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
May 16, 1994
(Date of earliest event reported)
Advanced Technology Laboratories, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-15160 91-1353386
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
organization)
22100 Bothell Everett Highway,
P.O. Box 3003, Bothell, WA 98041-3003
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(206) 487-7000
Page 1 of 11
Exhibit Index is on page 8 of this filing
Item 2. Acquisition or Disposition of Assets
On April 18, 1994, Advanced Technology Laboratories, Inc. ("ATL" or
the "Company" ) and Interspec, Inc. ("Interspec") distributed to each
of its respective shareholders a Notice and Proxy Statement/Prospectus
seeking approval for a previously announced Agreement and Plan of
Merger (the "Merger") whereby Interspec would become a wholly owned
subsidiary of ATL through an exchange of 0.413 shares of ATL stock for
each share of Interspec stock.
On May 16, 1994, ATL announced that its shareholders had approved the
Merger. Also, on May 16, 1994, Interspec announced that its
shareholders had approved the issuance of ATL stock to consummate the
Merger.
On May 17, 1994, the effective date of the Merger, ATL Sub Acquisition
Corp., a wholly owned subsidiary of ATL, was merged with Interspec,
with Interspec continuing as the surviving corporation and as a wholly
owned subsidiary of ATL with 100 shares of common stock outstanding.
Also, on May 17, 1994, ATL announced that the Merger transaction had
been completed and that the Company would be mailing transmittal forms
to Interspec's shareholders to exchange their Interspec stock
certificates for ATL certificates. Effective at 11:59 p.m. Eastern
Daylight Savings Time on May 17, 1994, all shares of the Interspec
common stock ceased to be outstanding and traded, and each share of
Interspec common stock thereafter represents a right to acquire 0.413
shares of ATL common stock issued in connection with the Merger.
Following the merger, the fiscal year end for the combined companies
will end December 31, consistent with ATL's fiscal year. In order to
conform the financial reporting periods of the two companies, the
results of Interspec's operations for the one month period ended March
31, 1994 will be excluded from the consolidated statements of income
and cash flows and be reported as an adjustment to retained earnings.
The Company is anticipating incurring expenses of approximately $3
million for the integration of the operations of ATL and Interspec
associated with the termination of Interspec dealer arrangements and
consolidation of operations in countries outside the United States,
compared to $2 million previously estimated. In addition, in a recent
development, accounts receivable of approximately $1.5 million have
been garnished in the bankruptcy proceeding of Interspec's former
Italian distributor, a proceeding reported in Interspec's Quarterly
Report on Form 10-Q for the period ended February 28, 1994. As a
result, a reserve of $2.2 million has been established for the $1.5
million in garnished receivables and the remaining unreserved
receivable of $0.7 million owed Interspec by the Italian distributor.
Approximately $2.1 million of the estimated $5.2 million total of the
two preceeding non recurring operating expense items was incurred by
Interspec in March 1994 and will not be reported in the Company's
second quarter statement of income, but will be charged to retained
earnings due to the conformance of financial reporting periods as
discussed above. Additionally, as previously reported, Merger costs
of approximately $2.3 million relating primarily to legal, accounting,
investment advisory and printing services will be charged against
income in the second quarter of 1994.
Item 7. Financial Statement, Pro Forma Financial
Information and Exhibits
b. Pro Forma Financial Information.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined Statements of
Income and Balance Sheet give effect to the Merger on the pooling-of-
interests method of accounting. These unaudited pro forma condensed
combined Financial Statements have been prepared from the historical
consolidated financial statements of ATL and of Interspec incorporated
by reference herein and should be read in conjunction therewith. See
"Exhibits."
This pro forma condensed combined information is not necessarily
indicative of actual or future operating results or financial position
that would have occurred or will occur upon consummation of the
Merger.
Page 2 of 11
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
April 1, 1994
Historical Pro Forma
(In thousands) ATL Interspec Adjust- Combined
ments
ASSETS
CURRENT ASSETS
Cash and short-term investments $52,799 $ 114 $ 52,913
Receivables 87,363 17,682 $(2,100) 102,945
Inventories 72,271 16,424 (2,082) 86,613
Prepaid expenses 1,477 1,043 2,520
Deferred income taxes 7,400 1,571 8,971
------- ------- -------- --------
221,310 36,834 (4,182) 253,962
MARKETABLE DEBT SECURITY 4,988 -- 4,988
PROPERTY, PLANT AND EQUIPMENT, NET 41,352 14,215 55,567
OTHER ASSETS, NET 2,646 5,622 8,268
-------- ------- -------- --------
$270,296 $56,671 $(4,182) $322,785
======== ======= ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 573 $ 5,500 $ 6,073
Current installments of long-term
debt -- 1,282 1,282
Accounts payable and accrued
expenses 43,916 10,375 $(2,100) 52,191
Deferred revenue 30,187 929 31,116
Taxes on income 4,530 168 4,698
--------- ------- -------- --------
79,206 18,254 (2,100) 95,360
DEFERRED INCOME TAXES 3,057 1,571 4,628
LONG-TERM DEBT, LESS CURRENT
INSTALLMENTS -- 4,170 4,170
SUBORDINATED LONG-TERM DEBT -- 1,588 1,588
SUBORDINATED LONG-TERM DEBT - RELATED
PARTIES -- 4,912 4,912
SHAREHOLDERS' EQUITY 188,033 26,176 (2,082) 212,127
-------- ------- -------- --------
$270,296 $56,671 $(4,182) $322,785
======== ======= ======== ========
See accompanying notes to unaudited pro forma condensed combined
financial statements.
Page 3 of 11
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
For the three months ended April 1, 1994
Historical Pro Forma
(In thousands except per ATL Interspec Adjust- Combined
share data) ments
REVENUES
Product sales $60,145 $12,527 $(1,985) $70,687
Service 15,751 3,139 (220) 18,670
------- ------- ------- -------
75,896 15,666 (2,205) 89,357
COST OF SALES
Cost of product sales 34,211 6,009 (1,353) 38,867
Cost of service 9,687 2,173 (210) 11,650
------- ------- ------- -------
43,898 8,182 (1,563) 50,517
GROSS PROFIT 31,998 7,484 (642) 38,840
OPERATING EXPENSES
Selling, general and
administrative 20,602 4,654 25,256
Research and development 10,286 2,339 12,625
Other expense, net 354 76 430
------- ------- ------ -------
31,242 7,069 38,311
INCOME FROM OPERATIONS 756 415 (642) 529
Interest income 520 103 623
Interest expense (125) (306) (431)
------- ------- ------ -------
INCOME BEFORE INCOME TAXES 1,151 212 (642) 721
Provision for income taxes 409 11 420
------- ------- ------ -------
NET INCOME $ 742 $ 201 $ (642) $ 301
======= ======= ====== =======
Net income per share $0.07 $0.03 $0.02
Weighted average common
shares and equivalents 10,570 6,325 13,182
outstanding
See accompanying notes to unaudited pro forma condensed combined
financial statements.
Page 4 of 11
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
For the three months ended April 2, 1993
Historical Pro Forma
(In thousands except per ATL Interspec Adjust- Combined
share data) ments
REVENUES
Product sales $66,610 $11,644 $(1,463) $76,791
Service 14,789 2,803 (148) 17,444
------- ------- ------- -------
81,399 14,447 (1,611) 94,235
COST OF SALES
Cost of product sales 35,659 5,757 (1,448) 39,968
Cost of service 9,912 2,088 (146) 11,854
------- ------- ------- -------
45,571 7,845 (1,594) 51,822
GROSS PROFIT 35,828 6,602 (17) 42,413
OPERATING EXPENSES
Selling, general and
administrative 22,326 3,944 26,270
Research and development 10,354 1,905 12,259
Other expense (income),net 1,598 (40) 1,558
------- ------- ------ -------
34,278 5,809 40,087
INCOME FROM OPERATIONS 1,550 793 (17) 2,326
Interest income 889 42 931
Interest expense (185) (247) (432)
------- ------- ------ -------
INCOME BEFORE INCOME TAXES 2,254 588 (17) 2,825
Provision for income taxes 337 3 340
------- ------- ------ -------
NET INCOME $ 1,917 $ 585 $ (17) $ 2,485
======== ======= ====== =======
Net income per share $0.17 $0.09 $0.18
Weighted average common
shares and equivalents 11,348 6,347 13,969
outstanding
See accompanying notes to unaudited pro forma condensed combined
financial statements.
Page 5 of 11
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Note 1: The pro forma condensed combined Balance Sheet reflects the
result of combining the balance sheet of ATL as of April 1, 1994 with
the balance sheet of Interspec as of February 28, 1994, the end of the
companies' respective first quarters for fiscal year 1994.
The pro forma condensed combined Statements of Income for the three
months ended April 1, 1994 and April 2, 1993 reflect the results of
combining the historical results of operations of ATL and of
Interspec. Interspec's first fiscal quarter ends on February 28. The
Interspec Statements of Income for the three months ended February 28,
1994 and 1993 have been combined with the ATL Statements of Income for
the three months ended April 1, 1994 and April 2, 1993, respectively.
Following the merger, the fiscal year end for the combined companies
will end December 31, consistent with ATL's fiscal year. Prior to the
Merger, Interspec's year end was November 30. In order to conform the
financial reporting periods of the two companies, the results of
Interspec's operations for the one month period ended March 31, 1994
will be excluded from the consolidated statements of income and cash
flows and be reported as an adjustment to retained earnings.
Note 2: The pro forma condensed combined Statements of Income include
adjustments to eliminate revenues and cost of sales generated from
transactions between ATL and Interspec. The pro forma condensed
combined Balance Sheet includes adjustments to eliminate the amount of
unrealized profit in inventory and trade accounts receivable and
payable resulting from transactions between ATL and Interspec.
Note 3: Merger costs listed in Item 2 on page 2 have not been
reported in the accompanying pro forma combined financial statements.
Note 4: Per share data are based on the weighted average number of
common shares and dilutive common share equivalents outstanding. The
pro forma ATL Common Stock include shares of ATL Common Stock assumed
to be issued as if the Merger had taken place at the beginning of the
respective periods.
c. Exhibits
(2) a Joint Proxy Statement/Prospectus dated April 18,
1994, as filed in the ATL S-4
Registration Statement, Registration No. 33-53161,
effective April 18, 1994.
(13) a Quarterly Report on Form 10-Q for the period ended
April 1, 1994.
(13) b Interspec Quarterly Report on Form 10-Q for the
period ended February 28, 1994.
(20) a Interspec Press Release dated May 16, 1994
(20) b ATL Press Release dated May 16, 1994
(20) c ATL Press Release dated May 17, 1994
Page 6 of 11
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
ADVANCED TECHNOLOGY LABORATORIES, INC.,
DATED: May 31, 1994 BY: /s/ Harvey N. Gillis
---------------------------------
Harvey N. Gillis,
Sr. Vice President Finance &
Administration, CFO and
Treasurer
Page 7 of 11
EXHIBIT INDEX
Exhibit Sequentially
Number Exhibit Numbered
Page
2 (a) Previously filed with and incorporated -
herein by reference to the Joint Proxy
Statement/Prospectus dated April 18, 1994,
as filed in the ATL Registration Statement
on Form S-4, Registration No. 33-53161,
effective April 18, 1994.
13 (a) Previously filed with and incorporated -
herein by reference to the Quarterly Report
on Form 10-Q for the period ended April 1,
1994.
13 (b) Previously filed with and incorporated -
herein by reference to the Interspec, Inc.
Form 10-Q Quarterly Report for the Quarter
Ended February 28, 1994.
20 (a) Interspec Press Release dated May 16, 1994 9
20 (b) ATL Press Release dated May 16, 1994 10
20 (c) ATL Press Release dated May 17, 1994 11
Page 8 of 11