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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
(AMENDMENT NO. 2)
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MAY 14, 2004
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GSI LUMONICS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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NEW BRUNSWICK, CANADA 000-25705 NO. 98-0110412
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
39 Manning Road, Billerica, Massachusetts 01821
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(978) 439-5511
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Item 7 of the Registrant's Current Report on Form 8-K filed with the Securities
and Exchange Commission (the "SEC") on May 17, 2004, which was amended and
restated in its entirety by Amendment No. 1 filed with the SEC on July 13, 2004
is hereby amended and restated as set forth herein:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
The following documents appear as Exhibit 99.3 to this Amendment No. 2 to
Current Report on Form 8-K/A and are incorporated herein by reference:
(1) Consolidated Financial Statements of MicroE Systems as of and
for the years ended September 28, 2003 and September 29, 2002,
including the Report of Independent Registered Public
Accounting Firm.
(2) Notes to Consolidated Financial Statements.
The following documents appear as Exhibit 99.4 to this Amendment No. 2 to
Current Report on Form 8-K/A and are incorporated herein by reference:
(1) Unaudited Condensed Consolidated Financial Statements of
MicroE Systems as of and for the six months ended April 4,
2004 and March 30, 2003.
(2) Notes to Unaudited Condensed Consolidated Financial
Statements.
(b) PRO FORMA FINANCIAL INFORMATION.
Unaudited Pro Forma Condensed Consolidated Financial Information
On May 14, 2004, GSI Lumonics Inc. ("the Company" or "GSI") completed its
acquisition of MicroE Systems Corp., a Delaware corporation ("MicroE").
The acquisition was completed by means of a merger (the "Merger") of
Motion Acquisition Corporation, a Delaware corporation and an indirect
wholly owned subsidiary of the Company, with and into MicroE, pursuant to
an Agreement and Plan of Merger dated as of April 12, 2004 (the "Merger
Agreement"). As a result of the Merger, MicroE became an indirect wholly
owned subsidiary of the Company.
Pursuant to the terms of the Merger Agreement, upon the effective time of
the Merger, the Company paid former MicroE security holders $53.8 million
in cash, net of cash received as part of the merger (the "Merger
Consideration") in exchange for all of MicroE's outstanding capital stock.
The Merger Consideration and the terms of the Merger were determined in
arms-length negotiations between the parties. The Company paid the Merger
Consideration from existing cash. The total purchase price, net of cash
acquired and including costs of transaction, is expected to be
approximately $54.7 million.
The following unaudited pro forma condensed consolidated balance sheet as
of April 2, 2004, and the unaudited pro forma condensed consolidated
statements of operations for the three months ended April 2, 2004 and the
year ended December 31, 2003, give effect to the Company's acquisition of
MicroE. The unaudited pro forma condensed consolidated balance sheet
presents the financial position of the Company as if the acquisition of
MicroE had occurred on April 2, 2004. The unaudited pro forma condensed
consolidated statements of operations for the year ended December 31, 2003
and for the three months ended April 2, 2004 have been prepared as if the
acquisition occurred on January 1, 2003. MicroE's fiscal year ended on
September 28, 2003. The financials for MicroE have been adjusted to
reflect twelve months of activity through January
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4, 2004 using audited twelve month information and unaudited three month
information to derive the twelve months ended January 4, 2004. The use of
MicroE's financial statements for the three months ended April 4, 2004 as
opposed to April 2, 2004 and for the twelve months ended January 4, 2004
as opposed to December 31, 2003 had no significant impact on reported
results. The acquisition has been accounted for using purchase accounting
in accordance with the provisions of Statement of Financial Accounting
Standards No. 141, Business Combinations.
These pro forma unaudited condensed consolidated financial statements have
been prepared in accordance with Article 11 of Regulation S-X. The pro
forma unaudited condensed consolidated financial statements are provided
for informational purposes only and do not necessarily represent what our
results of operations would have been had the acquisition occurred January
1, 2003, or our financial position had the acquisition occurred April 2,
2004.
Certain pro forma balances are preliminary, as the Company has allocated
the estimated purchase price to the assets acquired and liabilities
assumed based on a preliminary assessment made by management. The Company
has not yet completed the process of conducting a valuation of the fair
value of the assets acquired or liabilities assumed, including the
allocation of the purchase price. This preliminary estimate of the fair
value of the assets acquired, liabilities assumed and allocation of the
purchase price along with the resulting pro forma amounts is subject to
adjustment for any differences that might occur upon the Company's
completion of the valuation process.
The unaudited pro forma condensed consolidated financial statements also
do not purport to project our financial position or results of operations
at any future date or for any future period.
This information should be read in conjunction with our previously filed
Current Reports on Form 8-K, dated May 17, 2004 and Form 8-K/A Amendment
No. 1, dated July 13, 2004; our Quarterly Report on Form 10-Q for the
three months ended April 2, 2004; our Annual Report on Form 10-K for the
year ended December 31, 2003 and the financial statements and
accompanying notes of MicroE included as exhibits to this Amendment No. 2
to the Current Report on Form 8-K/A.
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GSI LUMONICS INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
APRIL 2, 2004
(U.S. GAAP AND IN THOUSANDS OF U.S. DOLLARS, EXCEPT SHARE AMOUNTS)
PRO FORMA
GSI MICROE ADJUSTMENTS PRO FORMA
---------- --------- ------------ ---------
ASSETS
Current
Cash and cash equivalents............................. $ 91,997 $ 3,481 $ (57,263) a $ 38,215
Short-term investments................................ 20,577 -- 20,577
Accounts receivable, net.............................. 63,068 4,119 67,187
Income taxes receivable............................... 1,199 -- 1,199
Inventories........................................... 51,686 1,656 53,342
Deferred tax assets................................... 11,527 639 12,166
Other current assets.................................. 7,574 132 7,706
---------- --------- ---------- -----------
Total current assets............................... 247,628 10,027 (57,263) 200,392
Property, plant and equipment, net of accumulated
depreciation............................................ 52,041 390 52,431
Deferred tax assets..................................... 3,611 46 3,657
Other assets............................................ 2,324 61 2,385
Long-term investments................................... 1,644 -- 1,644
Intangible assets, net of amortization.................. 22,986 69 32,131 b, c 55,186
Goodwill................................................ -- -- 31,094 c, e 31,094
---------- --------- ---------- -----------
$ 330,234 $ 10,593 $ 5,962 $ 346,789
========== ========= ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable $ 22,488 $ 811 $ 23,299
Income taxes payable -- 888 888
Accrued compensation and benefits..................... 8,312 594 8,906
Other accrued expenses................................ 22,407 354 1,991 a, b 24,752
---------- --------- ---------- -----------
Total current liabilities.......................... 53,207 2,647 1,991 57,845
Deferred compensation................................... 2,343 -- 2,343
Other liability......................................... -- 30 30
Deferred tax liability.................................. 12,317 e 12,317
Accrued minimum pension liability....................... 1,616 -- 1,616
---------- --------- ---------- -----------
Total liabilities.................................. 57,166 2,677 14,308 74,151
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value; Authorized shares:
1,200,000; Issued and outstanding: 768,858............ 9 (9) d --
Treasury stock, at cost, 103,501 shares................. (1,157) 1,157 d --
Additional paid-in capital.............................. 794 (794) d --
Common shares, no par value; Authorized shares:
unlimited; Issued and outstanding: 40,976,318......... 305,840 -- 305,840
Additional paid-in capital............................ 2,851 -- 2,851
Retained earnings (accumulated deficit)............... (34,501) 8,250 (8,680) d, f (34,931)
Accumulated other comprehensive income (loss)......... (1,122) 20 (20) d (1,122)
---------- --------- ---------- -----------
Total stockholders' equity......................... 273,068 7,916 (8,346) 272,638
---------- --------- ---------- -----------
$ 330,234 $ 10,593 $ 5,962 $ 346,789
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See the accompanying notes to unaudited pro forma condensed
consolidated balance sheet.
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GSI LUMONICS INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
APRIL 2, 2004
The following footnotes correspond to the April 2, 2004 unaudited pro forma
condensed consolidated balance sheet:
a) To reflect the cash payments directly attributable to the acquisition. The
Company acquired all of the capital stock of MicroE in exchange for
approximately $57.3 million in cash. In addition, acquisition-related
costs of approximately $1.0 million are expected to be incurred by the
Company. These are included in other accrued expenses.
b) To adjust the values of assets and liabilities acquired to their estimated
fair value as of the date of the acquisition.
c) To recognize identifiable intangible assets consisting of completed
technology, trademarks/tradenames and customer relationships. The Company
has allocated the estimated purchase price, net of cash acquired, to the
assets acquired and liabilities assumed based on a preliminary assessment
made by management. The Company has not yet completed the process of
conducting a valuation of the fair value of the assets acquired or
liabilities assumed, including the allocation of the purchase price. This
preliminary estimate of the fair value of the assets acquired, liabilities
assumed and allocation of the purchase price along with the resulting pro
forma amounts is subject to adjustment for any differences that might
occur upon the Company's completion of the valuation process. The
preliminary assessment indicates that the fair value of the assets
acquired and liabilities assumed is less than the purchase price,
resulting in goodwill. The following is a summary of the estimated
purchase price, net of cash acquired, allocation:
in thousands $
Cash paid ................................... $ 57,263
Cash received upon acquisition .............. (3,506)
Acquisition-related costs ................... 987
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Total purchase price ........................ $ 54,744
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Allocated to tangible assets acquired ....... $ 7,990
Allocated to liabilities assumed ............ (4,653)
Deferred tax liability ...................... (12,317)
Intangible assets ........................... 32,200
Goodwill .................................... 31,094
Purchased in process research and development 430
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Total ....................................... $ 54,744
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Preliminary allocation of intangible assets is as follows:
Estimated Fair
Value Estimated
in thousands $ Useful Life
Customer relationships .... $ 8,500 8
Tradename ................. 3,100 15
Acquired technology ....... 20,600 10
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Total purchase price ...... $32,200
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d) To eliminate the stockholders' equity of MicroE at April 2, 2004.
e) To recognize estimated deferred tax liability attributable to the
acquisition of MicroE. The acquisition of MicroE was structured in such a
manner, that the Company is not expected to receive any tax benefit from
the amortization of intangibles. As such, in accordance with US GAAP a
deferred tax liability based on estimated tax rates has been established
with a corresponding increase to goodwill.
f) To reflect an estimated in-process technology charge of approximately $0.4
million. The Company expects to record a one-time charge of approximately
$0.4 million in the second quarter of 2004 for purchased in-process
technology related to development projects that have not reached
technological feasibility, have no alternative future use, and for which
successful development is uncertain. This in-process technology charge has
not been included in the pro forma condensed consolidated statements of
operations for the three months ended April 2, 2004 and the year ended
December 31, 2003. The final determination of the charge for in-process
technology is subject to the completion of the valuation process.
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GSI LUMONICS INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED APRIL 2, 2004
(U.S. GAAP AND IN THOUSANDS OF U.S. DOLLARS, EXCEPT SHARE AMOUNTS)
PRO FORMA
GSI MICROE ADJUSTMENTS PRO FORMA
---------- ---------- ------------ ----------
Sales.................................................. $ 74,853 $ 7,653 $ $ 82,506
Cost of goods sold..................................... 45,113 2,948 48,061
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Gross profit........................................... 29,740 4,705 34,445
Operating expenses:
Research and development............................. 4,759 1,168 5,927
Selling, general and administrative.................. 13,484 1,808 15,292
Amortization of purchased intangibles................ 1,549 -- 834 a 2,383
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Total operating expenses.......................... 19,792 2,976 834 23,602
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Income (loss) from operations 9,948 1,729 (834) 10,843
Other expense........................................ (124) (100) (224)
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Income (loss) before income taxes...................... 9,824 1,629 (834) 10,619
Income tax provision (benefit)......................... 885 410 (317) b 978
---------- ---------- ---------- ----------
Net income (loss)...................................... $ 8,939 $ 1,219 $ (517) $ 9,641
========== ========== ========== ==========
Net income (loss) per common share:
Basic................................................ $ 0.22 $ 0.24
Diluted.............................................. $ 0.21 $ 0.23
Weighted average common shares outstanding (000's)..... 40,951 40,951
Weighted average common shares outstanding for
diluted net income (loss) per common share (000's)..... 42,114 42,114
See the accompanying notes to unaudited pro forma condensed consolidated
statements of operations.
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GSI LUMONICS INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
(U.S. GAAP AND IN THOUSANDS OF U.S. DOLLARS, EXCEPT SHARE AMOUNTS)
PRO FORMA
GSI MICROE ADJUSTMENTS PRO FORMA
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Sales............................................... $ 185,561 $ 21,053 $ $ 206,614
Cost of goods sold.................................. 117,084 8,806 125,890
---------- ---------- ----------
Gross profit........................................ 68,477 12,247 80,724
Operating expenses:
Research and development.......................... 13,895 5,082 18,977
Selling, general and administrative............... 48,952 6,143 55,095
Amortization of purchased intangibles............. 5,657 -- 3,330 a 8,987
Restructuring..................................... 3,228 -- 3,228
Other............................................. 831 -- 831
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Total operating expenses....................... 72,563 11,225 3,330 87,118
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Income (loss) from operations (4,086) 1,022 (3,330) (6,394)
Other income (expense)............................ 2,238 (162) 2,076
---------- ---------- ---------- ----------
Income (loss) before income taxes................... (1,848) 860 (3,330) (4,318)
Income tax provision (benefit)...................... 322 140 (1,219) b (757)
---------- ---------- ---------- ----------
Net income (loss)................................... $ (2,170) $ 720 $ (2,111) $ (3,561)
========== ========== ========== ==========
Net income (loss) per common share:
Basic............................................. $ (0.05) $ (0.09)
Diluted........................................... $ (0.05) $ (0.09)
Weighted average common shares outstanding (000's).. 40,837 40,837
Weighted average common shares outstanding for
diluted net income (loss) per common share (000's) 40,837 40,837
See the accompanying notes to unaudited pro forma condensed consolidated
statements of operations.
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GSI LUMONICS INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED APRIL 2, 2004 AND THE YEAR ENDED DECEMBER 31, 2003
The following footnotes correspond to the unaudited pro forma condensed
consolidated statements of operations for the three months ended April 2, 2004
and the year ended December 31, 2003:
a) To reflect the amortization of intangible assets acquired. The allocation
of purchase price, net of cash acquired, to the fair value of the assets
and liabilities acquired is preliminary and may change upon completion of
the valuation process.
The Company expects to record a one-time charge of approximately $0.4
million in the second quarter of 2004 for purchased in-process technology
related to development projects that have not reached technological
feasibility, have no alternative future use, and for which successful
development is uncertain. This in-process technology charge has not been
included in the pro forma condensed consolidated statements of operations
for the three months ended April 2, 2004 and the year ended December 31,
2003. The final determination of the charge for in-process technology is
subject to the completion of the valuation process.
See other preliminary allocations of the purchase price in footnote (c) to
the Unaudited Pro Forma Condensed Consolidated Balance Sheet at April 2,
2004.
b) To reflect the income tax provision related to the pretax income of MicroE
less the effect of the tax provision related to the estimated benefit of
the pro forma adjustments.
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(c) EXHIBITS.
2.1(1) Agreement and Plan of Merger dated as of April 12, 2004 by and
among GSI Lumonics Inc., Motion Acquisition Corporation and MicroE
Systems Corp.
23.1* Consent of Deloitte & Touche (regarding MicroE Systems)
99.1(1) Press Release dated April 12, 2004.
99.2(2) Press Release dated May 17, 2004.
99.3* Financial Statements of MicroE Systems as of and for the years
ended September 28, 2003 and September 29, 2002, including the
Report of Independent Registered Public Accounting Firm.
99.4* Unaudited Condensed Financial Statements of MicroE Systems as of
and for the six months ended April 4, 2004 and March 30, 2003.
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(1) Incorporated herein by reference to the registrant's Current Report on
Form 8-K filed on April 13, 2004.
(2) Incorporated herein by reference to the registrant's Current Report on
Form 8-K filed on May 17, 2004.
* Attached herewith
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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.
GSI LUMONICS INC.
By: /s/ THOMAS R. SWAIN
Date: July 28, 2004 --------------------------------
Thomas R. Swain
Vice President, Finance and
Chief Financial Officer
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