-----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, LFyccfTHhGj3WK4DzHlgD8sMMk6oZNG5lH5s5Z8ng681Of0Cj+Ur/GAvBBm4PI9I etC+GM9Mjbg7fDT0kksknQ== 0000950148-96-001457.txt : 19960725 0000950148-96-001457.hdr.sgml : 19960725 ACCESSION NUMBER: 0000950148-96-001457 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960724 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: 96598017 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 June 30, 1996 [ ] 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 June 30, 1996, was 13,548,561. =============================================================================== 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 Six Months Ended June 30, June 30, ----------------------------------------------------- 1996 1995 1996 1995 --------- --------- --------- --------- SALES $43,369 $38,534 $86,615 $77,735 --------- --------- --------- --------- COSTS AND EXPENSES: Cost of sales 18,032 16,971 36,120 34,233 Selling 8,561 6,803 16,618 13,406 Research and development 4,484 4,077 8,868 7,947 General and administrative 4,102 3,172 8,751 7,314 Equity in income of affiliates (357) (295) (803) (615) Investment income (357) (359) (764) (670) --------- --------- --------- --------- Total costs and expenses 34,465 30,369 68,790 61,615 --------- --------- --------- --------- INCOME BEFORE INCOME TAXES 8,904 8,165 17,825 16,120 PROVISION FOR INCOME TAXES 2,340 2,060 4,760 4,210 --------- --------- --------- --------- NET INCOME $ 6,564 $ 6,105 $13,065 $11,910 ========= ========= ========= ========= NET INCOME PER SHARE $ .47 $ .44 $ .94 $ .86 WEIGHTED AVERAGE SHARES AND EQUIVALENTS OUTSTANDING 13,984 13,986 13,963 13,834
1 3 DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands) June 30, December 31, 1996 1995 --------- --------- ASSETS (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 7,744 $ 16,519 Accounts receivable-net of allowance for doubtful accounts of $80 and $77 46,296 40,802 Inventories 40,754 35,521 Prepaid expenses and other current assets 526 358 Deferred income taxes 3,451 3,451 --------- --------- Total current assets 98,771 96,651 PROPERTY, PLANT AND EQUIPMENT: Land and buildings 27,734 27,553 Machinery and equipment 41,191 38,607 Leasehold improvements 6,690 6,635 Construction in progress 762 836 --------- --------- Total 76,377 73,631 Less accumulated depreciation and amortization 33,964 31,707 --------- --------- Property, plant and equipment - net 42,413 41,924 SALES-TYPE AND OPERATING LEASES 19,350 18,128 DEFERRED INCOME TAXES 3,200 3,200 INVESTMENTS IN AFFILIATED COMPANIES 14,562 13,279 EXCESS OF COST OVER NET ASSETS ACQUIRED- Net of amortization of $5,865 and $5,373 15,567 16,280 --------- --------- TOTAL ASSETS $193,863 $189,462 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $ 2,705 Accounts payable 12,019 $ 16,969 Accrued liabilities 3,998 5,708 Income taxes payable 2,764 3,435 --------- --------- Total current liabilities 21,486 26,112 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common Stock-no par value, authorized 30,000,000 shares; outstanding 13,548,561 shares and 13,524,051 shares. 35,583 35,179 Retained earnings 140,952 131,136 Foreign currency translation adjustments (4,158) (2,965) --------- --------- Total shareholders' equity 172,377 163,350 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $193,863 $189,462 ========= =========
2 4 DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in Thousands) Six Months Ended June 30, ------------------------- 1996 1995 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 13,065 $ 11,910 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 3,305 2,683 Equity in undistributed income of unconsolidated affiliates (802) 27 Accounts receivable (6,173) (5,405) Inventories (5,432) (3,938) Prepaid expenses and other current assets (168) 157 Accounts payable (4,360) 500 Accrued liabilities (1,710) (1,455) Income taxes payable (633) 2,930 --------- --------- Net Cash Flows from Operating Activities (2,908) 7,409 CASH FLOWS FROM (USED FOR) INVESTING ACTIVITIES: Additions to property, plant and equipment (3,427) (3,892) Sales-type and operating leases (1,659) (2,650) Investment in affiliated company (481) --------- --------- Net Cash from (used for) Investing Activities (5,567) (6,542) CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES: Borrowing 2,737 Proceeds from exercise of stock options 404 2,575 Cash dividends paid (3,249) (2,865) --------- --------- Net Cash from (used for) Financing Activities (108) (290) EFFECT OF EXCHANGE RATE CHANGES ON CASH (192) 900 --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (8,775) 1,477 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 16,519 14,833 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,744 $ 16,310 ========= =========
3 5 DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 1--BASIS OF PRESENTATION The information for the six months ended June 30, 1996 and 1995 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 1995 annual report on Form 10-K as filed with the Securities and Exchange Commission. The results of operations for the six-month period ending June 30, 1996 are not necessarily indicative of the results to be expected for the year ended December 31, 1996. Net income per share has been computed using the weighted-average number of common shares and common share equivalents outstanding during each period. Common share equivalents represent the dilutive effect of outstanding stock options. NOTE 2--INVENTORIES Inventories by major categories are summarized as follows:
June 30, December 31, 1996 1995 ----------- ----------- Raw materials $13,970,000 $11,414,000 Work in process 16,410,000 14,567,000 Finished goods 10,374,000 9,540,000 ----------- ----------- Total $40,754,000 $35,521,000 =========== ===========
4 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Record sales of $43.4 million were achieved in the second quarter of 1996, a 13% increase over the second quarter 1995. Sales for the six months were a record $86.6 million, an 11% increase over 1995. 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 strengthening, the effect of translation of the financial statements of the consolidated foreign affiliates is that of lower sales, costs and net income. The stronger U.S. dollar in the second quarter 1996 when compared to the second quarter 1995 resulted in lowered reported sales of approximately 3% and lower reported net income of 1%. The stronger U.S. dollar in the six months 1996 when compared to the 1995 six-month period resulted in lower reported sales of approximately 2% and lower reported net income of 1%. Cost of sales as a percentage of sales was 42% in the 1996 second quarter and six months as compared to 44% in the corresponding 1995 periods. The 1996 results continue the improvement trend set in the 1995 fourth quarter principally resulting from increased utilization at the Wales manufacturing facility and at the New Jersey IMMULITE instrument manufacturing facility. Selling costs as a percent of sales were 20% in the 1996 second quarter and 19% in the 1996 six-month period compared to 18% and 17% in the corresponding 1995 periods. These increased costs are a result of the continual expansion of the marketing and sales effort, especially for the IMMULITE system. Research and development expenses increased 10% in 1996 second quarter over 1995. In the 1996 six-month period, the expenses increased 12% over 1995. These expenditures have increased to support the IMMULITE system. In the 1996 and 1995 second quarters and six-month periods, the research and development costs as a percentage of sales were 10%. General and administrative costs were 9% of sales in the 1996 second quarter compared to 8% in the 1995 quarter. In the 1996 six-month period, the general and administrative costs were 10% compared to 9% in the 1995 period. Included in general and administrative expenses is the amortization of the excess of cost over net assets acquired and minority interest. Equity in income of affiliates, which increased 21% in the 1996 second quarter compared to the 1995 quarter and increased 31% in the 1996 six-month period over the 1995 period, represents the Company's share of earnings of nonconsolidated affiliates, principally the 45%-owned Italian affiliate. Profitability in Italy which in prior quarters had declined was modestly higher in the 1996 second quarter and six months when compared to 1995. The other affiliates reported increases in their second quarter and six months net income. The Company's effective tax rate includes Federal, state and foreign taxes. The 1996 rate of 27% approximates the 1995 rate of 26%. The Company has adequate working capital and sources of capital (including an unused $10 million unsecured line of credit) to carry on its current business and to meet its existing capital requirements. Cash flow used for operating activities was $2.9 million in the 1996 six months as compared to cash flow from operating activities of $7.4 million in the 1995 period. Cash flow in the 1996 period was primarily used for increases in accounts receivables and inventories and reduction of accounts payable. During 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. 5 7 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Company's Annual Meeting of Shareholders was held on May 8, 1996. The only matter voted on was the election of directors. Each nominee received the following votes:
Nominee For Withheld - --------------------------------------------------- Sigi Ziering 12,014,025 17,462 Sidney A. Aroesty 11,905,645 125,842 Marilyn Ziering 12,008,780 22,707 Maxwell H. Salter 12,006,555 24,932 James D. Watson 11,901,700 129,787 Michael Ziering 12,010,750 20,737 Frederick Frank 12,011,015 20,472
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 PRODUCTS CORPORATION (Registrant) JULY 24, 1996 SIGI ZIERING - ------------------------ -------------------------------- Date Sigi Ziering, Ph.D., Chairman of the Board Chief Executive Officer JULY 24, 1996 JULIAN R. BOCKSERMAN - ------------------------ -------------------------------- Date Julian R. Bockserman, Vice President Chief Financial Officer
6 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 7,744 0 46,296 80 40,754 98,771 76,377 33,964 193,863 21,486 0 0 0 35,583 140,952 172,377 86,615 86,615 36,120 36,120 32,670 0 0 17,825 4,760 13,065 0 0 0 13,065 .94 0
-----END PRIVACY-ENHANCED MESSAGE-----