-----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, WmN33Iv7YQ0mSp/KdtYCfsoyredsjtXz2hviUP/G2DZfSmiRTZUTAdemfCtV760V NzSN5OEwUlXXLLOIlsO3ig== /in/edgar/work/20000810/0001104659-00-000400/0001104659-00-000400.txt : 20000921 0001104659-00-000400.hdr.sgml : 20000921 ACCESSION NUMBER: 0001104659-00-000400 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATRION CORP CENTRAL INDEX KEY: 0000701288 STANDARD INDUSTRIAL CLASSIFICATION: [3841 ] IRS NUMBER: 630821819 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-10763 FILM NUMBER: 691512 BUSINESS ADDRESS: STREET 1: ONE ALLENTOWN PARKWAY CITY: ALLEN STATE: TX ZIP: 75002 BUSINESS PHONE: 9723909800 MAIL ADDRESS: STREET 1: POST OFFICE 3869 CITY: MUSCLE SHOALS STATE: AL ZIP: 356623869 FORMER COMPANY: FORMER CONFORMED NAME: ALATENN RESOURCES INC DATE OF NAME CHANGE: 19920703 10-Q 1 0001.txt QUARTERLY REPORT 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 PERIOD ENDED JUNE 30, 2000 COMMISSION FILE NUMBER 0-10763 ATRION CORPORATION (Exact Name of Registrant as Specified in its Charter) DELAWARE 63-0821819 ----------------------------------- ----------------------------------- (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) ONE ALLENTOWN PARKWAY, ALLEN, TEXAS 75002 ----------------------------------------- (Address of Principal Executive Offices) (Zip Code) (972) 390-9800 -------------- (Registrant's Telephone Number, Including Area Code) Indicate by check 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. NUMBER OF SHARES OUTSTANDING AT TITLE OF EACH CLASS AUGUST 5, 2000 - ----------------------------------------- -------------------------------- COMMON STOCK, PAR VALUE $0.10 PER SHARE 2,035,593 ATRION CORPORATION AND SUBSIDIARIES TABLE OF CONTENTS PART I. FINANCIAL INFORMATION 2 ITEM 1. Financial Statements Consolidated Statements of Income (Unaudited) For the Three and Six Months Ended June 30, 2000 and 1999 3 Consolidated Balance Sheets (Unaudited) June 30, 2000 and December 31, 1999 4-5 Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2000 and 1999 6 Notes to Consolidated Financial Statements (Unaudited) 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders 11 ITEM 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 1 PART I FINANCIAL INFORMATION 2 ATRION CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 ---------------------------------- ---------------------------------- 2000 1999 2000 1999 (In thousands, except per share data) (In thousands, except per share data) ----------------- ---------------- ----------------- ---------------- Revenues $ 13,042 $ 12,737 $ 26,027 $ 24,318 Cost of goods sold 7,903 7,527 15,907 14,483 -------------- -------------- -------------- -------------- Gross profit 5,139 5,210 10,120 9,835 -------------- -------------- -------------- -------------- Operating expenses: Selling expense 1,901 1,822 3,833 3,489 General and administrative 1,696 1,796 3,339 3,448 Research and development 498 679 1,040 1,379 -------------- -------------- -------------- -------------- 4,095 4,297 8,212 8,316 -------------- -------------- -------------- -------------- Operating income 1,044 913 1,908 1,519 -------------- -------------- -------------- -------------- Other income (expense): Interest expense, net (185) (78) (323) (72) Other (expense) income (15) - (12) 10 -------------- -------------- -------------- -------------- (200) (78) (335) (62) -------------- -------------- -------------- -------------- Income from continuing operations before provision for income taxes 844 835 1,573 1,457 Provision for income taxes 205 215 402 444 -------------- -------------- -------------- -------------- Income from continuing operations 639 620 1,171 1,013 Gain on disposal of discontinued operations, net of income taxes 99 165 99 165 -------------- -------------- -------------- -------------- Net income $ 738 $ 785 $ 1,270 $ 1,178 ============== ============== ============== ============== Earnings per basic share: Continuing operations $ 0.31 $ 0.24 $ 0.57 $ 0.37 Gain on disposal of discontinued operations 0.05 0.06 0.05 0.06 ------------- ------------- ------------- ------------- $ 0.36 $ 0.30 $ 0.62 $ 0.43 ============= ============= ============= ============= Weighted average basic shares outstanding 2,044 2,582 2,072 2,750 ============= ============= ============= ============= Earnings per diluted share: Continuing operations $ 0.30 $ 0.23 $ 0.53 $ 0.36 Gain on disposal of discontinued operations 0.05 0.06 0.05 0.06 ------------- ------------- ------------- ------------- $ 0.35 $ 0.29 $ 0.58 $ 0.42 ============= ============= ============= ============= Weighted average diluted shares outstanding 2,134 2,640 2,194 2,787 ============= ============= ============= ==============
The accompanying notes are an integral part of these consolidated statements. 3 ATRION CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 30, DECEMBER 31, ASSETS 2000 1999 - ------ ---------------------- ---------------------- Current assets: (In thousands) Cash and cash equivalents $ 90 $ 70 Accounts receivable 8,684 8,522 Inventories 10,233 9,106 Prepaid expenses and other 1,098 1,004 -------------- -------------- 20,105 18,702 -------------- -------------- Property, plant and equipment: Original cost 35,874 34,417 Less accumulated depreciation and amortization 9,539 7,999 -------------- -------------- 26,335 26,418 -------------- -------------- Deferred charges: Patents 3,164 3,316 Goodwill 13,092 13,393 Other 2,820 2,811 -------------- -------------- 19,076 19,520 -------------- -------------- $ 65,516 $ 64,640 ============== ==============
The accompanying notes are an integral part of these Consolidated Balance Sheets. 4 ATRION CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 30, DECEMBER 31, LIABILITIES AND STOCKHOLDERS' EQUITY 2000 1999 - ------------------------------------ --------------------- --------------------- Current liabilities: Accounts payable and accrued liabilities $ 5,085 $ 3,957 -------------- -------------- 5,085 3,957 -------------- -------------- Long-term debt, less current maturities 10,047 10,417 -------------- -------------- Other noncurrent liabilities 7,327 7,693 -------------- -------------- Stockholders' equity: Common shares, par value $0.10 per share; authorized 10,000,000 shares, issued 3,419,953 shares 342 342 Paid-in capital 6,403 6,403 Retained earnings 50,384 49,114 Treasury shares, 1,384,360 shares in 2000 and 1,322,360 shares in 1999, at cost (14,072) (13,286) -------------- -------------- Total stockholders' equity 43,057 42,573 -------------- -------------- $ 65,516 $ 64,640 ============== ==============
The accompanying notes are an integral part of these Consolidated Balance Sheets. 5 ATRION CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30 --------------------------------------------- 2000 1999 ------------------- ------------------- Cash flows from operating activities: Net income $ 1,270 $ 1,178 Adjustments to reconcile net income to net cash provided by operating activities: Gain on disposal of discontinued operations (99) (165) Depreciation and amortization 1,993 1,869 Deferred income taxes (432) 146 Other 56 (235) ------------- -------------- 2,788 2,793 Change in current assets and liabilities: (Increase) in accounts receivable (162) (1,367) (Increase) in other current assets (1,221) (1,220) Increase in accounts payable 661 1,980 Increase in other current liabilities 467 229 ------------- ------------- Net cash provided by continuing operations 2,533 2,415 Net cash provided by discontinued operations 99 165 ------------- ------------- 2,632 2,580 ------------- ------------- Cash flows from investing activities: Property, plant and equipment additions (1,457) (9,523) ------------- ------------- (1,457) (9,523) ------------- ------------- Cash flows from financing activities: (Decrease) increase in long-term indebtedness (370) 6,022 Issuance of common stock 23 - Repurchase of common stock (808) (4,613) ------------- ------------- (1,155) 1,409 ------------- ------------- Net change in cash and cash equivalents 20 (5,534) Cash and cash equivalents at beginning of period 70 5,635 ------------- ------------- Cash and cash equivalents at end of period $ 90 $ 101 ============= ============= Cash paid for: Interest (net of capitalized amounts) $ 374 $ 60 Income taxes (net of refunds) $ 162 $ 132
The accompanying notes are an integral part of these consolidated statements. 6 ATRION CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (1) BASIS OF PRESENTATION In the opinion of management, all adjustments necessary for a fair presentation of results of operations for the periods presented have been included in the accompanying unaudited consolidated financial statements of Atrion Corporation (the "Company"). Such adjustments consist of normal recurring items. The accompanying financial statements have been prepared in accordance with the instructions to Form 10-Q and include the information and notes required by such instructions. Accordingly, the consolidated financial statements and notes thereto should be read in conjunction with the financial statements and notes included in the Company's 1999 Annual Report on Form 10-K. 7 ATRION CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2000 The Company's consolidated net income for the quarter ended June 30, 2000 was $738,000, or $.36 per basic and $.35 per diluted share, compared with $785,000, or $.30 per basic and $.29 per diluted share, for the second quarter of 1999. Income from continuing operations for the second quarter of 2000 was $639,000, or $.31 per basic and $.30 per diluted share, compared with $620,000, or $.24 per basic and $.23 per diluted share, for the second quarter of 1999. The earnings per basic share computations are based on weighted average basic shares outstanding of 2,043,780 in 2000 and 2,582,342 in 1999. The earnings per diluted share computations are based on weighted average diluted shares outstanding of 2,133,642 in 2000 and 2,639,815 in 1999. Consolidated revenues of $13.0 million for the second quarter of 2000 were $.3 million or 2 percent higher than revenues for the second quarter of 1999. Gross profit of $5.1 million in the second quarter of 2000 was $71,000 or 1 percent lower than that in the comparable 1999 period. The Company's gross profit for the second quarter of 2000 was 39 percent of sales, which was lower than the gross profit percentage for the same period in 1999 of 41 percent of sales. The lower gross profit percentage in 2000 is primarily the result of product mix and manufacturing inefficiencies at certain of the Company's operations. The Company's second quarter 2000 operating expenses of $4.1 million were $202,000 lower than the operating expenses for the second quarter of 1999. General and administrative (G&A) expenses for the second quarter of 2000 were $100,000 lower than G&A expenses for the same period in 1999 primarily as a result of lower spending on outside services. Research and development (R&D) expenses were $181,000 lower for the three months ended June 30, 2000 as compared with the same 1999 period. This reduction is primarily the result of decreased costs associated with the development of the Company's MPS during the current-year period. Selling expenses for the three months ended June 30, 2000 were $78,000 higher than in the comparable 1999 period. Operating income in the second quarter of 2000 totaled $1,044,000 compared with $913,000 in the second quarter of 1999. Net interest expense for the second quarter of 2000 was $185,000 compared with net interest expense of $78,000 for the same period in 1999. This change is primarily attributable to additional borrowings under the Company's revolving credit facility to fund its repurchases of outstanding common stock of the Company during 1999 and 2000. Under the terms of the Company's sale of its natural gas operations in 1997, certain annual contingent payments of up to $250,000 per year may be paid to the Company over an eight-year period that began in 1999. Pursuant to such arrangement, the Company received payments of $250,000 each in the second quarters of 2000 and 1999. During the three months ended June 30, 2000, the Company recorded a write-down of $100,000 related to certain natural gas properties held for sale. After taking that write-down into account, the Company recorded a gain on the disposal of discontinued operations of $99,000 after tax, or $.05 per basic and diluted share, for the three months ended June 30, 2000 compared with a gain of $165,000 after tax, or $.06 per basic and diluted share, for the three months ended June 30, 1999. 8 The Company anticipates that earnings per share from continuing operations for the third and fourth quarters of 2000 will exceed the comparable 1999 periods. The Company also believes that 2000 earnings per share from continuing operations will exceed the 1999 level by at least 25%. RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2000 The Company's consolidated net income for the six-month period ended June 30, 2000 was $1.3 million, or $.62 per basic and $.58 per diluted share, compared with $1.2 million, or $.43 per basic and $.42 per diluted share, for the first six months of 1999. Income from continuing operations for the first six months of 2000 was $1.2 million, or $.57 per basic and $.53 per diluted share, compared with $1.0 million, or $.37 per basic and $.36 per diluted share. The earnings per basic share computations are based on weighted average basic shares outstanding of 2,071,527 in 2000 and 2,750,266 in 1999. The earnings per diluted share computations are based on weighted average diluted shares outstanding of 2,194,493 in 2000 and 2,787,270 in 1999. Consolidated revenues of $26.0 million for the six months ended June 30, 2000 were $1.7 million or 7 percent higher than revenues for the six months ended June 30, 1999. Gross profit of $10.1 million for the first six months of 2000 was $285,000 or 3 percent higher than that in the comparable period of 1999. The Company's gross profit for the six months ended June 30, 2000 was 39 percent of sales, which was lower than the gross profit percentage for the same period in 1999 of 40 percent of sales. The lower gross profit percentage in 2000 is primarily related to manufacturing inefficiencies at certain of the Company's operations. The Company's operating expenses of $8.2 million for the first six months of 2000 were $104,000 lower than operating expenses for the first six months of 1999. G&A expenses for the first six months of 2000 were $109,000 lower than G&A expenses for the same period in 1999. R&D expenses were $339,000 lower for the six months ended June 30, 2000 as compared with the same 1999 period primarily as a the result of decreased costs associated with the development of the Company's MPS during the current period. Selling expenses for the six months ended June 30, 2000 were $344,000 higher than the comparable 1999 period. This increase is primarily attributable to the expansion of marketing efforts associated with the Company's MPS product line. Operating income in the six months ended June 30, 2000 totaled $1.9 million compared with $1.5 million in the same period of 1999. Net interest expense for the six months ended June 30, 2000 was $323,000 compared with net interest expense of $72,000 for the same period in 1999. This change is primarily attributable to additional borrowings under the Company's revolving credit facility to fund its repurchases of outstanding common stock of the Company. Increases in benefits from the Company's foreign sales corporation and tax credits attributable to the Company's research and development activities resulted in a lower effective income tax rate, and contributed to improved earnings, in the first six months of 2000 as compared to the six months ended June 30,1999. As discussed above, the Company recorded a gain on the disposal of discontinued operations relating to the sale of its natural gas operations of $99,000 after tax, or $.05 per basic and diluted share, for the six months ended June 30, 2000 compared with a 9 gain of $165,000 after tax, or $.06 per basic and diluted share, for the six months ended June 30, 1999. LIQUIDITY AND CAPITAL RESOURCES At June 30, 2000, the Company had cash and cash equivalents of $90,000 compared with $70,000 at December 31, 1999. The Company had long-tem debt of $10.1 million under its $18.5 million revolving credit facility at June 30, 2000 compared with long-term debt of $10.4 million at December 31, 1999. This reduction in long-term debt from December 31, 1999 to June 30, 2000 was primarily funded by net cash from operating activities remaining after capital expenditures and repurchases of outstanding common stock of the Company. In April 2000, the Company's Board of Directors authorized a program under which the Company may repurchase up to 200,000 shares of its common stock in open market or negotiated transactions at such times and at such prices as management may from time to time decide. The Company believes that its existing cash and cash equivalents, cash flows from operations, borrowings available under the Company's revolving credit facility and other equity or debt financing, which the Company believes would be available, will be sufficient to fund the Company's cash requirements for at least the foreseeable future. FORWARD-LOOKING STATEMENTS The statements in this Management's Discussion and Analysis that are forward-looking are based upon current expectations, and actual results may differ materially. Therefore, the inclusion of such forward-looking information should not be regarded as a representation by the Company that the objectives or plans of the Company would be achieved. Such statements include, but are not limited to, the Company's expectations regarding earnings per share from continuing operations for the third and fourth quarters of 2000 and for the year 2000, as well as future liquidity and capital resources. Words such as "anticipates," "believes," "expects," "estimated" and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements contained herein involve numerous risks and uncertainties, and there are a number of factors that could cause actual results to differ materially including, but not limited to, the following: changing economic, market and business conditions, market acceptance of the Company's products, the effects of governmental regulation, the impact of competition and new technologies, slower-than-anticipated introduction of new products or implementation of marketing strategies, changes in the prices or availability of raw materials, changes in product mix, product recalls, the ability to attract and retain qualified personnel and the loss of any significant customer. In addition, assumptions relating to budgeting, marketing, product development and other management decisions are subjective in many respects and thus susceptible to interpretations and periodic review which may cause the Company to alter its marketing, capital expenditures or other budgets, which in turn may affect the Company's results of operations and financial condition. 10 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company held its 2000 Annual Meeting of Stockholders on April 25, 2000 at its offices in Allen, Texas. At such meeting, the Company's stockholders ratified the Board of Director's appointment of Arthur Andersen LLP as independent accountants with 1,633,657 shares voted for ratification, 11,771 voted against and 4,910 abstentions. The voting with respect to the nominees for election as directors was as follows: NOMINEE VOTES FOR VOTES WITHHELD ------- --------- -------------- Richard O. Jacobson 1,613,507 36,831 Jerome J. McGrath 1,612,907 37,431 Hugh J. Morgan, Jr. 1,613,507 36,831 The terms of the following directors continued after the meeting: Roger F. Stebbing, John P. Stupp, Jr., Emile A. Battat and John H. P. Maley. ITEM 5. OTHER INFORMATION None 11 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27 Financial Data Schedules (filed electronically only) (b) No reports on Form 8-K have been filed during the quarter ended June 30, 2000. 12 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 thereunto duly authorized. ATRION CORPORATION ------------------ (Registrant) Date: August 10, 2000 /S/ EMILE A. BATTAT ------------------- Emile A. Battat Chairman, President and Chief Executive Officer Date: August 10, 2000 /S/ JEFFERY STRICKLAND ---------------------- Jeffery Strickland Vice President and Chief Financial Officer 13 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 0000701288 Atrion Corporation 1,000 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 90 0 8,684 0 10,233 20,105 35,874 9,539 65,516 5,085 10,047 0 0 342 42,715 65,516 26,027 26,027 15,907 15,907 8,212 0 323 1,573 402 1,171 99 0 0 1,270 0.62 0.58
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