UNITED STATES
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): March 23, 2001
Commission File Number 0-10964
MAXWELL TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2390133
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9244 Balboa Avenue, San Diego, CA 92123
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (858) 279-5100
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The Company's majority-owned subsidiary, Maxwell Technologies Systems
Division, Inc. ("Systems") has sold substantially all of its assets and
business operations and certain of its liabilities to two buyers in two
separate transactions.
On March 23, 2001, Systems closed the sale of its advanced pulsed
power systems and x-ray simulator businesses for an aggregate purchase
price of $11,500,000. Of the total purchase price, $9,800,000 was paid
in cash within 10 days of the closing and the balance represents a
holdback for indemnification claims and other contingencies by the buyer
for a period of six months from the closing. The final purchase price
is subject to adjustment, either up or down, based on whether the net
assets of the businesses sold as of the closing date are more or less
than $4,500,000. Systems also agreed to repurchase any accounts
receivable as of the closing date that are not paid in full within six
months from the closing. The buyer may withhold the amount of such unpaid
receivables, as well as any indemnification claims that may arise during
the six-month period, out of the portion of the purchase price held back
and pay Systems the net amount. The buyer hired substantially all of
Systems' employees in the businesses involved in the sale and assumed the
accrued liabilities of the acquired businesses and ongoing contractual
obligations.
On March 30, 2001, Systems completed the sale of its contract
research and development, electronics technology and high power microwave
and pulsed power business units to for an aggregate purchase price of
$10,337,000. Of the total purchase price, $9,537,000 was paid in cash
at closing and the balance represents a holdback for indemnification
claims and other contingencies by the buyer for a period of six months
from the closing. The final purchase price is subject to adjustment,
either up or down, based on whether the net assets of the businesses
sold as of the closing date are more or less than $6,149,000. The buyer
hired substantially all of Systems' employees in the businesses
involved in the transaction and assumed certain accrued compensation
amounts related to those employees. The buyer assumed no other liabilities
of Systems in the transaction except for ongoing contractual obligations.
Of the total aggregate proceeds of $19,337,000 received at closing,
the Company used $15 million to repay advances under the Bridge Loan
portion of its new credit facility with Comerica Bank - California ("Bank
Credit Facility"). The remaining proceeds will be used to pay liabilities
retained by Systems, expenses related to the transactions and amounts
distributable to minority shareholders of Systems. Any remaining net
proceeds will be used to repay revolving advances outstanding under the
Company's Bank Credit Facility.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
A. Financial Statements of Business Acquired
Not applicable.
B. Pro Forma Financial Information
In accordance with Article 11 of Regulation S-X, the following pro
forma financial information is filed with this Report.
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
(IN THOUSANDS)
PRO FORMA
AS REPORTED ADJUSTMENTS PRO FORMA
--------- --------- ---------
Note 3
ASSETS
Current assets:
Cash and cash equivalents $ 2,686 $ 2,337 a $ 5,023
Accounts receivable, net 24,652 2,500 a 27,152
Inventories 24,769 - 24,769
Prepaid expenses and other current assets 1,133 - 1,133
Deferred income taxes 13,031 (1,401)e 11,630
Net assets of discontinued operations 13,963 (15,767)b,c (1,804)
--------- --------- ---------
Total current assets 80,234 (12,331) 67,903
Property, plant and equipment, net 22,567 - 22,567
Goodwill, other intangibles and other assets 19,308 - 19,308
--------- --------- ---------
$ 122,109 $ (12,331) $ 109,778
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 24,536 $ - $ 24,536
Current portion of long-term debt and short-term borrowings 22,754 (17,000)a 5,754
--------- --------- ---------
Total current liabilities 47,290 (17,000) 30,290
Minority interest 5,065 - 5,065
Stockholders' equity:
Common stock 988 - 988
Additional paid-in capital 81,204 - 81,204
Notes receivable from officers for stock purchases (900) - (900)
Deferred compensation (15) - (15)
Retained earnings (deficit) (10,942) 4,669 c (6,273)
Accumulated other comprehensive loss - foreign currency
translation adjustments (581) - (581)
--------- --------- ---------
Total stockholders' equity 69,754 4,669 74,423
--------- --------- ---------
$ 122,109 $ (12,331) $ 109,778
========= ========= =========
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Pro Forma
As Reported Adjustments Pro Forma
--------- --------- ---------
(Note 2)
Continuing operations:
Sales $ 102,347 $ - $ 102,347
Cost of sales 79,472 - 79,472
Gross profit 22,875 - 22,875
Operating expenses:
Selling, general and administrative 26,260 - 26,260
Research and development 8,713 - 8,713
Restructuring, acquisition and other charges 9,220 - 9,220
--------- --------- ---------
Total operating expenses 44,193 - 44,193
--------- --------- ---------
Operating loss (21,318) - (21,318)
Interest expense (1,430) 1,030 (400)
Interest income and other, net 9 - 9
--------- --------- ---------
Loss from continuing operations before income
taxes and minority interest (22,739) 1,030 (21,709)
Credit for income taxes (6,267) 383 (5,884)
Minority interest in net loss of subsidiaries (181) - (181)
--------- --------- ---------
Loss from continuing operations $ (16,291) $ 647 $ (15,644)
========= ========= =========
Loss per share from continuing operations:
Basic and Diluted $ (1.66) $ 0.06 $ (1.60)
========= ========= =========
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The unaudited pro forma condensed consolidated financial statements
reflect the sale of substantially all of the assets and certain
liabilities of the Company's majority-owned subsidiary, Maxwell
Technologies Systems Division, Inc. ("Systems") to two buyers in two
separate transactions, for total aggregate consideration of
approximately $21.8 million in cash, of which $19.3 million was
received on the closing dates and $2.5 million is expected to be
received following a six-month holdback period. Of the aggregate
proceeds of $19.3 million received at closing, the Company used $15
million to repay advances under the Bridge Loam portion of its new
credit facility with Comerica Bank - California ("Bank Credit
Facility"). The remaining proceeds will be used to pay liabilities
retained by Systems, expesens related to the transactions and amounts
distributable to minority shareholders of Systems. Any remaining net
proceeds will be used to repay revolving advances outstanding under
the Company's Bank Credit Facility.
2. The unaudited pro forma condensed consolidated statement of
operations for the year ended December 31, 2000 reflects the Company's
results of continuing operations as if the Company had completed the
sale transactions described in Note 1 as of January 1, 2000 and had
used proceeds of $17.0 million received on January 1 and $2.5 million
received following a six-month holdback period on July 1 to reduce
short-term borrowings, thereby reducing interest expense for the year
by $1.0 million, with a corresponding reduction in the credit for
income taxes of $0.4 million. In addition, the higher cash balances
would have increased interest income for calendar year 2000 by
approximately $0.4 million, less income taxes of approximately $0.1
million. Such adjustment to interest income, and the related
adjustment to the credit for income taxes, has not been reflected in
the accompanying Unaudited Pro Forma Condensed Consolidated Statement
of Operations.
3. The unaudited pro forma condensed consolidated balance sheet
includes the adjustments necessary as if the sale transactions
described in Note 1 occurred on December 31, 2000 and reflects the
receipt of the consideration, removal of the net assets sold from the
Company's balance sheets and the accrual of the estimated transaction
costs. These adjustments are summarized as follows:
a) Receipt of $19.3 million in cash with $2.5 million receivable
in six months. Cash received applied as a $17.0 million pay down
of debt and a $2.3 million addition to cash pending payment of
liabilities.
b) Removal of net assets of the Systems Division, totaling $14.8
million, included in net assets of discontinued operations.
c) Accrual of $1.0 million representing estimated expenses and
certain transaction costs.
d) Recognition of an immediate $7.4 million gain on the sale of
the assets (net of income taxes of $2.8 million).
e) Accrual of estimated income tax provision for gain on sale
using the Company's incremental effective tax rate in effect
for the year ended December 31, 2000. The provision is
comprised of $1.4 million of deferred tax assets of the
discontinued operation, reversed as a result of the sale
(included in b) above), and $1.4 million of the Company's
operating loss carryforwards deemed to be used in the sale.
The unaudited pro forma financial statements have been prepared on
the basis of preliminary estimates which are subject to adjustment. The
unaudited pro forma financial statements may not be indicative of the
results that actually would have been achieved if the disposition had been
effected on the date indicated above, or the results which may be achieved
in the future. The pro forma financial statements should be read in
conjunction with the consolidated financial statements of Maxwell
Technologies, Inc. included in its December 31, 2000 annual report on Form
10-K.
C. Exhibits
2.1 Asset Purchase Agreement Dated as of March 23, 2001, By and
Among Maxwell Technologies Systems Division, Inc., Maxwell
Technologies Inc. and Titan Systems Corporation.
2.2 Asset Purchase Agreement By and Among Science Applications
International Corporation, Maxwell Technologies, Inc. and
Maxwell Technologies Systems Division, Inc., dated March 30,
2001.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Current Report on Form 8-K to be
signed on its behalf by the undersigned thereunto duly authorized.
MAXWELL TECHNOLOGIES, INC.
April 4, 2001 /s/ Vickie L. Capps
- ------------------------ ----------------------------------
Date Vickie L. Capps, Vice President
- Finance, Treasurer and Chief
Financial Officer
(Principal Financial and
Accounting Officer