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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 8-K
CURRENT REPORT
SEPTEMBER 6, 2001
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-4829-03
NABI
(Exact name of registrant as specified in its charter)
Delaware 59-1212264
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(State or other jurisdiction of I.R.S. Employer Identification No.)
incorporation or organization)
5800 Park of Commerce Boulevard N.W., Boca Raton, FL 33487
(Address of principal executive offices, including zip code)
(561) 989-5800
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 6, 2001, we sold the operating assets of a majority of our antibody
collection business and our testing laboratory (collectively the "Transferred
Antibody Collection Business") to CSL Limited ("CSL") for $152 million in cash,
subject to closing adjustments (as of September 6, 2001, these closing
adjustments resulted in the receipt of an additional $1 million in cash by us).
The assets sold were certain real estate, leasehold interests, fixtures,
furniture, tools, machinery and equipment, other fixed assets, plasma
inventories and related supplies, contracts, agreements, arrangements and/or
commitments, licenses and permits, business and financial records, intellectual
property and goodwill related to the operation of 47 of our current 56 antibody
collection centers and our testing laboratory. The purchase price we received
was the result of arm's-length bargaining between CSL and us. There is no
material relationship between CSL and us or, to our knowledge, between CSL and
any of our affiliates, any of our Directors or officers or any associate of any
such Director or officer.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information
Condensed Consolidated Pro Forma Financial Information Introduction.....................3
Condensed Consolidated Pro Forma Balance Sheet, June 30, 2001 (Unaudited)...............4
Condensed Consolidated Pro Forma Income Statement for the
Six Months Ended June 30, 2001 (Unaudited).....................................5
Condensed Consolidated Pro Forma Income Statement for the
Year Ended December 30, 2000 (Unaudited).......................................6
Notes to Condensed Consolidated Pro Forma Financial Statements (Unaudited)..............7
(c) Exhibits
Exhibit No. Description
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2.1 Agreement for Purchase and Sale of Assets by and
between Nabi and CSL Limited. We have requested
confidential treatment of the redacted portions of
this exhibit pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended, and have
separately filed a complete copy of this exhibit with
the Securities and Exchange Commission.
2.2 First Amendment to Agreement for Purchase and Sale
of Assets
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.
Nabi (Registrant)
Date: September 21, 2001 By: /s/ Mark L. Smith
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Mark L. Smith
Senior Vice President, Finance and
Chief Financial Officer
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ITEM 7(b) CONDENSED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION INTRODUCTION
On September 6, 2001, we completed the sale of the operating assets of 47 of our
antibody collection centers and the majority of our testing laboratory
(collectively the "Transferred Antibody Collection Business") to CSL Limited
("CSL"). Total cash proceeds from the sale were $153 million, after closing
adjustments as of the time of sale pursuant to the Asset Purchase Agreement,
dated June 25, 2001, as amended. Further closing adjustments will be made as
provided for in the agreement.
We applied $18 million of the proceeds to pay back all of our short-term debt as
of the closing date which comprised a revolving credit facility and a term loan.
The remaining proceeds will be used for working capital and other corporate
purposes, and may be used to position us to accelerate the development of our
research and development pipeline and to acquire or in-license additional
biopharmaceutical products.
For purposes of this document, the unaudited condensed consolidated pro forma
balance sheet of Nabi set forth below is used to show the effects of the sale of
the Transferred Antibody Collection Business as if it occurred on June 30, 2001
based on certain estimates and assumptions. The unaudited condensed consolidated
pro forma balance sheet includes pro forma adjustments to give effect to the
disposition of assets and the use of proceeds as though they had occurred as of
June 30, 2001. We used June 30, 2001 because it marks the end of the latest
fiscal period for which financial information is publicly available.
The accompanying unaudited condensed consolidated pro forma income statements
for the six months ended June 30, 2001 and the year ended December 30, 2000
assume that the assets were disposed of as of January 1, 2000 and eliminates the
estimated historical results of operations of the Transferred Antibody
Collection Business from the historical results of operations of Nabi for the
six months ended June 30, 2001 and the year ended December 30, 2000, and the
interest expense related to the short-term debt that was repaid with the
proceeds.
The accompanying pro forma information should be read in conjunction with our
annual report on Form 10-K for the fiscal year ended December 30, 2000, the
quarterly report on Form 10-Q for the period ended June 30, 2001 and the current
report on Form 8-K filed on July 10, 2001. The pro forma information is not
necessarily indicative of the results that would actually have occurred had this
transaction been consummated on the dates or for the periods indicated or that
may occur in the future. For example, lower antibody product margins in 2000
reflect higher costs of production including higher donor fees and increased
cost of regulatory compliance as discussed in our 2000 Form 10-K. Further, had
the transaction occurred on January 1, 1999, the Pro Forma Sales less Costs of
Products Sold would have been $12 million for the year ended December 31, 1999
as compared to Pro Forma Sales less Pro Forma Costs of Products Sold of ($4)
million for the year ended December 30, 2000.
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Nabi
CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
(unaudited, amounts in thousands)
Adjustments
June 30, Arising From
2001 Transaction Pro Forma
--------- ------------- ---------
Cash $ 1,954 $ 152,997 (A)
(24,478)(B) $ 130,473
Trade accounts receivable, net 34,435 -- 34,435
Inventories, net 30,261 (14,272)(C) 15,989
Prepaid expenses and other current assets 3,312 2,824 (D) 6,136
Property and equipment, net 124,243 (17,579)(E) 106,664
Other assets, net 25,576 (14,911)(F) 10,665
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Total assets $ 219,781 $ 84,581 $ 304,362
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Trade accounts payable and accrued expenses $ 36,226 $ 13,679 (G) $ 49,905
Notes payable 102,978 (24,478)(B) 78,500
Other liabilities 241 -- 241
Stockholders' equity 80,336 95,380 (H) 175,716
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Total liabilities and stockholders' equity $ 219,781 $ 84,581 $ 304,362
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Nabi
CONDENSED CONSOLIDATED PRO FORMA INCOME STATEMENT
(unaudited, amounts in thousands, except per share data)
For the Six Months Ended June 30, 2001
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Adjustments
Historical Arising from
as Reported Transaction Pro Forma
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Sales $ 125,466 $ 64,373 (1) $ 61,093
Costs and expenses:
Costs of products sold 88,941 62,190 (2) 26,751
Royalty expense 5,477 -- 5,477
Selling, general and administrative expense 20,015 3,135 (2) 16,880
Research and development expense 6,878 -- 6,878
Other operating expense 887 716 (2) 171
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Operating income 3,268 (1,668) 4,936
Interest income 13 -- 13
Interest expense (944) (944)(4) --
Other expense, net (22) -- (22)
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Income before provision for income taxes 2,315 (2,612) 4,927
Provision for income taxes (115) 1,609 (5) (1,724)
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Income from continuing operations $ 2,200 $ (1,003) $ 3,203
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Basic earnings per share $ 0.06 $ 0.08
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Diluted earnings per share $ 0.06 $ 0.08
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Basic weighted average shares outstanding 37,889 37,889
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Diluted weighted average shares outstanding 38,933 38,933
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Nabi
CONDENSED CONSOLIDATED PRO FORMA INCOME STATEMENT
(unaudited, amounts in thousands, except per share data)
For the Year Ended December 30, 2000
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Adjustments
Historical Arising from
as Reported Transaction Pro Forma
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Sales $ 228,783 $ 117,957 (1) $ 110,826
Costs and expenses:
Costs of products sold 160,766 124,394 (2) 36,372
Royalty expense 11,175 -- 11,175
Selling, general and administrative expense 37,168 6,551 (2) 30,617
Research and development expense 14,266 -- 14,266
Other operating expense 1,827 1,421 (2) 406
Non-recurring credit (3,875) (863)(3) (3,012)
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Operating income 7,456 (13,546) 21,002
Interest income 33 -- 33
Interest expense (3,581) (3,330)(4) (251)
Other income, net 198 -- 198
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Income before provision for income taxes 4,106 (16,876) 20,982
Provision for income taxes (87) 7,257 (5) (7,344)
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Income from continuing operations $ 4,019 $ (9,619) $ 13,638
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Basic earnings per share $ 0.11 $ 0.37
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Diluted earnings per share $ 0.11 $ 0.36
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Basic weighted average shares outstanding 36,604 36,604
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Diluted weighted average shares outstanding 37,739 37,739
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PRO FORMA ADJUSTMENTS: The following adjustments have been made to the condensed
consolidated pro forma balance sheet of Nabi at June 30, 2001 and to the
condensed consolidated pro forma income statements for the six months ended June
30, 2001 and the year ended December 30, 2000:
A. Reflects total proceeds of $153 million received by Nabi from CSL.
B. Reflects repayment of short-term debt that comprised a revolving credit
facility and a term loan. For the purposes of this unaudited pro forma
condensed consolidated balance sheet, it has been assumed that all
short-term debt is repaid on June 30, 2001. At June 30, 2001, short-term
debt was $24,478 compared to $17,608 as of September 6, 2001, the date of
completing the transaction.
C. Reflects the values of plasma inventory sold associated with the
transaction.
D. Relates to estimated amounts receivable for reimbursement of transferred
assets including inventory.
E. Reflects the carrying value of fixed assets sold.
F. Reflects the disposition of goodwill and other intangibles related to the
antibody collection centers.
G. Relates to accrued transaction costs and an estimated tax liability
H. Reflects estimated gain resulting from the sale of the Transferred Antibody
Collection Business and other assets and liabilities incurred or relieved
as a result of the sale. The net estimated gain on sale as of June 30, 2001
is recorded as an increase to stockholder's equity. The final pre-tax gain
amount will be determined based on the excess of proceeds received over the
actual carrying value of the Transferred Antibody Collection Business's net
assets as of September 6, 2001 less direct costs associated with the sale.
The following represents a summary of the components of the estimated gain on
sale as of September 6, 2001:
(amounts in thousands)
Initial proceeds from sale $152,997
Net investment in sold operations (42,845)
Transaction costs (5,937)
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Estimated gain before tax 104,215
Provision for taxes (8,835)
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Net estimated gain before purchase price adjustments $ 95,380
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1. Reflects sales associated with the Transferred Antibody Collection Business
sold to CSL.
2. Reflects costs of products sold, amortization and freight associated with
the Transferred Antibody Collection Business and general and administrative
expense related to personnel transferred to CSL.
3. Reflects a non-recurring credit related to the Transferred Antibody
Collection Business sold to CSL.
4. To adjust interest expense for the six months ended June 30, 2001 and for
the year ended December 30, 2000 to reflect the repayment of the short-term
debt.
5. Estimated income tax provision at our statutory rate of 35%.
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