnings on
uncompleted
contracts............. 121,831 -- -- 121,831
Other current
liabilities........... 77,045 37,549 -- 114,594
----------- -------- ------- ----------
Total current
liabilities......... 939,475 104,385 38,205 1,082,065
----------- -------- ------- ----------
Notes payable........... 475,181 -- -- 475,181
Long-term debt,
excluding current
portion................ 128,988 307,567 8,401 304 a(viii) 445,260
Convertible subordinated
debentures............. 554,000 -- -- 554,000
Deferred taxes.......... 3,506 29,949 -- (1,175) a(ii) 32,280
Other liabilities....... 66,108 27,935 1,805 95,848
----------- -------- ------- ----------
Total liabilities.... 2,167,258 469,836 48,411 2,684,634
----------- -------- ------- ----------
Minority interest....... -- 1,972 -- 1,972
Shareholders' equity:...
Common stock........... 1,040 252 3,528 (3,339) a(ix),a(x) 1,481
Additional paid-in
capital............... 1,500,786 366,370 21,004 (21,193) a(ix),a(x) 1,866,967
Currency translation
adjustment............ (37,287) (5,749) -- (43,036)
Retained earnings
(accumulated
deficit).............. (271,015) (39,912) 3,674 (3,674) a(x) (310,927)
----------- -------- ------- ----------
Total shareholders'
equity.............. 1,193,524 320,961 28,206 $1,514,485
----------- -------- ------- ----------
$ 3,360,782 $792,769 $76,617 $4,201,091
=========== ======== ======= ==========
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma combined
financial information.
F-4
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31, 1997 (NOTE b)
---------------------------------------------------------------------------------------------------
HISTORICAL (NOTE c)
---------------------------------------------------------------------------------------
INCREASE
COMPANY MEMTEC CULLIGAN AMETEK PROTEAN USG WATERPRO WSMG PED (DECREASE)
---------- -------- -------- ------- -------- ------- -------- -------- -------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues........... $1,764,406 $243,616 $371,018 $68,650 $129,014 $85,899 $185,199 $218,973 $130,407 $ (827)
Cost of sales...... 1,376,615 155,638 205,581 44,039 66,980 70,011 151,238 171,673 92,728 885
---------- -------- -------- ------- -------- ------- -------- -------- --------
Gross profit...... 387,791 87,978 165,437 24,611 62,034 15,888 33,961 47,300 37,679
Selling, general
and administrative
expenses.......... 316,190 72,702 131,454 12,251 45,385 13,595 24,689 32,854 32,270 9,324
Merger,
restructuring,
acquisition and
other related
charges............ 5,581 1,677 -- -- 2,105 -- -- -- 1,992 (975)
---------- -------- -------- ------- -------- ------- -------- -------- --------
321,771 74,379 131,454 12,251 47,490 13,595 24,689 32,854 34,262
---------- -------- -------- ------- -------- ------- -------- -------- --------
Operating
income............ 66,020 13,599 33,983 12,360 14,544 2,293 9,272 14,446 3,417
---------- -------- -------- ------- -------- ------- -------- -------- --------
Other income
(expense):
Interest
expense........... (26,509) (5,613) (5,490) -- (1,285) (932) (2,433) -- (9,469) (35,972)
Interest and
other income...... 3,678 816 7,656 (9) 639 411 358 439 --
---------- -------- -------- ------- -------- ------- -------- -------- --------
(22,831) (4,797) 2,166 (9) (646) (521) (2,075) 439 (9,469)
---------- -------- -------- ------- -------- ------- -------- -------- --------
Income before
income tax
expense........... 43,189 8,802 36,149 12,351 13,898 1,772 7,197 14,885 (6,052)
Income tax expense
(benefit)......... 10,681 1,306 20,264 4,188 4,822 711 2,829 5,954 (310) (16,112)
---------- -------- -------- ------- -------- ------- -------- -------- --------
Net income........ $ 32,508 $ 7,496 $ 15,885 $ 8,163 $ 9,076 $ 1,061 $ 4,368 $ 8,931 $ (5,742)
========== ======== ======== ======= ======== ======= ======== ======== ========
Net income per
common share:
Basic........... $ 0.51
==========
Diluted......... $ 0.49
==========
Weighted average
shares
outstanding:
Basic........... 64,082
==========
Diluted......... 66,531
==========
<CAPTION>
PRO FORMA
--------------------------------
NOTES COMBINED
-------------------- -----------
<S> <C> <C>
Revenues........... b(i) $3,196,355
Cost of sales...... b(i), b(ii), b(iii) 2,335,388
b(iv), b(v)
-----------
Gross profit...... 860,967
Selling, general
and administrative
expenses.......... b(i), b(ii), b(iii), 690,714
b(vi), b(vii),
b(viii), b(ix), b(x)
Merger,
restructuring,
acquisition and
other related
charges............ b(x) 10,380
-----------
701,094
-----------
Operating
income............ 159,873
-----------
Other income
(expense):
Interest
expense........... b(xi) (87,703)
Interest and
other income...... 13,988
-----------
(73,715)
-----------
Income before
income tax
expense........... 86,158
Income tax expense
(benefit)......... b(xii) 34,333
-----------
Net income........ $ 51,825
===========
Net income per
common share:
Basic........... $ 0.47
===========
Diluted......... $ 0.45
===========
Weighted average
shares
outstanding:
Basic........... 110,877
===========
Diluted......... 114,775
===========
</TABLE>
The accompanying notes are an integral part of these pro forma combined
financial data.
F-5
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS ENDED DECEMBER 31, 1997 (NOTE b)
-----------------------------------------------------------------------------------------------------------
HISTORICAL (NOTE c) PRO FORMA
------------------------------------------------ ---------------------------------------------------------
U.S. ADJUSTMENTS
FILTER MEMTEC CULLIGAN AMETEK PROTEAN INCREASE (DECREASE) NOTES COMBINED
---------- -------- -------- ------- -------- ------------------- --------------------------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues........... $2,346,553 $168,503 $354,254 $38,381 $104,129 3,011,820
Cost of sales...... 1,798,595 106,412 202,441 24,623 54,926 $ 38 b (v) 2,187,305
---------- -------- -------- ------- -------- ---------
Gross profit...... 547,958 62,091 151,813 13,758 49,203 824,785
Selling, general
and administrative
expenses.......... 414,546 53,130 105,543 7,206 34,683 5,463 b(vi), b(viii), b(ix), b(x) 620,571
Purchased in-
process research
and development... 299,505 -- 20,170 -- -- 319,675
Merger,
restructuring,
acquisition and
other related
charges........... 141,109 2,714 5,236 -- -- 149,059
---------- -------- -------- ------- -------- ---------
855,160 55,844 130,949 7,206 34,683 1,089,305
---------- -------- -------- ------- -------- ---------
Operating income
(loss)........... (307,202) 6,247 20,864 6,552 14,520 (264,520)
---------- -------- -------- ------- -------- ---------
Other income
(expense):
Interest
expense.......... (34,374) (3,869) (5,277) -- (1,593) (24,359) b(xi) (69,472)
Gain on
disposition of
affiliate........ -- -- 31,098 -- -- 31,098
Interest and
other income..... 3,002 92 2,398 83 867 6,442
---------- -------- -------- ------- -------- ---------
(31,372) (3,777) 28,219 83 (726) (31,932)
---------- -------- -------- ------- -------- ---------
Income (loss)
before income
tax expense...... (338,574) 2,470 49,083 6,635 13,794 (296,452)
Income tax expense
(benefit)......... (1,273) 1,543 27,092 2,744 4,826 (10,451) b(xii) 24,481
Minority interest.. -- -- 665 -- -- 665
---------- -------- -------- ------- -------- ---------
Net income (loss)
before
extraordinary
item............. $ (337,301) $ 927 $ 21,326 $ 3,891 $ 8,968 $(321,598)
========== ======== ======== ======= ======== =========
Net income (loss)
per common share
before
extraordinary
item:
Basic........... $ (3.65) $ (2.36)
========== =========
Diluted......... $ (3.65) $ (2.36)
========== =========
Weighted average
shares
outstanding:
Basic........... 92,340 136,499
========== =========
Diluted......... 92,340 136,499
========== =========
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma combined
financial information.
F-6
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31, 1996 (NOTE b)
-------------------------------------------------
HISTORICAL PRO FORMA
-------------------- ---------------------------
U.S. INCREASE
FILTER CULLIGAN (DECREASE) NOTES COMBINED
---------- -------- ---------- ----- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Revenues.................... $1,090,745 $304,502 $1,395,247
Cost of sales............... 836,973 168,363 1,005,336
---------- -------- ----------
Gross profit.............. 253,772 136,139 389,911
Selling, general and
administrative expenses.... 192,387 134,525 326,912
---------- -------- ----------
Operating income.......... 61,385 1,614 62,999
---------- -------- ----------
Other income (expense):
Interest expense.......... (16,280) (12,426) (28,706)
Interest and other
income................... 5,923 4,443 10,366
---------- -------- ----------
(10,357) (7,983) (18,340)
---------- -------- ----------
Income (loss) before
income tax expense....... 51,028 (6,369) 44,659
Income tax expense.......... 20,329 14,910 35,239
---------- -------- ----------
Net income (loss)......... $ 30,699 $(21,279) $ 9,420
========== ======== ==========
Net income per common share:
Basic................... $ 0.62 $ 0.12
========== === ==========
Diluted................. $ 0.61 $ 0.11
========== === ==========
Weighted average shares
outstanding:
Basic................... 48,369 76,326
========== === ==========
Diluted................. 49,668 78,147
========== ==========
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma combined
financial information.
F-7
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31, 1995 (NOTE b)
------------------------------------------------
HISTORICAL PRO FORMA
------------------ ----------------------------
U.S. INCREASE
FILTER CULLIGAN (DECREASE) NOTES COMBINED
-------- -------- --------- ------ ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Revenues..................... $830,765 $280,051 $1,110,816
Cost of sales................ 658,834 155,829 814,663
-------- -------- ----------
Gross profit............... 171,931 124,222 296,153
Selling, general and
administrative expenses..... 131,210 131,775 262,985
Restructuring expenses....... -- 5,917 5,917
-------- -------- ----------
131,210 137,692 268,902
-------- -------- ----------
Operating income (loss).... 40,721 (13,470) 27,251
-------- -------- ----------
Other income (expense):
Interest expense........... (8,807) (19,085) (27,892)
Interest and other income.. 1,611 1,837 3,448
-------- -------- ----------
(7,196) (17,248) (24,444)
-------- -------- ----------
Income (loss) before income
tax expense............... 33,525 (30,718) 2,807
Income tax expense........... 8,904 5,678 14,582
-------- -------- ----------
Net income (loss).......... $ 24,621 $(36,396) $ (11,775)
======== ======== ==========
Net income (loss) per common
share:
Basic...................... $ 0.68 $ (0.20)
======== ==========
Diluted.................... $ 0.66 $ (0.20)
======== ==========
Weighted average shares
outstanding:
Basic...................... 35,198 62,432
======== ==========
Diluted.................... 43,707 62,432
======== ==========
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma combined
financial information.
F-8
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS ENDED DECEMBER 31, 1996 (NOTE b)
---------------------------------------------------
HISTORICAL PRO FORMA
--------------------- ----------------------------
INCREASE
COMPANY CULLIGAN (DECREASE) NOTES COMBINED
----------- -------- --------- ------ ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Revenues.................. $ 1,094,636 $272,416 $1,367,052
Cost of sales............. 859,754 151,696 1,011,450
----------- -------- ----------
Gross profit............ 234,882 120,720 355,602
Selling, general and
administrative expenses.. 196,752 100,220 296,972
Merger expenses........... 5,581 0 5,581
----------- -------- ----------
202,333 100,220 302,553
----------- -------- ----------
Operating income ....... 32,549 20,500 53,049
----------- -------- ----------
Other income (expense):
Interest expense........ (15,907) (4,076) (19,983)
Interest and other
income................. 2,981 5,683 8,664
----------- -------- ----------
(12,926) 1,607 (11,319)
----------- -------- ----------
Income (loss) before
income tax expense..... 19,623 22,107 41,730
Income tax expense........ 3,845 14,743 18,588
----------- -------- ----------
Net income (loss)....... $ 15,778 $ 7,364 $ 23,142
=========== ======== ==========
Net income (loss) per
common share:
Basic................... $ 0.27 $ 0.24
=========== ==========
Diluted................. $ 0.26 $ 0.23
=========== ==========
Weighted average shares
outstanding:
Basic................... 58,016 95,290
=========== ==========
Diluted................. 61,464 98,737
=========== ==========
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma combined
financial information.
F-9
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
a. The Unaudited Pro Forma Combined Balance Sheet has been prepared to reflect
the pending acquisition by U.S. Filter of the Company under the pooling of
interests method of accounting. U.S. Filter plans to acquire all of the
outstanding capital stock of the Company in exchange for approximately 44.2
million shares of U.S. Filter's Common Stock (assuming an exchange ratio of
1.714 shares of U.S. Filter's Common Stock for each outstanding share of
the Company's Common Stock). Pursuant to the pooling of interests method of
accounting, the recorded assets and liabilities of each of U.S. Filter and
the Company will be recorded as the assets and liabilities of the combined
entity.
The Unaudited Pro Forma Combined Balance Sheet has also been prepared to
reflect the Company's acquisition of Protean under the purchase method of
accounting. Including transaction costs of approximately $8.7 million, the
equity purchase price of Protean was approximately $174.5 million. The
purchase price will be allocated to the assets of Protean based on their
respective estimated fair values. In addition to the equity purchase price,
the Company assumed Protean's long-term indebtedness of approximately $8.4
million. The Protean balance sheet has been derived from the historical
financial statements, presented in accordance with UK GAAP and has been
translated into US dollars. The pro forma adjustments include certain
adjustments necessary to reflect Protean's historical financial statements
in accordance with US GAAP. Certain reclassifications have been made to the
historical financial statements of Protean to conform with U.S. Filter's
presentation. All amounts herein are presented in US dollars. In connection
with the acquisition of Protean, Culligan had decided to divest the
Analytical and Thermal Group of Protean by November 1998. These operations
were reflected as discontinued operations in the Company's Form 10-K/A for
the year ended January 31, 1998 which has been incorporated by reference
herein. Upon completion of the merger, U.S. Filter will record a cumulative
adjustment to reflect the results of operations of the Analytical and
Thermal Group of Protean as if it had never been held for sale. The
cumulative adjustment for the period from the date of acquisition through
January 31, 1998 will result in a reduction in net income of $264,000.
The Unaudited Pro Forma Combined Balance Sheet as of December 31, 1997
combines the consolidated balance sheet of U.S. Filter as of December 31,
1997 with the consolidated balance sheets of the Company as of October 31,
1997 and Protean as of September 30, 1997 and has been adjusted as follows.
The U.S. Filter consolidated balance sheet as of December 31, 1997 includes
the accounts of Kinetics, Memtec, USG, WaterPro, WMSG and PED as all of
these acquisitions were closed on or prior to December 31, 1997. The
Company's consolidated balance sheet as of October 31, 1997 includes the
accounts of Ametek as if the Company acquired Ametek on August 1, 1997.
(i) To eliminate restricted cash that was held in escrow until the
Company's offer to acquire Protean was declared unconditional on
December 2, 1997. The restricted cash was used to acquire a portion of
Protean's outstanding shares.
(ii) To reclassify non-current deferred tax assets included in Protean's
prepaid assets.
(iii) To reverse the periodic revaluation of certain property, plant and
equipment allowed for UK GAAP purposes. Under US GAAP such
revaluations are not permitted and all property, plant and equipment,
other than land, is depreciated over their estimated economic lives.
The adjustment results in a reduction of the carrying value of net
property plant and equipment of $332,000.
(iv) To increase property, plant and equipment for the estimated step-up to
fair value in the amount of $840,000.
(v) To record the goodwill related to the Company's acquisition of Protean.
Goodwill represents the excess of the purchase price paid over the sum
of the estimated fair value of identifiable assets acquired less
liabilities assumed and may change based on the final asset valuation.
(vi) To record a non-current asset of $1,757,000 to reflect Protean's
pension accounting on a US GAAP basis. Protean provides for the cost
of retirement benefits based upon consistent percentages of
F-10
<PAGE>
employees' pension payables as recommended by independent qualified
actuaries. US GAAP requires that the projected benefit obligation be
reduced to the extent of the plans' fair value of assets and be
adjusted to reflect unrecognized obligations or assets in determining
pension cost or credit for the year.
(vii)To eliminate the Company's equity investment in Protean of $30,193,000
that was recorded on the Company's consolidated balance sheet at
October 31, 1997.
(viii) To record incremental indebtedness for the Company's acquisition of
Protean. The total cash purchase price of Protean was approximately
$174.5 million including transactional costs of approximately
$8.7 million. Incremental indebtedness is calculated as follows:
<TABLE>
<S> <C>
Protean purchase price.................................... $ 174,465,000
Less:
Proceeds from restricted cash............................. (143,968,000)
Proceeds from initial equity investment................... (30,193,000)
-------------
Incremental indebtedness for acquisition of Protean....... $ 304,000
=============
</TABLE>
Proceeds from restricted cash and from initial equity investment were
obtained through borrowings by the Company prior to October 31, 1997.
Accordingly debt associated with such borrowings are included on the
Company's balance sheet as of October 31, 1997.
(ix)To reflect the equity adjustments necessary to reflect the acquisition
of the Company on a pooling of interests basis. Such adjustments had
the effect of increasing common stock $189,000 and reducing additional
paid-in-capital by $189,000.
(x)To eliminate the equity of Protean.
b. The Unaudited Pro Forma Combined Statement of Operations for the fiscal
year ended March 31, 1997, combines (i) the results of U.S. Filter (as
restated for the acquisition of Kinetics which was accounted for as a
pooling of interests) and Protean for such fiscal year, (ii) the results of
Memtec for their fiscal year ended June 30, 1997, (iii) the results of the
Company for their fiscal year ended January 31, 1997, (iv) the results of
Ametek for their fiscal year ended December 31, 1996, (v) the results of
USG for the period beginning on April 1, 1996 and ending immediately prior
to U.S. Filter's acquisition of USG on October 25, 1996, (vi) the results
of WaterPro for the period beginning on April 1, 1996 and ending
immediately prior to U.S. Filter's acquisition of WaterPro on October 28,
1996, (vii) the results of WSMG for the period beginning on April 1, 1996
and ending immediately prior to U.S. Filter's acquisition of WSMG on
December 2, 1996, and (vii) the results of PED for the period beginning on
April 1, 1996 and ending immediately prior to U.S. Filter's acquisition of
PED on January 6, 1997. Results of USG, WaterPro, WSMG and PED after they
were acquired by U.S. Filter to March 31, 1997 are included in U.S.
Filter's historical results for the fiscal year ended March 31, 1997.
The Unaudited Pro Forma Combined Statement of Operations for the nine
months ended December 31, 1997 combines (i) the results of U.S. Filter for
such nine month period (which includes the results of Kinetics as such
acquisition closed on December 31, 1997 and was accounted for as a pooling
of interests), (ii) the results of Memtec for the period beginning on April
1, 1997 and ended immediately prior to the acquisition by U.S. Filter on
December 9, 1997 (Memtec's results subsequent to its acquisition are
included in U.S. Filter's historical results), (iii) the results of the
Company for their nine months ended October 31, 1997, (iv) the results of
Ametek for the period beginning on February 1, 1997 and ending immediately
prior to its acquisition by the Company on August 1, 1997 (Ametek's results
subsequent to its acquisition by the Company are included in the Company's
historical results) and (v) the results of Protean for their nine months
ended September 30, 1997. The Protean statements of operations have been
derived from the historical financial accounts of Protean and are presented
in accordance with UK GAAP. These statements of operations have been
translated into US dollars using exchange rates of $1.59 and $1.63 per
British pound sterling for the year ended March 31, 1997 and the nine
months ended September 30, 1997, respectively. Additionally, certain pro
forma adjustments were made to conform Protean's historical financial
information with US GAAP.
F-11
<PAGE>
For the fiscal years ended March 31, 1996 and 1995, the historical results
of U.S. Filter for the fiscal years ended March 31, 1996 and 1995, are
combined with the results of the Company for their fiscal years ended
January 31, 1996 and 1995, respectively. For the nine month period ended
December 31, 1996, the historical results of U.S. Filter (as restated for
the acquisition of Kinetics which was accounted for as a pooling of
interests) for such period are combined with the results of the Company for
the nine months ended October 31, 1996. The Unaudited Pro Forma Combined
Statements of Operations for these periods are in effect a restatement of
the historical operations of each of U.S. Filter and the Company and
accordingly do not include the results of Memtec, Protean, Ametek, USG,
WaterPro, WSMG and PED which were acquisitions accounted for as purchases.
The Unaudited Pro Forma Combined Statements of Operations gives effect to
the following adjustments:
<TABLE>
<CAPTION>
FISCAL YEAR
ENDED NINE MONTHS ENDED
MARCH 31, 1997 DECEMBER 31, 1997
-------------- -----------------
(IN THOUSANDS)
<S> <C> <C>
(i) To eliminate November and December 1995 sales (and
related expenses) of APIC International, S.A., a wholly
owned subsidiary of Ametek, to reduce the results to
the twelve months ended December 31, 1996. The
adjustment impacts the following accounts:
Sales................................................ $ 827 $--
======= ====
Cost of sales........................................ $ (359) $--
======= ====
Selling, general and administrative expenses......... $ (367) $--
======= ====
(ii) To reclassify research and development expenses
included in cost of sales in Ametek's historical
results for the year ended December 31, 1996 to
selling, general and administrative expenses in order
to combine Ametek's historical results on a basis
consistent with U.S. Filter. The adjustment impacts
the following accounts:
Cost of sales........................................ $ (618) $--
======= ====
Selling, general and administrative expenses......... $ 618 $--
======= ====
(iii) To reclassify depreciation expense of Ametek to cost
of sales from selling, general and administrative
expenses for the year ended December 31, 1996 in
order to combine Ametek's historical results on a
basis consistent with U.S. Filter. The adjustment
impacts the following accounts:
Cost of sales........................................ $ 1,856 $--
======= ====
Selling, general and administrative expenses......... $(1,856) $--
======= ====
(iv) To adjust cost of sales to capitalize tooling costs
expensed by Ametek, net of additional depreciation
expense related to such capitalized amounts, in
order to present Ametek's historical results on a
basis consistent with U.S. Filter and the accounting
policies that are being used subsequent to the
Company's acquisition of Ametek .................... $ (45) $--
======= ====
</TABLE>
F-12
<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR
ENDED NINE MONTHS ENDED
MARCH 31, 1997 DECEMBER 31, 1997
-------------- -----------------
(IN THOUSANDS)
<S> <C> <C>
(v) To adjust cost of sales to record
depreciation expense on the net step-up
in fair value of the property, plant and
equipment acquired by the Company in the
Protean acquisition. Such assets are
depreciated over a 10 year economic life
......................................... $ 51 $ 38
====== ======
(vi) To adjust selling, general and
administrative expenses to record
amortization expense of identifiable
trademarks acquired in connection with
the Company's acquisition of Ametek .... $ 160 $ 80
====== ======
(vii) To adjust selling, general and
administrative expenses to reflect
goodwill amortization from U.S.
Filter's acquisitions of USG, WaterPro,
WSMG and PED, with such goodwill of
approximately $262,326,000 amortized
over 40 years. The Pro Forma adjustment
reflects goodwill amortization from
April 1, 1996 until each of USG,
WaterPro, WSMG and PED were acquired.
Goodwill amortization related to these
acquirees after their respective
acquisition dates is included in U.S.
Filter's historical results............ $3,279 $ --
====== ======
(viii) To adjust selling, general and
administrative expenses to reflect the
goodwill amortization from the
Company's acquisitions of Protean and
Ametek, with such goodwill of
approximately $262,634,000 amortized
over 40 years ........................ $6,566 $4,924
====== ======
(ix) To reclassify restructuring expenses
recorded by Protean in accordance with
UK GAAP into selling, general and
administrative expenses for the year
ended March 31, 1997, as they do not
meet the definition of restructuring
costs under US GAAP. Additionally,
during the nine months ended December
31, 1997 certain costs that were accrued
by Protean as restructuring costs at
March 31, 1997 should have been expensed
as selling, general and administrative
costs as incurred in the subsequent nine
month period. The adjustments impact the
following accounts:
Selling, general and administrative
expenses................................ $ 975 $ 619
====== ======
Merger, restructuring, acquisition and
other related charges................... $ (975) $ --
====== ======
(x) To adjust selling, general and
administrative expenses to recognize the
effect of accounting for pension costs on
a US GAAP basis.......................... $ (51) $ (160)
====== ======
(xi) To adjust interest expense related to
the debt of approximately $562,829,000
incurred or to be incurred to finance
the acquisitions Memtec and Protean; and
to adjust interest expense related to
the debt of $25,000,000 assumed in the
Company's acquisition of Ametek.
Interest on the total debt of
$587,829,000 is assumed to be either
financed by or refinanced by borrowings
under U.S. Filter's Senior Credit
Facility at an assumed effective rate of
5.92% per annum.
</TABLE>
F-13
<PAGE>
<TABLE>
<CAPTION>
FISCAL YEAR
ENDED NINE MONTHS ENDED
MARCH 31, 1997 DECEMBER 31, 1997
-------------- -----------------
(IN THOUSANDS)
<S> <C> <C>
For the fiscal year ended March 31,
1997, the total incremental debt of
$587,829,000 is assumed to be
outstanding for the entire fiscal year.
For the nine months ended December 31,
1997, incremental debt of $388,364,000
used to finance the acquisition of
Memtec is assumed to be outstanding for
period beginning on April 1, 1997 and
ending immediately prior to its
acquisition by U.S. Filter on December
9, 1997 (from that date until the end of
the nine month period on December 31,
1997 debt to acquire Memtec was actually
outstanding and interest expense on such
debt was included in U.S. Filter's
historical results). Additionally, for
the nine months ended December 31, 1997,
incremental debt of $174,465,000 used to
finance the Company's acquisition of
Protean is assumed to be outstanding for
the entire nine month period; whereas
debt assumed in the Company's
acquisition of Ametek of $25,000,000 is
assumed to be outstanding for the period
beginning on February 1, 1997 and ending
immediately prior to its acquisition by
Culligan on August 1, 1997 (from that
date until the end of the nine month
period on October 31, 1997 debt assumed
in the Company's acquisition of Ametek
was actually outstanding and interest
expense on such debt was included in the
Company's actual results).
For the fiscal year ended March 31,
1997, the interest expense adjustment
includes a provision for the debt of
approximately $541,025,000 incurred to
finance the acquisitions of WSMG and
PED, net of historical interest expense
recorded by WaterPro and PED on parent
company debt. WaterPro and PED incurred
interest on such parent company debt at
the prime rate and approximately 11%,
respectively, and incurred interest
expense of $2,433,000 and $9,469,000
respectively, for the period beginning
April 1, 1996 and ending when upon
acquisition of the individual
businesses. The assumed interest rate on
$414,000,000 of the debt incurred to
finance the WSMG and PED acquisitions is
4.5% as this debt was funded by
convertible subordinated debentures
issue December 12, 1996. The remaining
$137,025,000 of such debt is assumed to
be financed on borrowings under U.S.
Filter's Senior Credit Facility with an
effective interest rate of 5.92%.
The assumed effective interest of
5.92% on assumed borrowings under U.S.
Filter's Senior Credit Facility is
subject to variability. A 0.125%
increase-decrease in the assumed
effective interest rate incrementally
decreases-increases pro forma combined
net income (loss) $505,000 and
$325,000 for the year ended March 31,
1997 and the nine months ended
December 31, 1997..................... $ 35,972 $ 24,359
======== ========
(xii) To adjust the provision for income
taxes for each of the pro forma
adjustments assuming the statutory
tax rate of 35%..................... $(16,112) $(10,451)
======== ========
</TABLE>
F-14
<PAGE>
c. During the fiscal year ended March 31, 1997, U.S. Filter recorded merger
expenses of $5.6 million related to the acquisition of Davis. Such expenses
consisted primarily of investment banking, printing, stock transfer, legal,
accounting, governmental filing fees and certain other costs related to
existing Davis pension plans and change of control payments. On December 9,
1997, U.S. Filter acquired all of the outstanding shares of Memtec in
exchange for cash totaling $397.2 million (including estimated transaction
costs of $10.6 million). U.S. Filter acquired from Memtec certain in-
process research and development projects that had not reached
technological feasibility and that had no alternative future use. The
estimated market value of such in-process research and development
projects, as determined by an independent appraiser, was $299.5 million and
was expensed at the acquisition date. During the nine months ended December
31, 1997, U.S. Filter recorded a pre-tax charge for merger, restructuring,
acquisition and other related charges of $141.1 million. Such charges
related to a restructuring plan that U.S. Filter designed and implemented
concurrent with the acquisitions of Kinetics and Memtec. The plan was
designed to streamline U.S. Filter's manufacturing and production base,
improve efficiency and enhance its competitiveness. Included in the merger,
restructuring, acquisition and other related charges was merger expenses
incurred to consummated the Kinetics transaction of $4.3 million consisting
of investment banking, printing, stock transfer, legal, accounting,
governmental filing and certain other transaction costs.
During the fiscal year ended June 30, 1997 and the nine months ended
December 31, 1997, Memtec recorded restructuring expenses of $1.7 million
and $2.7 million, respectively. Such restructuring expenses related to
employee terminations and asset write-downs at Memtec's French operations.
The restructuring was performed to focus Memtec's French operations on
global brands and away from non-core businesses.
During the nine months ended October 31, 1997, the Company recorded a
merger and restructuring charge of $9.5 million in connection with the
acquisition of Ametek to reflect the integration and restructuring of the
Company's Everpure(R), UltraPure(R) and US Water(R) Products operations
with Ametek and the restructuring of the Company's consumer products
division to focus principally on the "do-it-yourself" and hybrid retail
markets. During the nine months ended October 31, 1997, the Company
acquired from Ametek certain in-process research and development projects
that had not reached technological feasibility and that had no alternative
future use. The estimated market value of such in-process research and
development projects was $17.0 million and was expensed at the acquisition
date. In addition during such nine months, the Company wrote-off the
remaining goodwill of $3.2 million arising from the acquisition of Ultra
Pure(R) in January 1996 related to more costly technology used prior to the
acquisition of Ametek. During the nine months ended October 31, 1997, the
Company disposed of its investment in Anvil Holdings, Inc. for total cash
proceeds of $50.9 million. The transaction, which included payment of
outstanding accrued interest receivable and dividends, resulted in a pre-
tax gain of approximately $31.1 million.
During the fiscal year ended March 31, 1997, Protean recorded a charge of
$2.1 million ($1.1 million for US GAAP purposes) for reorganization costs
incurred in respect of DWA GmBH & Co. AG consisting of redundancies and
professional and consultancy assistance in Germany, together with inventory
write downs and other provisions.
Prior to the acquisition of PED by U.S. Filter during the fiscal year ended
March 31, 1997, PED incurred restructuring charges relating to the plant
closure and relocation of the operations of Wallace & Tieman, Inc. a
subsidiary, from Belleville, N.J. to Vineland, N.J. These restructuring
charges totaled $2.0 million during the period beginning of April 1, 1996
and ending immediately prior to PED being acquired by U.S. Filter on
January 6, 1997.
F-15
