-----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, HbnpwpACenXPg6zkMgqkX7yqbe5qv+bskIi1ew8t8qPRP/+mZoU6CqXZTxF5cZ/T +S9ltTYO8rdle9/MEgr6zA== 0000950123-96-004347.txt : 19960814 0000950123-96-004347.hdr.sgml : 19960814 ACCESSION NUMBER: 0000950123-96-004347 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ISOMEDIX INC CENTRAL INDEX KEY: 0000719522 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 221986189 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12488 FILM NUMBER: 96609831 BUSINESS ADDRESS: STREET 1: 11 APOLLO DR CITY: WHIPPANY STATE: NJ ZIP: 07981 BUSINESS PHONE: 2018874700 MAIL ADDRESS: STREET 1: 11 APOLLO DR CITY: WHIPPANY STATE: NJ ZIP: 07981 10-Q 1 FORM 10-Q -- ISOMEDIX INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 10Q (Mark One) /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 OR / / 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 0-12488 --------- Isomedix Inc. ----------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 22-1986189 ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation of organization) 11 Apollo Drive, Whippany, New Jersey 07981 --------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (201) 887-4700 ---------------------------------------------------- (Registrant's telephone number, including area code) NOT APPLICABLE -------------------------------------------------------------- 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 --- --- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of June 30, 1996, 6,852,704 shares of common stock, $.01 par value. 2 ISOMEDIX INC. AND SUBSIDIARIES TABLE OF CONTENTS JUNE 30, 1996 Page Number PART I. FINANCIAL INFORMATION Item 1. Financial Statements CONSOLIDATED BALANCE SHEETS 3-4 June 30, 1996 and December 31, 1995 CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended June 30, 1996 and 1995 5 For the Six Months Ended June 30, 1996 and 1995 6 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY For the Six Months Ended June 30, 1996 7-8 CONSOLIDATED STATEMENTS OF CASH FLOWS 9 For the Six Months Ended June 30, 1996 and 1995 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10-12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13-19 PART II. OTHER INFORMATION 20-23 - 2 - 3 PART I. FINANCIAL INFORMATION Item 1. Financial Statements ISOMEDIX INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 1996 AND DECEMBER 31, 1995
June 30, December 31, 1996 1995 ------------ ------------ (Unaudited) ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 4,203,308 $ 4,860,088 Held-to-Maturity Securities 17,304,883 17,003,329 Accounts Receivable, Less Allowance for Doubtful Accounts of $475,000 at June 30, 1996 and $350,000 at December 31, 1995 8,583,491 8,048,560 Prepaid Expenses and Other Current Assets 991,011 830,629 ------------ ------------ Total Current Assets 31,082,693 30,742,606 ------------ ------------ PROPERTY, PLANT AND EQUIPMENT At Cost 68,378,868 66,751,900 Less, Accumulated Depreciation 19,203,009 17,855,870 ------------ ------------ 49,175,859 48,896,030 ------------ ------------ RADIOISOTOPE At Cost 68,470,904 66,096,338 Less, Accumulated Depreciation 38,757,083 36,624,237 ------------ ------------ 29,713,821 29,472,101 ------------ ------------ EXCESS OF COSTS OVER NET ASSETS ACQUIRED 712,106 725,906 OTHER ASSETS 2,984,337 2,186,868 ------------ ------------ Total Assets $113,668,816 $112,023,511 ============ ============
See accompanying notes to the consolidated financial statements. - 3 - 4
June 30, December 31, 1996 1995 ------------- ------------- LIABILITIES (Unaudited) CURRENT LIABILITIES Current Portion of Long-Term Debt $ 500,000 $ 500,000 Accounts Payable 816,041 766,914 Accrued Expenses 1,145,783 864,539 Contract Deposits 81,391 119,781 Income Taxes Payable 471,900 545,888 ------------- ------------- Total Current Liabilities 3,015,115 2,797,122 LONG-TERM DEBT 8,500,000 8,600,000 DEFERRED INCOME TAXES 8,647,256 8,453,497 ------------- ------------- Total Liabilities 20,162,371 19,850,619 ------------- ------------- STOCKHOLDERS' EQUITY PREFERRED STOCK $1.00 par value Authorized - 1,000,000 shares Issued and Outstanding - none COMMON STOCK $.01 par value Authorized - 15,000,000 shares Issued: June 30, 1996 - 7,169,868 shares December 31, 1995 - 7,169,868 shares Outstanding: June 30, 1996 - 6,852,704 shares December 31, 1995 - 6,984,528 shares 71,699 71,699 ADDITIONAL PAID-IN CAPITAL 37,683,481 37,719,155 RETAINED EARNINGS 60,426,865 57,167,649 ------------- ------------- 98,182,045 94,958,503 LESS, COMMON STOCK HELD IN THE TREASURY, AT COST June 30, 1996 - 317,164 shares December 31, 1995 - 185,340 shares (4,675,600) (2,785,611) ------------- ------------- Total Stockholders' Equity 93,506,445 92,172,892 ------------- ------------- Total Liabilities and Stockholders' Equity $ 113,668,816 $ 112,023,511 ============= =============
See accompanying notes to the consolidated financial statements. - 4 - 5 ISOMEDIX INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995 (Unaudited)
June 30, June 30, 1996 % 1995 % ------------ ----- ------------ ----- SALES $ 12,688,114 100.0 $ 11,479,351 100.0 COST OF SALES 6,231,186 49.1 5,461,840 47.6 ------------ ----- ------------ ----- GROSS PROFIT 6,456,928 50.9 6,017,511 52.4 SELLING, GENERAL & ADMINISTRATIVE EXPENSES 3,605,003 28.4 2,870,241 25.0 ------------ ----- ------------ ----- OPERATING INCOME 2,851,925 22.5 3,147,270 27.4 OTHER INCOME (EXPENSE) Investment Income 222,727 1.7 303,320 2.6 Interest Expense (116,808) (.9) (137,655) (1.2) ------------ ----- ------------ ----- INCOME BEFORE PROVISION FOR INCOME TAXES 2,957,844 23.3 3,312,935 28.8 PROVISION FOR INCOME TAXES 1,183,129 9.3 1,325,174 11.5 ------------ ----- ------------ ----- NET INCOME $ 1,774,715 14.0 $ 1,987,761 17.3 ============ ===== ============ ===== EARNINGS PER SHARE $ .25 $ .28 ============ ============
See accompanying notes to the consolidated financial statements. - 5 - 6 ISOMEDIX INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (Unaudited)
June 30, June 30, 1996 % 1995 % ------------ ----- ------------ ----- SALES $ 24,257,648 100.0 $ 22,934,377 100.0 COST OF SALES 12,326,996 50.8 10,997,518 48.0 ------------ ----- ------------ ----- GROSS PROFIT 11,930,652 49.2 11,936,859 52.0 SELLING, GENERAL & ADMINISTRATIVE EXPENSES 6,677,323 27.5 5,715,209 24.9 ------------ ----- ------------ ----- OPERATING INCOME 5,253,329 21.7 6,221,650 27.1 OTHER INCOME (EXPENSE) Investment Income 414,637 1.7 471,196 2.1 Interest Expense (235,954) (1.0) (272,907) (1.2) ------------ ----- ------------ ----- INCOME BEFORE PROVISION FOR INCOME TAXES 5,432,012 22.4 6,419,939 28.0 PROVISION FOR INCOME TAXES 2,172,796 9.0 2,567,976 11.2 ------------ ----- ------------ ----- NET INCOME $ 3,259,216 13.4 $ 3,851,963 16.8 ============ ===== ============ ===== EARNINGS PER SHARE $ .45 $ .53 ============ ============
- 6 - 7 ISOMEDIX INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 1996 (Unaudited)
TOTAL STOCKHOLDERS' EQUITY ------------- BALANCE - December 31, 1995 $ 92,172,892 Exercise of Stock Options 155,920 Acquisition of Treasury Stock (2,145,003) Sales of Common Stock Under Employee Stock Purchase Plan 63,420 Net Income 3,259,216 ------------ BALANCE - June 30, 1996 $ 93,506,445 ============
See accompanying notes to the consolidated financial statements. - 7 - 8
COMMON STOCK TREASURY STOCK --------------------- ADDITIONAL ------------------------ NUMBER PAID-IN RETAINED NUMBER OF SHARES AMOUNT CAPITAL EARNINGS OF SHARES AMOUNT BALANCE - December 31, 1995 7,169,868 $71,699 $37,719,155 $57,167,649 (185,340) ($2,785,611) Exercise of Stock Options (35,674) 12,700 191,594 Acquisition of Treasury Stock (150,000) (2,145,003) Sales of Common Stock Under Employee Stock Purchase Plan 5,476 63,420 Net Income 3,259,216 --------- ------- ----------- ----------- -------- ----------- BALANCE - June 30, 1996 7,169,868 $71,699 $37,683,481 $60,426,865 (317,164) ($4,675,600) ========= ======= =========== =========== ======== ===========
See accompanying notes to the consolidated financial statements. - 8 - 9 ISOMEDIX INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (Unaudited) Increase (Decrease) in Cash and Cash Equivalents
June 30, June 30, 1996 1995 ------------ ------------ Cash flows from operating activities: Net Income $ 3,259,216 $ 3,851,963 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,479,985 3,434,790 Amortization 112,927 342,700 Increase in allowance for doubtful accounts 125,000 Changes in assets and liabilities: (Increase) decrease in accounts receivable (659,931) 406,927 (Increase) decrease in prepaid expenses and other assets (137,314) 602,195 Increase (decrease)in accounts payable and accrued expenses 330,371 (941,569) (Decrease) increase in contract deposits (38,390) 36,114 (Decrease) increase in income taxes payable (73,988) 30,833 Increase in deferred income taxes 193,759 169,975 ------------ ------------ Net cash provided by operating activities 6,591,635 7,933,928 ------------ ------------ Cash flows from investing activities: Purchases of held to maturity securities (31,748,331) (9,410,034) Proceeds from maturity of held to maturity securities 31,446,777 5,685,932 Increase in equipment deposits (900,000) Additions to property, plant and equipment (1,626,968) (3,215,894) Additions to radioisotope (2,374,566) (863,134) Other (19,664) (32,745) ------------ ------------ Net cash used in investing activities (5,222,752) (7,835,875) ------------ ------------ Cash flows from financing activities: Payment of long-term debt (100,000) (425,000) Purchases of treasury stock (2,145,003) (1,275,944) Other (93,099) Proceeds of stock options exercised and employee stock purchases 219,340 287,728 ------------ ------------ Net cash used in financing activities (2,025,663) (1,506,315) ------------ ------------ Net decrease in cash and cash equivalents (656,780) (1,408,262) Cash and cash equivalents at beginning of period 4,860,088 5,961,473 ------------ ------------ Cash and cash equivalents at end of period $ 4,203,308 $ 4,553,211 ------------ ------------ Supplemental cash flow information: Cash paid for interest (net of amounts capitalized) $ 179,914 $ 272,907 ------------ ------------ Cash paid for income taxes $ 499,702 $ 1,856,339 ------------ ------------ Supplemental non-cash investing activities Additions to radioisotope in satisfaction of lease receivable $ 180,440 ------------
See accompanying notes to the consolidated financial statements. - 9 - 10 ISOMEDIX INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. The interim consolidated financial statements reflect all adjustments, consisting only of normal recurring accruals, which are, in the opinion of the Company's management, necessary for a fair statement of results for the periods presented. Operating revenues and net income for any interim period are not necessarily indicative of results for a full year. 2. Earnings per share have been computed based upon the weighted average number of shares of common stock outstanding during each period. For the three months ended June 30, 1996 and 1995, the numbers of shares used in computing earnings per share were 7,172,600 and 7,189,192, respectively. For the six months ended June 30, 1996 and 1995, the numbers of shares used in computing earnings per share were 7,182,112 and 7,227,558, respectively. 3. As of June 30, 1996, debt securities had a carrying value of $17,304,883 and a market value of $17,362,859. The market value is calculated using information provided by outside quotation services. The Company's investments consist of debt instruments from federal, and various state and municipal issuers with maturity dates not exceeding one year. Gross unrealized losses were $2,574 at June 30, 1996, compared to $237,326 at June 30, 1995. - 10 - 11 4. The Company has reclassified certain prior period amounts to conform with the 1996 presentation. 5. In April, 1996, the Company made a decision to establish two fully operational validation service offices in New Jersey and Southern California. As part of this process, the headquarters of Skyland will be relocated from Bozeman, Montana to the vicinity of the Company's corporate office. Each regional operation will be in proximity to pharmaceutical industry concentration and will have the full complement of personnel and test equipment to conduct full scale validation projects. The benefits derived from this decision are greater access to Skyland's resources, reduction of travel costs of personnel and greater flexibility in the scheduling and performance of validation projects. Throughout the remainder of 1996, the Company will incur approximately an additional $250,000 of expenses, on a pre-tax basis, relating to the above. The foregoing paragraph contains forward looking information concerning the Company's expected future expenditures for fiscal 1996 in connection with the establishment of two new validation service offices and relocation of the headquarters of the Company's Skyland subsidiary. The forward looking statements are necessarily estimates and reflect the Company's best judgment based upon current information. Factors which could cause actual expenditures to differ from those estimated by the Company include an unanticipated delay in implementing the establishment of the offices and the headquarters relocation. - 11 - 12 6. In 1996 the Company adopted Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation." ("SFAS 123"). SFAS 123 establishes a fair value method for accounting for stock-based compensation plans either through recognition or disclosure. SFAS 123 is effective for financial statements for fiscal years beginning after December 15, 1995. The Company plans to comply with the proforma disclosure method provisions of SFAS 123 and will disclose in its financial statements for the full year 1996 the proforma net income and earnings per share amounts assuming the fair value method was effective on January 1, 1995. SFAS 123 is effective for the fiscal year ending December 31, 1996. The adoption of SFAS 123 will not impact the Company's consolidated results of operations, financial position or cash flows. - 12 - 13 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995 Consolidated sales increased approximately 10.5% to $12,688,114 in 1996 from $11,479,351 in 1995. This increase resulted from a 7.9% increase in sales of sterilization services to $11,562,127 in 1996 from $10,713,606 in 1995, due to the higher volumes of product processed for new and existing customers. This increase was partially offset by increased competitive factors including pricing pressures which are expected to continue during 1996. These pricing pressures are resulting in lower margin business for the Company, offset in part by higher volumes. Sales of validation services by the Company's Skyland subsidiary increased 47.0% to $1,125,987 in 1996 from $765,745 in 1995, due to additional contracts with new and existing customers. Gross profit decreased to 50.9% of sales in 1996 from 52.4% in 1995. This decrease is attributable to increased competitive factors including pricing pressures, as described above. This decrease was partially offset by the growth in consolidated sales. Selling, general and administrative expenses, as a percentage of sales, were 28.4% in 1996 compared to 25.0% in 1995. This increase was primarily due to a one-time charge of $350,000 ($210,000 after tax) in connection with the relocation of the - 13 - 14 headquarters of the Company's Skyland subsidiary to the vicinity of the Company's corporate office and the establishment of a West Coast regional center of operations. Selling, general and administrative expense was also impacted by increased payroll and payroll related costs resulting from the additions to the corporate management staff. Consolidated operating income increased 1.7% to $3,201,825 in 1996 from $3,147,270 in 1995, and as a percentage of sales, to 25.2% in 1996 compared to 27.4% in 1995, before a one-time charge in 1996 of $350,000 on a pretax basis in connection with the relocation of the headquarters of the Company's Skyland subsidiary to the vicinity of the Company's corporate office and the establishment of a West Coast regional center of operations. After taking into account the one-time charge, operating income decreased 9.4% to $2,851,925 in 1996 from $3,147,270 in 1995, and as a percentage of sales to 22.5% in 1996 compared to 27.4% in 1995. Operating income from sterilization services (before corporate overhead) decreased to 34.8% of that segment's sales in 1996 from 36.8% in 1995. These decreases resulted from the factors described above. Operating income from validation services (before corporate overhead) decreased to a loss of $199,412 in 1996 from income of $7,905 in 1995, primarily as a result of the one-time charge of $350,000 ($210,000 after tax) in connection with the relocation of the headquarters of Skyland and the establishment of a West Coast regional center of operations, as partially offset by the increase in sales. - 14 - 15 Investment income decreased to $222,727 in 1996 from $303,320 in 1995, primarily as a result of a decrease in invested capital, compared to a year ago, due to the purchase of Company common stock, radioisotope and property, plant and equipment, as partially offset by higher effective yields received on invested securities. Interest expense decreased to $116,808 in 1996 from $137,655 in 1995 as a result of the payments of current maturities on long-term debt. Net income decreased to $1,774,715 in 1996 from $1,987,761 in 1995. This decrease in net income was attributable to the reasons described above. As a percentage of sales, net income was 14.0% in 1996 compared to 17.3% in 1995. - 15 - 16 RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995 Consolidated sales increased approximately 5.8% to $24,257,648 in 1996 from $22,934,377 in 1995. This increase resulted from a 5.8% increase in sales of sterilization services to $22,354,859 in 1996 from $21,128,699 in 1995, due to higher volumes of products processed for new and existing customers and the recognition of progress billing toward an irradiator sold to the United States Department of Agriculture for insect sterilization. This increase was partially offset by increased competitive factors including pricing pressures which are expected to continue during 1996. These pricing pressures are resulting in lower margin business for the Company, offset in part by higher volumes. Sales of validation services by the Company's Skyland subsidiary increased 5.4% to $1,902,789 in 1996 from $1,805,678 in 1995, due to additional contracts for new and existing customers. Gross profit decreased to 49.2% of sales in 1996 from 52.0% in 1995. This decrease is attributable to increased competitive factors including pricing pressures, as described above. This decrease was partially offset by the growth in consolidated sales. Selling, general and administrative expenses, as a percentage of sales, were 27.5% in 1996 compared to 24.9% in 1995. This - 16 - 17 increase was primarily due to a one-time charge of $350,000 ($210,000 after tax) in connection with the relocation of the headquarters of the Company's Skyland subsidiary to the vicinity of the Company's Corporate office and the establishment of a West Coast regional center of operations. Selling, general and administrative expense was also impacted by increased payroll and payroll related costs resulting from the additions to the corporate management staff. Consolidated operating income decreased 15.6% to $5,253,329 in 1996 from $6,221,650 in 1995, and as a percentage of sales, to 21.7% in 1996 compared to 27.1% in 1995. Operating income from sterilization services (before corporate overhead) decreased to 32.9% of that segment's sales in 1996 from 35.5% in 1995. These decreases resulted from the factors described above. Operating income from validation services (before corporate overhead) decreased to a loss of $225,253 in 1996 from income of $144,300 in 1995, primarily as a result of the one-time charge, in 1996, of $350,000 ($210,000 after tax) in connection with the relocation of the headquarters of Skyland and the establishment of a West Coast regional center of operations. Investment income decreased to $414,637 in 1996 from $471,196 in 1995, primarily as a result of a decrease in invested capital, compared to a year ago, due to the purchase of Company common stock, and radioisotope and property, plant and equipment, as partially offset by higher effective yields received on invested securities. - 17 - 18 Interest expense decreased to $235,954 in 1996 from $272,907 in 1995 as a result of the payments of current maturities on long-term debt. Net income decreased to $3,259,216 in 1996 from $3,851,963 in 1995. This decrease in net income was attributable to the reasons described above. As a percentage of sales, net income was 13.4% in 1996 compared to 16.8% in 1995. LIQUIDITY AND CAPITAL RESOURCES The increase in the Company's liquidity was principally attributable to the cash provided by operating activities, derived from net income for the period as adjusted for non-cash expense items such as depreciation and amortization. This increase was partially offset by cash used to fund capital expenditures for the purchase of equipment and radioisotope for the Company's existing sterilization facilities, the construction of a new sterilization facility in Libertyville, Illinois, and the purchase of Company common stock. The Company has utilized industrial development revenue bonds and sales of common stock to finance a substantial portion of the costs of constructing and equipping (including the purchase of radioisotope) some of its sterilization facilities. The obligations of the Company under the terms of the industrial development revenue bonds are collateralized by the property, plant, equipment and radioisotope purchased with the proceeds of - 18 - 19 such bonds and the agreements relating to such bonds contain various restrictive covenants. More recently, funds generated from operations have served as a source of funds used to finance the construction and equipping of facilities. The Company believes that funds from operating activities will be sufficient to purchase radioisotope and to equip, on a year to year basis, the Company's existing sterilization facilities. The Company may utilize existing credit facilities, which the Company expects to be able to renew annually, to fund the working capital needs of the Company, as required. Expansion plans are expected to be funded from the Company's investments, which will mature in amounts necessary to cover the foreseeable expansion program of the Company. The Company's capital expenditures for 1996 are anticipated to be approximately $13 million, including the continuing construction and equipping of the Company's new sterilization facility in Libertyville, Illinois, which is expected to become operational in the latter part of 1996. INFLATION Inflation is not expected to have a significant impact on the Company's income, particularly as the United States economy is presently experiencing a period of low inflation. Based upon its experience since inception, the Company does not expect that future increases in the cost of radioisotope, ethylene oxide gas or other materials will be significant to its operations. - 19 - 20 PART II. OTHER INFORMATION Item 1 Legal Proceedings None to Report. Item 2 Changes in Securities None to report. Item 3 Defaults Upon Senior Securities None to report. Item 4 Submissions of Matters to a Vote of Security Holders a) Registrant held its Annual Meeting of Stockholders on May 17, 1996. Holders of at least 5,864,757 shares of the Common Stock of the Company were present in person or represented by proxy, being approximately 83.82% of the 6,996,213 shares of Common Stock of the Company outstanding at the close of business on March 25, 1996, the Record Date of the Meeting. The following matters were acted on by the stockholders at the Meeting: 1) The following persons were elected to the Board of Directors, as follows:
Votes Votes Votes For Against Abstaining Thomas J. DeAngelo 5,829,307 35,450 Thomas M. Haythe 5,828,407 36,350
The following persons continue as directors after the Meeting: H. Stuart Campbell, Elmer A. Sticco, David M. Lank, John Masefield and Peter Mayer. 2) A proposal for the adoption of the Isomedix Inc. 1996 Long Term Incentive Plan was approved, as follows: 3,078,004 shares voted in favor 838,993 shares voted against and 19,865 shares abstained. 3) A proposal for the ratification of the selection of Coopers & Lybrand L.L.P. to serve as the auditors for the fiscal year ending December 31, 1996 was approved, as follows: 5,819,167 shares voted in favor, 33,000 shares voted against and 12,590 shares abstained. - 20 - 21 PART II. OTHER INFORMATION Item 5 Other Information None to report. Item 6 Exhibits and Reports on Form 10-Q (a) Exhibits: XI(a) Statement Re: Computation of Earnings Per Share For the Three Months Ended June 30, 1996 and 1995. (Unaudited) XI(b) Statement Re: Computation of Earnings Per Share for the Six Months Ended June 30, 1996 and 1995. (Unaudited) 27 Financial Data Schedule (b) Reports on Form 8-K: During the three months ended June 30, 1996, the registrant filed no reports on Form 8-K. - 21 - 22 EXHIBIT XI (a) ISOMEDIX INC. AND SUBSIDIARIES STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995. (Unaudited) Net income and common shares used in the calculation of earnings per share for the three months ended June 30, 1996 and 1995, were computed as follows:
June 30, June 30, 1996 1995 ---------- ---------- Net Income $1,774,715 $1,987,761 ========== ========== Weighted average number of common shares outstanding during the period: 6,969,955 6,980,305 Add: Shares issuable upon assumed exercise or con- version of stock options and warrants 202,645 208,887 ---------- ---------- Common Shares 7,172,600 7,189,192 ========== ========== Earnings per common share $ .25 $ .28 ========== ==========
- 22 - 23 EXHIBIT XI (b) ISOMEDIX INC. AND SUBSIDIARIES STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995. (Unaudited) Net income and common shares used in the calculation of earnings per share for the six months ended June 30, 1996 and 1995, were computed as follows:
June 30, June 30, 1996 1995 ---------- ---------- Net Income $3,259,216 $3,851,963 ========== ========== Weighted average number of common shares outstanding during the period: 6,981,350 7,005,528 Add: Shares issuable upon assumed exercise or con- version of stock options and warrants 200,762 222,030 ---------- ---------- Common Shares 7,182,112 7,227,558 ========== ========== Earnings per common share $ .45 $ .53 ========== ==========
- 23 - 24 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. ISOMEDIX INC. (Registrant) Date: August 9, 1996 /s/ Peter Mayer --------------------------- Peter Mayer President and Chief Executive Officer Date: August 9, 1996 /s/ Thomas J. DeAngelo --------------------------- Thomas J. DeAngelo Vice President Finance and Administration and Chief Financial Officer - 24 - 25 EXHIBIT INDEX ------------- Exhibit 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 U.S. DOLLARS 3-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 1 4,203,308 17,304,883 9,058,491 475,000 0 31,082,693 136,849,772 57,960,092 113,668,816 3,015,115 8,500,000 0 0 71,699 93,434,746 113,668,816 24,257,648 24,257,648 12,326,996 12,326,996 6,677,323 0 235,954 5,432,012 2,172,796 3,259,216 0 0 0 3,259,216 0.45 0.45
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