-----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, E1oJ5SlmPJCQ2v8f12RGVN+1hz8y85MMmu2EChy39bjkH4Y8aP2Hcgq5Bi7BpJZ0 qvEF/I2ZKd6YWHab54n4fA== 0000950148-95-000672.txt : 19951025 0000950148-95-000672.hdr.sgml : 19951025 ACCESSION NUMBER: 0000950148-95-000672 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951024 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIAGNOSTIC PRODUCTS CORP CENTRAL INDEX KEY: 0000702259 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 952802182 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09957 FILM NUMBER: 95583565 BUSINESS ADDRESS: STREET 1: 5700 W 96TH ST CITY: LOS ANGELES STATE: CA ZIP: 90045 BUSINESS PHONE: 2137760180 10-Q 1 FORM 10-Q 1 =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------- FORM 10-Q [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 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 number 1-9957 Diagnostic Products Corporation (Exact name of registrant as specified in its charter) CALIFORNIA 95-2802182 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5700 WEST 96TH STREET LOS ANGELES, CALIFORNIA 90045 (Address of principal executive offices) Registrant's telephone number: (213) 776-0180 NO CHANGE (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ YES X ][NO ] The number of shares of Common Stock, no par value, outstanding as of September 30, 1995, was 13,357,203. =============================================================================== 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, ------------------- -------------------- 1995 1994 1995 1994 ------- ------- -------- ------- SALES $40,530 $30,643 $118,265 $88,548 ------- ------- -------- ------- COSTS AND EXPENSES: Cost of sales 19,066 13,275 53,299 38,358 Selling 6,951 5,589 20,357 16,810 Research and development 3,970 3,337 11,917 9,790 General and administrative 3,337 3,056 10,651 9,346 Equity in income of affiliates (125) (221) (740) (1,145) Investment income (610) (141) (1,280) (347) ------- ------- -------- ------- Total costs and expenses 32,589 24,895 94,204 72,812 ------- ------- -------- ------- INCOME BEFORE INCOME TAXES 7,941 5,748 24,061 15,736 PROVISION FOR INCOME TAXES 2,050 1,430 6,260 4,050 ------- ------- -------- ------- NET INCOME $ 5,891 $ 4,318 $17,801 $11,686 ======= ======= ======== ======= NET INCOME PER SHARE OF COMMON STOCK: Primary $ .43 $ .32 $1.29 $ .87 Fully Diluted .41 .31 1.24 .84 AVERAGE COMMON SHARES OUTSTANDING: Primary 13,846 13,572 13,838 13,501 Fully Diluted 14,251 13,936 14,326 13,933
1 3 DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands) September 30, December 31, 1995 1994 ------------- ------------ ASSETS (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 15,954 $ 14,833 Accounts receivable - net of allowance for doubtful accounts of $85 and $76 38,656 32,076 Inventories 32,964 28,324 Prepaid expenses and other current assets 613 983 Deferred income taxes 2,123 2,123 -------- -------- Total current assets 90,310 78,339 PROPERTY, PLANT AND EQUIPMENT: Land and buildings 27,376 26,224 Machinery and equipment 36,365 31,040 Leasehold improvements 6,179 6,175 Construction in progress 1,552 162 -------- -------- Total 71,472 63,601 Less accumulated depreciation and amortization 30,622 26,337 -------- -------- Property, plant and equipment - net 40,850 37,264 SALES-TYPE AND OPERATING LEASES 15,548 8,005 DEFERRED INCOME TAXES 2,537 2,537 INVESTMENTS IN AFFILIATED COMPANIES 12,532 12,775 EXCESS OF COST OVER NET ASSETS ACQUIRED - Net of amortization of $5,127 and $4,453 16,699 13,815 -------- -------- TOTAL ASSETS $178,476 $152,735 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 15,717 $ 11,667 Accrued liabilities 3,973 5,124 Income taxes payable 1,922 844 -------- -------- Total current liabilities 21,612 17,635 SHAREHOLDERS' EQUITY: Common Stock - no par value, authorized 30,000,000 shares; outstanding 13,357,203 shares and 12,952,880 shares. 33,697 27,334 Retained earnings 126,389 113,041 Foreign currency translation adjustments (3,222) (5,275) -------- -------- Total shareholders' equity 156,864 135,100 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $178,476 $152,735 ======== ========
2 4 DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in Thousands) Nine Months Ended September 30, ------------------------ 1995 1994 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $17,801 $11,686 Adjustments to reconcile net income to net cash flows from operating activities (Net of effects from 1995 purchase of Brazilian distributor): Depreciation and amortization 4,363 4,089 Equity in undistributed income of unconsolidated affiliates 243 (354) Accounts receivable (3,940) (4,889) Inventories (3,957) (723) Prepaid expenses and other current assets 370 48 Accounts payable (7,077) (372) Accrued liabilities (1,151) (392) Income taxes payable 1,052 (437) ------- ------- Net Cash Flows from Operating Activities 7,704 8,656 CASH FLOWS FROM (USED FOR) INVESTING ACTIVITIES: Additions to property, plant and equipment (5,264) (3,157) Sales-type and operating leases (3,719) (1,888) Purchase of Brazilian distributor (1) ------- ------- Net Cash from (used for) Investing Activities (8,984) (5,045) CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES: Proceeds from exercise of stock options 6,363 184 Cash dividends paid (4,453) (3,905) Repurchase of common stock (2,429) ------- ------- Net Cash from (used for) Financing Activities 1,910 (6,150) EFFECT OF EXCHANGE RATE CHANGES ON CASH 491 350 ------- ------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,121 (2,189) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 14,833 12,884 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $15,954 $10,695 ======= =======
3 5 DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 1 -- BASIS OF PRESENTATION The information for the nine months ended September 30, 1995 and 1994 has not been audited by independent accountants, but includes all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for such periods. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the requirements of the Securities and Exchange Commission, although the Company believes that the disclosures included in these financial statements are adequate to make the information not misleading. The consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 1994 annual report on Form 10-K as filed with the Securities and Exchange Commission. The results of operations for the nine-month period ending September 30, 1995 are not necessarily indicative of the results to be expected for the year ended December 31, 1995. Net income per share - primary is based upon the weighted average number of common shares outstanding, including stock options when dilutive. Net income per share - fully diluted is based upon the weighted average number of common shares outstanding and the assumed exercise of all dilutive stock options, including the effect of contingent options. NOTE 2 -- INVENTORIES Inventories by major categories are summarized as follows:
September 30, December 31, 1995 1994 ----------- ----------- Raw materials $10,697,000 $ 9,259,000 Work in process 13,807,000 11,233,000 Finished goods 8,460,000 7,832,000 ----------- ----------- Total $32,964,000 $28,324,000 =========== ===========
4 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Record sales of $40.5 million were achieved in the third quarter 1995, a 32% increase over the third quarter 1994. Sales for the nine months were a record $118.3 million, a 34% increase over 1994. The sales increases are principally a result of the continuing increased worldwide acceptance of the fully automated, random access IMMULITE system. The system is expected to account for the greatest amount of growth of all the Company's product lines for the foreseeable future. In periods when the U.S. dollar is weakening, the effect of translation of the financial statements of the consolidated foreign affiliates is that of higher sales, costs and net income. The weaker U.S. dollar in the third quarter 1995 when compared to the third quarter 1994 resulted in higher reported sales of approximately 5% and higher reported net income of approximately 3%. For the nine month period, the weaker 1995 U.S. dollar resulted in higher reported sales of approximately 7% and higher reported net income of approximately 4%. Cost of sales as a percentage of sales in the 1995 third quarter and nine months was 47% and 45% compared to 43% in the corresponding periods in 1994. These increases are due to higher cost of sales percentages derived from the manufacture and sale of instruments at lower margins. Selling expenditures increased approximately 24% and 21% in the 1995 third quarter and nine months compared to 1994 representing 17% of sales in 1995 and 18% and 19% of sales in 1994. These increased costs are a result of the continued expansion of the marketing and sales effort, especially for the IMMULITE system. Research and development expenditures increased 19% in the 1995 third quarter and 22% in the1995 nine months over the corresponding periods of the prior year. These expenditures have increased to support the IMMULITE system. General and administrative costs were approximately 8% and 9% of sales in the 1995 third quarter and nine months compared to approximately 10% of sales in the 1994 periods. Included in general and administrative expenses is the amortization of the excess of cost over net assets acquired. Equity in income of affiliates, which decreased 43% in the 1995 third quarter and decreased 35% in the 1995 nine months when compared to the 1994 periods, represents the Company's share of earnings of nonconsolidated affiliates, principally the 45%-owned Italian affiliate. Profitability in Italy continued to be adversely effected by reduced sales caused by current serious economic problems and reductions in health care cost reimbursements. As of September 1, 1995, the Company acquired a 56% equity interest in DPC Medlab Produtos Hospitalares Ltda., the Company's Brazilian distributor. The Company's effective tax rate includes Federal, state and foreign taxes. The 1995 rate of 26% approximates the 1994 rate of 26%. The Company has adequate working capital and sources of capital to carry on its current business and to meet its existing capital requirements. Cash flow from operating activities was $7.7 million in 1995 nine months compared to $8.7 million in 1994 period. During 1994 and the first quarter of 1995, the Company paid a quarterly cash dividend of $.10 per share. Commencing with the second quarter of 1995, the quarterly dividend was increased to $.12 per share. In March 1994, the Company repurchased 129,200 shares of its Common Stock in the open market at a cost of $2,429,000. 5 7 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits 27 Financial Data Schedule (b) Reports on Form 8-K. None. 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. DIAGNOSTIC PRODUCTUS CORPORATION (Registrant) October 24, 1995 Sigi Ziering - -------------------------------- --------------------------------------- Date Sigi Ziering, Ph.D., Chairman of the Board Chief Executive Officer October 24, 1995 Julian R. Bockserman - -------------------------------- --------------------------------------- Date Julian R. Bockserman, Vice President Chief Financial Officer 6 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 U.S. DOLLARS 9-MOS DEC-31-1995 SEP-30-1995 1 15,954 0 38,656 85 32,964 90,310 71,472 30,622 178,476 21,612 0 33,697 0 0 123,167 178,476 118,265 118,265 53,229 53,229 40,905 0 0 24,061 6,260 17,801 0 0 0 17,801 1.29 1.24
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