-----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, CNhru96AHGGjii//Fr9rhWhFvfnOtJyijNn+5FaDGzgQcRdnh90ip1eXFvLtHj99 IfEV5K6+hQkm8pgvTXeDtg== 0000891554-96-000697.txt : 19961018 0000891554-96-000697.hdr.sgml : 19961018 ACCESSION NUMBER: 0000891554-96-000697 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951130 FILED AS OF DATE: 19961017 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIHOLDING CORP CENTRAL INDEX KEY: 0000354199 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MEDICAL LABORATORIES [8071] IRS NUMBER: 581443790 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-09833 FILM NUMBER: 96644743 BUSINESS ADDRESS: STREET 1: 96 SPRING STREET STREET 2: 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10012 BUSINESS PHONE: 2122199496 MAIL ADDRESS: STREET 1: 96 SPRING ST STREET 2: 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10012 FORMER COMPANY: FORMER CONFORMED NAME: UNITED FASHIONS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CP OVERSEAS INC DATE OF NAME CHANGE: 19901009 FORMER COMPANY: FORMER CONFORMED NAME: IRT REALTY SERVICES INC DATE OF NAME CHANGE: 19880501 10-Q/A 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A-2 Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended November 30, 1995 ------------------------- COMMISSION FILE NUMBER O-9833 ------------------------- UNIHOLDING CORPORATION ---------------------------- (Exact name of small business issuer as specified in its charter) Delaware 58-1443790 -------------------------- --------------------------- (State or jurisdiction of (IRS Employer identification incorporation or organization) Number) 96 Spring Street, New York, New York 10012 - ------------------------------------- ----------- (Address of principal executive offices) (Zip Code) (212) 219-9496 ---------------------------------------------------- (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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of January 10, 1996, there were 6,124,432 shares of Common Stock, par value $0.01 per share, of the Registrant's outstanding. UNIHOLDING CORPORATION AND SUBSIDIARIES Form 10-Q for the Quarterly Period Ended November 30, 1995 INDEX Part I - FINANCIAL INFORMATION: Item 1. Financial Statements Consolidated Balance Sheets - November 30, 1995 and May 31, 1995 Consolidated Statements of Operations Three month and six month periods ended November 30, 1995 and 1994 Consolidated Statements of Cash Flows Six month periods ended November 30, 1995 and 1994 Notes to Unaudited Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Signatures PART I - FINANCIAL INFORMATION Item 1. Financial Statements UNIHOLDING CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) ASSETS November 30, 1995 May 31, 1995 ----------------- ------------ (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 2,427 $ 16,939 Accounts receivable, net of allowance for doubtful accounts 18,118 17,890 Due from related companies 1,005 124 Inventories 1,890 1,867 Prepaid expenses 2,338 2,921 Other current assets 1,252 1,413 -------- --------- Total current assets 27,030 41,154 -------- --------- NON-CURRENT ASSETS: Long-term notes receivable 3,501 2,815 Intangible assets, net 57,268 55,654 Property, plant and equipment, net 32,196 33,511 Investment in equity affiliates 1,738 -- Other assets, net 458 424 -------- --------- Total non-current assets 95,161 92,404 -------- --------- $122,191 $133,558 ======== ========= See notes to financial statements UNIHOLDING CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) LIABILITIES AND STOCKHOLDERS' EQUITY November 30, 1995 May 31, 1995 ----------------- ------------ (Unaudited) CURRENT LIABILITIES: Bank overdrafts $6,042 $6,501 Lease payable, short-term portion 1,097 1,021 Payable to related parties 54 338 Trade payables 5,927 4,854 Accrued liabilities 5,290 4,997 Long-term debt, current portion 19,838 4,378 Taxes payable, current portion 3,808 2,751 ----------- ----------- Total current liabilities 42,056 24,840 ----------- ----------- NON-CURRENT LIABILITIES: Lease payable, non-current 1,925 1,386 Long-term debt, non-current 34,327 32,662 Taxes payable, long-term portion 192 195 Deferred taxes 4,094 4,534 ----------- ----------- Total non-current liabilities 40,538 38,777 ----------- ----------- Total liabilities 82,594 63,617 ----------- ----------- MINORITY INTERESTS 5,950 32,064 ----------- ----------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Common stock, $0.01 par value; authorized 20,000,000 shares; issued and outstanding 5,959,682 at November 30, 1995 and 6,060,182 at May 31, 1995 245 242 Additional paid-in capital 32,244 31,008 Cumulative translation adjustment - 1,174 Retained earnings 4,245 5,453 ----------- ----------- 36,734 37,877 Less - cost of 163,000 and -0- shares of Common Stock held in treasury at November 30, 1995 and May 31, 1995, respectively (3,087) - ----------- ----------- Total stockholders' equity 33,647 37,877 ----------- ----------- $122,191 $133,558 =========== =========== See notes to financial statements UNIHOLDING CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data)
Three Months ended Six Months ended November 30 November 30 ---------------------- --------------------- 1995 1994 1995 1994 ---------------------- --------------------- REVENUE $ 25,612 $ 20,775 $ 47,675 $ 39,004 Operating expenses: Salaries and related charges 10,253 8,148 20,216 16,366 Supplies 3,903 3,611 7,360 7,062 Other operating expenses 6,011 4,226 11,227 7,679 Depreciation and amortization of tangible assets 1,395 1,252 2,921 2,401 Amortization of intangible assets 609 493 1,194 987 -------- -------- -------- -------- OPERATING INCOME 3,441 3,045 4,757 4,509 Interest expense, net (623) (317) (1,096) (775) Equity in loss of affiliates (3,005) -- (3,005) -- Other, net (545) -- 134 (57) -------- -------- -------- -------- Income (loss) before taxes and minority interests (732) 2,728 790 3,677 Tax provision (783) (872) (1,186) (1,288) -------- -------- -------- -------- Income (loss) from continuing operations before minority interests (1,515) 1,856 (396) 2,389 Minority interests in income of continuing operations (497) (978) (812) (1,329) -------- -------- -------- -------- Income (loss) from continuing operations (2,012) 878 (1,208) 1,060 Loss on disposition of discontinued operation, net of tax benefit of $195 and minority interests of $220 -- (234) -- (234) -------- -------- -------- -------- NET INCOME (LOSS) $ (2,012) $ 644 $ (1,208) $ 826 ======== ======== ======== ======== Weighted average common shares outstanding 6,026,218 5,810,183 6,051,353 5,710,688 Earnings per share of common stock Net income (loss) from continuing operations $ (0.33) $ 0.15 $ (0.20) $ 0.19 Loss on disposition of discontinued operation -- $ (0.04) -- $ (0.04) Net income (loss) $ (0.33) $ 0.11 $ (0.20) $ 0.14
See notes to financial statements UNIHOLDING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Six Months ended November 30 ----------------- 1995 1994 ------- ------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (1,208) $ 826 Adjustments to reconcile net income to net cash provided by operations: Equity in loss of affiliates 3,005 -- Minority interests in income 812 1,109 Depreciation and amortization of tangible assets 2,921 2,401 Amortization of intangible assets 1,194 987 Other non-cash expenses (5) -- Net changes in assets and liabilities, net of acquisitions: (Increase) Decrease in accounts receivable (625) (146) (Increase) Decrease in inventories (57) 792 (Increase) in prepaid expenses 576 1,239 (Increase) Decrease in other assets (470) 491 Increase (Decrease) in trade payables 1,229 (2,628) Increase (Decrease) in accrued liabilities 403 (1,242) Increase (Decrease) in reserve for taxes 1,098 (1,007) Increase (Decrease) in deferred taxes (506) 442 ------- ------- Net cash provided by operating activities 8,367 3,264 ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash proceeds from issuance of share capital 1,240 -- Repayment of long-term debt (888) (75) Cash proceeds from long-term debt 565 657 Proceeds (reimbursement) from (of) bank overdrafts (228) 1,378 Dividend paid to minority shareholders (34) (23) Proceeds (repayment) of lease debt 690 279 Payment for purchase of treasury stock (3,087) -- ------- ------- Net cash provided by (used in) financing activities (1,742) 2,216 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Payment for purchases of property and equipment ($ 2,916) ($ 2,396) Loans and advances (to) from affiliates, related companies and shareholders (2,196) (694) Payment for purchase of interest in subsidiaries (16,025) (992) Payment for purchase of intangible assets (162) (1,834) Proceeds from sale of assets 210 760 -------- -------- Net cash used in investing activities (21,089) (5,156) ------- ------- Effect of exchange rate changes on cash (48) 61 Net increase (decrease) in cash and cash equivalents (14,512) 385 Cash and cash equivalents, beginning of year 16,939 1,095 -------- -------- Cash and cash equivalents, end of period $ 2,427 $ 1,480 ======== ========
See notes to financial statements UNIHOLDING CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Monetary amounts in thousands, except per share data) 1. Description of the Company and Basis of Presentation As more fully discussed in UniHolding Corporation's ("UniHolding") Annual Report on Form 10-K for the year ended May 31, 1995, UniHolding and its subsidiaries (collectively the "Company") primarily provide clinical laboratory testing services to physicians, managed care organizations, hospitals and other health care providers through its laboratories in Switzerland, the United Kingdom, Italy and Spain. On March 31, 1994 UniHolding issued 13,103,459 (pre-reverse split) shares (65.75%) of its common stock, a promissory note in the amount of $18,000 and canceled a debt in the amount of $2,900 in exchange for 60% of the capital stock of Unilabs Group Limited ("UGL"), 100% of the capital stock of Uni Clinical Laboratories UCL Engineering SA ( UCLE ), and options to acquire certain laboratory operating companies in Spain and Italy from Unilabs Holdings SA, a Panama corporation, ( Holdings ) pursuant to a stock exchange agreement between UniHolding and Holdings. UGL was formed pursuant to a Stock Purchase Agreement dated January 19, 1993 among Unilab Corporation ( Old Unilab ), MetCal, Inc. (now known as Unilab Corporation ) and Holdings. Pursuant to the agreement, which closed on November 10, 1993, Holdings contributed 70% of Unilabs SA, a Swiss corporation ( ULSA ), subject to the assumption by Unilab Corporation from UGL of a liability of $21,000 to Holdings and Unilab Corporation contributed 100% of the capital stock of JS Pathology plc ("JSP") in exchange for 60% and 40%, respectively, of the capital stock of UGL. Subsequent to November 10, 1993, Holdings and Unilab agreed upon an increase in the relative value of Holdings' original contribution by approximately $4,100. Accordingly, UGL issued a note in this amount to Holdings. JSP was subsequently transferred to United Laboratories Limited ("ULL"), a newly formed United Kingdom corporation and 100% subsidiary of UGL, in a reorganization which is deemed to have occurred as of November 10, 1993. The acquisitions referred to above were accounted for as the reverse acquisition of UniHolding by an "accounting entity" consisting of ULSA and UCLE because following the acquisitions the former shareholders of ULSA and UCLE were in control of the Company. Accordingly, the financial statements of the Company are the financial statements of the "accounting entity" adjusted for the assumed acquisition, at fair value, of the net assets of UniHolding in exchange for the issuance of UniHolding's common stock outstanding before the transaction. The Company accounted for the net assets of UniHolding at the fair value of the net assets acquired as of March 31, 1994. On May 31, 1995, the Company exercised its options, acquired on March 31, 1994, to acquire the Spanish and Italian laboratory operations from Holdings for an aggregate cost of $7,342 paid in the form of two promissory notes offset against cash advances. The acquisitions were accounted for at predecessor cost. As of May 29, 1995, with a view to streamlining the European subsidiary structure, UGL sold ULL, its wholly-owned subsidiary, to ULSA, currently an 87.2% subsidiary of UGL. As of June 30, 1995, UniHolding and UGL entered into an agreement whereby UGL acquired from Unilab 40% of UGL's common stock for a total consideration of $ 30,000. The consideration was paid $ 13,000 in cash, $ 2,000 through the assumption of a debt from Unilab to JSP, and $ 15,000 in the form of a one-year, interest-bearing promissory note. The interest on the $ 15,000 promissory note is the greater of (i) 10% and (ii) the 3-month LIBOR rate on the business day immediately preceding the first day of a calendar quarter plus 3.25%. Such interest started accruing on January 1, 1996. The agreement provides that if the note is still unpaid six months after its due date, it shall be converted into shares of UniHolding's common stock. In accordance with the agreements between Unilab and the Company, both parties must in such an instance, so long as all interest accrued on the $ 15,000 note have been fully paid, use their respective reasonable efforts to agree upon a mutually acceptable resolution. If such a mutually acceptable resolution is not found, the amount of principal and accrued unpaid interest shall be converted on January 1, 1997 into UniHolding Common Stock at 75% of then market price. Until such time as the note is paid either in cash or in UniHolding Common Stock, the UGL shares so acquired remain in escrow. The acquisition of the minority interest in UGL was accounted for as a purchase and the excess of the purchase price over the fair value, which approximates the carrying value, of the assets acquired, $ 3,301, was allocated to goodwill. The accompanying financial statements have been prepared based on generally accepted accounting principles in the United States and include the accounts of all the subsidiaries, as restated for this purpose. 2. Management Opinion In the opinion of management, the accompanying unaudited interim financial statements reflect all adjustments which are necessary to present fairly the financial position, results of operations and cash flows for the interim periods reported. All such adjustments made were of a normal recurring nature. The accompanying interim financial statements and related notes should be read in conjunction with the consolidated financial statements of the Company and related notes as contained in the Annual Report on Form 10-K for the year ended May 31, 1995. The results of operations and financial position for interim periods are not necessarily indicative of those to be expected for a full year, due, in part, to the seasonal fluctuations which are normal for the Company's business. 3. Net Income (Loss) Per Share Net income (loss) per share is computed by dividing net income or net loss by the weighted average number of common shares outstanding. 4. Paid-in Capital and Reverse Split Effective as of December 27, 1995, the Company effected a four-to-one reverse split of its Common Stock. These financial statements reflect this reverse split for all periods presented. The reverse split has no effect on the financial position or results of operations of the Company. As of July 3, 1995, the Company issued 100,000 (pre-reverse split) new shares of common stock to one investor, at a price of $5.50 per share, including warrants for 50,000 (pre-reverse split) shares at a price of $6.50 exercisable for 18 months from July 3, 1995. Further, as of October 5, 1995, the Company issued 150,000 (pre-reverse split) new shares of common stock to two investors, at a price of $5.50 per share, including warrants for 75,000 (pre-reverse split) shares at a price of $6.50 exercisable for 18 months from October 5, 1995. See also Note 7. 5. Cumulative Translation Adjustment The Company's operations are located in Switzerland, the United Kingdom, Italy and Spain. Its net assets, revenues and expenses are substantially all denominated in Swiss franc, Sterling pound, Italian lire, and Spanish pesetas, while the Company presents its consolidated financial statements in US dollars. In accordance with generally accepted accounting principles in the United States, net gains and losses arising upon translation from local currency financial statements are accumulated in a separate component of Stockholders' Equity, the Cumulative Translation Adjustment account, which may be realized upon the eventual disposition by the Company of part or all of its investments. 6. Supplemental Disclosure of Cash Flow Information Six months ended November 30 ---------------------------- 1995 l994 ---- ---- Cash paid during the period for Interest $ 947 $ 859 Income taxes 727 1,715 During the period ended November 30, 1995, in connection with its acquisition of 40% of the share capital of UGL, the Company issued a note of $15,000 and assumed a note of $2,000 payable to JSP. During the period ended November 30, 1995, capital lease obligations of $1,296 were incurred when the Company entered into leases for new capital equipment. 7. Acquisition of Treasury Stock At various times during the quarter ended August 31, 1995, the Company transferred funds to Holdings, with a view to enable Holdings to acquire some shares of the Company's common stock, either from private sources or on the market. As of November 30, 1995, the balance due by Holdings to the Company was approximately $2,900. The Company has agreed with Holdings that such balance would be paid by Holdings through the transfer of 155,000 (post-reverse split) shares of the Company's common stock reflecting the purchase price of such stock as paid by Holdings. The Company has recorded the receipt of the 155,000 (post-reverse split) shares as treasury stock offsetting the $2,900 balance due from Holdings as of November 30, 1995. Further, during the period, the Company acquired 8,000 (post-reverse split) of its own shares on the market for $142. 8. Expansion into Clinical Trials As of March 1, 1995, the Company entered into a Cooperation Agreement, a License Agreement and a Marketing Agreement (together referred to as the "NDA Agreements") with NDA Clinical Trials Services Inc., a Delaware corporation ("NDA") to provide laboratory testing services to the pharmaceutical industry in clinical evaluations conducted in both the United States and Europe. According to the NDA Agreements, the Company and NDA will seek to offer a unique service to the pharmaceutical industry through their joint efforts in conducting laboratory tests of pharmaceutical products, utilizing similar procedures and data management, thereby providing a global product. European operations commenced in the Summer of 1995. In connection therewith, the Company has formed a wholly-owned subsidiary whose only activity will be to sell and perform clinical trials services. The subsidiary's name is Unilabs Clinical Trials Ltd. ("UCT"), and is domiciled in London (UK). In connection with its decision to expand into the clinical trials business, as of October 16, 1995, the Company entered into a Stock Purchase Agreement and an Option Agreement with NDA. Under these Agreements, the Company acquired 17% of NDA's capital through the purchase of newly-issued shares, together with an option to increase its stake in NDA to 30% on or before May 31, 1998. The consideration for the acquisition of 17% was $1,188 paid in cash at closing. The price for the acquisition of the additional 13% will be based on a formula linked to NDA's revenues for its fiscal year ending December 31, 1997. Simultaneously, UCT granted to NDA and NDA's stockholders (excluding the Company), an option to subscribe to new shares of UCT based on a formula linked to UCT's revenues for its fiscal year ending May 31, 1998. The option is contingent upon the Company exercising its option on NDA's equity, and is limited to a maximum of 5/7th of the Company's aggregate investment in NDA. 9. Investment in new venture On September 14, 1995, UGL entered into an agreement with Health Strategies Limited (a Jersey, Channel Islands, corporation, "HSL", a company which may be deemed to be related to the Company for the reasons mentioned below, and which the Company believes may be deemed to be controlled by a director of Unilab), whereby a new company, MISE S.A. (a British Virgin Islands corporation, "MISE") was formed. UGL invested $ 3,005 in MISE for 33.3% of the voting rights and for 66.6% of the equity in MISE stock, of which $ 2,005 was paid during the period, and the balance is payable in two installments of $ 500 each in September 1996 and 1997. HSL owns the remaining voting and equity interests in MISE for which it contributed a nominal amount of cash and its agreement to obtain for MISE certain know-how and related software and services. MISE then acquired for $ 1,500 certain know-how and computer software from HSL, which know-how and software were simultaneously acquired for $ 250 by HSL from Medical Diagnostic Management Inc. (a U.S. corporation, "MDM"), which may be deemed to be related to HSL, and, for the reasons mentioned below, may also be deemed to be related to the Company. Further, MISE committed to pay HSL a total of $ 1,500 for certain plans for marketing the know-how and software in several European countries. Out of such amount, $ 500 was paid during the period, and the balance is payable in two installments of $ 500 each in October 1996 and 1997. The fee agreed for the marketing plans also includes support services and customization to European needs. Based upon MDM s representations, MDM's board of directors include two directors or officers of Unilab. Unilab may be deemed to be a related party of the Company by virtue of the $ 15,000 note due to Unilab in connection with the acquisition of Unilab's 40% investment in UGL on June 30, 1995, which note may under certain circumstances be converted by Unilab into UniHolding Common Stock. None of those two directors or officers of Unilab are directors or officers of UniHolding, and no director or officer of UniHolding has any direct or indirect interest in either of HSL or MDM. The acquisition value of the know-how was determined on MISE's behalf through negotiations between the Company and a director of MDM who is also a director of Unilab, and was agreed upon by the UGL and UniHolding boards of directors. The director of Unilab is HSL's designee to the board of directors of MISE. The investment provides the Company access to certain know-how developed by MDM. MDM is a start-up company which is active in the industry of health information services in the U.S., and is focusing on organizing and managing access to discounted provider networks for ambulatory diagnostic services (radiology, other imaging techniques, and laboratory). Its strategy is to be a clinical, financial, administrative and information management intermediary among referring physicians, payers and diagnostic providers. The know-how acquired by MISE from HSL includes, but is not limited to, a certain computerized information system proprietary to MDM. HSL granted to MISE a perpetual license for the use of the MDM know-how and related software for use in Western Europe. In addition, HSL agreed to provide marketing and support services for a three-year period at no further cost to MISE. Both UGL and HSL agreed to use their best efforts to implement the MISE business in Western Europe and agreed not to compete with MISE in the same territory. The Company, through MISE, intends to market the concept, including the computerized information system, to health insurance companies throughout Europe. The Company believes that such a concept should be particularly useful and applicable in the context of the ongoing deregulation of the health care system and may provide a useful tool to achieve substantial savings in health care costs in several European countries. During the period, MISE had no activity, however the Company's management is of the opinion that there has been no impairment of its investment, and that operations will start in fiscal year 1997. Accounting principles generally accepted in the U.S. require that know-how and marketing plans such as those purchased by MISE, purchased from either related or unrelated parties, be expensed as incurred. Accordingly, during the period, the Company has recognized a loss from its equity investee of $ 3,000. 10. Subsequent Events Effective as of December 27, 1995, the Company undertook the following corporate actions: (1) a four-to-one reverse split of its Common Stock; (2) a decrease of authorized shares of its Common Stock from 60 million to 20 million; and (3) changed its name from UniHolding Corp. to UniHolding Corporation. Further, on December 15, 1995, the Company announced its intent to effect a spin-off of its clinical trials business through a distribution to its shareholders. Had such spin-off been effected as of June 1, 1995, the Company would have recorded the following pro forma results for the six months ended November 30, 1995 (unaudited): Revenue $ 47,675 Operating income 5,355 Net loss $ (776) Per share $ (0.13) A summary of the consolidated balance sheet giving pro forma effect to the spin-off as if it had occurred on June 1, 1995 is as follows (unaudited): Current assets $ 26,539 Other assets 93,620 -------- $120,159 ======== Current liabilities $ 41,474 Other liabilities 40,538 Minority interests 5,950 Stockholders' equity 32,197 -------- $120,159 ======== Item 2. Management's Discussions and Analysis of Financial Condition and Results of Operations Results of Operations As discussed in Note 1 to the accompanying financial statements, the Company's results for the three and six month periods ended November 30, 1995 give effect to the acquisition by UniHolding and UGL, as of June 30, 1995, of 40% of the capital stock of UGL, while the Company's results for the three and six month periods ended November 30, 1994 included a 40% minority interest on UGL's earnings. The financial statements also give effect to the acquisition of ULL by ULSA from UGL. The following table presents the required adjustments to the results of operations for the three and six month periods ended November 30, 1994, providing a comparative analysis with the comparable period in the current fiscal year, had the 40% of UGL's common stock been acquired as of June 1, 1994, and had ULL been owned by ULSA as of June 1, 1994 (unaudited). The results of operations for the three and six month periods ended November, 1994 were translated into U.S. dollars using the exchange rates which were then valid. Had the Spanish and Italian operations been acquired by the Company as of June 1, 1994, there would have been no material effect on the consolidated operations of the Company for the six month period ended November 30, 1994.
Three Months ended November 30, 1994 ---------------------------------------- Three Months ended As Reported Adjustments Pro Forma November 30, 1995 --------------------------------------------------------------- REVENUE $20,775 $20,775 $ $25,612 Operating expenses: Salaries and related charges 8,148 8,148 10,253 Supplies 3,611 3,611 3,903 Other operating expenses 4,226 4,226 6,011 Depreciation 1,252 1,252 1,395 Amortization 493 25 518 609 -------- -------- --------- --------- OPERATING INCOME 3,045 (25) 3,020 3,441 Interest expense, net (317) (415) (732) (623) Equity in loss of affiliates -- -- -- (3,005) Other, net -- -- -- (545) -------- -------- --------- --------- Income (loss) before taxes and minority interests 2,278) (440) 2,288 (732) Tax provision (872) 222 (650) (783) --------- ----------- ----------- ----------- Income (loss) from continuing operations before minority interests 1,856 (218) 1,638 (1,515) Minority interests in income of continuing operations (978) 377 (601) (497) -------- -------- --------- --------- Income (loss) from continuing operations 878 159 1,037 (2,012) Loss on disposition of discontinued operation, net (234) -- (234) -- -------- -------- --------- --------- NET INCOME (LOSS) $ 644 $ 159 $ 803 $(2,012) ======== ======== ========= ========= Weighted average common shares outstanding 5,810,183 6,026,218 Earnings per share of common stock Net income (loss) from continuing operations $ 0.18 $ (0.33) Loss on disposition of discontinued operation $(0.04) -- Net income (loss) $ 0.14 $ (0.33)
Six Months ended November 30, 1994 Six Months ended ---------------------------------------- As Reported Adjustments Pro Forma November 30, 1995 --------------------------------------------------------------- REVENUE $39,004 $ $39,004 $47,675 Operating expenses: Salaries and related charges 16,366 16,366 20,216 Supplies 7,062 7,062 7,360 Other operating expenses 7,679 7,679 11,227 Depreciation 2,401 2,401 2,921 Amortization 987 50 1,037 1,194 -------- -------- --------- --------- OPERATING INCOME 3,045 (50) 4,459 4,757 Interest expense, net (775) (829) (1,604) (1,096) Equity in loss of affiliates -- -- (3,005) -- Other, net (57) (57) 134 -------- -------- --------- --------- Income (loss) before taxes and minority interests 3,677 (879) 2,798 790 Tax provision (1,288) 249 (836) (1,186) 125 78 -------- -------- --------- --------- Income (loss) from continuing operations before minority interests 2,389 (427) 1,962 (396) Minority interests in income of continuing operations (1,329) 484 (808) (812) 63 (16) (10) -------- -------- --------- --------- Income (loss) from continuing operations 1,060 94 1,154 (1,208) Loss on disposition of discontinued operation, net (234) -- (234) -- --------- --------- --------- --------- NET INCOME (LOSS) $ 826 $ 94 $ 920 $(1,208) ======== ======== ========= ========= Weighted average common shares outstanding 5,710,688 6,051,353 Earnings per share of common stock Net income (loss) from continuing operations $ 0.20 $ (0.20) Loss on disposition of discontinued operation $(0.04) -- Net income (loss) $ 0.16 $ (0.20)
Three and Six month periods ended November 30, 1995 compared with the Three and Six month periods ended November 30, 1994. Consolidated revenue denominated in US dollars for the three and six months ended November 30, 1995 increased $4.9 million or 23.6% and $8.7 million or 22.3%, respectively, as compared to the similar prior year periods. Excluding the effect of the change in the US dollar exchange rate versus the Swiss franc and the pound Sterling (approximately $2.6 million and $4.2 million for the three and six months, respectively), and excluding revenue generated by the newly-acquired Italian and Spanish operations ($1.7 million and $3.0 million for the three and six months, respectively), revenue increased by approximately $0.6 million and $1.5 million for the three and six months, respectively. Revenue generated by the Swiss operations remained stable because an increase in specimen volume was offset by a decrease in revenue resulting from the sale of a subsidiary in October 1994. Revenue generated by the UK operations increased by approximately 12.9% over the comparable six month period of the prior year due to additional revenue resulting from the NHS contract, offset by a decrease in other revenues due to the loss of a significant client. UCT has not recorded any revenues during the three and six months periods. It is actively engaged in a marketing and selling effort which is expected to be brought to fruition within a few weeks. Management is confident that revenue will begin to be recorded within the present fiscal year. Operating income for the six months ended November 30, 1995 increased by $0.2 million versus the comparable prior year period. This increase includes the positive effect of the change in the US dollar exchange rate versus the Swiss franc and the pound Sterling (approximately $0.6 million), the start-up expenses of the clinical trials activity without matching income ($0.5 million) and an increase in operating costs related to the strengthening of certain administrative functions and controls. The contribution to operating income by the Swiss operations was higher than in the comparable prior year period, whereas the contribution to operating income by the UK operations was lower. Operating income for the three months ended November 30, 1995 increased by $0.3 million versus the comparable prior year period due to the same factors. Interest expense increased during the three and six months ended November 30, 1995 as compared to the similar prior year periods, due to higher average borrowing levels by the Company resulting from the Company s acquisition of the 40% minority interest in UGL and other capital expenditures, offset by an overall decrease in interest rates. Other income of $0.1 million was recorded primarily from exchange gains realized on certain assets and liabilities as a result of fluctuations in exchange rates. Other income was also negatively impacted by a charge of $ 3.0 million resulting from the equity pick-up of the Company's investment in MISE. This was due to the fact that MISE has recorded a one-time amortization of the know-how and computer software it purchased during the year. While the Company's management believes that the fair value of its investment in MISE has not been impaired, accounting principles generally accepted in the U.S. require that know-how and marketing plans, such as those purchased by MISE, whether they are purchased from either related or unrelated parties, be expensed as incurred. Provision for income taxes remained stable as compared to the comparable prior year period. Minority interests in income decreased substantially as compared to the comparable prior year period. This resulted primarily from the decrease in the minority interests in income of UGL due to the acquisition of the 40% minority interest in UGL as of June 30, 1995. Liquidity and Capital Resources Net cash provided by operating activities for the six months ended November 30, 1995 amounted to $8.4 million, an increase of $5.1 million from the prior year primarily due to decreases in working capital needs. Net cash used in financing activities for the six months ended November 30, 1995 was $1.7 million, as compared to $2.2 million provided by financing activities in the comparable prior year period. The change primarily resulted from repayment of debt, acquisition of treasury stock, coupled with cash proceeds from issuance of new capital. Net cash used in investing activities for the six months ended November 30, 1995 was $21.3 million, consisting primarily of capital expenditures incurred in connection with new laboratory equipment, lending to affiliates, the purchase of the 40% minority interest in UGL as of June 30, 1995, the purchase of the 17% minority interest in NDA as of October 16, 1995 and the recent investment in MISE ($3.0 million of which $2.0 million is presently paid). This compares to $5.2 million used in investing activities in the comparable prior year period, which had been used for purchases of property and equipment and intangibles, and for lending to affiliates. The Company's bank facilities provide for a total of approximately $43.7 million, including secured senior revolving facilities consisting of term loans, working capital loans and/or guarantees. As of January 10, 1996, the Company had approximately $6.2 million of availability under the aggregate credit facilities. Cash on hand, cash flows from operations and additional borrowing capabilities are expected to be sufficient to meet anticipated operating requirements, debt repayments and provide funds for capital expenditures, excluding acquisitions, and working capital for the foreseeable future. Other On June 30, 1995, the Company, UGL and Unilab entered into an agreement whereby UGL acquired from Unilab 40% of UGL's common stock for a total consideration of $30.0 million. The consideration was paid $13.0 million in cash, $2.0 million through the assumption of a debt from Unilab to JSP, and $15.0 million in the form of a one-year, interest-bearing promissory note. While the agreement provides that if the note is still unpaid six months after its due date, it shall be converted into shares of the Company's common stock at 75% of the market price, the Company intends to pay the note on or before its due date. In connection with this note, the Company is considering raising additional capital through debt or equity financing. In July 1995, the Company issued 100,000 (pre-reverse split) new shares of common stock to one investor, at a price of $5.50 per share, including warrants for 50,000 (pre-reverse split) shares at a price of $6.75 exercisable for 18 months from July 3, 1995. In October, 1995, the Company issued 150,000 (pre-reverse split) new shares of common stock to two investors, at a price of $5.50 per share, including warrants for 75,000 (pre-reverse split) shares at a price of $6.50 exercisable for 18 months from October 5, 1995. 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. UniHolding Corporation By: /s/ Bruno Adam --------------------------------- Bruno Adam, CFO Date: October 15, 1996 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FINANCIAL STATEMENTS FOR THE QUARTER ENDED NOV. 30, 1995 AS SUBMITTED IN ITS QUARTERLY REPORT ON FORM 10Q/A-2 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS WITH REFERENCE TO THE ANNUAL REPORT FILED ON FORM 10K FOR FISCAL YEAR ENDED MAY 31, 1995 1,000 6-MOS MAY-31-1996 JUN-01-1995 NOV-30-1995 2,427 0 18,118 0 1,890 27,030 32,196 1,395 122,191 42,056 0 0 0 245 33,402 122,191 47,675 47,675 27,576 42,918 0 3,005 1,096 790 1,186 (396) 0 0 0 (1,208) (.20) (.20)
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