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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
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 30, 1996
LASERSCOPE
(Exact name of Registrant as specified in its charter)
CALIFORNIA 0-18053 77-0049527
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
3052 ORCHARD DRIVE
SAN JOSE, CALIFORNIA 95134-2011
(Address of principal executive offices) (Zip code)
(408) 943-0636
(Registrant's telephone number, including area code)
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The Registrant hereby amends the following item of its Report on Form 8-K filed
with the Securities and Exchange Commission on September 11, 1996. The
Registrant is amending Item 7 to include certain required financial statements
and pro forma financial statements and associated exhibits.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
The following pages 2 through 14 included in Exhibit 99.1
hereto contain the audited balance sheets for Heraeus Surgical, Inc. ("HSI") as
of December 31, 1995 and 1994 and the related statements of operations,
stockholder's equity, and cash flows for each of the years in the three year
period ended December 31, 1995 as well as the unaudited balance sheet for HSI as
of June 30, 1996 and the related unaudited statements of operations,
stockholder's equity and cash flows for the six-month period ended June 30,
1996 and 1995.
(b) Pro Forma Financial Information.
The following pages F-2 through F-6 contain the unaudited pro forma
combined condensed balance sheet as of June 30, 1996, the unaudited pro forma
combined condensed statements of operations for the year ended December 31,
1995 and the six months ended June 30, 1996 and the notes thereto.
(c) Exhibits.
*2.1 Acquisition Agreement dated April 23, 1996 between
Laserscope and Heraeus Med GmbH (included as Exhibit
A to the Proxy Statement of Laserscope dated July 29,
1996, which is incorporated herein by reference).
*20.1 Proxy Statement of Laserscope dated July 29, 1996.
23.1 Consent of KPMG Peat Marwick LLP.
99.1 Heraeus Surgical, Inc. Financial Statements with
Report of KPMG Peat Marwick LLP.
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*Filed with the Commission on July 29, 1996 and incorporated as an exhibit
hereto pursuant to Rule 12b-32 promulgated under the Exchange Act.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
LASERSCOPE
(Registrant)
Dated: November 8, 1996 By: /s/ DENNIS LaLUMANDIERE
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Dennis LaLumandiere
Vice President of Finance and
Chief Financial Officer
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INDEX TO FINANCIAL STATEMENTS
PAGE
Unaudited Pro Forma Financial Statements:
Combined Condensed Balance Sheet as of June 30, 1996 F-3
Combined Condensed Statements of Operations for the year ended December 31, 1995
and the six months ended June 30, 1996 F-4
Notes to Pro Forma Financial Statements F-5
F-1
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LASERSCOPE AND HERAEUS SURGICAL, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The following pages F-3 through F-6 contain the Unaudited Pro Forma
Combined Condensed Balance Sheet as of June 30, 1996, the Unaudited Pro Forma
Combined Condensed Statements of Operations for the fiscal year ended December
31, 1995 and the six months ended June 30, 1996 and the notes thereto.
The Unaudited Pro Forma Combined Condensed Balance Sheet and the
Unaudited Pro Forma Combined Condensed Statements of Operations (collectively,
the Unaudited Pro Forma Statements) were prepared to give effect to
Laserscope's acquisition (the "Acquisition") of Heraeus Surgical, Inc. ("HSI")
and certain of the assets and liabilities of Heraeus Med GmbH's laser
distribution operations (the "LDB") accounted for under the purchase method of
accounting. The Unaudited Pro Forma Combined Condensed Balance Sheet assumes
that the Acquisition occurred on June 30, 1996. The Unaudited Pro Forma Combined
Condensed Statements of Operations assume that the Acquisition occurred on
January 1, 1995. The Unaudited Pro Forma Statements are based on the historical
Consolidated Financial Statements of Laserscope and HSI under the assumptions
and adjustments set forth in the accompanying Notes to the Unaudited Pro Forma
Combined Condensed Financial Statements. The combined condensed financial
information for the fiscal year ended December 31, 1995 has been obtained from
the consolidated financial statements of Laserscope and HSI, which statements
have been audited by Ernst & Young LLP and KPMG Peat Marwick LLP, the
independent auditors for Laserscope and HSI, respectively. The selected
financial data for Laserscope and HSI for the six-month period ended June 30,
1996 has been obtained from their respective unaudited financial statements and
includes, in the opinion of Laserscope's and HSI's management, all adjustments
necessary to present fairly the data for such period. The Unaudited Pro Forma
Statements may not be indicative of the results that actually would have
occurred if the Acquisition had been in effect on the dates indicated or which
may be obtained in the future.
The pro forma adjustments are based upon available information and
upon certain assumptions, as described in the Notes to the Unaudited Pro Forma
Statements, that Laserscope's management believes are reasonable in the
circumstances. The purchase price has been allocated to the acquired assets and
liabilities based on a determination from an independent appraisal of their
respective fair values. The Unaudited Pro Forma Statements and accompanying
notes should be read in conjunction with the separate consolidated financial
statements and notes thereto of Laserscope and HSI which have been included or
incorporated by reference in this report on Form 8-K/A.
F-2
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LASERSCOPE AND HSI
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
(IN THOUSANDS)
LASERSCOPE HSI
JUNE 30, JUNE 30, PRO FORMA PRO FORMA
1996 1996 ADJUSTMENTS(3) ADJUSTMENTS(2) COMBINED
---- ---- -------------- -------------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 3,432 $ 561 $ (2,000)(a) $ 1,993
Accounts receivable, net 6,263 6,478 (450)(b) 12,291
Due from related parties 1,351 (430)(b) 921
Inventories 9,002 8,732 1,416 (600)(b)
(708)(b)
(405)(g) 17,437
Other current assets 535 198 733
-------- -------- ------- -------- --------
Total current assets 19,232 17,320 1,416 (4,593) 33,375
Property and equipment, net 2,430 505 17 (467)(g) 2,485
Intangible assets:
Developed technology 2,397 (b) 2,397
In-process technology 2,139 (b)
(2,139)(f)
Workforce 416 (b) 416
Other assets 2,359 375 2,734
-------- -------- ------- -------- --------
Total assets $ 24,021 $ 18,200 $ 1,433 $ (2,247) $ 41,407
======== ======== ======= ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,640 $ 2,821 $ $ (430)(b) $ 4,461
Intercompany payable 2,121 430 2,121
Accrued compensation 1,369 572 350 200 (b) 2,291
Warranty 461 200 861
Deferred revenue 1,674 825 1,662 (a) 2,499
Other accrued liabilities 1,106 421 325 (g)
3,514
-------- -------- ------- -------- --------
Total current liabilities 6,250 6,960 780 1,757 15,747
Shareholders' equity:
Common stock 37,404 36,997 10,900 (a) 48,304
Paid-in capital (36,997)(c)
Retained earnings (deficit) (18,908) (25,757) 653 25,757 (e)
(2,139)(f)
(653)(e)
(872)(g) (21,919)
Notes receivable from
shareholders (350) (350)
Translation adjustments (375) (375)
-------- -------- ------- -------- --------
Total shareholders'
equity 17,771 11,240 653 (4,004) 25,660
-------- -------- ------- -------- --------
Total liabilities and
shareholders' equity $ 24,021 $ 18,200 $ 1,433 $ (2,247) $ 41,407
======== ======== ======= ======== ========
F-3
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LASERSCOPE AND HSI
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
FOR THE YEAR ENDED
DECEMBER 31, 1995 PRO FORMA PRO FORMA
LASERSCOPE HSI ADJUSTMENTS COMBINED
Net revenue $30,133 $27,776 $ -- $57,909
Cost of Sales 14,792 17,470 (627)(h) 31,635
------- ------- ------- -------
Gross margin 15,341 10,306 627 $26,274
Operating expenses:
Research and development 3,838 1,714 (37)(h) 5,515
Selling, general and administrative 15,333 11,480 425 (c)
(2,137)(h) 25,101
------- ------- ------- -------
Total operating expenses 19,171 13,194 (1,749) 30,616
------- ------- ------- -------
Operating income (loss) (3,830) (2,888) 2,376 (4,342)
Interest and other income, net 278 (385) (175)(d) (282)
------- ------- ------- -------
Income (loss) before income taxes (3,552) (3,273) 2,201 (4,624)
Provision for income taxes -- 2 -- 2
------- ------- ------- -------
Net income (loss) $(3,552) $(3,275) $ 2,201 $(4,626)
------- ------- ------- -------
Net income (loss) per share $ (0.51) $ (0.40)
------- -------
Shares used in per share calculations 6,999 4,609(a) 11,608
------- ------- -------
FOR THE SIX
MONTHS ENDED
JUNE 30, 1996 PRO FORMA PRO FORMA
LASERSCOPE HSI ADJUSTMENTS COMBINED
Net revenues $ 16,203 $ 14,776 $ -- $30,979
Cost of sales 8,140 8,650 (314)(h) 16,476
------- ------- ------- -------
Gross margin 8,063 6,126 314 14,503
Operating expenses:
Research and development 1,151 843 (18)(h) 1,976
Selling, general and administrative 6,493 5,498 213 (c)
(1,068)(h) 11,136
------- ------- ------- -------
Total operating expenses 7,644 6,341 (873) 13,112
------- ------- ------- -------
Operating income (loss) 419 (215) 1,187 1,391
Interest and other income, net 22 200 (88)(d) 134
------ ------- ------- -------
Income (loss) before income taxes 441 (15) 1,099 1,525
Provision for income taxes 53 3 -- 56
------- ------- ------- -------
Net income (loss) $ 388 $ (18) $ 1,099 $ 1,469
------- ------- ------- -------
Net income (loss) per share $ 0.05 $ 0.12
------- -------
Shares used in per share calculations 7,512 4,609(a) 12,121
------- ------- -------
See accompanying Notes to Unaudited Pro Forma Combined Condensed
Financial Statements.
F-4
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LASERSCOPE AND HERAEUS
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The pro forma information presented is theoretical in nature and not
necessarily indicative of the future consolidated results of operations of the
Company or the consolidated results of operations which would have resulted had
the Acquisition taken place during the periods presented. The pro forma combined
condensed financial statements reflect the effects of the Acquisition, assuming
the Acquisition and related events occurred as of June 30, 1996 for the purposes
of the pro forma condensed combined balance sheet and as of January 1, 1995 for
the purposes of the pro forma condensed combined statements of operations.
2. PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENT ADJUSTMENTS:
(a) The purchase price for the Acquisition was determined as
follows (in thousands):
Cash $ 2,000
Laserscope common stock (approximately 4.6 million shares) 10,900
Estimated transaction and other direct acquisition costs 1,147
Estimated severance costs for HSI and LDB employees 515
-------
$14,562
-------
(b) Allocation of the purchase price for the completion of the Heraeus
acquisition was determined as follows (in thousands):
Net assets of HSI at June 30, 1996, as adjusted $9,235
Net assets of LDB at June 30, 1996, as adjusted 375
Developed Technology 2,397
In-process Technology 2,139
Acquired workforce 416
-------
$14,562
-------
The net assets of HSI and LDB at June 30, 1996 were adjusted to
conform to accounting policies of Laserscope and were for HSI: $450 reduction in
accounts receivable; $600 reduction in inventories and $200 increase to
warranty. For LDB the adjustments consisted of $708 reduction in inventories. In
addition, the $430 intercompany balance between HSI and LDB was eliminated.
(c) Amortization of the developed technology and acquired workforce
will be over the estimated useful lives ranging from five to seven years.
(d) To reduce interest income earned on the cash payment to Heraeus of
$3,500,000 for the purchase price and related transaction and direct acquisition
costs.
(e) Elimination of HSI and LDB stockholders equity amounts.
(f) The pro forma combined condensed balance sheet includes a charge of
approximately $2.1 million for the write-off of purchased in-process technology
which arose from the Acquisition. This charge is not reflected in the pro forma
combined condensed statements of operations included herein since it is a
non-recurring charge directly attributable to the transaction.
The purchase price was allocated to the tangible and intangible assets
of HSI based on the fair market values of those assets using a risk adjusted
discounted cash flows approach. The evaluation of the underlying
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technology acquired considered the inherent difficulties and uncertainties in
completing the development, and thereby achieving technological feasibility, and
the risk related to the viability of and potential changes in future target
markets. The underlying technology had no alternative future use (in research
and development projects or otherwise) since the technology was acquired for the
sole purpose of developing emulation products.
(g) The pro forma combined condensed balance sheet includes reductions
of $405,000 to inventories and $467,000 to property, plant and equipment which
represent the respective reductions in value to these Laserscope assets which
became redundant as a result of the acquisition of HSI. In addition, the pro
forma combined condensed balance sheet includes an addition of $325,000 in
accrued expenses representing expected costs of the cancellation of certain HSI
distribution arrangements which became redundant as a result of the acquisition
of HSI by Laserscope.
(h) Represents estimated cost savings resulting from the Acquisition,
primarily due to reduction in personnel and elimination of duplicate facilities.
Cost savings total approximately $2,800,000 and $1,400,000 for the year ended
December 31, 1995 and the six months ended June 30, 1996, respectively.
3. ADDITIONAL NET ASSETS ACQUIRED
Included in the Acquisition was the purchase of certain assets and the
assumption of certain liabilities related to the Heraeus laser distribution
business. These net assets had an approximate fair value of $375,000 as of June
30, 1996. (See Note 2(b)).
F-6
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INDEX TO EXHIBITS
Exhibit
No. Exhibit
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*2.1 Acquisition Agreement dated April 23, 1996 between
Laserscope and Heraeus Med GmbH
*20.1 Proxy Statement of Laserscope dated July 29, 1996
23.1 Consent of KPMG Peat Marwick LLP
99.1 Heraeus Surgical, Inc. Financial Statements with
Report of KPMG Peat Marwick LLP.
*Filed with the Commission on July 29, 1996 and incorporated as an exhibit
hereto pursuant to Rule 12b-32 promulgated under the Exchange Act.