-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, jMVc/5qS7+vsg/Ab+lg/ow3cqDz5x56/7ZZd0gu8kGFp8PLTzRfE2UH2CpHY060l GNOfeh4gF1Bk6NKb+SHuSw== 0000892569-95-000194.txt : 19950516 0000892569-95-000194.hdr.sgml : 19950516 ACCESSION NUMBER: 0000892569-95-000194 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HYCOR BIOMEDICAL INC /DE/ CENTRAL INDEX KEY: 0000719447 STANDARD INDUSTRIAL CLASSIFICATION: 2835 IRS NUMBER: 581437178 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11647 FILM NUMBER: 95536534 BUSINESS ADDRESS: STREET 1: 7272 CHAPMAN AVE CITY: GARDEN GROVE STATE: CA ZIP: 92641 BUSINESS PHONE: 7148959558 MAIL ADDRESS: STREET 2: 18800 VON KARMAN AVE CITY: IRVINE STATE: CA ZIP: 92715-1517 FORMER COMPANY: FORMER CONFORMED NAME: HYBRIDOMA SCIENCES INC DATE OF NAME CHANGE: 19860813 10-Q 1 FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 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: 0-11647 HYCOR BIOMEDICAL INC. (Exact name of registrant as specified in its charter) Delaware 58-1437178 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 18800 Von Karman Avenue, Irvine, California 92715-1517 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (714) 440-2000 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 [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class Outstanding at April 30, 1995 ----- ----------------------------- Common Stock, $.01 Par Value 8,283,175
2 PART I. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS HYCOR BIOMEDICAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31, ASSETS 1995 1994 ---------- ------------ (unaudited) CURRENT ASSETS: Cash and cash equivalents 1,422,525 1,366,956 Investments 2,202,830 2,475,078 Accounts Receivable, net of allowance for doubtful accounts of $216,141 and $170,841 4,370,829 4,263,335 Income Tax Receivable 679,770 90,170 Inventories (Note 2) 6,720,658 6,725,565 Deposits and other prepaids 458,888 621,416 Deferred income tax benefit 652,017 610,000 ---------- ---------- Total current assets 16,507,517 16,152,520 ---------- ---------- PROPERTY AND EQUIPMENT, at cost 11,946,709 12,058,248 Less accumulated depreciation (6,047,141) (5,639,674) ---------- ---------- 5,899,568 6,418,574 ---------- ---------- GOODWILL AND OTHER INTANGIBLES, net of amortization of $907,001 and $741,543 5,714,609 5,459,039 DEFERRED INCOME TAX BENEFIT 620,000 620,000 OTHER ASSETS, net 397,336 350,166 ---------- ---------- Total assets 29,139,030 29,000,299 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable 721,685 1,104,520 Accrued liabilities 1,275,145 1,726,461 ---------- ---------- Total current liabilites 1,996,830 2,830,981 ---------- ---------- STOCKHOLDERS' EQUITY: Common stock 82,832 82,269 Paid-in capital 17,162,263 16,971,456 Retained earnings 9,634,263 9,084,739 Foreign currency translation adjustments 331,432 144,138 Unrealized losses on investments, net (68,590) (113,284) ---------- ---------- Total stockholders' equity 27,142,200 26,169,318 ---------- ---------- Total liabilities and stockholders' equity 29,139,030 29,000,299 ========== ==========
Page 2 3 HYCOR BIOMEDICAL INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three Months Ended March 31, ---------------------------- 1995 1994 ---- ---- NET SALES 6,492,935 6,553,111 COST OF SALES 2,895,013 2,766,117 --------- --------- Gross profit 3,597,922 3,786,994 --------- --------- OPERATING EXPENSES Selling, general and administrative 2,334,275 2,154,734 Research and development 634,560 496,823 --------- --------- 2,968,835 2,651,557 --------- --------- OPERATING INCOME 629,087 1,135,437 INTEREST INCOME, net 60,726 124,610 GAIN ON FOREIGN CURRENCY TRANSACTION 231,327 - --------- --------- INCOME BEFORE TAXES 921,140 1,260,047 PROVISION FOR INCOME TAXES 371,617 483,500 --------- --------- NET INCOME 549,523 776,547 ========= ========= NET INCOME PER SHARE $.07 $.09 AVERAGE COMMON SHARES OUTSTANDING 8,283,922 8,438,019
Page 3 4 HYCOR BIOMEDICAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended March 31, 1995 1994 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income 549,524 776,548 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 568,727 350,618 Deferred income tax benefit 42,017 149 Gain on foreign currency transactions (231,327) - Change in assets and liabilities, net of effects of acquisitions, foreign currency adjustments and noncash transactions: Accounts receivable (57,228) 1,352,263 Inventories 40,688 (353,191) Prepaid expenses and other assets 133,816 3,777 Accounts payable (385,257) (221,640) Accrued liabilities (511,087) (461,684) Accrued income taxes (590,519) 268,372 --------- --------- Total adjustments (990,170) 938,664 --------- --------- Net cash provided by (used in) operating activities (440,646) 1,715,212 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sales of investments 336,808 2,036,390 Business acquisitions, net of cash acquired - (1,989,487) Purchases of tangible and intangible assets, net (228,122) (481,316) Proceeds from collection of notes receivable 6,734 4,819 --------- --------- Net cash provided by (used) in investing activities 115,420 (429,594) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock 191,370 207,799 Purchases of common stock - (1,173,475) --------- --------- Net cash provided by (used in) financing activities 191,370 (965,676) --------- --------- EFFECT OF EXCHANGE RATE CHANGES ON CASH 189,426 30,871 INCREASE IN CASH AND CASH EQUIVALENTS 55,570 350,813 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,366,956 683,573 --------- --------- CASH AND CASH EQUIVALENTS, END OF PERIOD 1,422,526 1,034,386 ========= =========
Page 4 5 HYCOR BIOMEDICAL INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1995 1. BASIS OF PRESENTATION In the opinion of the Company, the accompanying financial statements contain adjustments necessary to present fairly the financial position as of March 31, 1995 and December 31, 1994, the results of operations and the cash flows for the three month periods ended March 31, 1995 and 1994. The results of operations for any interim period are not necessarily indicative of results for the full year. These statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and do not include all the information and note disclosures required by generally accepted accounting principles for complete financial statements and may be subject to year-end adjustments. The financial information contained in this report reflects all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods. All adjustments are of a normal recurring nature except for those costs described in the following Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations." The consolidated financial statements include the accounts of Hycor Biomedical Inc. and its wholly-owned subsidiaries. All material intercompany amounts and transactions have been eliminated. Reference is made to the audited financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. Net income per share is based upon the weighted average number of shares outstanding during the periods plus common stock equivalents relating to warrants and options. The number of common stock equivalents relating to options and warrants is determined using the treasury stock method. Common stock equivalents are not included when their effect is antidilutive. Fully diluted net income per share approximates primary net income per share in each period. 2. INVENTORIES Inventories are valued at the lower of cost (first-in, first-out method) or market. Cost includes material, direct labor and manufacturing overhead. Inventories at March 31, 1995 and December 31, 1994 consist of:
3/31/95 12/31/94 ------- -------- Raw materials $2,193,985 $2,122,387 Work in process 2,853,322 2,836,388 Finished goods 2,456,674 2,536,877 Allowance for short- dated inventory (783,323) (770,087) ---------- ---------- $6,720,658 $6,725,565 ========== ==========
Page 5 6 3. ACQUISITIONS On October 3, 1994, the Company completed the acquisition of Medical Specialties International, Inc. (MSI) of So. Plainfield, New Jersey. MSI primarily manufactures and sells hematology controls in domestic markets. 4. FOREIGN CURRENCY Realized gains or losses from foreign currency transactions are included in operations as incurred and relate to intercompany balances amounting to approximately $2,053,000 between Hycor and its German subsidiary. The Company has not hedged this foreign currency exchange rate position. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations FINANCIAL CONDITION The Company increased its working capital $1,189,000 as of March 31, 1995, compared to December 31, 1994. This was primarily as a result of continued profitability. The Company expects to be able to fund operations from current working capital and profits generated from operations. Cash and cash equivalents, marketable securities and receivables fluctuate throughout the year based upon the sales of products through distributors and the timing of the distributors related payments to the Company. These fluctuations do not have a significant seasonal component. Income taxes receivable increased $590,000 as of March 31, 1995, compared to December 21, 1994, primarily due to recovery of foreign taxes paid in association with the January 1994 acquisition of Melja Diagnostik GmbH. The Company's principal capital commitments are for lease payments under non-cancelable operating leases and leasehold improvements. Working capital and operating profits are anticipated to be sufficient to satisfy these commitments. The Company is continuing to evaluate for acquisition additional product lines and companies in the medical diagnostics field. The Company could use sources other than cash from operations, such as issuance of debt or equity securities, to finance any such acquisition. If such an acquisition were completed, the Company's operating results and financial condition could change significantly in future periods. RESULTS OF OPERATIONS During the three month period ended March 31, 1995, sales decreased 1%, compared to the same period last year, primarily due to a general softness in the health care industry offset by the contribution from MSI operations. Gross profit for the quarter as a percentage of product sales decreased from approximately 58% to 55%, primarily due to issues associated with the manufacture of the new HY.TEC(TM) reagents which generated unfavorable production variances. We do not expect these variances to continue. Page 6 7 Selling, general and administrative expenses for the three month period ended March 31, 1995 have increased slightly for the quarter due to the additional expenses from MSI and the marketing and sales support on the HY.TEC launch. For the three month period ended March 31, 1995, research and development costs increased primarily due to continuing development on the HY.TEC product line. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K: None SIGNATURE 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. HYCOR BIOMEDICAL INC. Date: May 11, 1995 By: Armando Correa ------------------ ----------------------------------- Armando Correa, Director of Finance (Mr. Correa is the Principal Accounting Officer and has been duly authorized to sign on behalf of the registrant.) Page 7 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE QUARTER ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1995. 1 U.S. DOLLARS 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 1 1,422,525 2,202,830 4,586,970 216,141 6,720,658 16,507,517 11,946,709 6,047,141 29,139,030 1,996,830 0 82,832 0 0 27,059,368 29,139,030 6,492,935 6,492,935 2,895,013 2,895,013 2,968,835 0 0 921,140 371,617 549,523 0 0 0 549,523 0.07 0.07
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