-----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, PtuCA85paWNKQISiyoJ1EO6bPa1AuywR2CMW9p8bGr7Ki7JrLRLJDyzek5aN38Wo TRfn1XbmkJToYTZM2d3RNQ== 0000950116-98-001650.txt : 19980812 0000950116-98-001650.hdr.sgml : 19980812 ACCESSION NUMBER: 0000950116-98-001650 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW BRUNSWICK SCIENTIFIC CO INC CENTRAL INDEX KEY: 0000071241 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY APPARATUS & FURNITURE [3821] IRS NUMBER: 221630072 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-06994 FILM NUMBER: 98682474 BUSINESS ADDRESS: STREET 1: 44 TALMADGE RD STREET 2: PO BOX 4005 CITY: EDISON STATE: NJ ZIP: 08818-4005 BUSINESS PHONE: 9082871200 MAIL ADDRESS: STREET 1: 44 TALMADGE ROAD STREET 2: PO BOX 4005 CITY: EDISON STATE: NJ ZIP: 08818-4005 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarter Ended June 30, 1998 Commission File No. 0-6994 ------ NEW BRUNSWICK SCIENTIFIC CO., INC. State of Incorporation - New Jersey E.I. #22-1630072 ----------- 44 Talmadge Road, Edison, N.J. 08818-4005 Registrant's Telephone Number: 732-287-1200 ------------ 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 twelve (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 ninety (90) days. Yes X No --- --- There are 4,685,569 Common shares outstanding as of August 7, 1998. Page 1 NEW BRUNSWICK SCIENTIFIC CO., INC. Index
PAGE NO. -------- PART I. FINANCIAL INFORMATION: Item 1: Consolidated Condensed Balance Sheets - June 30, 1998 and December 31, 1997 3 Consolidated Condensed Statements of Operations - Three and Six Months Ended June 30, 1998 and 1997 4 Consolidated Condensed Statements of Cash Flows - Six Months Ended June 30, 1998 and 1997 5 Consolidated Condensed Statements of Comprehensive Operations - Three and Six Months Ended June 30, 1998 and 1997 6 Notes to Consolidated Condensed Financial Statements 7 Item II: Management's Discussion and Analysis of Results of Operations and Financial Condition 8 PART II. OTHER INFORMATION 11
Page 2 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands, except for share data)
ASSETS ------ June 30, December 31, 1998 1997 -------- -------- Current Assets (Unaudited) Cash and cash equivalents $ 3,231 $ 3,968 Accounts receivable, net 8,144 10,602 Refundable income taxes 394 314 Deferred income tax benefit 134 134 Inventories: Raw materials and sub-assemblies 7,362 7,493 Work-in-process 3,480 2,668 Finished goods 5,766 4,701 -------- -------- Total inventories 16,608 14,862 Prepaid expenses and other current assets 1,927 1,819 -------- -------- Total current assets 30,438 31,699 -------- -------- Property, plant and equipment, net 5,564 5,354 Other assets 1,115 1,100 -------- -------- $ 37,117 $ 38,153 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Current Liabilities Current installments of long-term debt $ 53 $ 110 Accounts payable and accrued expenses 7,293 7,709 -------- -------- Total current liabilities 7,346 7,819 -------- -------- Long-term debt, net of current installments 233 247 -------- -------- Shareholders' equity: Common stock, $.0625 par value, authorized 25,000,000 shares; shares issued and outstanding, 1998 - 4,671,781 and 1997 - 4,204,845 net of shares held in treasury, 1998 - 430,063 and 1997 - 390,967 292 263 Capital in excess of par 27,828 23,854 Retained earnings 2,350 7,085 Accumulated other comprehensive income (932) (1,115) -------- -------- Total shareholders' equity 29,538 30,087 -------- -------- $ 37,117 $ 38,153 ======== ========
See notes to consolidated condensed financial statements. Page 3 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, -------- -------- 1998 1997 1998 1997 ---- ---- ---- ---- Net sales $ 10,076 $ 11,517 $ 21,026 $ 21,612 Operating costs and expenses: Cost of sales 6,136 7,098 12,975 13,480 Selling, general and administrative expenses 3,603 3,315 6,991 6,463 Research, development and engineering expenses 1,188 1,088 2,340 2,089 --------- --------- --------- -------- Total operating costs and expenses 10,927 11,501 22,306 22,032 --------- --------- --------- -------- Income (loss) from operations (851) 16 (1,280) (420) Other income (expense): Interest income 33 40 62 73 Interest expense (3) (19) (5) (27) Other income (expense), net (14) (5) (19) (4) --------- --------- --------- -------- 16 16 38 42 --------- --------- --------- -------- Income (loss) before income taxes (835) 32 (1,242) (378) Income taxes (benefit) (201) 6 (299) (76) --------- --------- --------- -------- Net income (loss) $ (634) $ 26 $ (943) $ (302) --------- --------- --------- -------- Basic earnings (loss) per share $ (.14) $ .01 $ (.20) $ (.07) ========= ========= ========= ======== Diluted earnings (loss) per share $ (.14) $ .01 $ (.20) $ (.07) ========= ========= ========= ======== Basic weighted average number of shares outstanding 4,653 4,614 4,643 4,612 ========= ========= ========= ======== Diluted weighted average number of shares outstanding 4,653 4,708 4,643 4,612 ========= ========= ========= ========
See notes to consolidated condensed financial statements. Page 4 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Six Months Ended June 30, ------------------------- 1998 1997 ------- ------- Cash flows from operating activities: Net loss $ (943) $ (302) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation 507 429 Discount from fair market value upon issue of options under stock option plan for nonemployee directors -- 35 Change in assets and liabilities: Accounts receivable 2,530 1,816 Refundable income taxes (80) 99 Inventories (1,714) (2,244) Prepaid expenses and other current assets (100) 134 Accounts payable and accrued expenses (295) (733) Advance payments from customers (120) (334) ------- ------- Net cash used by operating activities (215) (1,100) ------- ------- Cash flows from investing activities: Capital expenditures (729) (470) Investment -- (250) Sale of equipment 56 17 ------- ------- Net cash used by investing activities (673) (703) ------- ------- Cash flows from financing activities: Repayment of long-term debt (66) (60) Proceeds from issue of shares under Employee Stock Purchase Plan 44 38 Proceeds from issue of Common stock under stock option plans 167 8 ------- ------- Net cash provided (used) by financing activities 145 (14) ------- ------- Net effect of exchange rate changes on cash 6 (158) ------- ------- Net decrease in cash and cash equivalents (737) (1,975) Cash and cash equivalents at beginning of period 3,968 5,196 ------- ------- Cash and cash equivalents at end of period $ 3,231 $ 3,221 ======= ======= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 5 $ 26 Income taxes 89 213
See notes to consolidated condensed financial statements. Page 5 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS (In thousands) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, -------- -------- 1998 1997 1998 1997 ---- ---- ---- ---- Net income (loss) $ (634) $ 26 $ (943) $ (302) Other comprehensive income (loss): Foreign currency translation adjustment 57 (184) 183 (731) ------- ------- ------- ------- Total comprehensive loss (577) (158) (760) (1,033) Income taxes -- -- -- -- ------- ------- ------- ------- Net comprehensive loss $ (577) $ (158) $ (760) $(1,033) ======= ======= ======= =======
See notes to consolidated condensed financial statements. Page 6 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited) Note 1 - Interim results: In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly, its financial position as of June 30, 1998 and the results of its operations and cash flows for the six months ended June 30, 1998 and 1997. Interim results may not be indicative of the results that may be expected for the year. Note 2 - Earnings (loss) per Common share: Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares outstanding. Diluted earnings (loss) per share is calculated by dividing net income by the sum of the weighted average number of shares outstanding plus the dilutive effect, if any, of stock options which have been issued by the Company. The weighted average number of shares outstanding for the three and six month periods ended June 30, 1997, have been restated to reflect a 10% stock dividend distributed on May 15, 1998. Note 3 - Consolidated condensed statements of shareholders' equity:
Six Months Ended June 30, -------------------------- 1998 1997 -------- -------- (In thousands) Balance at beginning of period $ 30,087 $ 29,251 Net loss (943) (302) Other comprehensive income (loss) 183 (731) Discount from fair market value upon issue of options under stock option plan for nonemployee directors -- 35 Issue of shares under Employee Stock Purchase Plan 44 38 Issue of shares under stock option plans 167 8 -------- -------- Balance at end of period $ 29,538 $ 28,299 ======== ========
Page 7 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, are made throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "seeks," "estimates," and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements. The following is Management's discussion and analysis of significant factors that have affected the Company's operating results and financial condition during the quarter and six months ended June 30, 1998. Results of Operations --------------------- Quarter Ended June 30, 1998 vs. Quarter Ended June 30, 1997. For the quarter ended June 30, 1998, net sales were $10,076,000 compared with net sales of $11,517,000 for the quarter ended June 30, 1997, a decrease of 12.5%. The net loss for the 1998 quarter of $634,000 or $.14 per diluted share compares with net income of $26,000 or $.01 per diluted share for the second quarter of 1997. During the quarter ended June 30, 1998, shipments of custom bioprocess systems, due to their timing and nature, were significantly lower than in the comparable 1997 quarter and there has also been a decrease in export sales, particularly to Asia due to the adverse financial situation in that part of the world. Sales to Asia which amounted to approximately 12% for the second quarter of 1997 amounted to approximately 5% for the second quarter of 1998. Selling, general and administrative expenses increased due to normal annual increases and as the result of an effort to strengthen the Company's sales and service capabilities. Cost of sales as a percentage of net sales decreased to 60.9% for the quarter ended June 30, 1998 from 61.6% for the comparable 1997 quarter due to the lower shipments of custom bioprocess systems and lower export sales during the 1998 quarter since both carry lower profit margins than core products sold domestically. Research, development and engineering expenses increased to $1,188,000 in the 1998 quarter from $1,088,000 in the second quarter of 1997 due primarily to the strengthening of the Company's bioprocess engineering division as well as its new product development efforts and included $556,000 and $516,000, respectively, for the quarters ended June 30, 1998 and 1997 related to costs to support the research efforts of DGI BioTechnologies, the Company's drug lead discovery operation. Six Months Ended June 30, 1998 vs. Six Months Ended June 30, 1997 - ----------------------------------------------------------------- For the six months ended June 30, 1998, net sales were $21,026,000 compared with net sales of $21,612,000 for the six months ended June 30, 1997. The net loss for the 1998 period of Page 8 $943,000 or $.20 per diluted share compares with a net loss of $302,000 or $.07 per diluted share for the six months ended June 30, 1997. Selling, general and administrative expenses increased due to normal annual increases and as the result of an effort to strengthen the Company's sales and service capabilities. Research, development and engineering expenses increased to $2,340,000 in the 1998 period from $2,089,000 in the first six months of 1997 due primarily to the strengthening of the Company's bioprocess engineering division as well as its new product development efforts and included $1,037,000 and $974,000, respectively, for the six months ended June 30, 1998 and 1997 related to costs to support the research efforts of DGI BioTechnologies, the Company's drug lead discovery operation. Financial Condition ------------------- Liquidity and Capital Resources - ------------------------------- During the six months ended June 30, 1998, Cash and Cash Equivalents decreased to $3,231,000 from $3,968,000 at December 31, 1997. The decrease in cash resulted primarily from the net loss for the period of $943,000, an increase in inventories of $1,746,000, and a decrease in accounts payable and accrued expenses of $416,000, partially offset by a decrease in accounts receivable of $2,458,000. Work-in-process inventories increased to $3,480,000 at June 30, 1998 from $2,668,000 at December 31, 1997, primarily as a result of contracts for custom bioprocess systems which will be delivered during the third and fourth quarters. Finished goods inventories increased to $5,766,000 at June 30, 1998 from $4,701,000 at December 31, 1997, as a result of less than anticipated sales during the period. Cash Flows from Operating Activities - ------------------------------------ During the period ended June 30, 1998 and 1997 net cash used by operating activities amounted to $215,000 and $1,100,000, respectively. The primary reasons for the $885,000 change between the two periods were a decrease in accounts receivable of $2,530,000 in 1998 vs. a decrease of $1,816,000 in 1997, an increase in inventories of $1,714,000 in 1998 vs. an increase of $2,244,000 in 1997, a decrease in advance payments from customers in 1998 of $120,000 vs. a decrease of $334,000 in 1997 and a decrease in accounts payable and accrued expenses in 1998 of $295,000 vs. a decrease of $733,000 in 1997. Cash Flows from Investing Activities - ------------------------------------ Net cash used by investing activities amounted to $673,000 in 1998 vs. $703,000 in 1997, primarily as a result of additions to property, plant and equipment during 1998 and 1997 as well as from an investment in another entity in 1997. Cash Flows from Financing Activities - ------------------------------------ Net cash provided by financing activities amounted to $145,000 in 1998 vs. cash used of $14,000 in 1997. The 1998 amount includes $167,000 from the exercise of stock options and $44,000 from the issue of shares under the Company's Employee Stock Purchase Plan, partially offset by the repayment of long-term debt. The 1997 amount includes $8,000 from the exercise of stock options and $38,000 from the issue of shares under the Company's Employee Stock Purchase Plan, partially offset by repayment of long-term debt. Management believes that the resources available to the Company, including its line of credit are sufficient to meet its near and intermediate-term needs, including funding commitments for DGI Page 9 BioTechnologies, and its strong unleveraged balance sheet and debt-free real estate provide the basis for any long-term financing if the need should arise. Recent Accounting Pronouncements - -------------------------------- In June 1997, Statement of Financial Accounting Standards (SFAS) No. 131 "Disclosure About Segments of an Enterprise and Related Information", was issued to establish standards for public business enterprises reporting information regarding operating segments in annual and interim financial statements issued to shareholders. It also establishes standards for related disclosures about products and services, geographic areas and major customers. This statement is effective for financial statements for periods beginning after December 15, 1997. The Company has adopted SFAS 131 which does not require interim period reporting in the year of adoption. The Company is completing its evaluation of the disclosure requirements of SFAS 131 and will begin such disclosures in its Form 10-K filing for the year ended December 31, 1998. This statement does not have any effect on the results of operations or financial position of the Company. In June 1998, SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities", was issued to establish standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. This statement is effective for all quarters of fiscal years beginning after June 15, 1999. The Company does not believe that this statement will have a material impact on the financial statements. Page 10 NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K - ---------------------------------------- No reports on Form 8-K have been filed during the quarter ended June 30, 1998. Page 11 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. NEW BRUNSWICK SCIENTIFIC CO., INC. ---------------------------------- (Registrant) Date: August 10, 1998 /s/ Ezra Weisman ---------------------------------- Ezra Weisman President (Chief Executive Officer) /s/ Samuel Eichenbaum ---------------------------------- Samuel Eichenbaum Vice President - Finance (Principal Accounting Officer) Page 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 0000071241 NEW BRUNSWICK SCIENTIFIC CO., INC. 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 3,231,000 0 8,144,000 0 16,608,000 30,438,000 5,564,000 0 37,117,000 7,346,000 0 0 0 292,000 29,246,000 37,117,000 21,026,000 21,026,000 12,975,000 22,306,000 (43,000) 0 5,000 (1,242,000) (299,000) (943,000) 0 0 0 (943,000) (.20) (.20)
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