-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UaBR0JyftzjDeTqAST6RnxVkqJ62ixXcOxcq69M/akZYpmp5+uBcd6Lc3iCErmsf II5pUB1SPbNUoKSpMtuqbQ== 0000310252-95-000014.txt : 19951218 0000310252-95-000014.hdr.sgml : 19951218 ACCESSION NUMBER: 0000310252-95-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19951215 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GELMAN SCIENCES INC CENTRAL INDEX KEY: 0000310252 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY APPARATUS & FURNITURE [3821] IRS NUMBER: 381614806 STATE OF INCORPORATION: MI FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07828 FILM NUMBER: 95601834 BUSINESS ADDRESS: STREET 1: 600 SOUTH WAGNER RD CITY: ANN ARBOR STATE: MI ZIP: 48103-9019 BUSINESS PHONE: 3136650651 MAIL ADDRESS: STREET 1: 600 S WAGNER RD STREET 2: 600 S WAGNER RD CITY: ANN ARBOR STATE: MI ZIP: 48103-9019 FORMER COMPANY: FORMER CONFORMED NAME: GELMAN INSTRUMENT CO DATE OF NAME CHANGE: 19600201 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 1995 ----------------- OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from __________ to ___________ Commission file number I7828 ----------------------------- GELMAN SCIENCES INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) MICHIGAN 38-1614806 - ------------------------------ ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 600 South Wagner Road, Ann Arbor, Michigan 48103-9019 ------------------------------------------------------ (Address of principal executive offices) (Zip Code) (313) 665-0651 ---------------------------------------------------- (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 and 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. At December 4, 1995, 7,831,211 shares were outstanding of the Company's $.10 par value common stock. -1- GELMAN SCIENCES INC. INDEX Page PART I. Financial Information Number Item 1. Financial Statements Condensed Consolidated Balance Sheets October 31, 1995 (Unaudited) and July 31, 1995 . . . . . . . . . . . . . . . . . . . . . 3 Condensed Unaudited Consolidated Statements of Income for the three months ended October 31, 1995 and 1994. . . . . . . . . . . . . . . .4 Condensed Unaudited Consolidated Statements of Cash Flows for the three months ended October 31, 1995 and 1994. . . . . . . . . . . . . . . .5 Condensed Notes to Unaudited Consolidated Financial Statements. . . . . . . . . . . . . . . . . . 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . . . . . . . . . . . .7 PART II. Other Information Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . .8 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . .10 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 -2- GELMAN SCIENCES INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
October 31 July 31, 1995 1995 ------------------------ ASSETS (Unaudited) Current Assets: Cash and cash equivalents $ 3,292 $ 3,010 Accounts receivable, less allowances 24,790 23,985 Inventories: Finished products 5,654 6,320 Work in process 1,732 1,572 Raw material and purchased parts 6,406 7,052 ---------- ---------- 13,792 14,944 Other current assets 5,282 4,988 ---------- ---------- Total Current Assets 47,156 46,927 Property, Plant and Equipment 71,310 69,842 Less Allowances for Depreciation (38,358) (37,258) ---------- ---------- 32,952 32,584 Intangibles and Other Assets 2,293 2,270 ---------- ---------- Total Assets $ 82,401 $ 81,781 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable $ 1,191 $ 1,368 Accounts payable 3,477 3,813 Accrued expenses 8,949 9,312 Current maturities of long-term debt 512 524 ---------- ---------- Total Current Liabilities 14,129 15,017 Long-Term Debt, Exclusive of Current Maturities 5,182 5,493 Other Long-Term Liabilities 2,187 2,498 Stockholders' Equity: Preferred stock, par value $1.00 per share Common stock, par value $.10 per share 782 779 Additional capital 35,461 35,145 Retained earnings 25,636 23,714 Translation adjustments (676) (565) Less loan to Employee Stock Ownership Plan (300) (300) ---------- ---------- Total Stockholders' Equity 60,903 58,773 ---------- ---------- Total Liabilities and Stockholders' Equity $ 82,401 $ 81,781 ========== ==========
See Notes To Unaudited Consolidated Financial Statements. -3- GELMAN SCIENCES INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In Thousands, except per share data)
Three Months Ended October 31 -------------------------- 1995 1994 ------------ ------------ Net sales $ 27,335 $ 24,167 Cost and expenses: Cost of products sold 13,493 12,010 Selling and administrative 9,574 8,512 Research and development 1,491 1,308 Other income - net (287) (5) --------- --------- Operating earnings 3,064 2,342 Interest expense 154 433 --------- --------- Earnings before income taxes 2,910 1,909 Provision for income taxes 988 678 --------- --------- Net earnings $ 1,922 $ 1,231 ========== ========== Primary earnings per share $ 0.24 $ 0.19 ========== ========== Weighted average common and common equivalent shares outstanding 8,145 6,596 ========== ==========
See Notes To Unaudited Consolidated Financial Statements. -4- GELMAN SCIENCES INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
Three Months Ended October 31 -------------------------- 1995 1994 ------------ ----------- Operating Activities Net earnings $ 1,922 $ 1,231 Loss on disposal of assets - 55 Depreciation and amortization 1,172 1,014 Decrease in inventories 1,376 695 (Increase) decrease in accounts receivable (1,247) 770 Increase in other current assets (475) (845) Decrease in current liabilities (699) (1,393) Decrease in liabilities for environmental activity (84) (163) Other (162) 56 ---------- ---------- Net Cash Provided by Operating Activities 1,803 1,420 Financing Activities Long-term debt borrowings 681 6,410 Principal payments on long-term debt (982) (4,810) Tax benefit from exercised stock options 177 0 Proceeds from exercised stock options 141 76 ---------- ---------- Net Cash Provided by Financing Activities 17 1,676 Investment Activities Capital expenditures (1,552) (1,284) Proceeds from sale of assets - 11 Increase in intangibles and other assets (32) (121) ---------- ---------- Net Cash Used in Investment Activities (1,584) (1,394) Effects of Exchange Rate Changes on Cash 46 (184) ---------- ---------- Net change in cash during the period 282 1,518 Cash at beginning of period 3,010 1,525 ---------- ---------- Cash at end of period $ 3,292 $ 3,043 ========== ==========
See Notes To Unaudited Consolidated Financial Statements. -5- GELMAN SCIENCES INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS General In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (which are of a normal recurring nature) necessary to present fairly the financial position of Gelman Sciences Inc. and subsidiaries as of October 31, 1995, and the results of their operations and cash flows for the three months ended October 31, 1995 and 1994. These financial statements should be read in conjunction with the financial statements and notes set forth in the Company's Annual Report and Form 10-K for the year ended July 31, 1995. The results of operations for the three months ended October 31, 1995 and 1994 are not necessarily indicative of the results of the full year. -6- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Net sales for the first quarter ended October 31, 1995 increased 13% to $27.3 million as compared to net sales of $24.2 million for the quarter ended October 31, 1994. The increase was due mainly to strong international sales led by medical device products. Foreign currency fluctuations represented less than 1 percent of the overall percentage increase. Overall, sales to customers in Europe increased 27% due mainly to increases in medical device products used in intravenous therapy and OEM membrane. Sales to customers in Asia/Pacific increased 24% due to sales increases in process products used in high-technology filtration systems. Sales to customers in the Americas increased 8% over the same period of last fiscal year. Sales of microporous membrane, in the Americas, were level compared to last fiscal first quarter. Worldwide sales by product lines, as compared to the first quarter of last fiscal year, in the laboratory market of our business increased 8%. Medical Device sales improved 22%. Process filtration sales improved 16% and sales of microporous membrane improved 15%. Gross margin for the quarter was 50.6% as compared to 50.3% for the prior year first quarter. The gross margin improvement is attributed to international sales growth plus continued manufacturing efficiencies. Selling and administrative costs as a percentage of sales was 35% for the quarters ended October 31, 1995 and 1994. Research and development costs also remained level as a percentage of sales at 5.5%. The effective tax rate for the first quarters ended October 31, 1995 and 1994 was 34% and 35%, respectively. The increase in Other income - net is due mainly to gains on foreign currency transactions. Interest expense decreased $279,000 due to the repayment of outstanding indebtedness in the third quarter of fiscal 1995. Net earnings for the first quarter ended October 31, 1995 increased 56% to $1.9 million or $.24 per share, as compared with $1.2 million or $.19 per share. Liquidity and Capital Resources The Company generated cash from operations of $1.8 million for the first quarter ended October 31, 1995 compared to $1.4 million for the quarter ended October 31, 1994. The Company used the cash to fund capital expenditures of $1.6 million. Working capital at October 31, 1995 was $33.0 million compared to $31.9 million at July 31,1995. The decrease in current liabilities was due to timing of payments on trade payables and the payment, during the quarter, of accrued liabilities at July 31, 1995. At October 31, 1995, the Company's unused portion of lines of credit under the revolving credit agreement was $15 million. -7- PART II. OTHER INFORMATION Item 1. Legal Proceedings The Company is involved in various legal actions in the normal course of business. In addition, the Company is currently a party to various legal actions arising under statutes regulating the discharge of materials into the environment or otherwise protecting the environment. These have been described in the Company's 1995 Annual Report and Item 1. Environmental Regulations and Item 3. Legal Proceedings of the Company's Form 10-K for the year ended July 31, 1995. The following sets forth these environmental matters to the extent any material developments have occurred since the filing of the Company's Form 10-K for the year ended July 31, 1995. Scarbrough, et al. v. Gelman Sciences Inc., et al. (Circuit Court for Washtenaw County, Michigan, Case No. 88-35594-CE). By Complaint filed August 8, 1988, and amended September 15, 1988, 27 residents of the Westover subdivision located near the main facility of the Company sued the Company and 8 other defendants for damages associated with alleged contamination of residential water supplies and for the cost of court- supervised medical surveillance. The total demand was $3,095,000. On March 9, 1990, plaintiffs settled with 7 of the 8 other defendants for $100,000. (The suit against the remaining other defendant was subsequently dismissed by the Court.) Thereafter, 15 plaintiffs settled with the Company for a total of $175,535. Twelve plaintiffs refused to settle. On November 30, 1990, a jury returned a verdict in favor of the 12 plaintiffs, awarding damages totalling $119,756. After adjustment for the March 9, 1990, settlement between plaintiffs and 7 other defendants, the net jury verdict against the Company was $62,250, plus interest. On December 11, 1991, the Court awarded the Company costs totalling $87,529.38, plus interest. The 12 plaintiffs who went to trial appealed the outcome of the case. On July 27, 1994, the Court of Appeals affirmed the jury verdict. On September 21, 1994, the Court of Appeals denied plaintiffs Motion for Rehearing. Plaintiffs filed an Application for Leave to Appeal with the Michigan Supreme Court. On June 30, 1995, the Supreme Court denied the Application. Plaintiffs filed a Motion for Reconsideration, which was denied on October 31, 1995. -8- Dawson, et ano v. Gelman Sciences Inc., et al. (Circuit Court for Washtenaw County, Michigan, Case No. 92-43975-CE). On November 3, 1992, two residents in the Evergreen subdivision located near the main facility of the Company filed a Complaint against the Company, the Chairman of the Company, and eight other defendants for damages associated with alleged contamination of residential water supplies. On January 7, 1993, the Company and its Chairman filed their Answers denying liability and cross- claiming against the co-defendants. On October 27, 1993, the Court granted the motion of the Company and its Chairman for summary judgment. An Order dismissing this case was entered on December 15, 1993. Plaintiffs appealed, and, on November 7, 1995, the Michigan Court of Appeals affirmed the dismissal. -9- Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits (4) Instruments Defining the Rights of Security Holders (1) Pursuant to 17 CFR 229.601(b)(4)(iii), instruments with respect to long-term debt issues have been omitted where the amount of securities authorized under each instrument does not exceed 10% of the total consolidated assets of the Company. The Company hereby agrees to furnish a copy of each such instrument to the Commission upon its request. (11) Statement re computation of per share earnings for the three months ended October 31, 1995 and 1994. (27) Financial Data Schedules (b) Reports on Form 8-K No reports on Form 8-K were filed during the fiscal quarter ended October 31, 1995. -10- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant had duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GELMAN SCIENCES INC. -------------------------------- (Registrant) Date: December 12, 1995 /s/ Charles Gelman -------------------------------------- Charles Gelman, Chairman of the Board and Chief Executive Officer Date: December 12, 1995 /s/ David J. DiMaggio ---------------------------------------- David J. DiMaggio, Controller -11- EX-11 2 Exhibit 11 Computation of Earnings Per Common Share Primary and Fully Diluted
Three Months Ended October 31 ----------------------- 1995 1994 ----------- ----------- Net income for computing primary and fully diluted earnings per common share $ 1,922,000 $ 1,231,000 Primary shares Weighted average number of common shares outstanding 7,810,109 6,142,707 Additions from assumed exercise of stock options and warrants 335,204 445,938 ----------- ----------- Weighted average of common and common equivalent shares 8,145,314 6,588,645 =========== =========== Fully diluted shares Weighted average number of common shares outstanding 7,810,109 6,142,707 Additions from assumed exercise of stock options and warrants 346,428 445,938 ----------- ----------- Weighted average of common and common equivalent shares 8,156,538 6,588,645 =========== =========== Net income per common share Primary $0.24 $0.19 =========== =========== Fully diluted $0.24 $0.19 =========== ===========
Primary additions from assumed exercise of stock options and warrants are net of assumed purchase of common shares at the average market price during the period. Fully diluted earnings per share was determined in the same manner except that the greater of period end or period average stock price was used. EX-27 3
5 This schedule contains summary financial information extracted from (a) Gelman Sciences Inc. Statement of Income and Consolidated Statement of Cash Flows for the three months ended October 31, 1995 an the Consolidated Balance Sheet as of October 31, 1995 and is qualified in its entirety by reference to such (b) Form 10-Q for the fist quarter ended October 31, 1995. 0000310252 GELMAN SCIENCES INC. 1,000 US DOLLARS 3-MOS JUL-31-1996 Oct-31-1995 1 3,292 0 26,154 1,364 13,792 47,156 71,310 38,358 82,401 14,129 7,369 782 0 0 60,121 82,401 27,335 27,335 13,493 13,493 10,702 76 154 2,910 988 1,922 0 0 0 1,922 0.24 0.24
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