FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period ended
Commission File Number 1-7211
Ionics, Incorporated
(Exact name of registrant as specified in it charter)
Massachusetts 04-2068530
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
65 Grove Street, Watertown, Massachusetts 02172
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 617-926-2500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $1 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [X]
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State the aggregate market value of the voting stock held by non-
affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date
within 60 days prior to the date of filing. The aggregate market
value of the voting stock held by non-affiliates as of March 17, 1995
was $392,303,896 (13,412,099 shares at $29.25 per share) (includes
shares owned by a trust for the indirect benefit of a non-employee
director, and by a trust for the indirect benefit of a spouse of a
non-employee director).
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest practicable
date. As of March 17, 1995, 14,008,049 shares of Common Stock, $1 par
value, were issued and outstanding (reflects a 2-for-1 stock split by
way of a 100% stock dividend distributed on January 6, 1995 to
stockholders of record on December 14, 1994).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of 1994 Annual Report to Stockholders Parts I, II and IV
Portions of Definitive Proxy Statement for
the Annual Meeting of Stockholders to be held
on May 4, 1995 Part III
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PART I
Item 1. BUSINESS
Ionics, Incorporated ("Ionics," the "Company," or the
"Registrant") is a leading water purification company engaged
worldwide in the supply of water and of water treatment equipment
through the use of proprietary separations technologies and systems.
Ionics' products and services are used by the Company or its customers
to desalt brackish water and seawater, to purify and supply bottled
water, to treat water in the home, to manufacture and supply water
treatment chemicals and ultrapure water, to process food products,
recycle and reclaim process water and wastewater, and to measure
levels of water-borne contaminants and pollutants. The Company's
customers include industrial companies, consumers, municipalities and
utilities.
The Company's business activities are divided into three
segments: Membranes and Related Equipment, Water, Food and Chemical
Supply, and Consumer Products, which in 1994 accounted for
approximately 54%, 24% and 22% of revenues, respectively.
Approximately 37% of the Company's 1994 revenues were derived from
foreign sales or operations. Since 1985, the Company has pursued a
strategy of expanding beyond its traditional focus of selling
desalination plants and equipment by owning and operating its own
equipment to produce and sell water, food and chemicals. In 1994, the
Water, Food and Chemical Supply and Consumer Products business
segments accounted for 79% of the Company's earnings before interest
and taxes.
Over forty years ago, the Company pioneered the development of
the ion-exchange membrane and the electrodialysis process. Since that
time, the Company has expanded its separations technology base to
include a number of membrane and non-membrane-based separations
processes which the Company refers to as "The Ionics ToolboxSM."
These separations processes include the electrodialysis reversal
(EDR), reverse osmosis (RO), ultrafiltration (UF) and microfiltration
(MF) membrane processes, as well as related processes such as
electrodeionization (EDI), electrodialysis, ion-exchange and carbon
adsorption. With its acquisition of the business of Resources
Conservation Company, now called Ionics RCC, at the end of 1993, the
Company's separations technology base also includes thermal processes
such as evaporation and crystallization, as well as solvent extraction
and recovery processes. The Company believes that it is the world's
leading manufacturer of ion-exchange membranes and of membrane-based
systems for the desalination of water.
The Company was incorporated in Massachusetts in 1948. The
Company's principal executive offices are located at 65 Grove Street,
Watertown, Massachusetts 02172.
Financial Information About Business Segments
The information contained in Note 14 of Notes to Consolidated
Financial Statements contained in the Company's Annual Report to
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Stockholders for the year ended December 31, 1994 is incorporated
herein by reference.
Membranes and Related Equipment
The Company's Membranes and Related Equipment business segment,
which accounted for approximately 54% of revenues in 1994, currently
encompasses the following products: electrodialysis reversal systems;
reverse osmosis systems; microfiltration systems; ultrafiltration
systems; non-membrane water and wastewater treatment equipment; other
separations technology products; instruments for monitoring and on-
line detection of pollution levels; fabricated products; brine
concentrators, evaporators and crystallizers utilizing thermal
separations processes; and soil remediation equipment.
EDR Systems
The Company's AquamiteR desalination systems utilize Ionics' EDR
process to treat brackish water and produce potable water for
commercial, municipal, and a variety of industrial purposes. The
Company sells, under the Aquamite name, a number of standardized
versions of EDR equipment, which are designed for ease of installation
and low maintenance and have production capacities ranging from 500
gallons to 1.5 million gallons per day. Multiple unit configurations
are used for systems of larger capacities.
Customers for water purification systems increasingly have
requested the Company to supply complete turnkey plants. For such
customers, Ionics provides basic Aquamite equipment, peripheral water
treatment equipment, complete engineering services, process and
equipment design, project engineering, commissioning, operator
training and field service.
RO Systems
The Company manufactures seawater desalination plants as well as
systems for the production of ultrapure water which utilize RO
membrane technology. The Company owns and operates seawater
desalination plants in Grand Canary Island, Spain; Santa Barbara,
California; and at the Diablo Canyon Power Plant in California. See
"Water, Food and Chemical Supply."
MF Systems
Utilizing the Company's proprietary Aqua-PoreR microfiltration
membranes, the Company's EnviromatR Integrated Membrane Filtration
System removes toxic contaminants such as lead, nickel and other
materials from industrial wastewaters and enables manufacturers to
meet stringent regulations for effluent compliance.
UF Systems
In 1994, the Company commenced commercial manufacture of
ultrafiltration (UF) membranes and spiral wound UF membrane modules.
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The Company uses these modules in its own equipment and systems and
also sells them as components to end-users and original equipment
manufacturers.
Non-Membrane Water and Wastewater Treatment Equipment
Through its wholly owned Italian subsidiary, Ionics Italba,
S.p.A., Ionics designs, engineers and constructs customized systems
for wastewater and municipal water treatment. These include ion-
exchange systems which provide purified water for power stations,
chemical and petrochemical plants, metalworking and automobile
factories, textile manufacture and a variety of other industrial
applications. Other systems neutralize and filter industrial
wastewater, separate suspended solids and, in some cases, recover
chemicals. Ionics Italba also provides custom municipal and packaged
sewage treatment systems. Ionics Italba generally subcontracts the
construction activities associated with its projects.
Through its Ionics Resources Conservation Company (Ionics RCC)
business unit, Ionics designs, engineers and constructs brine
concentrators, evaporators and crystallizers which are used to clean,
recover and recycle wastewater, particularly in zero liquid discharge
industrial uses. Ionics RCC also developed, and holds an exclusive
license for, a patented solvent extraction technology known as
B.E.S.T. (Basic Extractive Sludge Technology), which separates
contaminated sludges, sediments and soils into oil, water and solids,
and has potential use for the cleanup of toxic organic materials at
Superfund sites.
In 1994, Ionics RCC entered into a $40 million contract to
deliver a wastewater treatment system in the Czech Republic to treat
an underground reservoir of contaminated water which threatens
drinking water supplies near Prague.
Other Separations Technology Products
Using its separations technology, Ionics manufactures, markets or
supplies products which are used in the recovery and recycling of
selected components from process streams, the manufacture of commodity
and specialty compounds and the purification of valuable fluids. The
Company's ElectromatR system is used in the demineralization of cheese
whey to produce a major component utilized extensively in infant
formula products. A similar Ionics system is used to deacidify fruit
juices for a manufacturer of canned fruit products.
Other Ionics process systems include the ChemomatR system to
generate organic acids and to recover, recycle, remove and separate
metals and other components from industrial wastewaters, and the
CloromatR system for the production of sodium hypochlorite and related
chlor-alkali chemicals.
Instruments for Monitoring and On-Line Detection
of Pollution Levels
The Company designs, manufactures and sells equipment to measure
the quality of treated or untreated water. Its products, which are
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used by industrial and governmental customers to measure organic and
toxic contaminants in water, food and chemical process streams,
include process and laboratory instruments to measure total carbon,
total organic carbon, chemical oxygen demand and total oxygen demand.
The Company has expanded the monitoring capabilities of its
instruments with the introduction of analyzers to measure
concentrations at the parts-per-billion level of dissolved metals such
as copper, lead, iron, mercury, and arsenic and specific chemical
analyzers for ammonia, phosphates, nitrates, and chlorine. The
process systems provide real-time measurement of the level of
contaminants in active waste streams. In 1994 in Europe, the Company
introduced SlickwatchTM, a new continuous water monitor that detects
oil slicks at thicknesses as low as 0.1 micron on the surface of
water.
Fabricated Products
At its Bridgeville, Pennsylvania facility, the Company fabricates
specially designed products for defense-related and industrial
applications. The Company's experience and expertise in design,
welding, machining and assembly to meet exceptionally fine tolerances
have been utilized to fabricate products ranging from intricate small
parts to very large multi-ton assemblies.
Water, Food and Chemical Supply
The Water, Food and Chemical Supply business segment accounted in
1994 for approximately 24% of the Company's revenues. With the
addition of whey processing to the Company's "own and operate"
activities in 1994, food product processing revenues have been added
to this business segment. In addition, commencing in 1994, revenues
from the sale of bleach and bleach-based cleaning products for the
consumer market have been moved from this segment to the Consumer
Products segment. As a result, certain prior year amounts in the
financial statements have been reclassified to conform to the current
year's presentation. The Company's strategy is to sell, where
appropriate, water, food products and chemicals produced by its
membrane-based equipment, rather than selling the equipment itself.
The water, food and chemical supply business segment can be divided
into four categories: sale of desalted water for municipal and
industrial use; sale of ultrapure water for electronics and other
industries; processing of food products, such as reduced mineral whey;
and sale of sodium hypochlorite and related chemicals to the
industrial and municipal markets.
Sale of Desalted Water for Municipal and Industrial Use
Ionics' position in water supply as a seller of purified or
treated water has evolved from its traditional role as a supplier of
water treatment equipment. In certain situations, opportunities are
available for the Company to provide a complete service package
involving financing, construction, operation and maintenance of water
treatment facilities.
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Ionics, through its wholly owned subsidiary, Ionics Iberica,
S.A., owns and operates a 5.5 million gallon per day capacity brackish
water EDR facility and a 2.2 million gallon per day RO seawater
facility on Grand Canary Island, Spain. Under long-term contracts,
the Company is selling the desalted water from both facilities to the
local water utility for distribution. In December 1994, the Company
contracted with the water utility to expand its seawater RO facility
to 3 million gallons per day.
The Company's wholly owned subsidiary, Ionics (Bermuda) Ltd.,
owns and operates a 600,000 gallon per day EDR brackish water
desalting plant on the island of Bermuda. This plant supplies fresh
water under a long-term contract with Watlington Waterworks Ltd., a
Bermuda corporation partially owned by Ionics.
The Company financed, constructed, owns and operates a seawater
RO desalination facility in Santa Barbara, California. The facility
began operation in March 1992, has the capacity to produce 7,500 acre-
feet per year (approximately 6.7 million gallons per day) of
desalinated water, and is expandable to 10,000 acre-feet per year.
Under the terms of the Company's contract with the City, the City can
either purchase water from the Company or, under conditions in which
the City deems it unnecessary to purchase water, pay the Company a
"stand-by fee" during the contract's five-year term and, if the City
elects to continue, a five-year extension term. The City has placed
the facility on "stand-by" status because of the alleviation of the
area's drought. At the end of the initial five-year term, the City
will have the right to renew the contract for another five-year term,
purchase the facility from the Company, or direct the Company to
remove the facility (most of which is housed in trailers) from its
site. In the event the City purchases the facility, the City must
reimburse the Company for all costs not previously recovered from
operations, plus a factor to cover general and administrative expenses
and profit. In 1994, the City approved a two-year extension of the
Company's current operation and maintenance contract into 1997.
Sale of Ultrapure Water for Electronics and Other Industries
In industries such as power generation, semiconductors,
pharmaceuticals and biotechnology, ultrapure water (water in which the
impurities have been reduced to concentrations of less than several
parts per billion) is critical to product quality and yield. In the
electric power industry, ultrapure boiler feedwater minimizes
corrosion, inefficiency and downtime in steam boilers and turbines.
Depending on the composition and quantity of the impurities to be
removed or treated, any one of several membrane separations methods
can be utilized to provide ultrapure water to the customer. Ionics
has pioneered in the application of three membrane technologies (EDR,
RO and UF) combined together in a mobile system called the "triple
membrane" trailer, which the Company believes to be the most advanced
technology used in the commercial processing of ultrapure water.
Ionics provides ultrapure water services through the sale of ultrapure
water in 6,000 gallon tank trucks and the production and sale of
ultrapure water from trailer-mounted units at the customer sites.
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Ionics has commercially implemented its new electrodeionization
(EDI) technology in the production of ultrapure water. EDI is a
continuous, electrically driven, membrane-based water purification
process which produces ultrapure water without the use of the strong
chemical regenerants, such as sulfuric acid and caustic soda, which
are commonly required. The Company's new TMT-II trailers utilize a
combination of EDI, RO and UF technologies to produce ultrapure water.
At the end of 1994, the Company had a total capacity, installed
or under construction, of approximately 8,000 gallons per minute for
the production of ultrapure water under long-term contracts with
various industries.
The Company serves the ultrapure water market from its
headquarters facilities in Watertown, Massachusetts, through the
Ionics Pure Solutions Division in Phoenix, Arizona, and through the
following subsidiaries: Ionics Ultrapure Water Corporation, Campbell,
California; Ionics (U.K.) Limited, London, England; Ionics Italba,
S.p.A., Milan, Italy; and Eau et Industrie, Paris, France.
Sale of Sodium Hypochlorite and Related Chemicals
In the chemical supply area, the Company uses its CloromatR
technology to produce sodium hypochlorite and related chlor-alkali
chemicals in a membrane-based process that principally relies on water
and salt as raw materials. The Company's wholly owned Australian
subsidiary, Elite Chemicals Pty. Ltd., utilizes Cloromat systems to
produce sodium hypochlorite on-site in Brisbane for industrial,
commercial and janitorial supply of bleach products. In 1994, the
Australian subsidiary signed a five-year contract to supply sodium
hypochlorite to treat the City of Brisbane's drinking water supply.
In 1993, the Company's wholly owned English subsidiary, Ionics
(U.K.) Limited, commenced bulk bleach sales at a new Cloromat facility
in Bridgwater, England. A large portion of the facility's output is
being sold to an English manufacturer for use in cellophane
manufacture, and the balance is being sold to the regional market. In
1994, the Company and the manufacturer agreed to an expansion of the
Cloromat facility. In addition, the Company entered into a long-term
bleach supply agreement with a major European cleaning products
manufacturer which will result in the Company's ownership and
operation of another Cloromat facility.
Food Processing Services
In 1994, the Company commenced operations under an agreement with
a major U.S. dairy cooperative overseeing whey processing activities
at two plants owned by the cooperative. Included in the equipment
being utilized by the Company at these plants are its ElectromatR
electrodialysis systems. The Company receives a processing fee based
on the production of demineralized whey for its services.
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Consumer Products
Ionics' consumer products business segment accounted for
approximately 22% of the Company's revenues in 1994. The Company's
consumer products include bottled water, over and under-the-sink
point-of-use devices, point-of-entry systems for treating the entire
home water supply, and bleach and bleach-based cleaning products and
related products, including windshield wash solution.
Aqua CoolR Pure Bottled Water
Ionics entered the bottled water business in 1984. The Company's
strategy is to utilize its proprietary desalination and purification
technology to create a brand of drinking water, named Aqua Cool Pure
Bottled Water, which can be reproduced with uniform consistency and
high quality at numerous locations around the world. Distribution
operations have been established to serve the areas in and around
London, Manchester, and Birmingham, England; a number of metropolitan
areas in the Eastern United States; and, through joint ventures, in
Bahrain, Kuwait and Saudi Arabia. The Company's business focuses on
the sale of Aqua Cool in five-gallon bottles to a variety of
commercial and residential customers. The Company also manufactures
coolers in a wide variety of colors which offer options for hot, cold
and room temperature water.
In 1989, the Company entered into agreements with Aqua Cool
Enterprises, Inc. (ACE), a newly formed, independently owned
corporation, which established ACE as a marketer and distributor of
Aqua Cool in 10 eastern states and the District of Columbia, and
provided for Ionics' supply to ACE of products, management services
and operational support. In May 1993, the Company loaned $8.25
million to ACE which was used by ACE to redeem debt and preferred
stock of ACE held by Westinghouse Credit Corporation. In June 1993,
the Company's loan was converted into preferred stock, and as a result
of these transactions, the Company began consolidating the operating
results of ACE.
ACE operates eight distribution centers in Massachusetts,
Connecticut, New York, New Jersey, Pennsylvania and Virginia, which
augment the Company's distribution network. At the end of 1994, there
were a total of 21 Aqua Cool distribution centers in the United States
and overseas, supplied with Aqua Cool by six regional water
purification and bottling facilities.
Point-of-Use Devices
The Company participates in the "point-of-use" market for over
and under-the-sink water purifiers through the manufacture and sale of
HYgeneR, a proprietary, EPA-registered, silver-impregnated activated
carbon filtering media, and through the sale of reverse osmosis and
activated carbon-based filtering devices. The Company incorporates
HYgene, which is designed to prevent bacterial build-up while
providing the capability of removing undesirable tastes and odors from
the water supply, into its own bacteriostatic water conditioners and
also sells HYgene to manufacturers of household point-of-use water
filters.
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Point-of-Entry Systems
Ionics' point-of-entry water products include ion-exchange water
conditioners to "soften" hard water, and chemicals and media for
filtration and treatment. The Company sells its products, under the
General Ionics and other brands, through both independent
distributorships and wholly owned sales and service dealerships. In
1994, the Company introduced new marketing assistance programs,
including retail financing, to its independent distributors, and also
increased its base of independent distributors.
Bleach-Based Cleaning Products
The Company's Elite Chemicals New England division operates a
Cloromat facility in Springfield, Massachusetts which produces and
distributes bleach-based products for the consumer market, primarily
one-gallon bleach products under private label or under the Company's
own "Elite" and "UltraPure" brands, and methanol-based automobile
windshield wash solution. In 1994, to expand these operations, the
Company purchased a 129,000 square foot manufacturing facility,
located in Ludlow, Massachusetts, which has now commenced operations.
The Company intends to pursue a strategy of utilizing Cloromat
equipment and technology at Company-owned facilities to produce high
quality bleach and other chlor-alkali products at selected regional
sites in the United States and overseas.
Raw Materials and Sources of Supply
All raw materials essential to the business of the Company can
normally be obtained from more than one source. In those few
instances where raw materials are being supplied by only one source,
the current supplier has given the Company a lead time for
cancellation, which the Company believes is sufficient to enable it to
obtain other suppliers. In addition, the Company maintains
inventories of single source items which it believes are adequate
under the circumstances.
The Company produces the membranes required for its equipment and
systems that use the ED, EDR, MF, UF and EDI processes. Membranes
used for the RO process are purchased from outside suppliers, and are
normally available from multiple sources.
Patents and Trademarks
The Company believes that its products, know-how, servicing
network and marketing skills are more significant to its business than
trademark or patent protection of its technology. Nevertheless, the
Company has a policy of applying for patents both in the United States
and abroad on inventions made in the course of its research and
development work for which a commercial use is considered likely. The
Company owns numerous United States and foreign patents and trademarks
and has issued licenses thereunder, and currently has additional
pending patent applications. Of the 92 active U.S. patents held by
the Company, a substantial portion involves membranes, membrane
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technology and related separations processes such as electrodialysis
and electrodialysis reversal, reverse osmosis, ultrafiltration and
electrodeionization. The Company believes that none of its individual
patents or groups of related patents, nor any of its trademarks, is of
sufficient importance for its termination or abandonment, or
cancellation of licenses extending rights thereunder, to have a
material adverse effect on the Company.
Seasonality
The activities of the Company's businesses are not of a seasonal
nature, except that bottled water sales and bleach products for
swimming pool use tend to increase during the summer months. Also,
the Company's Elite Chemicals New England facility produces windshield
wash solution, for which sales levels increase in the winter months.
Customers
The nature of the Company's business is such that it frequently
has in progress large contracts with one or more customers for
specific projects; however, there is no one customer whose purchases
account for 10% or more of the Company's consolidated revenues and
whose loss would have a material adverse effect on the Company and its
subsidiaries taken as a whole.
Backlog
The Company's backlog of firm orders was $152,340,000 at December
31, 1994 and $129,271,000 at December 31, 1993. In the case of multi-
year contracts entered into through June 30, 1991, the Company
initially included in reported backlog only the revenues expected from
the first four years of the contract. For multi-year contracts
entered into after that date, the Company has initially included in
reported backlog the revenues associated with the first five years of
the contract. Also, the Company now includes in backlog up to one
year of revenues relating to multi-year contracts which are not
otherwise included in backlog. Ionics expects to fill approximately
62% of its December 31, 1994 backlog during 1995. The Company does
not believe that there are any seasonal aspects to these backlog
figures.
Government Contracts
The Company does not believe that any of its sales under U.S.
Government contracts or subcontracts during 1994 are subject to
renegotiation. The Company has not had adjustments to its negotiated
contract prices, nor are any proceedings pending for such adjustments.
Research and Development
Since the development of the ion-exchange membrane and the EDR
process, Ionics has continued its commitment to research and
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development directed toward products for use in water purification,
processing and measurement, and separations technology. The Company's
research and development expenses were approximately $3,372,000 in
1994, $3,678,000 in 1993 and $3,084,000 in 1992.
Competition
The Company experiences competition from a variety of sources
with respect to virtually all of its products, systems and services,
although the Company knows of no single entity that competes with it
across the full range of its products and services. Competition in
the markets served by the Company is based on a number of factors,
which may include price, technology, applications experience, know-
how, availability of financing, reputation, product warranties,
reliability, service and distribution.
With respect to the Company's membrane and related equipment
business segment, there are a number of companies, including several
sizable chemical companies, that manufacture membranes, but not
equipment. There are numerous smaller companies, primarily
fabricators, that build water treatment and desalination equipment,
but which generally do not have their own proprietary membrane
technology. A limited number of companies manufacture both membranes
and equipment. The Company has numerous competitors in its
conventional water treatment, instruments and fabricated products
business lines.
In 1994, the International Desalination Association released a
report providing data regarding the manufacturers of desalination
equipment. According to the report, which covered land-based water
desalination plants delivered or under construction as of December
1993, with a capacity to produce 100 cubic meters (approximately
25,000 gallons) or more of fresh water daily, Ionics ranked first in
terms of the cumulative number of such plants sold, having sold 1,244
plants of such capacity, more than the next three manufacturers
combined. When compared only to manufacturers of membrane-type
desalination equipment, Ionics ranked first in both number of units
sold and the total capacity of units sold.
With respect to the water, food and chemical supply business
segment, the Company competes with regional suppliers of ultrapure
water services, and with other manufacturers of membrane-related
equipment. In the chemical supply activity, the Company competes with
manufacturers and distributors of sodium hypochlorite and water
treatment chemicals.
With respect to the Company's consumer products business segment,
there are numerous bottled water companies which compete with the
Company, including several which are much larger than the Company.
Most of the Company's competitors in point-of-entry and point-of use
products for the home are small assemblers, serving local or regional
markets. However, there are also several large companies competing
nationally in these markets. In the case of its silver impregnated
activated carbon product lines, the Company knows of two competitors
with which it competes on a national basis.
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The Company competes with many suppliers of bleach and bleach-
based cleaning products and automobile windshield wash for the
consumer market, a number of which are much larger than the Company.
The Company is unable to state with certainty its relative market
position in all aspects of its business. Many of its competitors have
financial and other resources greater than those of the Company.
Environmental Matters
Continued compliance by the Company or by its subsidiaries with
federal, state and local provisions regulating the discharge of
materials into the environment or otherwise relating to the protection
of the environment is expected to have no material effect upon capital
expenditures, earnings or the competitive position of the Company or
any of its subsidiaries.
The Company is one of more than 200 potentially responsible
parties (PRPs) in connection with the Silresim Superfund Site in
Lowell, Massachusetts. Under the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA or Superfund), the U.S.
Environmental Protection Agency (EPA) has the authority to undertake
remedial action at a Superfund site and hold responsible parties
liable, on a joint and several basis and without regard to fault or
negligence for costs incurred. Under the terms of a 1992 Settlement
Agreement among the PRPs, EPA and the Commonwealth of Massachusetts,
Ionics paid $381,000 as a settlement amount to the site settlement
trust fund, representing the Company's approximately 1% volumetric
contribution of wastes to the site. This fund will be used by the EPA
to clean up the Silresim Site. The amount paid by Ionics had been
fully reserved at December 31, 1991, and the payment had no material
adverse impact on the Company. Because the pollution problems at the
site have been extensively studied and because the funds collected
from the settling PRPs by the site settlement trust fund substantially
exceeds the EPA's own estimate of remediation costs, the Company
believes that it is highly unlikely that it will incur any further
monetary obligations with respect to this site, other than site access
costs that will be incurred by the EPA in connection with its
remediation activities. The Company's share of these site access
costs is expected to be $30,000 to $40,000 over the next several
years.
The Company was notified in 1992 that it is a potentially
responsible party (PRP) at a Superfund site, Solvent Recovery Service
of New England in Southington, Connecticut (the "SRS Site"). The
Environmental Protection Agency (EPA) has completed its remedial
investigation and its preliminary estimate of clean-up costs totaled
$30 million, of which the Company's share approximates $160,000. The
PRP group has presented a counterproposal for clean-up which the EPA
is considering. The cost of the counterproposal would approximate
$5.5 - $7.5 million, of which the Company's share would approximate
$30,000 - $40,000. The Company has to date been assessed a total of
$21,000 for the clean-up of the site. Based upon the very large
number of PRPs identified (over 1,000), the Company's small volumetric
ranking in comparison to the total volume of wastes (approximately
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0.522%) and the identities of the larger PRPs, which include many
substantial companies, the Company believes that its liability in this
matter will not have a material effect on the Company or its financial
position.
The Company has never had a product liability claim grounded in
environmental liability, and believes that the nature of its products
and business makes such a claim unlikely.
Employees
The Company and its consolidated subsidiaries employ
approximately 1,300 full-time persons, none of whom are represented by
unions except for the employees of the Company's Australian subsidiary
and certain employees of the Company's Spanish subsidiary. The
Company considers its relations with its employees to be good.
Foreign Operations
The Company's sales to customers in foreign countries primarily
involve desalination systems, water and wastewater treatment systems,
sodium hypochlorite, Cloromat systems, and related products and
services. The Company seeks to minimize financial risks relating to
its international operations. Wherever possible, the Company obtains
letters of credit or similar payment assurances denominated in
dollars. If dollar payments cannot be secured, the Company, where
appropriate, enters into foreign currency hedging transactions. The
Company also uses foreign sources for equipment parts and may borrow
funds in local (foreign) currency to offset the asset risk of foreign
currency devaluation. Net foreign currency transaction gains included
in income before taxes totalled $23,000 in 1994, $157,000 in 1993, and
$587,000 in 1992.
Ionics engages in certain foreign operations both directly and
through the following wholly owned subsidiaries: Ionics (Bermuda)
Ltd.; Ionics Iberica, S.A.; Ionics (U.K.) Limited; Ionics Italba,
S.p.A.; Ionics Nederland B.V.; Global Water Services, S.A.; Elite
Chemicals Pty. Ltd.; Eau et Industrie; Resources Conservation Co.
International; and Ionics Foreign Sales Corporation Limited.
The Company engages in various foreign operations through
investments in affiliated companies and joint venture relationships.
The activities include the production, sale and distribution of
bottled water through a 40% owned affiliate in Bahrain, a 40% owned
affiliate in Saudi Arabia and a 49% owned affiliate in Kuwait.
In addition, the Company has a 23% ownership interest in Watlington
Waterworks Ltd. in Bermuda. Watlington collects, treats and
distributes water throughout Bermuda for both potable and non-potable
uses. The Company also has a 50% ownership interest in Yuasa-Ionics
Co., Ltd., Tokyo, Japan, which among its other activities serves as a
distributor of certain of the Company's products in Japan; and a 49%
ownership interest in Ionics-Mega s.r.o, a limited liability company
of the Czech Republic established to pursue water treatment
opportunities in that country.
/14
I-12
Further geographical and financial information concerning the
Company's foreign operations appears in Notes 1, 5, 8, 12, and 14 to
the Company's Consolidated Financial Statements included as part of
the Company's 1994 Annual Report to the Stockholders, which Notes are
incorporated herein by reference.
Financial Information About Foreign and
Domestic Operations and Export Sales
The information contained in Note 14 of Notes to Consolidated
Financial Statements contained in the Company's Annual Report to
Stockholders for the year ended December 31, 1994 is incorporated
herein by reference.
Item 2. PROPERTIES
The Company owns or leases and occupies various manufacturing and
office facilities in the United States and abroad. The principal
facilities owned by the Company include two buildings in Watertown,
Massachusetts, containing approximately 250,000 square feet and
housing executive offices, laboratories and manufacturing and assembly
operations; a 129,000 square foot facility in Ludlow, Massachusetts
which will be utilized primarily for consumer bleach-based product
manufacturing; two buildings in Bridgeville, Pennsylvania containing
approximately 77,000 square feet and housing manufacturing operations
for home water treatment equipment and fabricated products; and other
facilities in Phoenix, Arizona; Lorton, Virginia; Union, New Jersey;
Fairfield, Ohio; Thetford, England; Wimbledon, England; Brisbane,
Australia; and Milan, Italy, for various operations relating to the
business of the Company.
The Company considers the business facilities that it utilizes to
be adequate for the uses to which they are being put.
Item 3. LEGAL PROCEEDINGS
The Company is involved in the normal course of its business in
various litigation matters. Although the Company's counsel is unable
to determine at the present time whether the Company will have any
liability in any of the pending matters, some of which are in the
early stages of pretrial discovery, the Company believes it has
meritorious defenses and that none of the pending matters will have an
outcome material to the financial condition or business of the
Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during
the fourth quarter of the fiscal year covered by this report.
/15
I-13
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
Reference is made to the Company's Annual Report to Stockholders
for the year ended December 31, 1994. The information set forth on
page 32 entitled "Common Stock Price Range" and the inside back cover
of such Annual Report is hereby incorporated by reference.
Item 6. SELECTED FINANCIAL DATA
Reference is made to the Company's Annual Report to Stockholders
for the year ended December 31, 1994. The information set forth on
page 32 of such Annual Report entitled "Selected Quarterly Financial
Data (unaudited)" is hereby incorporated by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Reference is made to the Company's Annual Report to Stockholders
for the year ended December 31, 1994. The information set forth on
pages 17 through 19 of such Annual Report entitled "Management's
Discussion and Analysis of Results of Operations and Financial
Condition" is hereby incorporated by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the Company's Annual Report to Stockholders
for the year ended December 31, 1994. The consolidated balance sheets
of the Registrant as of December 31, 1994 and 1993, the related
consolidated statements of operations, cash flows and stockholders'
equity for the years ended December 31, 1994, 1993 and 1992, and the
related notes with the opinion thereon of Coopers & Lybrand L.L.P.,
independent accountants, on pages 20 through 31, and Selected
Quarterly Financial Data (unaudited) on page 32, are hereby
incorporated by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
This item is not applicable to the Company.
/16
II-1
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 10 with respect to Directors is
hereby incorporated by reference from the Company's definitive proxy
statement for the Annual Meeting of Stockholders to be held May 4,
1995 to be filed with the Securities and Exchange Commission on or
about March 30, 1995.
The information regarding executive officers is as follows:
Age as of Positions
Name March 1, 1995 Presently Held
Executive Officers:
Arthur L. Goldstein* 59 President, Chief Executive Officer
and Director since 1971; Chairman
of the Board since 1990
Kachig Kachadurian 45 Executive Vice President since 1994,
Senior Vice President from 1991 to
1994 and Vice President from 1983 to
1991; Director since 1986
William E. Katz 70 Executive Vice President since 1983;
Director since 1961
Robert J. Halliday 40 Vice President, Finance and Accounting
since December 1990; Chief Financial
Officer since August 1992
Stephen Korn 49 Vice President, General Counsel
and Clerk since September 1989
Theodore G. Papastavros 61 Vice President since 1975 and
Treasurer since February 1990
___________________
* Member of Executive Committee
There are no family relationships between any of the officers or directors.
Officers of the Registrant are elected each year at the annual meeting of
Directors.
All of the above executive officers have been employed by the Registrant in
various capacities for more than five years, except for Mr. Halliday. Prior to
joining the Company in December 1990, Mr. Halliday served from April 1987 to
December 1990 as Corporate Controller of Alliant Computer Systems Corporation, a
manufacturer of mini-supercomputers.
Item 11. EXECUTIVE COMPENSATION
The information required by Item 11 is hereby incorporated by reference
from the Company's definitive proxy statement for the Annual Meeting of
Stockholders to be held May 4, 1995 to be filed with the Securities and
Exchange Commission on or about March 30, 1995.
/17
III-1
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The information required by Item 12 is hereby incorporated by reference
from the Company's definitive proxy statement for the Annual Meeting of
Stockholders to be held May 4, 1995 to be filed with the Securities and
Exchange Commission on or about March 30, 1995.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 is hereby incorporated by reference
from the Company's definitive proxy statement for the Annual Meeting of
Stockholders to be held May 4, 1995 to be filed with the Securities and
Exchange Commission on or about March 30, 1995.
/18
III-2
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) 1. Financial Statements
See Index to Financial Statements and Financial Statement
Schedules on page IV-7. The Financial Statement Schedules are
filed as part of this Annual Report on Form 10-K.
2. Financial Statement Schedules
See Index to Financial Statements and Financial Statement
Schedules on page IV-7.
3. Exhibits
Exhibit Page
No. Description No.
3.0 Articles of Organization and By-Laws
3.1 Restated Articles of Organization (filed *
as Exhibit 3(a) to Form 10-K for year
ended December 31, 1986).
3.1(a) Amendment to the Restated Articles of *
Organization (filed as Exhibit 3(b) to
Form 10-K for year ended December 31, 1987).
3.1(b) Amendment to Restated Articles of *
Organization (filed as Exhibit 3.1(b) to
Registration Statement No. 33-38290 on
Form S-2 effective January 24, 1991).
3.2 By-Laws, as amended (filed as Exhibit 19 to *
Form 10-Q for the quarter ended September 30,
1989).
4.0 Instruments defining the rights of security holders,
including indentures
4.1 Agreement for a loan payable by a consolidated **
subsidiary to a bank in Australia in the principal
amount of 725,000 Australian dollars guaranteed
by Registrant, and related documents.
4.2 Rights Agreement, dated as of December 22, 1987, *
as amended and restated as of August 15, 1989,
between Registrant and The First National Bank
of Boston (filed as Exhibit 1 to Registrant's
Current Report on Form 8-K dated August 30, 1989).
/19
IV-1
4.3 Indenture, dated as of December 22, 1987, between *
Registrant and The First National Bank of Boston,
relating to Rights Agreement (filed as Exhibit 2
to Registrant's Current Report on Form 8-K dated
December 22, 1987).
4.4 Form of Common Stock Certificate (filed as Exhibit *
4.10 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1990).
10. Material Contracts
10.1 1979 Stock Option Plan, as amended through *
February 17, 1994 (filed as Exhibit 10.1 to
Registrant's Annual Report on Form 10-K for
the year ended December 31, 1993).
10.2 1986 Stock Option Plan for Non-Employee Directors, *
as amended through February 18, 1992 (filed as
Exhibit 10.2 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1991).
10.3 Amended and Restated Credit Agreement between *
Registrant and The First National Bank of Boston
dated as of December 31, 1992 (filed as Exhibit
10.3 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1992).
10.4 Operating Agreement dated as of September 27, *
1989 between Registrant and Aqua Cool Enter-
prises, Inc. (filed as Exhibit 10.4 to
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1989).
10.5 Term Lease Master Agreement dated as of *
September 27, 1989 between Registrant and
Aqua Cool Enterprises, Inc. (filed as Exhibit
10.5 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1989).
10.6 Option Agreement dated as of September 27, 1989 *
among Registrant, Aqua Cool Enterprises, Inc.
and the other parties named therein (filed as
Exhibit 10.6 to Registrant's registration
statement on Form S-2, No. 33-38290,
effective January 24, 1991).
10.7 Agreement for Privatization of Water Supplies *
dated as of September 18, 1990 between the
Company and the City of Santa Barbara,
California (filed as Exhibit 10.7 to
Registrant's registration statement on Form S-2,
No. 33-38290, effective January 24, 1991).
10.8 Amendment No. 1, dated as of January 3, 1992, to *
Agreement for Privatization of Water Supplies
/20
IV-2
dated as of September 18, 1990 between the Company
and the City of Santa Barbara, California (filed as
Exhibit 10.8 to Registrant's annual report on
Form 10-K for the year ended December 31, 1991).
10.9 Amendment No. 2, dated as of January 19, 1993, *
to Agreement for Privatization of Water Supplies
dated as of September 18, 1990 between the Company
and the City of Santa Barbara, California (filed as
Exhibit 10.9 to the Registrant's annual report on
Form 10-K for the year ended December 31, 1992).
10.10 Amendment No. 3, dated June 28, 1994, to Agreement *
for Privatization of Water Supplies dated as of
September 18, 1990 between the Company and the City
of Santa Barbara, California (filed electronically
as Exhibit 10.1 to the Registrant's Form 10-Q for
the period ended June 30, 1994).
10.11 Asset Purchase Agreement Among the Company, *
Resources Conservation Company, Resources
Conservation Co. International and Halliburton
NUS Corporation dated December 30, 1993 (filed as
Exhibit 2 to Registrant's current report on
Form 8-K dated February 7, 1994 and filed
electronically on the same date).
10.12 1994 Restricted Stock Plan.
11. Statement re Computation of Earnings Per Share.
13. Annual Report to Stockholders of the Registrant for
the year ended December 31, 1994 (only pages 17
through 32 and the inside back cover constitute an
exhibit to this report).
22. Subsidiaries of the Registrant.
24. Consents
24.1 Consent of Coopers & Lybrand L.L.P. to incorporation
by reference of that firm's report dated
February 22, 1995, which is included on page 31 of
the Registrant's Annual Report to Stockholders
for the year ended December 31, 1994.
25. Power of Attorney.
27. Financial Data Schedule ***
________________________________
* incorporated herein by reference
** copies of which will be filed by Registrant with the
Securities and Exchange Commission upon its request
*** for electronic purposes only
/21
IV-3
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the
last quarter of fiscal 1994.
Undertaking
For purposes of complying with the amendments to the rules governing
Form S-8 effective July 13, 1990 under the Securities Act of 1933, the
undersigned hereby undertakes as follows, which undertaking shall be
incorporated by reference into registrant's registration statements on
Form S-8 Nos. 33-14194, 33-5814, 33-2092, 2-72936, 2-82780, 2-64255,
33-41598, 33-54400 and 33-54293.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
/22
IV-4
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
IONICS, INCORPORATED
(Registrant)
By/s/ Arthur L. Goldstein
Arthur L. Goldstein, Chairman
of the Board, President and
Chief Executive Officer
Date: March 30, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: March 30, 1995 By/s/ Arthur L. Goldstein
Arthur L. Goldstein, Chairman
of the Board, President and
Chief Executive Officer
(principal executive officer)
and Director
Date: March 30, 1995 By/s/ Robert J. Halliday
Robert J. Halliday, Vice President,
Finance and Accounting and Chief
Financial Officer (principal
financial and accounting officer)
/23
IV-5
Date: March 30, 1995 By/s/ William L. Brown
William L. Brown, Director
Date: March 30, 1995 By/s/ Arnaud de Vitry d'Avaucourt
Arnaud de Vitry d'Avaucourt,
Director
Date: March 30, 1995 By/s/ Lawrence E. Fouraker
Lawrence E. Fouraker, Director
Date: March 30, 1995 By/s/ Samuel A. Goldblith
Samuel A. Goldblith, Director
Date: March 30, 1995 By/s/ Kachig Kachadurian
Kachig Kachadurian, Director
Date: March 30, 1995 By/s/ William E. Katz
William E. Katz, Director
Date: March 30, 1995 By/s/ Robert B. Luick*
Robert B. Luick, Director
Date: March 30, 1995 By/s/ John J. Shields
John J. Shields, Director
Date: March 30, 1995 By/s/ Carl S. Sloane
Carl S. Sloane, Director
DATE: March 30, 1995 By/s/ Mark S. Wrighton
Mark S. Wrighton, Director
Date: March 30, 1995 By/s/ Allen S. aWyett
Allen S. Wyett, Director
*By/s/ Stephen Korn
Stephen Korn
Attorney-in-fact
/24
IV-6
IONICS, INCORPORATED
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
PAGES
Report of Independent Accountants 31*
Financial Statements:
Consolidated Statements of Operations for the Years Ended
December 31, 1994, 1993 and 1992 20*
Consolidated Balance Sheets as of December 31,
1994 and 1993 21*
Consolidated Statements of Cash Flows for the
Years Ended December 31, 1994, 1993 and 1992 22*
Consolidated Statements of Stockholders' Equity for
the Years Ended December 31, 1994, 1993 and 1992 23*
Notes to Consolidated Financial Statements 24-31*
Supporting Financial Statement Schedules for the years Ended December 31,
1994, 1993 and 1992:
Schedule II - Valuation and Qualifying Accounts IV-8
Report of Independent Accountants on Financial Statement
Schedule IV-9
__________________
All other schedules are omitted because the amounts are immaterial, the
schedules are not applicable or the required information is shown in the
financial statements or the notes thereto.
* Page references are to the Annual Report to Stockholders of the Company
for the year ended December 31, 1994, which pages are incorporated herein
by reference.
/25
IV-7
IONICS, INCORPORATED
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Additions Additions
Balance at Charged to Due to
Beginning Costs and Acquired Balance at
Description of Year Expenses Businesses(A) Deductions(B) End of Year
Allowance for doubtful
accounts and uncollectible
notes receivable:
Years ended:
December 31, 1994 $2,022,068 $535,200 $ 0 $ 360,098 $2,197,170
December 31, 1993 $2,694,200 $390,489 $(124,000) $ 938,621 $2,022,068
December 31, 1992 $2,510,588 $944,203 $ 190,200 $ 950,791 $2,694,200
(A) 1993 amount includes reductions of $413,000 resulting from the consolidation of ACE.
(B) Deductions result primarily from the write-off of accounts.
/26
IV-8
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Ionics, Incorporated:
Our report on the consolidated financial statements of Ionics,
Incorporated as of December 31, 1994 and 1993 and for each of the three years
in the period ended December 31, 1994 has been incorporated by reference in
this Form 10-K from page 31 of the 1994 Annual Report to Stockholders of
Ionics, Incorporated. In connection with our audits of such financial
statements, we have also audited the related financial statement schedule
listed in the Index on page IV-7 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 22, 1995
/27
IV-9
EXHIBIT INDEX
Sequentially
Exhibit Numbered
No. Description Page No.
3.0 Articles of Organization and By-Laws
3.1 Restated Articles of Organization (filed *
as Exhibit 3(a) to Form 10-K for year
ended December 31, 1986).
3.1(a) Amendment to the Restated Articles of *
Organization (filed as Exhibit 3(b) to
Form 10-K for year ended December 31, 1987).
3.1(b) Amendment to Restated Articles of *
Organization (filed as Exhibit 3.1(b) to
Registration Statement No. 33-38290 on
Form S-2 effective January 24, 1991).
3.2 By-Laws, as amended (filed as Exhibit 19 to *
Form 10-Q for the quarter ended September 30,
1989).
4.0 Instruments defining the rights of security holders,
including indentures
4.2 Rights Agreement, dated as of December 22, 1987, *
as amended and restated as of August 15, 1989,
between Registrant and The First National Bank
of Boston (filed as Exhibit 1 to Registrant's
current Report on Form 8-K dated August 30, 1989).
4.3 Indenture, dated as of December 22, 1987, between *
Registrant and The First National Bank of Boston,
relating to Rights Agreement (filed as Exhibit 2
to Registrant's Current Report on Form 8-K dated
December 22, 1987).
4.4 Form of Common Stock Certificate (filed as Exhibit *
4.10 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1990).
10. Material Contracts
10.1 1979 Stock Option Plan, as amended through *
February 17, 1994 (filed as Exhibit 10.1 to
Registrant's Annual Report on Form 10-K for
the year ended December 31, 1993).
/28
10.2 1986 Stock Option Plan for Non-Employee Directors, *
as amended through February 18, 1992 (filed as
Exhibit 10.2 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1991).
10.3 Amended and Restated Credit Agreement between *
Registrant and The First National Bank of Boston
dated as of December 31, 1992 (filed as Exhibit
10.3 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1992).
10.4 Operating Agreement dated as of September 27, *
1989 between Registrant and Aqua Cool Enter-
prises, Inc. (filed as Exhibit 10.4 to
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1989).
10.5 Term Lease Master Agreement dated as of *
September 27, 1989 between Registrant and
Aqua Cool Enterprises, Inc. (filed as Exhibit
10.5 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1989).
10.6 Option Agreement dated as of September 27, 1989 *
among Registrant, Aqua Cool Enterprises, Inc.
and the other parties named therein (filed as
Exhibit 10.6 to Registrant's registration
statement on Form S-2, No. 33-38290,
effective January 24, 1991).
10.7 Agreement for Privatization of Water Supplies *
dated as of September 18, 1990 between the
Company and the City of Santa Barbara,
California (filed as Exhibit 10.7 to
Registrant's registration statement on Form S-2,
No. 33-38290, effective January 24, 1991).
10.8 Amendment No. 1, dated as of January 3, 1992, to *
Agreement for Privatization of Water Supplies
dated as of September 18, 1990 between the Company
and the City of Santa Barbara, California (filed as
Exhibit 10.8 to Registrant's annual report on
Form 10-K for the year ended December 31, 1991).
10.9 Amendment No. 2, dated as of January 19, 1993, *
to Agreement for Privatization of Water Supplies
dated as of September 18, 1990 between the Company
and the City of Santa Barbara, California (filed as
Exhibit 10.9 to the Registrant's annual report on
Form 10-K for the year ended December 31, 1992).
10.10 Amendment No. 3, dated June 28, 1994, to Agreement *
for Privatization of Water Supplies dated as of
September 18, 1990 between the Company and the City
of Santa Barbara, California (filed electronically
as Exhibit 10.1 to the Registrant's Form 10-Q
for the period ended June 30, 1994).
/29
10.11 Asset Purchase Agreement among the Company, *
Resources Conservation Company, Resources
Conservation Co. International and Halliburton
NUS Corporation dated December 30, 1993 (filed
as Exhibit 2 to Registrant's current report on
Form 8-K dated February 7, 1994 and filed
electronically on the same date).
10.12 1994 Restricted Stock Plan
11. Statement re Computation of Earnings Per Share.
13. Annual Report to Stockholders of the Registrant for
the year ended December 31, 1994 (only pages 17
through 32 and the inside back cover constitute an
exhibit to this report).
22. Subsidiaries of the Registrant.
24.1 Consent of Coopers & Lybrand L.L.P. to incorporation
by reference of that firm's report dated
February 22, 1995, which is included on page 31 of
the Registrant's Annual Report to Stockholders
for the year ended December 31, 1994.
25. Power of Attorney.
27. Financial Data Schedule (for electronic
purposes only)
* incorporated herein by reference
/30