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) August 1, 2003
IONICS, INCORPORATED
(Exact name of registrant as specified in its charter)
Massachusetts 1-7211 04-2068530
(State of incorporation) (Commission File Number) (IRS Employer ID No.)
65 Grove Street 02472 (617) 926-2500
Watertown, MA (Zip Code) (Registrant's telephone
(Address of principal number including area code)
executive offices)
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Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits
Exhibit Number Description
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99 Press release dated August 1, 2003 regarding
the financial results of Ionics, Incorporated
for the second quarter ended June 30, 2003.
Item 12. Results of Operations and Financial Condition
---------------------------------------------
On August 1, 2003, Ionics, Incorporated issued a press release reporting
financial results for the second quarter and first six months of 2003, ended
June 30, 2003. A copy of the press release is attached hereto as Exhibit 99 and
is hereby incorporated by reference.
SIGNATURES
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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 duly authorized.
IONICS, INCORPORATED
August 1, 2003 By: /s/Douglas R. Brown
-------------------
Name: Douglas R. Brown
Title: Chief Executive Officer
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EXHIBIT INDEX
Number Description Page Number
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99 Press Release of Ionics, Incorporated dated August 1, 2003 4
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EXHIBIT 99
IONICS REPORTS SECOND QUARTER AND FIRST HALF RESULTS
WATERTOWN, MA, August 1, 2003... Ionics, Incorporated (NYSE-ION) today reported
financial results for the quarter and six months ended June 30, 2003. For the
quarter, revenues of $90.9 million were up from $79.5 million for the second
quarter of 2002. The net loss for the quarter of $4.9 million compared to net
income of $1.2 million for the second quarter of 2002, and the loss per share of
$0.28 for the quarter compared to earnings per share of $0.07 for the second
quarter of 2002.
Revenues for the first six months of 2003 were $179.1 million, compared to
$159.5 million for the first six months of 2002. The net loss for the first six
months of 2003 was $4.3 million, or $0.25 per share, compared to net income of
$2.7 million, or $0.15 per share, for the first six months of 2002. Ending
backlog on June 30, 2003 was $346.0 million, compared to $370.5 million one year
earlier.
During the quarter, the Company's Trinidadian affiliate, Desalination Company of
Trinidad and Tobago, Ltd. (Desalcott), completed long-term financing of the
desalination plant with the bank that provided the construction financing. The
proceeds were disbursed in July. Also during the quarter, the Company resolved
the outstanding payment matters that were in dispute with Desalcott relating to
the construction of the facility. In addition, the Company and Desalcott agreed
to a price of $7.7 million for the work required to complete the last phase of
the facility, which will result in a 9% capacity increase. The Company recorded
a $3.4 million equity loss associated with Desalcott in the quarter, in large
part attributable to the expenses associated with the close of the long-term
financing.
Results for the quarter and six month period ended June 30, 2003 also included
an asset impairment charge of $4.0 million related to the decision to no longer
utilize Cloromat sodium hypochlorite production equipment in the Company's
consumer chemical operations.
Subsequent to the close of the quarter, Ionics purchased the assets of
CoolerSmart LLC, located in New Castle, Delaware. CoolerSmart is a leading
point-of-use water cooler rental company with over 10,000 water coolers placed
throughout the mid-Atlantic region.
Ionics will broadcast its second quarter and first half financial results
conference call via the internet today at 10:30AM, EDT. This conference call
will be accessible on the Company's website at www.ionics.com. A recorded replay
of the conference call will also be accessible on our website for a two-week
period commencing at 5:00PM today. In addition, this press release will also be
accessible on our website promptly following its issuance.
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Ionics is a global separations technology company involved in the manufacture
and sale of membranes, equipment and own and operate services for the
purification, disinfection, concentration, treatment and analysis of water,
wastewater and ultrapure water. Over a period of more than 50 years Ionics has
built more desalination plants than any company in the world.
Safe-harbor statement under the Private Securities Litigation Reform Act of
1995: Forward-looking statements in this news release involve risk and
uncertainty. The statements contained in this release which are not historical
facts are forward-looking statements. These forward-looking statements are based
on management's current views and assumptions and are neither promises nor
guarantees but are subject to risks, uncertainties and other factors that could
cause actual results to differ materially from management's current expectations
as described in such forward-looking statements, including overall economic and
business conditions; competitive factors, such as acceptance of new products,
pricing pressures and competition from competitors larger than the Company;
risks of nonpayment of accounts receivable, including those from affiliated
companies; risks associated with foreign operations; technological and product
development risks; availability of manufacturing capacity; and other factors
described in the Company's filings with the Securities and Exchange Commission,
including its annual report on Form 10-K for the year ended December 31, 2002.
You should not place undue reliance on the forward-looking statements in this
press release, and the Company disavows any obligation to update or supplement
those statements in the event of any changes in the facts, circumstances, or
expectations that underlie those statements.
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IONICS REPORTS SECOND QUARTER AND FIRST HALF RESULTS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
-------------------------- --------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
(as restated) (as restated)
Revenues:
Equipment Business Group $ 37,430 $ 35,944 $ 70,114 $ 70,992
Ultrapure Water Group 23,615 25,440 48,864 50,185
Consumer Water Group 10,006 8,726 20,821 19,279
Instrument Business Group 6,879 6,810 14,559 13,354
Affiliated companies 13,006 2,577 24,783 5,692
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90,936 79,497 179,141 159,502
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Costs and expenses:
Cost of sales of Equipment Business Group 28,554 26,579 52,017 52,176
Cost of sales of Ultrapure Water Group 18,078 18,613 36,866 37,611
Cost of sales of Consumer Water Group 6,753 4,874 14,268 11,704
Cost of sales of Instrument Business Group 3,010 2,584 6,123 5,337
Cost of sales to affiliated companies 11,166 2,279 21,383 5,316
Research and development 1,954 1,594 3,731 3,215
Selling, general and administrative 22,827 21,545 45,374 41,400
Impairment of long-lived assets 3,981 - 3,981 -
------------ ------------ ------------ ------------
96,323 78,068 183,743 156,759
------------ ------------ ------------ ------------
(Loss) income from operations (5,387) 1,429 (4,602) 2,743
Interest income, net 491 492 1,055 925
Equity (loss) income (2,742) 782 (2,843) 1,674
------------ ------------ ------------ ------------
(Loss) income before income taxes and
minority interest expense (7,638) 2,703 (6,390) 5,342
Income tax (benefit) expense (2,902) 1,297 (2,428) 2,173
------------ ------------ ------------ ------------
(Loss) income before minority interest expense (4,736) 1,406 (3,962) 3,169
Minority interest expense 188 161 386 425
------------ ------------ ------------ ------------
Net (loss) income $ (4,924) $ 1,245 $ (4,348) $ 2,744
============ ============ ============ ============
Basic (loss) earnings per share $ (0.28) $ 0.07 $ (0.25) $ 0.16
============ ============ ============ ============
Diluted (loss) earnings per share $ (0.28) $ 0.07 $ (0.25) $ 0.15
============ ============ ============ ============
Shares used in basic (loss) earnings per share calculations 17,564 17,547 17,559 17,528
============ ============ ============ ============
Shares used in diluted (loss) earnings per share calculations 17,564 17,707 17,559 17,742
============ ============ ============ ============
Backlog $ 346,048 $ 370,524
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
June 30, December 31,
2003 2002
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Current assets:
Cash and cash equivalents $ 126,979 $ 136,044
Restricted cash - 4,250
Short-term investments 1,033 958
Notes receivable, current 7,092 6,662
Accounts receivable, net 83,907 94,841
Receivables from affiliated companies 47,491 23,642
Inventories 34,665 34,847
Other current assets 25,331 27,496
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Total current assets 326,498 328,740
Receivables from affiliated companies, long-term 17,935 11,740
Notes receivable, long-term, net 25,123 24,718
Investments in affiliated companies 19,078 22,618
Property, plant and equipment, net 179,537 179,914
Other assets 40,742 40,283
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Total assets $ 608,913 $ 608,013
=============== ===============
Current liabilities:
Notes payable and current portion of long-term debt $ 5,075 $ 4,134
Accounts payable 28,619 36,039
Deferred revenue and advances from affiliated companies 11,816 4,308
Other current liabilities 63,060 69,687
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Total current liabilities 108,570 114,168
Long-term debt and notes payable 9,421 9,670
Deferred income taxes 36,376 35,337
Deferred revenue from affiliated companies, long-term 3,916 4,662
Other liabilities 7,950 6,023
Stockholders' equity 442,680 438,153
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Total liabilities and stockholders' equity $ 608,913 $ 608,013
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For more information, contact:
Francine S. Bernitz, Vice President Theodore G. Papastavros
Marketing and Corporate Communications Executive Vice President and Treasurer
Ionics, Incorporated Ionics, Incorporated
Tel: (617) 926-2510 ext. 312 Tel: (617) 926-2510 ext. 221
fbernitz@ionics.com tpapastavros@ionics.com