-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, GElSfY3w8wqvTab3FlU/qEeepGlsoYYUAW0TepMYjAafPRelionqnobjGgABKQE5 uCbQOIoBq2CVm9RprJGSRQ== 0000912057-95-005434.txt : 199507180000912057-95-005434.hdr.sgml : 19950718 ACCESSION NUMBER: 0000912057-95-005434 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950531 FILED AS OF DATE: 19950717 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIO LOGIC SYSTEMS CORP CENTRAL INDEX KEY: 0000355007 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 363025678 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-12240 FILM NUMBER: 95554351 BUSINESS ADDRESS: STREET 1: ONE BIO LOGIC PLZ CITY: MUNDELEIN STATE: IL ZIP: 60060 BUSINESS PHONE: 7089495200 MAIL ADDRESS: STREET 1: ONE BIO LOGIC PLAZA CITY: MUNDELEIN STATE: IL ZIP: 60060 10QSB 1 10QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10Q-SB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended May 31, 1995 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ to ________ Commission File No. 0-12231 BIO-LOGIC SYSTEMS CORP. (Exact name of small business issuer as specified in its charter) Delaware 36-3025678 (State or other jurisdiction of (I.R.S. Employer Identification Number) ncorporation or organization) One Bio-logic Plaza, Mundelein, Illinois 60060 (Address of principal executive offices) (zip code) Registrant's telephone number, including area code (708-949-5200) (Former address, if changed since last report): not applicable Check whether the issuer (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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- ------ State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at July , 1995 Common Stock $.Ol par value shares Traditional Small Business Disclosure Format Yes X No ---- ---- BIO-LOGIC SYSTEMS CORP FORM 10Q-SB TABLE OF CONTENTS PART 1. FINANCIAL INFORMATION Page ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) Condensed Consolidated Balance Sheets at May 31, 1995 and February 28, 1995 3 Condensed Consolidated Statements of Operations and Retained Earnings for the three months ended May 31, 1995 and 1994 4 Condensed Consolidated Statements of Cash Flows for the three months ended May 31, 1995 and 1994 5 Notes to Condensed Consolidated Financial Statements 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11 SIGNATURES BIO-LOGIC SYSTEMS CORP FORM 10Q-SB PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONDENSED CONSOLIDATED BALANCE SHEETS
May 31, 1995 February 28, 1995 ------------ ----------------- (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 564,495 $ 1,187,388 Marketable securities 1,637,367 1,627,660 Accounts receivable, net 3,565,344 3,105,769 Inventories 2,887,927 2,895,987 Prepaid expenses 58,268 91,144 Deferred income taxes 139,251 139,251 ------------ ------------- Total current assets 8,852,652 9,047,199 PROPERTY, PLANT AND EQUIPMENT - Net 1,970,605 2,012,121 MARKETABLE SECURITIES 1,723,520 1,727,440 OTHER ASSETS 774,059 712,924 ------------ ------------- TOTAL ASSETS $ 13,320,836 $ 13,499,684 ------------ ------------- ------------ ------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 112,499 $ 110,649 Accounts payable 265,743 698,410 Accrued salaries & payroll taxes 540,137 513,558 Accrued interest & other expenses 426,665 445,065 Accrued income taxes 151,424 162,274 Deferred revenue 196,684 191,701 ------------ ------------- Total current liabilities 1,693,152 2,121,657 LONG-TERM DEBT - Less current maturities 779,749 808,726 DEFERRED INCOME TAXES 200,048 200,048 ------------ ------------- Total liabilities 2,672,949 3,130,431 ------------ ------------- SHAREHOLDERS' EQUITY: Capital stock, $.Ol par value. Authorized 10,000,000 shares, issued and outstanding 4,147,799 shares at May 31, 1995 and 4,146,949 at February 28, 1995. 41,477 41,469 Additional paid-in capital 5,343,433 5,342,371 Retained Earnings 5,262,977 4,985,413 ------------ ------------- Total shareholders' equity 10,647,887 10,369,253 ------------ ------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 13,320,836 $ 13,499,684 ------------ ------------- ------------ -------------
See accompanying notes to condensed financial statements. 3 BIO-LOGIC SYSTEMS CORP FORM 10Q-SB CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (UNAUDITED)
Three Months Ended May 31, ------------------------- 1995 1994 ----------- ----------- (unaudited) NET SALES $3,666,987 $2,453,628 COST OF SALES 1,313,262 897,254 ---------- ---------- Gross Profit 2,353,725 1,556,374 ---------- ---------- OPERATING EXPENSES: Selling, general & administrative 1,598,774 1,225,304 Research & development 375,844 393,517 ---------- ---------- Total operating expenses 1,974,618 1,618,821 ---------- ---------- OPERATING INCOME (LOSS) 379,107 (62,447) OTHER INCOME (EXPENSE): Interest income 45,975 51,503 Interest expense (18,962) (11,992) Miscellaneous 444 243 ---------- ---------- TOTAL OTHER INCOME 27,457 39,754 INCOME (LOSS) BEFORE INCOME TAXES 406,564 (22,693) PROVISION (BENEFIT) FOR INCOME TAXES 129,000 (3,000) ---------- ---------- NET INCOME (LOSS) $ 277,564 $ (19,693) ---------- ---------- ---------- ---------- RETAINED EARNINGS, BEGINNING OF PERIOD 4,985,413 4,245,001 ---------- ---------- RETAINED EARNINGS, END OF PERIOD $5,262,977 $4,225,308 ---------- ---------- ---------- ---------- EARNINGS PER SHARE: Primary and Fully Diluted $.07 $0.00 ---------- ---------- ---------- ----------
See accompanying notes to condensed financial statements. 4 BIO-LOGIC SYSTEMS CORP FORM 10Q-SB CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended May 31, --------------------------- 1995 1994 --------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 277,564 $ (19,693) Adjustments to reconcile net income (loss) to net cash flows from operating activities: Depreciation and amortization 84,055 74,709 Provision for bad debts 3,000 3,000 Provision for inventory valuation 77,250 40,461 (Increases) decreases in assets: Accounts receivable (462,575) (263,426) Inventories (69,190) (167,489) Income taxes receivable 0 (61,578) Prepaid expenses 32,876 (4,148) Increases (decreases) in liabilities: Accounts payable and overdrafts (432,667) (81,560) Accrued liabilities and deferred revenue 13,162 80,876 Accrued income taxes (10,850) (69,522) ---------- -------- Net cash flows from operating activities (487,375) (468,370) ---------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (25,183) (62,381) Investments in other assets (78,491) (14,654) Purchases of investments (5,787) 0 Proceeds from maturities of investments 0 22,737 ---------- --------- Net cash flows from investing activities (109,461) (54,298) ---------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 1,070 10,434 Payments of long-term debt (27,127) (25,388) ---------- --------- Net cash flows from financing activities (26,057) (14,954) ---------- --------- DECREASE IN CASH AND CASH EQUIVALENTS (622,893) (537,622) CASH AND CASH EQUIVALENTS - Beginning of period 1,187,388 1,010,329 ---------- ---------- CASH AND CASH EQUIVALENTS - End of period $ 564,495 $ 472,707 ---------- ---------- ---------- ---------- SUPPLEMENTAL DISCLOSURES OF CASH FLOWS: Cash paid during the period for: Interest $ 19,538 $ 17,683 ---------- ---------- ---------- ---------- Income Taxes $ 139,850 $ 128,100 ---------- ---------- ---------- ----------
See accompanying notes to condensed financial statements 5 BIO-LOGIC SYSTEMS CORP FORM 10Q-SB NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. The information furnished in this report reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods. The results of operations for the three months ended May 31, 1995 are not necessarily indicative of the results to be expected for the full year. 2. INVENTORIES Inventories principally consist of components, parts and supplies. 3. NET INCOME PER SHARE Primary earnings per share are based on the weighted average number of common and dilutive common equivalent shares outstanding during each quarter. The weighted average shares for computing primary earnings per share were 4,214,975 and 4,237,289 for the quarters ended May 31, 1995 and May 31, 1994, respectively. Fully diluted earnings per share are based on the weighted average number of common and dilutive common equivalent shares calculated at quarter-end market prices. The weighted average shares for computing fully diluted earnings per share were 4,260,343 and 4,237,289 for the quarters ended May 31, 1995, and 1994, respectively. 4. ACCOUNTING FOR INCOME TAXES The Company adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes," effective March 1, 1993. This standard requires an asset and liability approach of accounting for income taxes. Deferred tax assets and liabilities are computed annually for differences between financial statement basis and tax basis of assets, liabilities and available general business tax credit carry-forwards. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. 6 BIO-LOGIC SYSTEMS CORP FORM 10Q-SB Deferred tax assets and liabilities as of May 31, 1995 are comprised of the following: Deferred tax liabilities: Depreciation $ 76,802 Research and development 123,246 Total deferred tax liabilities 200,048 Deferred tax assets: Accounts receivable 51,318 Inventory 70,813 Vacation 12,601 Warranty 60,774 Other 4,181 Tax credit carry-forwards 11,856 Less: current deferred tax - DISC income deferral (72,292) --------- Total deferred current tax assets - net 139,251 Net deferred tax liability $ 60,797 --------- ---------
5. MARKETABLE SECURITIES Effective March 1, 1994, the company adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (SFAS No. 115.) As required by SFAS 115, securities are classified into three categories: trading, held-to-maturity, and available for sale. Debt securities that the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity debt securities. The entire Company's portfolio of debt securities has been classified as held-to-maturity and are stated at cost, with premiums amortized and discounts accredited using the simple-interest method. 7 BIO-LOGIC SYSTEMS CORP FORM 10Q-SB Investment Securities Held-To-Maturity The amortized cost, unrealized gains, unrealized losses and estimated fair values of investment securities are summarized as follows:
Gross Gross Estimated Unrealized Unrealized Fair May 31, 1995 Amortized Cost Gains Losses Value - ------------ -------------- ---------- ---------- ---------- US Government securities $3,360,887 $ 0 $13,077 $3,347,810 May 31, 1994 - ------------ US Government securities $4,323,344 $ 0 $56,659 $4,266,685
At May 31, 1995, the maturities of marketable securities held-to-maturity are as follows:
Estimated Fair Term to Maturity Amortized Cost Value - ---------------- -------------- --------------- Due one year or less $1,637,367 $1,632,408 Due after one year through five years 1,723,520 1,715,402 ---------- ---------- Total $3,360,887 $3,347,810 ---------- ---------- ---------- ----------
6. SUBSEQUENT EVENT - STOCK REPURCHASE On June 1, 1995 the Board of Directors of the Company authorized the repurchase, from time to time, of up to 100,000 shares of the Company's common stock. As of the date of this report, the Company had made no repurchases of its common stock. 8 BIO-LOGIC SYSTEMS CORP FORM 10Q-SB ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES As of May 31, 1995 the Company had working capital of $7,159,500 including $2,201,862 in cash, cash equivalents and short-term investments. In addition, as of May 31, 1995, the Company has long-term investments of $1,723,520 in US Government Treasury Notes. The Company believes its capital and liquidity requirements for the foreseeable future will be satisfied by available and internally generated funds. To the extent the Company's capital and liquidity requirements are not satisfied internally, the Company may utilize a $ 1,000,000 unsecured bank line of credit, all of which is currently available. Borrowings under this line will bear interest at the bank's prime rate. Cash flow for the three months ended May 31, 1995 decreased by $622,893 and net cash flow from operations decreased $487,375. The decrease in cash flow from operations primarily reflects an increase in accounts receivable from higher net sales and a reduction in accounts payable due to cash payments to vendors. The Company's accounts receivable and payable balances at May 31, 1995 increased $462,575 and $432,667, respectively, from the net accounts receivable and payable balances at February 28, 1995. RESULTS OF OPERATIONS Net sales for the three months ended May 31, 1995 increased by approximately 50% to $3,666,987 from $2,453,628 for the three months ended May 31, 1994. Domestic sales increased by 52% to $2,673,323 for the three months ended May 31, 1995 from $1,753,161 for the three months ended May 31, 1994. Foreign sales of $993,664 contributed 27% of net sales for the three months ended May 31, 1995, a increase of 42% from $700,467 for the three months ended May 31, 1994. The Company attributes the increase in domestic and foreign sales to the strong continued acceptance of the Ceegraph-Trademark- product line and sales of the LBM series EMG product line first introduced on July 1, 1994. Cost of sales as a percentage of net sales decreased to 36% from 37% for the three months ended May 31, 1995 and 1994, respectively. This slight decrease in cost of sales reflects the higher efficiencies in the Company's manufacturing processes. Selling, general and administrative expenses increased by 30% to $1,598,774 from $1,225,304 during the three months ended May 31, 1995, and 1994, respectively, and as a percentage of net sales, decreased to 44% from 50% for the three months ended May 31, 1995 and May 31 1994, respectively. The increase in selling, general and administrative expenditures reflects additional costs from an expanded direct sales force plus higher sales costs associated with the increased net sales for the quarter ended May 31, 1995 compared to the quarter ended May 31, 1994. The decrease in selling, general and administrative expenditures as a percentage of net sales is due to the fixed cost component of these expenditures not increasing at the same rate as net sales for the three month period ending May 31, 1995. Research and development costs decreased by 4% to $375,844 from $393,517 for the three months ended May 31, 1995, and 1994, respectively, and as a percentage of net sales, decreased to 10% from 16% for the three months ended May 31, 1995 and 1994, respectively. This decrease is attributable to the capitalization of approximately $58,600 in certain research and development costs associated with specific identifiable future products. 9 BIO-LOGIC SYSTEMS CORP FORM 10Q-SB For the three months ended May 31, 1995, the Company had operating income of $379,107 compared to an operating loss of $62,447 for the three months ended May 31, 1994. This operating profit for the three months ended May 31, 1995 is due to significantly higher net sales and lower research and development costs partially offset by higher selling, general and administrative expenses. Net interest income decreased to $27,013 from $39,511 for the three month periods ended May 31, 1995 and 1994, respectively. This decrease reflects lower investment returns and higher interest rates on long-term debt. The income tax provision of $129,000 or 32% of income before taxes for the three month period ended May 31, 1995 and the income tax benefit of $3,000, or 13% of net loss before taxes for the three month period ended May 31, 1994 differ from the federal statutory rate of 35% due to the differences between financial statement basis and tax basis of assets, liabilities and available general business tax credit carry-forwards. The Company had net income of $277,564 or $0.07 per share for the three month period ended May 31, 1995 compared to net loss of $19,693 or $0.00 per share for the three month period ended May 31, 1994. The increase in earnings reflect significantly higher net sales resulting in higher gross profit, which was offset by both increases in selling, general, and administrative costs and income tax expense, as previously discussed. 10 BIO-LOGIC SYSTEMS CORP FORM 10Q-SB PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON 8-K (a) Exhibits 3.1 Certificate of Incorporation, Certificate of Amendment to Certificate of Incorporation, Agreement of Merger and Certificate of Merger and By-Laws (1) 3.2 Certificate of Amendment to Certificate of Incorporation (7) 10.1 Lease between the Company and Harris Trust & Savings Bank dated August 9, 1983 (2) 10.2 Technology License Agreement between the Company and Neurographic Technologies dated August 13, 1984 (3) 10.3 Real Estate Sale Contract between the Company and First National Bank of Lake Forest, as Trustee, dated December 23, 1985 (4) 10.4 Loan Agreement between the Company and Village of Mundelein, Illinois dated as of December 1, 1985 (4) 10.5 Mortgage and Security Agreement between the Company and Village of Mundelein, Illinois dated as of December 1, 1985 (4) 10.6 Bond Purchase Agreement between the Company and First American Bank of Dundee dated as of December 1, 1985 (4) 10.7 Agreement among Gabriel Raviv, Gil Raviv, Charles Z. Weingarten and the Company (5) 10.8 Employment Agreement between the Company and Gabriel Raviv (5) 10.9 Employment Agreement between the Company and Gil Raviv (5) 10.10 Form of Export Property Sale, Commission and Lease Agreement between the Company and Bio-logic International Corporation (6) 10.11 Agreement and General Release between the Company and Gil Raviv (9) 10.12 Letter dated May 2, 1994 from First American Bank to the Company (10) 10.13 Letter of Intent dated June 30, 1994 by and among the Company, Luther Medical Products, Inc. and Neuro Diagnostics, Inc. (11) 10.14 Asset Purchase Agreement dated as of July 1, 1994 by and among the Company, NDI Acquisition Corp., Luther Medical Products, Inc. and Neuro Diagnostics, Inc. (12) 21. Subsidiaries of the Company (8) 23. Consent of Independent Auditors (13) 27. Financial Data Schedule
11 BIO-LOGIC SYSTEMS CORP FORM 10Q-SB - ----------------------- (1) Incorporated by reference from the Company's Registration Statement on Form S-18 filed on August 7, 1981 (File No. 2-73587-C). (2) Incorporated by reference from the Company's Report on Form 10-Q for the quarter ended August 31, 1983. (3) Incorporated by reference from the Company's Annual Report on Form 10-K for the year ended February 28, 1985. (4) Incorporated by reference from the Company's Report on Form 10-Q for the quarter ended November 30, 1985. (5) Incorporated by reference from the Company's Registration Statement on Form S-1 (File No. 33-5471). (6) Incorporated by reference from the Company's Report on Form 10-Q for the quarter ended May 31, 1986. (7) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended February 28, 1987. (8) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended February 28, 1990. (9) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended February 28, 1993. (10) Incorporated by reference from the Company's Annual Report on Form 10-K for the Fiscal Year ended February 28, 1994. (11) Incorporated by reference from the Company's Report on Form 10-Q for the quarter ended May 31, 1994. (12) Incorporated by reference from the Company's Report on Form 10-Q for the quarter ended August 31, 1994. (13) Incorporated by reference from the Company's Annual Report on Form 10K-SB for the Fiscal Year ended February 28, 1995. (b) The Registrant did not file any reports on Form 8-K during the three months ended May 31, 1995 12 BIO-LOGIC SYSTEMS CORP FORM 10Q-SB SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: July 14, 1995 By: /s/ Gabriel Raviv ------------------------------- Gabriel Raviv, President Date: July 14, 1995 By: /s/ William K. Roenitz ------------------------------- William K. Roenitz, Controller and Asst. Treasurer 13 EX-27 2 EXHIBIT 27
5 3-MOS FEB-28-1996 MAY-31-1995 564,495 3,360,887 3,701,442 136,098 2,887,927 8,852,652 4,271,604 2,300,999 13,320,836 1,693,152 892,248 41,477 0 0 10,606,410 13,320,836 3,666,987 3,666,987 1,313,262 1,313,262 0 3,000 18,962 406,564 129,000 277,564 0 0 0 277,564 .07 .07
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