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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2000 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period from __________ to __________/
Commission file number: 000-30575
Avocent Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware 91-2032368
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
4991 Corporate Drive
Huntsville, Alabama 35805
(Address of Principal Executive Offices) (Zip Code)
256-430-4000
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant has (1) filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act 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.
[X]Yes [ ] No
As of August 8, 2000, 42,971,595 shares of the Company's Common Stock
were outstanding.
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AVOCENT CORPORATION
FORM 10-Q
JUNE 30, 2000
INDEX
Page(s)
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Part I Financial Information
Item 1. Financial Statement
Balance Sheet at June 30, 2000 (unaudited) 3
Notes to Balance Sheet (unaudited) 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 6
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 8
Index of Exhibits 9
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statement
AVOCENT CORPORATION
BALANCE SHEET
JUNE 30,
2000
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(unaudited)
ASSETS
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Total assets $ --
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Liabilities $ --
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Shareholders' equity
Preferred stock, $0.001 par value; 5,000,000 shares
authorized, no shares issued and outstanding --
Common stock,$0.001 par value; 200,000,000 shares
authorized, no shares issued and outstanding --
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Total shareholders' equity --
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Total liabilities and shareholders' equity $ --
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See notes accompanying these consolidated financial statements.
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AVOCENT CORPORATION
NOTES TO BALANCE SHEET
1. BASIS OF PRESENTATION
Avocent Corporation (the "Company", formerly Aegean Sea Inc.) was
incorporated in the state of Delaware on March 7, 2000. Pursuant to Sections
106 and 107 of the Delaware General Corporation Law, the incorporator of the
Company, in consultation with the management of Apex Inc. and Cybex Computer
Products Corporation, filed the Company's certificate of incorporation, adopted
the Company's bylaws and elected the initial directors of the Company. On March
7, 2000 the initial directors approved and ratified the actions of the
incorporator and elected the officers of the Company on March 8, 2000.
The Company was formed in connection with the merger of Apex and
Cybex. The initial directors approved the merger on March 7, 2000 in accordance
with Delaware Code Section 251(a). As no shares of the Company's stock had been
issued as of March 7, 2000, authorization of the merger required no vote of the
shareholders of the Company. Upon completion of the merger on July 1, 2000,
Apex and Cybex each became a wholly owned subsidiary of the Company. Other than
its formation, as of June 30, 2000, the Company had not conducted any
activities. The Company will operate on a calendar year basis with December 31
as its year-end.
No shares of common stock had been issued as of June 30, 2000.
The presentation of the financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported
in the balance sheet.
2. SUBSEQUENT EVENT
In March 2000, Apex and Cybex jointly announced a proposed merger.
Apex and Cybex (collectively "the companies") entered into a merger agreement,
under which they agreed to combine the two companies in a merger, resulting in
a new combined corporation under a newly created parent registrant, Aegean Sea
Inc. The newly formed company subsequently changed its name to Avocent
Corporation. On March 31, 2000, the newly created registrant and the companies
filed a registration statement on Form S-4, which was declared effective by the
Securities and Exchange Commission on June 2, 2000. The companies received
final approval of the merger and the Agreement and Plan of Reorganization dated
March 8, 2000, by the shareholders of the respective companies on June 30,
2000. The merger was effective as of July 1, 2000. Both Apex and Cybex filed
Forms 10-Q with the SEC for the quarter ended June 30, 2000.
The merger will be accounted for as a purchase in accordance with APB
16 with the purchase price allocated to the assets and liabilities of Cybex
based upon their fair values at the date of the transaction. The excess of the
purchase price over the fair value of the assets and liabilities has been
allocated to the identifiable intangible assets and goodwill. Additionally,
$94.0 million of the purchase price is expected to be expensed as in-process
research and development. A preliminary purchase price allocation is as
follows:
Tangible assets $110,775,673
Identifiable intangible assets 90,107,903
Goodwill 529,430,650
In-process R&D 94,000,000
Liabilities (28,843,613)
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Total purchase price $795,470,613
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
THE INFORMATION IN THIS ITEM 2 - "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" CONTAINS FORWARD-LOOKING
STATEMENTS, INCLUDING, WITHOUT LIMITATION, STATEMENTS RELATING TO EXPECTED
MERGER ACCOUNTING ACQUISITION AND TRANSACTION COSTS AND ADJUSTMENTS INCLUDING,
AMONG OTHER THINGS, WRITE OFF OF IN-PROCESS RESEARCH AND DEVELOPMENT COSTS, AND
AMORTIZATION OF INTANGIBLE ASSETS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT
TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THE FORWARD-LOOKING STATEMENTS. FACTORS
THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED IN OUR REGISTRATION STATEMENT ON FORM S-4, WHICH WAS DECLARED
EFFECTIVE BY THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 2, "RISK FACTORS."
MERGER
In March 2000, Apex and Cybex jointly announced a proposed merger.
Apex and Cybex (collectively "the companies") entered into a merger agreement,
under which they agreed to combine the two companies in a merger, resulting in
a new combined corporation under a newly created parent registrant, Aegean Sea
Inc. The newly formed company subsequently changed its name to Avocent
Corporation. On March 31, 2000, the newly created registrant and the companies
filed a registration statement on Form S-4, which was declared effective by the
Securities and Exchange Commission on June 2, 2000. The companies received
final approval of the merger and the Agreement and Plan of Reorganization dated
March 8, 2000, by the shareholders of the respective companies on June 30,
2000. The merger was effective as of July 1, 2000. Other than its formation, as
of June 30, 2000, the Company had not conducted any activities. The Company
will operate on a calendar year basis with December 31 as its year-end. For the
June 30, 2000 quarter results of Apex and Cybex, you may refer to each
company's Form 10-Q filed with the SEC on or about the same date of this
filing.
The merger will be accounted for as a purchase in accordance with APB
16 with the purchase price allocated to the assets and liabilities of Cybex
based upon their fair values at the date of the transaction. The excess of the
purchase price over the fair value of the assets and liabilities has been
allocated to the identifiable intangible assets and goodwill. Additionally,
$94.0 million of the purchase price is expected to be expensed as in process
research and development. A preliminary purchase price allocation is as
follows; $110.8 million of tangible assets, $90.1 million of identifiable
intangible assets, $529.4 million of goodwill, $94.0 of in-process R&D and
$28.8 million of assumed liabilities. The amortization periods are 3 to 7 years
for intangibles and 5 years for goodwill.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
On July 10, 2000, Avocent Corporation filed a Current Report on Form
8-K with the Securities and Exchange Commission relating to the merger of Apex
and Cybex, which was effected on July 1, 2000. Apex and Cybex are now
wholly-owned subsidiaries of Avocent.
ITEMS 1, 2, 3, 4 and 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AVOCENT CORPORATION
(Registrant)
Date: August 14, 2000 /s/ Douglas E. Pritchett
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Douglas E. Pritchett
Senior Vice President, Finance,
Chief Financial Officer
and Treasurer
Date: August 14, 2000 /s/ Samuel F. Saracino
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Samuel F. Saracino
Senior Vice, Legal and
Corporate Affairs, General Counsel
and Secretary
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INDEX OF EXHIBITS
EXHIBIT NO. DESCRIPTION PAGE NO.
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27 Financial Data Schedule (For SEC use only)
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