UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) March 16, 2004
IONICS, INCORPORATED
(Exact name of registrant as specified in its charter)
Massachusetts 1-7211 04-2068530
(State of incorporation) (Commission File No.) (IRS Employer Identification No.)
65 Grove Street, Watertown, MA 02472 (617) 926-2500
(Address of principal executive offices) (Zip Code) (Registrant's telephone number,
including area code)
Item 7. Financial Statements and Exhibits
---------------------------------
Exhibit Number Description
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99 Press Release dated March 16, 2004, reporting the
financial results of Ionics, Incorporated for the
quarter and year ended December 31, 2003.
Item. 12. Results of Operations and Financial Condition
---------------------------------------------
On March 16, 2004, Ionics, Incorporated issued a press release
reporting its financial results for the quarter and year-ended
December 31, 2003. A copy of the Press Release is attached hereto as
Exhibit 99 and is hereby incorporated by reference.
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 duly authorized.
IONICS, INCORPORATED
March 16, 2004 By: /s/Stephen Korn
----------------------------
Name: Stephen Korn
Title: Vice President and General Counsel
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EXHIBIT INDEX
Number Description Page Number
------ ----------- -----------
99 Press release dated March 16, 2004, reporting the financial 4
results of Ionics, Incorporated for the quarter and year
ended December 31, 2003.
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EXHIBIT 99
IONICS REPORTS 2003 RESULTS FOR THE FOURTH QUARTER AND THE YEAR
WATERTOWN, MA, March 16, 2004 . . . Ionics, Incorporated (NYSE-ION) today
reported financial results for the quarter and for the year ended December 31,
2003. For the quarter, revenues of $89.0 million were up from $84.1 million for
the fourth quarter of 2002. The net loss for the quarter was $18.4 million,
compared to net income of $1.7 million for the fourth quarter of 2002, and the
loss per share was $1.03 for the quarter, compared to earnings per share of
$0.10 for the fourth quarter of 2002.
Revenues for the year were $347.4 million compared to $318.9 million in 2002.
The net loss for the year was $44.8 million, or $2.53 per share, compared to net
income of $4.8 million, or $0.27 per share, in 2002. Ending backlog on December
31, 2003 was $330.0 million, compared to $377.2 million at the end of 2002.
The results for the quarter included $2.1 million of restructuring and
impairment of long-lived asset charges, primarily related to the Company's
ongoing restructuring program, as well as a $5.4 million pension curtailment
charge related to the decision to cease the accrual of future benefits under the
Company's defined benefit plan. Other charges in the quarter include $1.8
million in inventory and other charges primarily related to the restructuring
program, $1.4 million in process reengineering expense related to the Company's
implementation of new software, $1.8 million in bad debt expense, and a $4.2
million equity loss related to the Company's Toray Membrane America, Inc.
("TMA") affiliate (of which the Company holds a 43% equity interest). The TMA
equity loss was primarily related to an asset impairment charge recorded by TMA
in the quarter.
Due to the decision to divest the Company's Elite Consumer Products business,
which was sold on January 31, 2004, the results for that business have been
reflected as discontinued operations. Also included in discontinued operations
are the results for the European POU business, which the Company plans to
divest. Discontinued operations amounted to a tax-effected loss of $3.6 million
for the quarter.
Ionics will host a conference call today, Tuesday, March 16, 2004 at 2:00PM, EST
to discuss its fourth quarter and year-end financial results. This conference
call will be accessible on the Company's website at
http://www.shareholder.com/ion/medialist.cfm. A recorded replay of the
conference call will also be accessible on our website for a one-week period. In
addition, this press release will also be accessible on our website promptly
following its issuance.
About Ionics, Inc.
Ionics is a global leader in water purification and wastewater treatment. The
Company has over 50 years of experience in the design, installation, operation
and maintenance of water and wastewater treatment systems and is a leading
provider of emergency and long-term water treatment services. More
membrane-based desalination systems have been designed and built by Ionics than
any other supplier worldwide. Ionics is also a leader in supplying
zero-liquid-discharge systems, in providing ultrapure water systems for the
power and microelectronics industries, and in the measurement and analysis of
water impurities. The Company also supplies Point-of-Use and Point-of-Entry
water treatment systems for commercial and residential applications. For more
information, visit www.ionics.com.
Safe-harbor statement under the Private Securities Litigation Reform Act of
1995: Forward-looking statements in this news release involve risk and
uncertainty. The statements contained in this release which are not historical
facts are forward-looking statements. These forward-looking statements are based
on management's current views and assumptions and are neither promises nor
guarantees but are subject to risks, uncertainties and other factors that could
cause actual results to differ materially from management's current expectations
as described in such forward-looking statements, including overall economic and
business conditions; competitive factors, such as acceptance of new products,
pricing pressures and competition from competitors larger than the Company;
risks of nonpayment of accounts receivable, including those from affiliated
companies; risks associated with foreign operations; risks associated with the
Company's recently announced restructuring program; technological and product
development risks; availability of manufacturing capacity; and other factors
described in the Company's filings with the Securities and Exchange Commission,
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including its annual report on Form 10-K for the year ended December 31, 2003.
You should not place undue reliance on the forward-looking statements in this
press release, and the Company disavows any obligation to update or supplement
those statements in the event of any changes in the facts, circumstances, or
expectations that underlie those statements.
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IONICS REPORTS 2003 RESULTS FOR THE FOURTH QUARTER AND THE YEAR
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
Three months ended Years ended
December 31, December 31,
-------------------- ------------------
2003 2002 2003 2002
---------- --------- -------- --------
Revenues:
Equipment Business Group $ 34,657 $ 41,948 $ 144,043 $ 154,378
Ultrapure Water Group 27,074 27,053 102,600 102,407
Consumer Water Group 5,346 4,523 21,216 22,190
Instrument Business Group 8,136 7,397 29,807 27,741
Affiliated companies 13,823 3,146 49,741 12,168
---------- --------- -------- --------
89,036 84,067 347,407 318,884
---------- --------- -------- --------
Costs and expenses:
Cost of sales of Equipment Business Group 26,792 30,583 113,779 114,251
Cost of sales of Ultrapure Water Group 21,732 20,774 80,159 78,423
Cost of sales of Consumer Water Group 2,102 1,849 9,878 9,889
Cost of sales of Instrument Business Group 3,167 3,399 12,317 11,719
Cost of sales to affiliated companies 12,681 2,671 43,639 10,965
Research and development 1,934 1,630 7,449 6,462
Selling, general and administrative 32,477 28,710 99,754 89,078
Restructuring and impairment of long-lived assets 2,084 - 7,053 -
Impairment of goodwill - - 12,731 -
---------- --------- -------- --------
102,969 89,616 386,759 320,787
---------- --------- -------- --------
(Loss) income from continuing operations (13,933) (5,549) (39,352) (1,903)
Interest income, net 730 845 2,183 2,239
Equity (loss) income (4,364) 1,047 (7,164) 3,443
---------- --------- -------- --------
(Loss) income from continuing operations before gain on
sale, income tax and minority interest expense (17,567) (3,657) (44,333) 3,779
Gain on sale of Aqua Cool - 8,160 457 8,160
Income tax benefit (expense) 3,097 (2,381) 11,533 (5,466)
---------- --------- -------- --------
(Loss) income from continuing operations before
minority interest expense (14,470) 2,122 (32,343) 6,473
Minority interest expense 291 261 925 969
---------- --------- -------- --------
(Loss) income from continuing operations (14,761) 1,861 (33,268) 5,504
Discontinued operations:
Loss from operations (2,453) (292) (9,410) (1,270)
Loss on disposal (2,165) - (7,667) -
Income tax benefit 989 120 5,575 558
---------- --------- -------- --------
(Loss) income on discontinued operations, net of tax (3,629) (172) (11,502) (712)
---------- --------- -------- --------
Net (loss) income $ (18,390) $ 1,689 $ (44,770)$ 4,792
========== ========= ======== ========
Basic (loss) earnings per share from continuing operations $ (0.83) $ 0.11 $ (1.88) $ 0.31
Basic (loss) earnings per share from discontinued operations (0.20) (0.01) (0.65) (0.04)
---------- --------- -------- --------
Basic net (loss) earnings per share $ (1.03) $ 0.10 $ (2.53) $ 0.27
========== ========= ======== ========
Diluted (loss) earnings per share from continuing operations $ (0.83) $ 0.11 $ (1.88) $ 0.31
Diluted (loss) earnings per share from discontinued operations (0.20) (0.01) (0.65) (0.04)
---------- --------- -------- --------
Diluted net (loss) earnings per share $ (1.03) $ 0.10 $ (2.53) $ 0.27
========== ========= ======== ========
Shares used in basic (loss) earnings per share calculations 17,805 17,554 17,674 17,541
========== ========= ======== ========
Shares used in diluted (loss) earnings per share calculations 17,805 17,600 17,674 17,671
========== ========= ======== ========
Backlog $ 330,040 $ 377,156
======== ========
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IONICS REPORTS 2003 RESULTS FOR THE FOURTH QUARTER AND THE YEAR
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
December 31, December 31,
2003 2002
------------- -------------
Current assets:
Cash and cash equivalents $ 133,815 $ 136,044
Restricted cash - 4,250
Short-term investments - 958
Notes receivable, current 6,365 6,662
Accounts receivable, net 87,415 94,841
Receivables from affiliated companies 22,140 23,642
Inventories 24,716 29,833
Assets from discontinued operations 7,466 18,470
Other current assets 33,901 26,664
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Total current assets 315,818 341,364
Receivables from affiliated companies, long-term 20,915 11,740
Notes receivable, long-term, net 28,408 24,718
Investments in affiliated companies 14,362 18,198
Property, plant and equipment, net 171,785 167,456
Other assets 40,689 40,117
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Total assets $ 591,977 $ 603,593
============= =============
Current liabilities:
Notes payable and current portion of long-term debt $ 6,276 $ 4,134
Accounts payable 28,279 36,039
Billings in advance from affiliated companies 3,629 4,308
Liabilities from discontinued operations 396 227
Other current liabilities 79,512 69,460
------------- -------------
Total current liabilities 118,092 114,168
Long-term debt and notes payable 8,889 9,670
Deferred income taxes 30,979 35,337
Accumulated losses in investments in affiliated companies 5,068 242
Other liabilities 12,784 6,023
Stockholders' equity 416,165 438,153
------------- -------------
Total liabilities and stockholders' equity $ 591,977 $ 603,593
============= =============
# # # # #
For more information, contact:
John F. Curtis Daniel M. Kuzmak
Vice President, Vice President,
Strategy and Operations, Treasurer Chief Financial Officer
Ionics, Incorporated Ionics, Incorporated
Tel: (617) 673-4403 Tel: (617) 673-4350
jcurtis@ionics.com dkuzmak@ionics.com
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