SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
Current Report Pursuant
To Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 1, 1998
ATG INC.
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation)
0-23781 94-2657762
(Commission File Number) (IRS Employer Identification No.)
47375 Fremont Boulevard, Fremont, CA 94538
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 490-3008
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a) Financial Statements of Business Acquired
The following financial statements respecting the acquired assets are
included as part of this report:
Report of Independent Accountants
Statement of Assets Acquired and Liabilities Assumed of the Molten Metal
Technology, Inc. Catalytic Extraction and Wet Waste Business as of
September 30, 1998 and December 31, 1997
Statement of Revenue and Direct Operating Expenses of the Molten Metal
Technology, Inc. Catalytic Extraction and Wet Waste Business for the Nine
Months Ended September 30, 1998 and for the Year Ended December 31, 1997
Notes to Financial Statements
b) Pro Forma Financial Information
The following pro forma financial information is included as part of this
report:
Introduction to Pro Forma Financial Information
Pro Forma Condensed Combined Balance Sheet as of September 30, 1998
(unaudited)
Pro Forma Condensed Combined Statement of Operations for the Nine Months
Ended September 30, 1998 and for the Year Ended December 31, 1997
(unaudited)
Notes to Pro Forma Combined Financial Statements
c) Exhibits
2.1 Final bankruptcy court bid dated November 13, 1998.*
2.2 Form of letter agreement dated December 1, 1998 among the purchasers
and the Trustee.*
23.1 Consent of Independent Accountants.
_________
*Incorporated by reference to exhibits filed with the Registrant's Form 8-K
dated December 1, 1998.
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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.
ATG Inc.
Dated: August 4, 1999 By: /s/ Steven J. Guerrettaz
---------------------------
Steven J. Guerrettaz
Vice President - Chief Financial Officer
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of ATG Inc.
We have audited the accompanying statement of assets acquired and liabilities
assumed of the Molten Metal Technology, Inc. Catalytic Extraction and Wet Waste
Business as of September 30, 1998 and December 31, 1997 and the related
statement of revenue and direct operating expenses for the nine months ended
September 30, 1998 and for the year ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements audited by us present fairly, in all
material respects, the assets acquired and liabilities assumed of the Molten
Metal Technology, Inc. Catalytic Extraction and Wet Waste Business as of
September 30, 1998 and December 31, 1997, and the related statement of revenue
and direct operating expenses for the nine months ended September 30, 1998 and
for the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
/s/ PricewaterhouseCoopers LLP
Knoxville, Tennessee
July 27, 1999
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Statement of Assets Acquired and Liabilities Assumed
of the Molten Metal Technology, Inc.
Catalytic Extraction and Wet Waste Business
(In thousands)
September 30, December 31,
1998 1997
---------------------- ---------------------
ASSETS
Accounts receivable $ 3,535 $ 6,877
Inventory 613 194
Property, plant and equipment, net 58,803 59,435
Intangibles, net 2,648 3,448
Other 215 215
--------------------- ---------------------
$ 65,814 $ 70,169
===================== =====================
LIABILITIES
Accrued waste disposal $ 3,658 $ 2,068
Accrued decommissioning 164 94
--------------------- ---------------------
$ 3,822 $ 2,162
===================== =====================
The accompanying notes are an integral part of these financial statements.
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Statement of Revenue and Direct Operating Expenses
of the Molten Metal Technology, Inc.
Catalytic Extraction and Wet Waste Business
(In thousands)
Nine Months Fiscal Year
Ended Ended
September 30, 1998 December 31, 1997
--------------------- ---------------------
Revenue $ 17,685 $ 21,155
Direct Operating Expenses 25,781 35,901
--------------------- ---------------------
Excess of Direct Operating
Expenses over Revenue $ (8,096) $ (14,746)
===================== =====================
The accompanying notes are an integral part of these financial statements.
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Molten Metal Technology, Inc.
Catalytic Extraction and Wet Waste Business
Notes to Financial Statements
1. BUSINESS AND BASIS OF PRESENTATION
On December 1, 1998, ATG Inc. (the "Company"), acquired certain assets and
business lines from the trustee (the "Trustee" or "Seller") for debtors under
Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy
Court for the District of Massachusetts, Case Nos. 97-21385-CJK through 97-
21389-CJK. The assets and business lines acquired were formerly owned by Molten
Metal Technology, Inc. or its affiliates ("MMT").
The accompanying statement of assets acquired and liabilities assumed as of
September 30, 1998 and December 31, 1997 of the MMT Catalytic Extraction and Wet
Waste Business and the related statement of revenue and direct operating
expenses for the nine months ended September 30, 1998 and the year ended
December 31, 1997 were prepared from the books and records maintained by MMT
using the historical cost method, of which the Catalytic Extraction Business and
Wet Waste Business represents a specific business unit. The Catalytic
Extraction and Wet Waste Business has never operated as a separate business
entity or division of MMT but rather has been an integrated part of MMT's
consolidated business. The statement of revenue and direct operating expenses
do not include charges from MMT for corporate selling, general, administrative,
interest and income tax expense since such items are considered to be MMT
corporate expenses and are not allocable to individual business units. Such
expenses included costs for MMT's executive management, information systems
support, corporate accounting and treasury functions, corporate legal matters,
and other such costs.
The statement of revenue and direct operating expenses include the revenue and
direct costs that relate to the Catalytic Extraction and Wet Waste Business.
Direct operating expenses include salaries and wages, fringe benefits,
materials, depreciation and other expenses directly associated with revenue
generating activities.
The assets purchased by the Company included substantially all of the fixed
assets, contracts, licenses and permits associated with the Seller's catalytic
extraction processing (thermal treatment) of radioactively contaminated resins
used at nuclear power plants and wet waste processing of radioactive
contaminated liquids. The businesses also included the rental of containers and
shielded transportation equipment and sale of treatment, dewatering and volume
reduction equipment.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Inventory
- ---------
Inventory consists primarily of waste containers that are specifically
identified and are valued at the lower of acquisition cost or market.
Intangible Assets
- -----------------
Intangible assets are stated at cost. Amortization is calculated on a straight-
line basis over the estimated useful lives of the related assets.
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Property, Plant and Equipment
- -----------------------------
Property, plant and equipment are stated at cost. Depreciation on equipment is
calculated on a straight-line basis over the estimated useful lives of the
related assets. Repairs and maintenance costs are charged to expense as
incurred.
Revenue Recognition
- -------------------
Revenue from waste processing services is generally recognized upon the
substantial completion of the waste treatment process. Revenue from
transportation services and equipment sales is recognized as the services are
provided and equipment is delivered.
Direct Operating Expenses
- -------------------------
Direct operating expenses incurred represent only those costs associated with
the direct revenue and operations of the businesses. Such costs include
allowance for bad debts, reserves for closure or decommissioning, depreciation,
amortization, interest and taxes. Costs associated with estimates of realizable
value or valuation of assets, including impairment of assets have not been
included.
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment include the following at September 30, 1998 and
December 31, 1997 (in thousands):
1998 1997
-------------- --------------
Land $ 267 $ 267
Buildings 12,018 12,007
Machinery and equipment 40,485 44,900
Construction in progress 10,501 4,543
-------------- --------------
63,271 61,717
Less: Accumulated depreciation (4,468) (2,282)
-------------- --------------
$ 58,803 $ 59,435
============== ==============
4. INTANGIBLES
Intangibles consist of the following as of September 30, 1998 and December 31,
1997 (in thousands):
1998 1997
-------------- --------------
Non-compete agreement $ 2,768 $ 2,768
Permits 1,466 1,466
Engineering drawings and other 934 934
-------------- --------------
5,168 5,168
Less: Accumulated amortization (2,520) (1,720)
-------------- --------------
$ 2,648 $ 3,448
============== ==============
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PRO FORMA FINANCIAL INFORMATION
Introduction to Pro Forma Financial Information
The unaudited pro forma combined balance sheet of the Company as of September
30, 1998 assumes that the acquisition of certain assets and assumption of
certain liabilities of MMT's Catalytic Extraction and Wet Waste Business had
occurred on that date. The unaudited pro forma combined statements of
operations for the nine months ended September 30, 1998 and for the year-ended
December 31, 1997 present the results of operations of the Company assuming the
acquisition of MMT's Catalytic Extraction and Wet Waste Business had been
consummated as of the beginning of the periods indicated.
The unaudited pro forma combined financial statements have been prepared by the
Company and all calculations have been made based upon assumptions deemed
appropriate. Included in these assumptions is the presumption that no
additional selling, general and administrative costs are required because the
current infrastructure is deemed sufficient to support the additional activities
anticipated from the acquisition. The unaudited pro forma combined financial
statements were prepared utilizing the accounting policies of the Company. The
preliminary allocations of the purchase price, which may be subject to certain
adjustments as the Company finalizes the allocation of the purchase price in
accordance with generally accepted accounting principles, are included in the
unaudited pro forma combined financial statements. The purchase price has been
allocated based upon the estimated fair values of the assets acquired and
liabilities assumed.
The unaudited pro forma combined financial information does not purport to be
indicative of the results of operations or the financial position which would
have actually been obtained if the acquisition had been consummated on the dates
indicated. In addition, the unaudited pro forma combined financial information
does not purport to be indicative of the results of operations or financial
position which may be achieved in the future. The unaudited pro forma combined
financial information should be read in conjunction with the Company's
historical consolidated financial statements and notes thereto contained in the
1998 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998, June 30, 1998, and September 30, 1998, and the
Statements of Assets Acquired and Liabilities Assumed and of Revenue and Direct
Operating Expenses of MMT's Catalytic Extraction and Wet Waste Business
presented herein.
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ATG INC.
Pro Forma Condensed Combined Balance Sheet
As of September 30, 1998
(In thousands)
(Unaudited)
Net Assets Pro Forma Pro Forma
ATG Inc. Acquired Adjustements Combined
-------------- ---------------- ------------------ -----------------
Current Assets:
Cash and cash equivalents $ 6,894 $ - $ (2,931) $ 3,963
Accounts receivable, net 14,647 3,535 (779) 17,403
Prepayments and other
current assets 1,584 613 238 2,435
-------------- ---------------- ------------------ -----------------
Total current assets 23,125 4,148 (3,472) 23,801
Property and equipment, net 25,019 58,803 (43,432) 40,390
Other assets 4,802 2,863 (1,021) 6,644
-------------- ---------------- ------------------ -----------------
$ 52,946 $ 65,814 $ (47,925) $ 70,835
============== ================ ================== =================
Current Liabilities:
Short-term borrowings $ - $ - $ 3,800 $ 3,800
Current portion of long-term debt 1,638 - 3,133 4,771
Accounts payable and accrued
liabilities 6,608 3,822 1,267 11,697
-------------- ---------------- ------------------ -----------------
Total current liabilities 8,246 3,822 8,200 20,268
Long-term Debt and Capital Leases 5,689 - 5,867 11,556
Deferred Income Taxes 467 - - 467
Shareholders' Equity 38,544 - - 38,544
-------------- ---------------- ------------------ -----------------
$ 52,946 $ 3,822 $ 14,067 $ 70,835
============== ================ ================== =================
The accompanying notes are an integral part of this statement.
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ATG INC.
Pro Forma Condensed Combined Statement Of Operations
For The Nine Months Ended September 30, 1998
(In thousands, except per share data)
(Unaudited)
Net Assets Pro Forma Pro Forma
ATG Inc. Acquired Adjustments Combined
---------------- ----------------- ------------------- ----------------
Revenue $21,288 $17,685 $ - $38,973
Cost and expenses 16,297 25,781 (3,436) 38,642
---------------- ----------------- ------------------- ----------------
Operating income (loss) 4,991 (8,096) 3,436 331
Interest Income 139 - - 139
---------------- ----------------- ------------------- ----------------
Income (loss) before taxes 5,130 (8,096) 3,436 470
Provision (benefit) for taxes 2,052 - (1,872) 180
---------------- ----------------- ------------------- ----------------
Net income (loss) $ 3,078 $(8,096) $ 5,308 $ 290
================ ================= =================== ================
Net income per share
Basic $ 0.24 $ 0.02
Diluted $ 0.23 $ 0.02
Weighted average shares
Basic 12,686 12,686
Diluted 13,412 13,412
The accompanying notes are an integral part of this statement.
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ATG INC.
Pro Forma Condensed Combined Statement Of Operations
For The Year Ended December 31, 1997
(In thousands, except per share data)
(Unaudited)
Net Assets Pro Forma Pro Forma
ATG Inc. Required Adjustments Combined
--------------- ----------------- -------------------- -----------------
Revenue $19,107 $ 21,155 $ - $ 40,262
Costs and expenses 18,192 35,901 (3,013) 51,080
---------------- ------------------ --------------------- ------------------
Operating income (loss) 915 (14,746) 3,013 (10,818)
Interest income 58 - - 58
---------------- ------------------ --------------------- ------------------
Income (loss) before taxes 973 (14,746) 3,013 (10,760)
Provision (benefit) for taxes (45) - 45 -
---------------- ------------------ --------------------- ------------------
Net income (loss) 1,018 (14,746) 2,968 (10,760)
Accretion of mandatorily (1,469) - - (1,469)
redeemble preferred stock
---------------- ------------------ --------------------- ------------------
Net loss available to common $ (451) $(14,746) $ 2,968 $(12,229)
shareholders ================ ================== ===================== ==================
Net loss per share $ (0.06) $ (1.62)
Weighted average shares 7,532 7,532
The accompanying notes are an integral part of this statement.
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ATG INC.
Notes to Pro Forma Combined Financial Statements
(Unaudited)
1. The unaudited pro forma condensed combined statements of operations for the
nine months ended September 30, 1998 and year ended December 31, 1997, have
been prepared by combining the historical consolidated financial statements
of operations of the Company with the historical statements of revenue and
direct expenses related to the net assets acquired.
2. The acquisition is being accounted for using the purchase method of
accounting. The net purchase price is less than the fair market value of
assets purchased, thus no goodwill has been recognized.
3. The pro forma combined statements of operations include adjustments to: 1)
reflect estimated depreciation and amortization based on the allocated
purchase price to the assets acquired; and 2) adjust the combined tax
provision.
4. The pro forma combined balance sheet has been prepared to reflect the
acquisition of the assets and assumed liabilities as of the date of
purchase. Pro forma adjustments are made to reflect: 1) the payment of cash
and related borrowings; 2) the assumption of certain liabilities related to
legacy wastes, reserves for decommissioning of the facility and limited cure
costs payable to vendors; 3) the estimated fair value of land, buildings and
equipment purchased; and 4) the estimated fair value of receivables,
inventory and intangible assets. There was no goodwill reflected in the
transaction.
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