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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended April 4, 2003
Commission File Number 1-16137
WILSON GREATBATCH TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State of incorporation)
16-1531026
(I.R.S. employer identification no.)
9645 Wehrle Drive
Clarence, New York
14031
(Address of principal executive offices)
(716) 759-6901
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 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. Yes [X] No [ ]
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [X] No [ ]
As of May 12, 2003 Common stock, $.001 par value per share 21,162,088 shares
WILSON GREATBATCH TECHNOLOGIES, INC.
TABLE OF CONTENTS FOR FORM 10-Q
QUARTER ENDED MARCH 31, 2003
Page
COVER PAGE 1
TABLE OF CONTENTS 2
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of Financial Condition and 11
Results of Operations
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 16
ITEM 4. Controls and Procedures 16
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings 17
ITEM 2. Changes in Securities and Use of Proceeds 17
ITEM 3. Defaults Upon Senior Securities 17
ITEM 4. Submission of Matters to a Vote of Security Holders 17
ITEM 5. Other Information 17
ITEM 6. Exhibits and Reports on Form 8-K 17
EXHIBIT INDEX 18
SIGNATURES 19
CERTIFICATIONS 20
-2-
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WILSON GREATBATCH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET - Unaudited
(IN THOUSANDS)
- --------------------------------------------------------------------------------
ASSETS March 31, December 31,
2003 2002
Current assets:
Cash and cash equivalents $ 2,203 $ 4,608
Accounts receivable, net 26,769 19,310
Inventories 32,717 34,908
Prepaid expenses and other current assets 1,287 3,339
Refundable income taxes 3,038 3,038
Deferred income taxes 3,349 3,349
-------- --------
Total current assets 69,363 68,552
Property, plant, and equipment, net 64,124 64,699
Intangible assets, net 54,986 55,804
Goodwill 119,550 119,407
Other assets 3,738 3,789
-------- --------
Total assets $311,761 $312,251
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,752 $ 5,726
Accrued expenses and other current liabilities 9,893 13,872
Current portion of long-term debt 3,250 8,750
-------- --------
Total current liabilities 17,895 28,348
Long-term debt, net of current portion 76,250 76,250
Other long-term liabilities 870 790
-------- --------
Total liabilities 95,015 105,388
-------- --------
Stockholders' equity:
Preferred stock -- --
Common stock 21 21
Capital in excess of par value 205,262 202,279
Retained earnings 11,463 5,426
Treasury stock, at cost -- (863)
-------- --------
Total stockholders' equity 216,746 206,863
-------- --------
Total liabilities and stockholders' equity $311,761 $312,251
======== ========
The accompanying notes are an integral part of these
condensed consolidated financial statements
-3-
WILSON GREATBATCH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - Unaudited
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
2003 2002
Revenues $ 54,857 $ 36,303
Cost of revenues 32,044 20,351
-------- --------
Gross profit 22,813 15,952
Selling, general and administrative expenses 7,691 5,657
Research, development and engineering costs, net 4,560 3,653
Amortization of intangible assets 815 886
-------- --------
Operating income 9,747 5,756
Interest expense 931 892
Interest income (9) (145)
Other expense, net 12 26
-------- --------
Income before income taxes 8,813 4,983
Provision for income taxes 2,776 1,644
-------- --------
Net income $ 6,037 $ 3,339
======== ========
Earnings per share
Basic $ 0.29 $ 0.16
Diluted $ 0.28 $ 0.16
Weighted average shares outstanding
Basic 21,070 20,872
Diluted 21,354 21,268
The accompanying notes are an integral part of these
condensed consolidated financial statements
-4-
WILSON GREATBATCH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - Unaudited
(IN THOUSANDS)
- --------------------------------------------------------------------------------
Three Months Ended
March 31,
2003 2002
Cash flows from operating activities:
Net income $ 6,037 $ 3,339
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 3,419 3,013
Loss on disposal of property, plant, and equipment 70 --
Changes in operating assets and liabilities:
Accounts receivable (7,459) (243)
Inventories 2,191 (2,576)
Prepaid expenses and other current assets 2,052 (831)
Accounts payable (974) (2,126)
Accrued expenses and other current liabilities (622) 350
Income taxes 311 1,024
------- -------
Net cash provided by operating activities 5,025 1,950
------- -------
Cash flows from investing activities:
Acquisition of property, plant and equipment (2,100) (4,672)
Proceeds from sale of property, plant and equipment 2 --
Increase in other assets (10) --
------- -------
Net cash used in investing activities (2,108) (4,672)
------- -------
Cash flows from financing activities:
Principal payments of long-term debt (5,500) (3,004)
Issuance of common stock 178 5
------- -------
Net cash used in financing activities (5,322) (2,999)
------- -------
Net decrease in cash and cash equivalents (2,405) (5,721)
Cash and cash equivalents, beginning of year 4,608 43,272
------- -------
Cash and cash equivalents, end of year $ 2,203 $37,551
======= =======
The accompanying notes are an integral part of these
condensed consolidated financial statements
-5-
WILSON GREATBATCH TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information necessary for a fair presentation of
financial position, results of operations, and cash flows in conformity
with generally accepted accounting principles. Operating results for
interim periods are not necessarily indicative of results that may be
expected for the fiscal year as a whole. In the opinion of management, the
consolidated financial statements reflect all adjustments (consisting of
normal recurring adjustments) considered necessary for a fair presentation
of the results of Wilson Greatbatch Technologies, Inc. (the Company) for
the periods presented. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, expenses, and related
disclosures at the date of the financial statements and during the
reporting period. Actual results could differ from these estimates. For
further information, refer to the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
year ended January 3, 2003.
Certain prior year amounts have been reclassified to conform to current
year presentation.
The Company utilizes a fifty-two, fifty-three week fiscal year ending on
the Friday nearest December 31st. For 52-week years, each quarter contains
13 weeks. For 53-week years, the first, second and third quarters each
have 13 weeks, and the fourth quarter has 14 weeks. For clarity of
presentation, the Company describes all periods as if each quarter end is
on March 31st, June 30th and September 30th and as if the year-end is
December 31st.
2. STOCK BASED COMPENSATION
In 2002, the Company adopted Statement of Financial Accounting Standards
No. 148, Accounting for Stock-Based Compensation - Transition and
Disclosure. This standard provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for
stock-based employee compensation. Additionally, the standard also
requires prominent disclosures in the Company's financial statements about
the method of accounting used for stock-based employee compensation, and
the effect of the method used when reporting financial results.
The Company accounts for stock-based compensation in accordance with
Statement of Financial Accounting Standards No. 123, Accounting for
Stock-Based Compensation (SFAS No. 123). As permitted in that standard,
the Company has chosen to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board No. 25,
Accounting for Stock Issued to Employees, and related interpretations.
-6-
The Company has determined the pro forma information as if the Company had
accounted for stock options granted under the fair value method of SFAS
No. 123. The Black-Scholes option-pricing model was used with the
following weighted average assumptions. These pro forma calculations
assume the common stock is freely tradable for all periods presented and,
as such, the impact is not necessarily indicative of the effects on
reported net income of future years.
Three months ended
March 31,
2003 2002
Risk-free interest rate 2.89% 3.79%
Expected volatility 55% 55%
Expected life (in years) 5 5
Expected dividend yield 0% 0%
The Company's net income and earnings per share as if the fair value based
method had been applied to all outstanding and unvested awards in each
year is as follows (in thousands except per share data):
Three months ended
March 31,
2003 2002
Net income as reported $6,037 $ 3,339
Stock based employee compensation cost included
in net income as reported $ -- $ --
Stock-based employee compensation cost determined
using the fair value based method, net of
related tax effects $ 385 $ 204
Pro forma net income $5,652 $ 3,135
Net earnings per share:
Basic - as reported $ 0.29 $ 0.16
Basic - pro forma $ 0.27 $ 0.15
Diluted - as reported $ 0.28 $ 0.16
Diluted - pro forma $ 0.26 $ 0.15
-7-
3. INVENTORIES
Inventories comprised the following (in thousands):
March 31, December 31,
2003 2002
Raw material $ 14,310 $ 15,693
Work-in-process 13,890 13,592
Finished goods 4,517 5,623
-------- --------
Total $ 32,717 $ 34,908
======== ========
4. INTANGIBLE ASSETS
Intangible assets comprised the following (in thousands):
As of March 31, 2003
Gross Net
carrying Accumulated Carrying
amount Amortization Amount
Amortizing intangible assets:
Patented technology $21,875 $(7,428) $14,447
Unpatented technology 15,335 (3,897) 11,438
Other 7,740 (6,824) 916
------- -------- -------
44,950 (18,149) 26,801
Unamortizing intangible assets:
Trademark and names 31,420 (3,235) 28,185
------- -------- -------
Total intangible assets $76,370 $(21,384) $54,986
======= ======== =======
Aggregate amortization expense for first quarter 2003 was $815,000.
5. COMPREHENSIVE INCOME
For all periods presented, the Company's only component of comprehensive
income is its net income for those periods.
6. BUSINESS SEGMENT INFORMATION
The Company operates its business in two reportable segments: medical
technology and commercial power sources. The medical technology segment
designs and manufactures batteries, capacitors, filtered feedthroughs,
engineered components and enclosures used in implantable medical devices.
The commercial power sources segment designs and manufactures high
performance batteries for use in oil and gas exploration, oceanographic
equipment, and aerospace.
The Company's medical technology segment includes multiple business units
that have been aggregated because they share similar economic
characteristics and similarities in the areas of products, production
processes, types of customers, methods of distribution and regulatory
-8-
environment. The reportable segments are separately managed, and their
performance is evaluated based on numerous factors, including income from
operations.
Management defines segment income from operations as gross profit less
costs and expenses attributable to segment specific selling, general and
administrative and research, development and engineering expenses, and
intangible amortization. First quarter 2003 segment income also includes a
portion of non-segment specific selling, general and administrative,
research, development and engineering expenses based on allocation bases
appropriate to the expense categories. The remaining unallocated selling,
general and administrative, research, development and engineering expenses
and intangible amortization along with interest expense, and certain
non-recurring items are not allocated to reportable segments. This change
is not reflected in the first quarter 2002 calculation of segment income
from operations because it is impracticable to do so. The allocation of
expenses to segments in 2003 does not change the composition of the
reportable segments; the change is only a revision to the calculation of
segment income from operations. Transactions between the two segments are
not significant. The accounting policies of the segments are the same as
those described and referenced in Note 1. All dollars are in thousands.
-9-
An analysis and reconciliation of the Company's business segment
information to the respective information in the consolidated financial
statements is as follows (dollars in thousands):
Three months ended
March 31,
Revenues: 2003 2002
Medical technology
Medical batteries:
Implantable Cardioverter Defibrillators $ 10,760 $ 6,506
Pacemakers 6,037 5,529
Other devices 806 1,002
-------- --------
Total medical batteries 17,603 13,037
Capacitors 7,148 5,749
Components 23,277 11,527
-------- --------
Total medical technology 48,028 30,313
Commercial power sources 6,829 5,990
-------- --------
Total revenues $ 54,857 $ 36,303
======== ========
Segment income from operations:
Medical technology $ 11,326 $ 10,016
Commercial power sources 588 2,052
-------- --------
Total segment income from operations 11,914 12,068
Unallocated (3,101) (7,085)
-------- --------
Income before income taxes $ 8,813 $ 4,983
======== ========
The changes in the carrying amount of goodwill are as follows (amounts in
thousands):
Commercial
Medical Power
Technology Sources Total
Balance at December 31, 2002 $116,841 $ 2,566 $ 119,407
Goodwill recorded during the quarter 143 -- 143
-------- ------- ---------
Balance at March 31, 2003 $116,984 $ 2,566 $ 119,550
======== ======= =========
-10-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Introduction
We are a leading developer and manufacturer of batteries, capacitors, filtered
feedthroughs, engineered components and enclosures used in implantable medical
devices. We also develop and manufacture high performance batteries and battery
packs used in other demanding non-medical applications.
Our medical battery revenues are derived from sales of batteries for pacemakers,
implantable cardioverter defibrillators (ICDs), cardiac resynchronization
therapy devices (CRTs) and other implantable medical devices. Our capacitor
revenues are derived from sales of our wet tantalum capacitors, which we
developed for use in ICDs. Our component revenues are derived from sales of
feedthroughs, electrodes, electromagnetic interference (EMI) filters,
enclosures, and other precision components principally used in pacemakers and
ICDs. Our commercial power sources revenues are derived primarily from sales of
batteries and battery packs for use in oil and gas exploration. We also supply
batteries to NASA for its space shuttle program and other similarly demanding
commercial applications.
The Company utilizes a fifty-two, fifty-three week fiscal year ending on the
Friday nearest December 31st. For 52-week years, each quarter contains 13 weeks.
For 53-week years, the first, second and third quarters each have 13 weeks, and
the fourth quarter has 14 weeks. For clarity of presentation, the Company
describes all periods as if each quarter end is on March 31st, June 30th and
September 30th and as if the year-end is December 31st.
The commentary that follows should be read in conjunction with our condensed
consolidated financial statements and related notes included elsewhere in this
report.
-11-
Results of Operations - unaudited
Three months ended March 31,
In thousands, except per share data 2003 2002 Change % Change
- -----------------------------------------------------------------------------------------------------
Medical Technology
Medical Batteries:
ICDs $ 10,760 $ 6,506 $ 4,254 65%
Pacemakers 6,037 5,529 508 9%
Other Devices 806 1,002 (196) -20%
---------------------------------------
Total Medical Batteries 17,603 13,037 4,566 35%
Capacitors 7,148 5,749 1,399 24%
Components 23,277 11,527 11,750 102%
---------------------------------------
Total Medical Technology 48,028 30,313 17,715 58%
Commercial Power Sources 6,829 5,990 839 14%
---------------------------------------
Total Revenues 54,857 36,303 18,554 51%
Cost of revenues 32,044 20,351 11,693 57%
Gross profit 22,813 15,952 6,861 43%
Gross profit as a % of revenues 42% 44%
Selling, general, and administrative expenses (SG&A) 7,691 5,657 2,034 36%
SG&A as a % of revenues 14% 16%
Research, development and engineering costs, net (RD&E) 4,560 3,653 907 25%
RD&E as a % of revenues 8% 10%
Intangible amortization 815 886 (71) -8%
Interest expense 931 892 39 4%
Interest income (9) (145) 136 -94%
Other expense, net 12 26 (14) -54%
Provision for income taxes 2,776 1,644 1,132 69%
Effective tax rate 32% 37%
Net income $ 6,037 $ 3,339 $ 2,698 81%
Diluted net earnings per share $ 0.28 $ 0.16 $ 0.12 75%
-12-
Revenues
The increase in total revenues for first quarter 2003 included revenues of
Greatbatch-Globe, which we acquired in July 2002.
Medical. Medical battery revenues increased mainly due to our customers'
increased demand for ICD batteries. Capacitor revenues increased as a result of
increased demand by our existing customer for capacitors. The increase in sales
of medical components was due to the inclusion of revenues from Greatbatch-Globe
and the increased demand for our filtered feedthrough products. Substantially
all of the revenue changes for first quarter 2003 were attributable to volume.
Commercial. Commercial power sources revenues improved as the result of
increased demand from customers in the oil and gas exploration market.
Gross profit
Gross profit increased as a result of increased revenues. The overall 2.3
percentage point reduction in the gross margin was comprised of a 2.1 point
reduction for the inclusion of Greatbatch-Globe profits at lower than average
margins; a 0.9 point reduction for the costs related to the consolidation of our
commercial operations; a 1.5 point reduction for the costs associated with the
implementation of lean manufacturing initiatives at most facilities and other
infrastructure improvements; and a 2.2 point increase provided by the
improvement of margins at our Greatbatch-Sierra facility.
SG&A expenses
SG&A expenses increased in dollars and declined as a percentage of total
revenues. The expense increase is due to the inclusion of costs associated with
Greatbatch-Globe, costs associated with our Six Sigma(TM) quality initiatives,
improvements to our information technology systems, and the general development
of our infrastructure to support the Company growth.
RD&E expenses
RD&E expenses increased in dollars, but declined as a percentage of total
revenues. The decrease in the percentage of expenses as related to sales is
primarily attributable to the low level of RD&E expenses at Greatbatch-Globe. We
expect to increase our spending on RD&E to a level that will support the new
technologies demanded by the implantable medical device markets.
Amortization expense
Intangible amortization decreased due to the write-off of the Greatbatch-Hittman
Noncompete/Employment Agreement in third quarter 2002. Amortization expense for
first
-13-
quarter 2002 included $233 thousand for this agreement that is not included in
the first quarter 2003 expense.
Other expenses
Interest expense increased slightly as interest-bearing debt as a percentage of
total capitalization was 27% for both first quarter 2003 and 2002 with interest
rates of 3.3% and 3.2%, respectively. Interest income declined due to the
reduced levels of investable cash in first quarter 2003 following the
acquisition of Greatbatch-Globe during the last half of 2002.
Provision for income taxes
Our effective tax rate declined primarily as a result of increased research and
development credits, as well as the benefits of state tax planning strategies.
Liquidity and Capital Resources
Our principal source of short-term liquidity is our working capital of $51.3
million at March 31, 2003 combined with our unused $20 million credit line with
our lending syndicate. Historically we have generated cash from operations
sufficient to meet our capital expenditure and debt service needs, other than
for acquisitions, and we anticipate that this will continue for 2003. We believe
our relationship with our lending syndicate is good and that additional
short-term financing would be available to us from the syndicate on reasonable
terms if needed.
We anticipate higher than historical capital spending during 2003 as we build
out our new medical battery manufacturing factory that we purchased during the
fourth quarter of 2002 and invest in information technology and other
infrastructure to support the current business level and anticipated organic
growth.
The Company regularly engages in discussions relating to potential acquisitions
and has identified several possible acquisition opportunities. The Company
currently does not have any commitments, understandings, or agreements to
acquire any other business; however, the Company may announce an acquisition
transaction at any time.
At March 31, 2003 our capital structure consisted of our $120 million credit
facility and our 21.1 million shares of common stock outstanding. We have
historically financed our acquisitions with proceeds from our debt arrangements
and public stock offerings. Earnings before interest, taxes, depreciation and
amortization (EBITDA) is a primary measure of our ability to utilize debt
financing. We believe that our historical growth in EBITDA and our expectation
that it will continue to grow in the future positions us well to access
increased debt from commercial lenders if needed. We are authorized to issue 100
million shares of common stock and 100 million shares of preferred stock. The
market value of our outstanding common stock since our IPO has exceeded our book
value and the average daily trading volume of our common stock has also
increased; accordingly, we believe that if needed we can access public markets
to sell additional common stock, preferred stock, debt or convertible securities
if conditions are appropriate in the public markets.
-14-
Inflation
We do not believe that inflation has had a significant effect on our operations.
Impact of Recently Issued Accounting Standards
None.
Forward-Looking Statements
Some of the statements contained in this Quarterly Report on Form 10-Q and other
written and oral statements made from time to time by us and our
representatives, are not statements of historical or current fact. As such, they
are "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. We have based these forward-looking statements on our
current expectations, which are subject to known and unknown risks,
uncertainties and assumptions. They include statements relating to:
o future revenues, expenses and profitability;
o the future development and expected growth of our business and the
implantable medical device industry;
o our ability to successfully execute our business model and our
business strategy;
o our ability to identify trends within the for implantable medical
devices, medical components, and commercial power sources industries
and to offer products and services that meet the changing needs of
those markets;
o projected capital expenditures; and
o trends in government regulation.
You can identify forward-looking statements by terminology such as "may,"
"will," "should," "could," "expects," "intends," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of these terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially from those suggested
by these forward-looking statements. In evaluating these statements and our
prospects generally, you should carefully consider the factors set forth below.
All forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by these cautionary factors and
to others contained throughout this report. We are under no duty to update any
of the forward-looking statements after the date of this report or to conform
these statements to actual results.
-15-
Although it is not possible to create a comprehensive list of all factors that
may cause actual results to differ from the results expressed or implied by our
forward-looking statements or that may affect our future results, some of these
factors include the following: dependence upon a limited number of customers,
product obsolescence, inability to market current or future products, pricing
pressure from customers, reliance on third party suppliers for raw materials,
products and subcomponents, fluctuating operating results, inability to maintain
high quality standards for our products, challenges to our intellectual property
rights, product liability claims, inability to successfully consummate and
integrate acquisitions, unsuccessful expansion into new markets, competition,
inability to obtain licenses to key technology, regulatory changes or
consolidation in the healthcare industry, and other risks and uncertainties that
arise from time to time as described in the Company's Annual Report on Form 10-K
and other periodic filings with the Securities and Exchange Commission.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Under the Company's existing credit facility both the term loan and any
borrowings under the line of credit bear interest at fluctuating market rates.
An analysis of the impact on our interest rate sensitive financial instruments
of a hypothetical 10% change in short-term interest rates shows an impact on
expected 2003 earnings of approximately $0.3 million of higher or lower
earnings, depending on whether short-term rates rise or fall by 10%. The
discussion and the estimated amounts referred to above include forward-looking
statements of market risk that involve certain assumptions as to market interest
rates. Actual future market conditions may differ materially from such
assumptions. Accordingly, the forward-looking statements should not be
considered projections of future events by the Company.
ITEM 4. Controls and Procedures.
a) Evaluation of Disclosure Controls and Procedures. Within 90 days before
the filing date of this quarterly report (the "Evaluation Date") we
carried out an evaluation, under the supervision and with the
participation of the Company's management, including our Chief Executive
Officer and our Chief Financial Officer, of the effectiveness of the
design and operation of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-14(c)). Based
upon that evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that, as of the Evaluation Date, our disclosure controls
and procedures were effective to ensure that material information relating
to us and our consolidated subsidiaries is recorded, processed, summarized
and reported in a timely manner.
b) Changes in Internal Controls. We have reviewed our internal controls, and
there have been no significant changes in our internal controls or, to our
knowledge, in other factors that could significantly affect such controls,
subsequent to the Evaluation Date.
-16-
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
None.
ITEM 2. Changes in Securities and Use of Proceeds.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None.
ITEM 5. Other Information.
Effective April 1, 2003, we entered into a new Battery Supply Agreement with
Guidant Corporation that replaces and extends the terms of our February 1999
supply agreement with Guidant that would have expired on December 31, 2004. The
new agreement expires on December 31, 2006 and can be renewed for additional
one-year periods upon mutual agreement. Under our new agreement, we will
continue to supply and Guidant will continue to purchase several different
batteries for use in its implantable medical devices.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
See the Exhibit Index for a list of those exhibits filed herewith.
(b) Reports on Form 8-K
None.
-17-
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
3.1 Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to our registration
statement on Form S-1 (File No. 333-37554)).
3.2 Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.2 to our quarterly report on Form 10-Q ended March
29, 2002).
10.1+ Supply Agreement dated as of April 10, 2003, between Wilson
Greatbatch Technologies, Inc. and Guidant/CRM.
99.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
Portions of the exhibit marked "+" have been omitted and filed seperately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
-18-
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: May 16, 2003 WILSON GREATBATCH TECHNOLOGIES, INC.
By /s/ Edward F. Voboril
----------------------------------
Edward F. Voboril
Chairman of the Board,
President and Chief Executive
Officer
(Principal Executive Officer)
By /s/ Lawrence P. Reinhold
----------------------------------
Lawrence P. Reinhold
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
-19-
CERTIFICATIONS
I, Edward F. Voboril, certify that:
1. I have reviewed this report on Form 10-Q for the quarterly period ended
April 4, 2003 of Wilson Greatbatch Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by the
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which periodic
reports are being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this report (the "Evaluation Date"); and
c. presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditor and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
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6. The registrant's other certifying officer and I have indicated in this
report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 16, 2003
/s/ Edward F. Voboril
------------------------------------
Edward F. Voboril
Chairman of the Board, President and
Chief Executive Officer
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CERTIFICATIONS
I, Lawrence P. Reinhold, certify that:
1. I have reviewed this report on Form 10-Q for the quarterly period ended
April 4, 2003 of Wilson Greatbatch Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by the
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which periodic
reports are being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this report (the "Evaluation Date"); and
c. presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditor and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
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6. The registrant's other certifying officer and I have indicated in this
report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: May 16, 2003
/s/ Lawrence P. Reinhold
-------------------------------------
Lawrence P. Reinhold
Executive Vice President and
Chief Financial Officer
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