UNITED STATES
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 9, 2004
IONICS, INCORPORATED
(Exact name of registrant as specified in its charter)
Massachusetts 1-7211 04-2068530
(State of incorporation) (Commission File No.) (IRS Employer Identification No.)
65 Grove Street, Watertown, MA 02472 (617) 926-2500
(Address of principal executive offices) (Zip Code) (Registrant's telephone number,
including area code)
Item 7. Financial Statements and Exhibits
Exhibit Number Description
99 Press Release dated August 9, 2004, reporting the
financial results of Ionics, Incorporated for the
quarter ended June 30, 2004.
Item. 12. Results of Operations and Financial Condition
On August 9, 2004, Ionics, Incorporated issued a press release
reporting its financial results for the quarter ended June 30, 2004.
A copy of the Press Release is attached hereto as Exhibit 99 and is
hereby incorporated by reference.
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 duly authorized.
IONICS, INCORPORATED
August 9, 2004 By: /s/Stephen Korn
----------------------------
Name: Stephen Korn
Title: Vice President and General Counsel
2
EXHIBIT INDEX
Number Description Page Number
------ ----------- -----------
99 Press release dated August 9, 2004, reporting the 4
financial results of Ionics, Incorporated for the
quarter ended June 30, 2004.
3
EXHIBIT 99
IONICS REPORTS RESULTS FOR THE SECOND QUARTER
AND FIRST HALF OF 2004
Watertown, MA, August 9, 2004 . . . Ionics, Incorporated (NYSE-ION) today filed
its quarterly report on Form 10-Q, reporting results for the three and
six-months periods ended June 30, 2004. Second quarter revenues were $125.8
million compared to $83.6 million for the second quarter of 2003. The net loss
of $2.3 million, or ($0.10) per share, in Q2 2004 compared to a net loss of $4.9
million, or ($0.28) per share, for Q2 2003. The loss per share from continuing
operations of ($0.07) in Q2 2004 compares to a loss per share of ($0.11) in Q2
2003. Excluding amortization of intangibles, net of tax, the results of
continuing operations were break-even, compared to a loss per share of ($0.11)
in the second quarter of 2003.
Revenues for the first half of 2004 were $231.5 million compared to $163.8
million for the first half of 2003. The net loss of $6.3 million, or ($0.29) per
share, in the first half of 2004 compared to a net loss of $4.3 million, or
($0.25) per share, for the first half of 2003. The loss per share from
continuing operations, of ($0.14) in the first half of 2004 compares to a loss
per share of ($0.06) in the first half of 2003. Excluding amortization of
intangibles, net of tax, the loss per share for continuing operations of ($0.05)
compares to a loss per share of ($0.05) in the first half of 2003.
Income from continuing operations before income taxes and minority interest
expense for the second quarter and for the first six months of 2004 was $3.3
million and $1.8 million, respectively. This compares to a loss from continuing
operations before income taxes and minority interest expense for the second
quarter and first six months of 2003 of ($2.9) million and ($1.3) million,
respectively.
The results for the second quarter include a non-cash charge for the
establishment of a deferred tax asset valuation allowance in the amount of $3.3
million, which equates to approximately $0.15 per share. Other items included in
the results were $0.6 million of restructuring charges, and $0.9 million in
systems development and Sarbanes-Oxley Section 404 preparedness charges.
Also included are the consolidated results of the Ecolochem Group (acquired on
February 13, 2004), and Desalcott (Desalination Company of Trinidad and Tobago
Ltd.), the Company's 40%- owned joint venture in Trinidad. Desalcott's results
were included in the consolidated results of the Company in accordance with the
provisions of FIN46. Ecolochem revenues for the quarter and the first half were
$24.4 million and $36.3 million, respectively. Desalcott revenues for the
quarter and for the first half were $7.5 million and $14.4 million,
respectively.
For further information about the Company's second quarter and first half 2004
financial results, please refer to the Company's quarterly report on Form 10-Q.
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Ionics will host a conference call tomorrow, Tuesday, August 10, 2004 at
10:00AM, EDT to discuss its second quarter financial results. This conference
call will be accessible on the Company's home page, at
http://www.shareholder.com/ion/medialist.cfm. Recorded replays of the financial
results conference call will be available on the web site for a one-week period
beginning later that day.
About Ionics, Inc.
Ionics is a global leader in water purification and wastewater treatment. The
Company has over 50 years of experience in the design, installation, operation
and maintenance of water and wastewater treatment systems and is a leading
provider of emergency and long-term water treatment services. More
membrane-based desalination systems have been designed and built by Ionics than
any other supplier worldwide. Ionics is also a leader in supplying
zero-liquid-discharge systems, in providing ultrapure water systems for the
power and microelectronics industries, and in the measurement and analysis of
water impurities. The Company also supplies Point-of-Use and Point-of-Entry
water treatment systems for commercial and residential applications. For more
information, visit www.ionics.com.
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; risks associated with
the Company's restructuring program announced in September 2003; risks
associated with the integration of Ecolochem's operations with those of the
Company; 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, 2003 and its quarterly report on Form 10-Q for the
quarter ended June 30, 2004. 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 RESULTS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
----------------------- ----------------------
2004 2003 2004 2003
----------- ---------- ---------- ----------
Revenues:
Equipment Sales $ 37,991 $ 33,286 $ 71,421 $ 62,838
Operations 62,270 26,589 114,676 54,271
Consumer Water 4,038 2,626 7,990 5,477
Instruments 9,700 8,049 18,451 16,428
Affiliated companies 11,801 13,006 18,916 24,783
----------- ---------- ---------- ----------
125,800 83,556 231,454 163,797
----------- ---------- ---------- ----------
Costs and expenses:
Cost of sales of Equipment Sales 30,433 26,673 58,306 49,315
Cost of sales of Operations 38,805 19,096 73,353 38,229
Cost of sales of Consumer Water 1,606 1,039 3,477 2,413
Cost of sales of Instruments 3,977 3,872 7,983 7,461
Cost of sales to affiliated companies 10,494 11,166 16,603 21,383
Research and development 1,572 1,954 3,103 3,731
Selling, general and administrative 30,874 20,449 58,729 40,752
Restructuring charges 624 - 1,188 -
----------- ---------- ---------- ----------
118,385 84,249 222,742 163,284
----------- ---------- ---------- ----------
Income (loss) from continuing operations 7,415 (693) 8,712 513
Interest (expense) income, net (4,914) 491 (8,236) 1,047
Equity income (loss) 801 (2,742) 1,291 (2,843)
----------- ---------- ---------- ----------
Income (loss) from continuing operations before
income tax and minority interest expense 3,302 (2,944) 1,767 (1,283)
Income tax (expense) benefit (4,724) 1,142 (4,228) 561
----------- ---------- ---------- ----------
Loss from continuing operations before
minority interest expense (1,422) (1,802) (2,461) (722)
Minority interest expense 231 188 484 386
----------- ---------- ---------- ----------
Loss from continuing operations (1,653) (1,990) (2,945) (1,108)
Loss on discontinued operations, net of tax (676) (2,934) (3,334) (3,240)
----------- ---------- ---------- ----------
Net loss $ (2,329) $ (4,924) $ (6,279) $ (4,348)
=========== ========== ========== ==========
Basic loss per share from continuing operations $ (0.07) $ (0.11) $ (0.14) $ (0.06)
Basic loss per share from discontinued operations (0.03) (0.17) (0.16) (0.18)
----------- ---------- ---------- ----------
Basic net loss per share $ (0.10) $ (0.28) $ (0.29) $ (0.25)
=========== ========== ========== ==========
Diluted loss per share from continuing operations $ (0.07) $ (0.11) $ (0.14) $ (0.06)
Diluted loss per share from discontinued operations (0.03) (0.17) (0.16) (0.18)
----------- ---------- ---------- ----------
Diluted net loss per share $ (0.10) $ (0.28) $ (0.29) $ (0.25)
=========== ========== ========== ==========
Shares used in basic loss per share calculations 22,588 17,564 21,455 17,559
=========== ========== ========== ==========
Shares used in diluted loss per share calculations 22,588 17,564 21,455 17,559
=========== ========== ========== ==========
Backlog 424,624 346,048
========== ==========
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Other Data:
Three months ended Six months ended
June 30, June 30,
----------------------- ----------------------
2004 2003 2004 2003
----------- ---------- ---------- ----------
Reconciliation of loss from continuing operations
to net loss from continuing operations adjusted
for amortization of intangibles, net of tax:
Loss from continuing operations $ (1,653) $ (1,990) $ (2,945) $ (1,108)
Add back:
Amortization of intangibles, net of tax 1,548 100 1,767 156
----------- ---------- ---------- ----------
Net loss from continuing operations adjusted
for amortization of intangibles, net of tax $ (105) $ (1,890) $ (1,178) $ (952)
=========== ========== ========== ==========
Diluted loss per share from continuing operations $ (0.07) $ (0.11) $ (0.14) $ (0.06)
Add back:
Amortization of intangibles, net of tax 0.07 0.01 0.08 0.01
----------- ---------- ---------- ----------
Diluted loss per share from continuing operations
adjusted for amortization of intangibles, net of tax $ (0.00) $ (0.11) $ (0.05) $ (0.05)
=========== ========== ========== ==========
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IONICS REPORTS SECOND QUARTER RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
June 30, December 31,
2004 2003
---------------- ---------------
Current assets:
Cash and cash equivalents $ 60,258 $ 133,815
Restricted cash 16,736 -
Short-term investments 1,476 -
Notes receivable, current 7,872 6,365
Accounts receivable, net 116,641 87,415
Receivables from affiliated companies 29,470 22,140
Inventories 28,834 24,595
Assets from discontinued operations 1,081 7,959
Other current assets 42,974 33,781
---------------- ---------------
Total current assets 305,342 316,070
Receivables from affiliated companies, long-term 10,720 20,915
Notes receivable, long-term, net 31,951 28,408
Investments in affiliated companies 10,615 14,362
Property, plant and equipment, net 396,474 171,533
Goodwill 185,377 7,695
Intangible assets, net 77,199 6,378
Other assets 29,267 26,616
---------------- ---------------
Total assets $ 1,046,945 $ 591,977
================ ===============
Current liabilities:
Notes payable and current portion of long-term debt $ 11,877 $ 6,276
Accounts payable 42,369 28,279
Billings in advance from affiliated companies - 3,629
Liabilities from discontinued operations - 396
Other current liabilities 95,325 79,512
---------------- ---------------
Total current liabilities 149,571 118,092
Long-term debt and notes payable 281,499 8,889
Deferred income taxes 33,054 30,979
Minority interest 15,592 1,426
Accumulated losses in investments in affiliated companies 4,117 5,068
Other liabilities 10,803 11,358
Stockholders' equity 552,309 416,165
---------------- ---------------
Total liabilities and stockholders' equity $ 1,046,945 $ 591,977
================ ===============
For more information, contact:
John F. Curtis Daniel M. Kuzmak
Vice President, Strategy and Operations, Treasurer Vice President and Chief Financial Officer
Ionics, Incorporated Ionics, Incorporated
Tel: (617) 673-4403 Tel: (617) 673-4350
jcurtis@ionics.com dkuzmak@ionics.com