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):
FEBRUARY 26, 2001
GENZYME TRANSGENICS CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 0-21794 04-3186494
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
175 CROSSING BOULEVARD, 4TH FLOOR, SUITE 100
FRAMINGHAM MASSACHUSETTS 01702
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(508) 620-9700
Page 1 of 9
Exhibit Index appears on page 9
1
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On February 26, 2001, TSI Corporation ("TSI"), a wholly owned
subsidiary of Genzyme Transgenics Corporation ("GTC"), sold all of the capital
stock of Primedica Corporation ("Primedica"), a wholly owned subsidiary of TSI,
to Charles River Laboratories, Inc. ("Charles River"), pursuant to a Stock
Purchase Agreement dated as of February 6, 2001 by and among Charles River,
Primedica, TSI and GTC, a copy of which is filed as Exhibit 2.1 hereto and is
incorporated herein by reference.
In this transaction, TSI sold to Charles River all of the issued and
outstanding capital stock of Primedica, consisting of 5,100 shares of common
stock, $0.01 par value per share (the "Primedica Stock"). Primedica is a
contract resource organization which conducts its CRO services through four
laboratories: Primedica Worcester (Massachusetts), Primedica Redfield
(Arkansas), Primedica Rockville (Maryland) and Primedica Argus (Pennyslvania).
The purchase consideration paid to the Company consisted of (i)
$26,000,000 in cash, (ii) 658,945 shares of common stock of Charles River
(determined based on a $16,500,000 value), (iii) Charles River's assumption
and agreement to pay or discharge approximately $9,400,000 of the obligations
of Primedica and its affiliates and (iv) Charles River's assumption and
agreement to perform certain obligations of Primedica and its affiliates. The
consideration for the sale was determined by negotiation between GTC and
Charles River and was based on the estimated fair market value of the assets
transferred and liabilities assumed. Before the transaction, there had been
no material relationship between GTC and Charles River or any of their
respective affiliates, directors or officers or any associate of any director
or officer of GTC or Charles River.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
------------------------------------------------------------------
(b) Pro Forma Financial Information
The Unaudited Pro Forma Condensed Consolidated Financial Statements
illustrate the effect of GTC's disposition of the Primedica Stock and
liabilities (the "disposition") to Charles River on February 26, 2001. The
Unaudited Condensed Consolidated Balance Sheet reflects the financial
position of GTC after giving effect to the disposition as if it had occurred
at January 3, 2000. The unaudited Pro Forma Condensed Consolidated Statements
of Operations for the years ended December 31, 2000, January 2, 2000 and
January 3, 1999 give retroactive effect to the disposition as if it had
occurred on January 1, 1998.
Unaudited Pro Forma Condensed Consolidated Financial Statements of GTC
include the following:
(1) Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
December 31, 2000;
(2) Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended December 31, 2000;
(3) Unaudited Pro Forma Condensed Consolidated Statement of
Operations the year ended January 2, 2000;
(4) Unaudited Pro Forma Consolidated Statement of Operations for
the ended January 3, 1999; and
(5) Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements.
2
GENZYME TRANSGENICS CORPORATION
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
FOR THE YEAR ENDED DECEMBER 31, 2000
(in thousands)
PRO FORMA ADJUSTMENT
----------------------------------------------
GENZYME LESS:
TRANSGENICS PRIMEDICA SALE PRO FORMA
CORPORATION CORPORATION(1) PROCEEDS(2) TOTAL
----------- -------------- ----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 40,360 $ (664) $ 23,812 $ 64,836
Marketable Securities 25,525 17 16,500 42,008
Accounts receivable 13,259 11,494 1,765
Unbilled contract revenue 11,040 10,052 988
Net assets of discontinued operations held for sale 0 (37,272) (37,272) 0
Other current assets 2,447 1,349 1,098
-------- --------- --------- --------
Total current assets 92,631 (15,024) 3,040 110,695
Net property, plant, and equipment 38,474 24,633 13,841
Costs in excess of net assets acquired, net 16,116 16,116 0
Other assets 13,451 544 12,907
-------- --------- --------- --------
$160,672 $ 26,269 $ 3,040 $137,443
======== ========= ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,853 $ 3,340 $ $ 3,513
Accrued expenses 10,881 6,367 4,514
Deferred contract revenue 11,643 7,121 4,522
Current portion of long-term debt and capital leases 9,310 2,593 6,717
-------- --------- --------- --------
Total current liabilities 38,687 19,421 0 19,266
Long-term debt 5,854 5,631 223
Deferred lease obligation 806 735 71
-------- --------- --------- --------
Total liabilities 45,347 25,787 0 19,560
Stockholders' equity (deficit) 115,325 482 3,040 117,883
-------- --------- --------- --------
$160,672 $ 26,269 $ 3,040 $137,443
======== ========= ========= ========
3
GENZYME TRANSGENICS CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(in thousands except per share data)
PRO FORMA ADJUSTMENT
--------------------------------------
GENZYME LESS:
TRANSGENICS PRIMEDICA PRO FORMA
CORPORATION CORPORATION(3) TOTAL
----------- -------------- ---------
Revenues:
Services $ 71,986 $71,986 $ 0
Sponsored research and development 16,163 16,163
-------- ------- --------
88,149 71,986 16,163
Costs and operating expenses:
Services 59,724 59,724 0
Research and development: 0
Sponsored 15,619 15,619
Internal 3,357 3,357
Selling, general and administrative 20,135 10,988 9,147
Equity in loss of joint ventures 4,625 4,625
--------- ------- --------
103,460 70,712 32,748
--------- ------- --------
Loss from operations (15,311) 1,274 (16,585)
Other income (expense):
Interest income 3,779 9 3,770
Interest expense (1,813) (812) (1,001)
--------- ------- --------
Loss from operations before income taxes (13,345) 471 (13,816)
Provision for income taxes 248 247 1
--------- ------- --------
Net Loss (13,593) 224 (13,817)
Dividend to preferred shareholders (74) 0 (74)
--------- ------- --------
Net loss available to common shareholders $ (13,667) $ 224 $(13,891)
========= ======= ========
Net loss available per common share (basic and diluted) $ (0.48) $ (0.49)
========= ========
Weighted average number of common shares
outstanding (basic and diluted) 28,373 28,373
4
GENZYME TRANSGENICS CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED ENDED JANUARY 2, 2000
(in thousands except per share data)
PRO FORMA ADJUSTMENT
--------------------------------------
GENZYME LESS:
TRANSGENICS PRIMEDICA PRO FORMA
CORPORATION CORPORATION(3) TOTAL
----------- -------------- ---------
Revenues:
Services $ 54,959 $ 54,959 $ 0
Sponsored research and development 13,825 13,825
---------- --------- --------
68,784 54,959 13,825
Costs and operating expenses:
Services 46,602 46,602 0
Research and development: 0
Sponsored 11,402 11,402
Internal 3,690 3,690
Selling, general and administrative 18,872 10,997 7,875
Facility consolidation costs 1,245 1,245 0
Equity in loss of joint ventures 3,797 3,797
---------- --------- --------
85,608 58,844 26,764
---------- --------- --------
Loss from operations (16,824) (3,885) (12,939)
Other income (expense):
Interest income 65 0 65
Interest expense (2,166) (934) (1,232)
Other income 484 0 484
---------- --------- --------
Loss from operations before income taxes (18,441) (4,819) (13,622)
Provision for income taxes 320 320 0
---------- --------- --------
Net Loss (18,761) (5,139) (13,622)
Dividend to preferred shareholders (1,497) 0 (1,497)
---------- --------- --------
Net loss available to common shareholders $ (20,258) $ (5,139) $(15,119)
========== ========= ========
Net loss available per common share (basic and diluted) $ (1.02) $ (0.76)
========== ========
Weighted average number of common shares
outstanding (basic and diluted) 19,877 19,877
5
GENZYME TRANSGENICS CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED ENDED JANUARY 3, 1999
(in thousands except per share data)
PRO FORMA ADJUSTMENT
--------------------------------------
GENZYME LESS:
TRANSGENICS PRIMEDICA PRO FORMA
CORPORATION CORPORATION(3) TOTAL
----------- -------------- ---------
Revenues:
Services $ 50,816 $ 50,816 $ 0
Sponsored research and development 11,596 11,596
--------- -------- --------
62,412 50,816 11,596
Costs and operating expenses:
Services 43,668 43,668 0
Research and development: 0
Sponsored 10,486 10,486
Internal 6,155 6,155
Selling, general and administrative 16,184 10,103 6,081
Equity in loss of joint ventures 4,285 4,285
--------- -------- --------
80,778 53,771 27,007
--------- -------- --------
Loss from operations (18,366) (2,955) (15,411)
Other income (expense):
Interest income 280 0 280
Interest expense (1,379) (1,128) (251)
Other income 100 0 100
--------- -------- --------
Loss from operations before income taxes (19,365) (4,083) (15,282)
Provision for income taxes 225 264 (39)
--------- -------- --------
Net Loss (19,590) (4,347) (15,243)
Dividend to preferred shareholders (1,156) 0 (1,156)
--------- -------- --------
Net loss available to common shareholders $ (20,746) $ (4,347) $(16,399)
========= ======== ========
Net loss available per common share (basic and diluted) $ (1.15) $ (0.91)
========= ========
Weighted average number of common shares
outstanding (basic and diluted) 17,979 17,979
6
Notes to the Unaudited Pro Forma
Condensed Consolidated Financial
Statements
The pro forma adjustments to the unaudited pro forma condensed consolidated
financial statements, assuming this transaction occurred on January 3, 2000,
are as follows:
(1) Adjustment to reflect the balance sheet of Primedica Corporation sold as
part of the transaction.
(2) Adjustment to record the cash proceeds of $26 million, net of accrued
costs related to employee severance and option acceleration charges,
professional fees and other costs related to the transaction which
amounted to $2.188 million, and common stock of Charles River of
$16.5 million consideration received from the sale of the $37.272 million
net assets of Primedica at December 31, 2000 resulting in a gain of
$3.404 million, which is shown as an increase to shareholders' equity.
(3) Adjustment to eliminate results of operations of Primedica Corporation.
7
(c) Exhibits
2.1 Stock Purchase Agreement dated as of February 6, 2001, among
Charles River, Primedica, TSI and GTC. The last page of this
exhibit is a list identifying the contents of the schedules or
exhibits referred to in the Stock Purchase Agreement which are
omitted from this pursuant to Item 601(b)(2) of Regulation
S-K. GTC hereby undertakes to furnish supplementally a copy of
any omitted schedule or exhibit to the Commission upon
request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 13, 2001 GENZYME TRANSGENICS CORPORATION
By: /s/ John B. Green
-----------------------------------------
John B. Green
Vice President, Finance, Chief Financial
Officer
8
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
2.1 Stock Purchase Agreement dated as of February 6, 2001, among Charles
River, Primedica, TSI and GTC. The last page of this exhibit is a
list identifying the contents of the schedules or exhibits referred
to in the Stock Purchase Agreement which are omitted from this
pursuant to Item 601(b)(2) of Regulation S-K. GTC hereby undertakes
to furnish supplementally a copy of any omitted schedule or exhibit
to the Commission upon request.
9