-----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, Q+5qAPrDsju0J7ir3ciYUL4dzfANpQE7n+ZWsCK7JPrWsEKmZhOFQ+DwuUC4MMJ6 MoqavEr68h157tEaWkEPnw== 0000950148-97-001012.txt : 19970425 0000950148-97-001012.hdr.sgml : 19970425 ACCESSION NUMBER: 0000950148-97-001012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970424 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: 97586484 BUSINESS ADDRESS: STREET 1: 5700 W 96TH ST CITY: LOS ANGELES STATE: CA ZIP: 90045 BUSINESS PHONE: 2137760180 10-Q 1 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 March 31, 1997 [ ] 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 March 31, 1997, was 13,613,818. ================================================================================ 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 March 31, ------------------------- 1997 1996 -------- -------- SALES $ 44,400 $ 43,246 -------- -------- COSTS AND EXPENSES: Cost of sales 19,682 18,088 Selling 8,659 8,057 Research and development 4,756 4,384 General and administrative 5,526 4,649 Equity in income of affiliates (281) (446) Investment income (315) (407) -------- -------- Total costs and expenses 38,027 34,325 -------- -------- INCOME BEFORE INCOME TAXES 6,373 8,921 PROVISION FOR INCOME TAXES 1,710 2,420 -------- -------- NET INCOME $ 4,663 $ 6,501 ======== ======== NET INCOME PER SHARE $ .34 $ .47 WEIGHTED AVERAGE SHARES AND EQUIVALENTS OUTSTANDING 13,867 13,942
1 3 DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands) March 31, December 31, 1997 1996 --------- --------- ASSETS (Unaudited) CURRENT ASSETS: Cash and cash equivalents $ 7,425 $ 13,781 Accounts receivable - net of allowance for doubtful accounts of $82 and $76 49,279 45,631 Inventories 45,181 42,828 Prepaid expenses and other current assets 145 375 Deferred income taxes 3,663 3,663 --------- --------- Total current assets 105,693 106,278 PROPERTY, PLANT AND EQUIPMENT: Land and buildings 29,067 29,195 Machinery and equipment 46,387 46,043 Leasehold improvements 6,726 6,701 Construction in progress 770 700 --------- --------- Total 82,950 82,639 Less accumulated depreciation and amortization 37,756 37,192 --------- --------- Property, plant and equipment - net 45,194 45,447 SALES-TYPE AND OPERATING LEASES 22,361 22,056 DEFERRED INCOME TAXES 2,772 2,772 INVESTMENTS IN AFFILIATED COMPANIES 16,593 15,666 EXCESS OF COST OVER NET ASSETS ACQUIRED - Net of amortization of $6,503 and $6,357 14,391 14,783 --------- --------- TOTAL ASSETS $ 207,004 $ 207,002 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $ 4,354 $ 4,005 Accounts payable 13,525 13,024 Accrued liabilities 5,601 6,057 Income taxes payable 1,306 1,629 --------- --------- Total current liabilities 24,786 24,715 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common Stock - no par value, authorized 30,000,000 shares; outstanding 13,613,818 shares and 13,597,124 shares. 36,874 36,584 Retained earnings 150,610 147,579 Foreign currency translation adjustments (5,266) (1,876) --------- --------- Total shareholders' equity 182,218 182,287 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 207,004 $ 207,002 ========= =========
2 4 DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(Dollars in Thousands) Three Months Ended March 31, ---------------------- 1997 1996 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 4,663 $ 6,501 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 3,026 2,927 Equity in undistributed income of unconsolidated affiliates (281) (445) Accounts receivable (4,930) (3,251) Inventories (3,063) (2,556) Prepaid expenses and other current assets 230 197 Accounts payable 1,523 (2,908) Accrued liabilities (456) 367 Income taxes payable (277) 499 -------- -------- Net Cash Flows from Operating Activities 435 1,331 CASH FLOWS FROM (USED FOR) INVESTING ACTIVITIES: Additions to property, plant and equipment (2,761) (1,964) Sales-type and operating leases (2,354) (1,505) Investment in affiliated company (646) (481) -------- -------- Net Cash from (used for) Investing Activities (5,761) (3,950) CASH FLOWS FROM (USED FOR) FINANCING ACTIVITIES: Borrowing 669 Proceeds from exercise of stock options 290 265 Cash dividends paid (1,632) (1,624) -------- -------- Net Cash from (used for) Financing Activities (673) (1,359) EFFECT OF EXCHANGE RATE CHANGES ON CASH (357) (130) -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (6,356) (4,108) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 13,781 16,519 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,425 $ 12,411 ======== ========
3 5 DIAGNOSTIC PRODUCTS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 1 -- BASIS OF PRESENTATION The information for the three months ended March 31, 1997 and 1996 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 1996 annual report on Form 10-K as filed with the Securities and Exchange Commission. The results of operations for the three-month period ending March 31, 1997 are not necessarily indicative of the results to be expected for the year ended December 31, 1997. 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. In December 1997, the Company will be required to adopt Statement of Financial Accounting Standard No. 128, "Earnings per Share." The provisions of this statement will require a change in the method of calculating earnings per share which will result in an insignficant difference from currently reported earnings per share. NOTE 2 -- INVENTORIES Inventories by major categories are summarized as follows:
March 31, December 31, 1997 1996 ----------- ----------- Raw materials $17,992,000 $14,896,000 Work in process 17,296,000 17,472,000 Finished goods 9,893,000 10,460,000 ----------- ----------- Total $45,181,000 $42,828,000 =========== ===========
4 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Sales of $44.4 million were achieved in the first quarter of 1997 compared to $43.2 million in the first quarter 1996, an increase of approximately 3%. Growth in sales of IMMULITE instrumentation and reagents was partially offset by the continual decline of the Company's mature RIA product line. Unit sales of IMMULITE reagents increased 18% over the first quarter of 1996, reflecting the growing installed base for the system and key new tests introduced during the past year. 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 first quarter 1997 when compared to the first quarter 1996 resulted in lower reported sales of approximately 4 percentage points. Cost of sales as a percentage of sales was 44% in the 1997 quarter compared to 42% in the 1996 quarter. The increased 1997 costs were primarily the result of the transactional effect of the strengthening of the U.S. dollar in the first quarter 1997. The stronger U.S. dollar reduced gross margins by approximately 2 percentage points. Selling expenditures increased 7% in the 1997 quarter compared to the 1996 quarter representing 20% of sales in 1997 and 19% of sales in 1996. These increased costs are a result of the continual expansion of the marketing and sales effort, especially for the IMMULITE systems. Research and development expenditures increased 8% in the 1997 quarter over 1996. These expenditures have increased to support the IMMULITE systems. General and administrative expenses increased 19% in the first quarter 1997 over 1996. The increased costs in 1997 resulted primarily from the loss on the exchange rate recorded by the European subsidiaries on the strengthening of the U.S. dollar. Equity in income of affiliates represent the Company's share of earnings of nonconsolidated affiliates, principally the 45%-owned Italian affiliate. The Company's effective tax rate includes Federal, state and foreign taxes. The 1997 tax rate of 27% approximates the 1996 rate of 27%. 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 from operating activities was $435,000 in the first quarter 1997 compared to $1.3 million in the 1996 quarter. Cash flow in the 1997 quarter was primarily used for increases in accounts receivables and inventories. The quarterly cash dividend during 1996 and 1997 was $.12 per share. 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 PRODUCTS CORPORATION (Registrant) APRIL 24, 1997 SIGI ZIERING - --------------------------------- ------------------------------------------ Date Sigi Ziering, Ph.D., Chairman of the Board Chief Executive Officer APRIL 24, 1997 JULIAN R. BOCKSERMAN - --------------------------------- ------------------------------------------ Date Julian R. Bockserman, Vice President Chief Financial Officer 6 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 7,425 0 49,279 82 45,181 105,693 82,950 37,756 207,004 24,786 0 0 0 36,874 145,344 207,004 44,400 44,400 19,682 19,682 18,345 0 0 6,373 1,710 4,663 0 0 0 4,663 .47 0
-----END PRIVACY-ENHANCED MESSAGE-----