-----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, Kim69BDywhX92au3RqN9xDCvLkR2EjAnbtQx34VhizCxv2TEcPhZqEvA32kIi8pl 62JdvMESHdtcbZopKngHfQ== 0001005477-97-001808.txt : 19970709 0001005477-97-001808.hdr.sgml : 19970709 ACCESSION NUMBER: 0001005477-97-001808 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970531 FILED AS OF DATE: 19970708 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANGER BIOMECHANICS GROUP INC CENTRAL INDEX KEY: 0000725460 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 112239561 STATE OF INCORPORATION: NY FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12991 FILM NUMBER: 97637461 BUSINESS ADDRESS: STREET 1: 450 COMMACK ROAD CITY: DEER PARK STATE: NY ZIP: 11729 BUSINESS PHONE: 5166671200 MAIL ADDRESS: STREET 1: 450 COMMACK ROAD CITY: DEER PARK STATE: NY ZIP: 11729 10-Q 1 FORM 10-Q 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 May 31, 1997 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-12991 THE LANGER BIOMECHANICS GROUP, INC. ------------------------------------------------------- (Exact name of registrant as specified in its charter.) NEW YORK 11-2239561 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization.) Identification No.) 450 COMMACK ROAD, DEER PARK, NY 11729 ------------------------------------------------------- (Address of principal executive offices) (Zip Code) (516) 667-1200 ------------------------------------------------------- (Registrant's telephone number, including area code) 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 practical date. Common Stock, $.02 Par Value -- 2,584,281 shares as of July 7, 1997. INDEX THE LANGER BIOMECHANICS GROUP, INC. AND SUBSIDIARIES PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets -- May 31, 1997 and February 28, 1997 3 Condensed Consolidated Statements of Operations -- Three Months ended May 31, 1997 and May 25, 1996 4 Condensed Consolidated Statements of Cash Flows -- Three Months ended May 31, 1997 and May 25, 1996 5 Notes to Condensed Consolidated Financial Statements -- Three Months ended May 31, 1997 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 Signatures 10 2 PART I. FINANCIAL INFORMATION THE LANGER BIOMECHANICS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
Assets May 31, 1997 Feb. 28, 1997 -------------- --------------- (unaudited) Current Assets: Cash and cash equivalents $1,314,675 $1,125,589 Accounts receivable, net of allowance for doubtful accounts of $20,000 and $21,000 1,401,075 1,431,567 Inventories, net (Note 2) 1,003,698 922,346 Other current assets 286,840 279,558 -------------- --------------- Total current assets 4,006,288 3,759,060 Property and equipment, net 561,717 507,195 Other assets 177,571 178,771 -------------- --------------- Total Assets $4,745,576 $4,445,026 ============== =============== Liabilities and Stockholders' Equity Current Liabilities: Current maturities of notes payable -- $ 301 Accounts payable $ 349,890 341,078 Account liabilities: Accrued payroll and related payroll taxes 357,508 299,519 Other current liabilities 846,261 677,669 Unearned revenue 388,690 390,727 -------------- --------------- Total current liabilities 1,942,349 1,709,294 Accrued pension expense 314,615 287,315 Unearned revenue 147,913 151,732 Deferred income taxes 5,412 5,376 -------------- --------------- Total liabilities 2,410,289 2,153,717 -------------- --------------- Stockholders' Equity: Common stock, $.02 par value. Authorized 10,000,000 shares; outstanding 2,584,281 shares. 51,686 51,686 Additional paid-in capital 6,276,782 6,276,782 Accumulated deficit (3,697,789) (3,740,402) Aggregate adjustment resulting from translation of financial statement into U.S. dollars (47,144) (48,509) Minimum pension liability adjustment (248,248) (248,248) -------------- --------------- Total stockholders' equity 2,335,287 2,291,309 -------------- --------------- Total Liabilities and Stockholders' Equity $4,745,576 $4,445,026 ============== ===============
See notes to consolidated financial statements. 3 THE LANGER BIOMECHANICS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended: May 31, 1997 May 25, 1996 ------------ ------------ Net sales (Note 3) $2,515,285 $2,512,567 Cost of sales 1,507,780 1,471,300 ---------- ---------- Gross profit 1,007,505 1,041,267 Selling expense 385,551 448,928 General and administrative expense 598,969 580,713 Research and development expense -- -- ---------- ---------- Income from operations 22,985 11,626 Other income, principally interest 24,369 18,050 ---------- ---------- 47,354 29,676 Other expense, principally interest 3,445 2,319 ---------- ---------- Income before income taxes 43,909 27,357 Provision for income taxes (Note 1) 1,296 3,419 ---------- ---------- Net income $ 42,613 $ 23,938 ========== ========== Weighted average number of common and common common equivalent shares used in computation of net income per share: Primary 2,660,038 2,651,519 Fully Diluted 2,663,329 2,656,064 Net income per common and common equivalent share: Primary $ .02 $ .01 ========== ========== Fully Diluted $ .02 $ .01 ========== ========== See notes to consolidated financial statements. 4 THE LANGER BIOMECHANICS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Three Months Ended: May 31, 1997 May 25, 1996 ------------ ------------ Cash Flows from Operating Activities: Net income $ 42,613 $ 23,938 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 48,511 42,314 Loss on disposal of fixed assets -- 5,300 Changes in operating assets and liabilities: Accounts receivable 30,492 (287,117) Inventories (81,352) 62,109 Prepaid expenses and other assets (6,082) 26,820 Net pension liability 27,300 12,300 Accounts payable and accrued liabilities 231,741 94,606 Unearned revenue (5,856) (13,466) ----------- --------- Net cash provided by operating activities 287,367 (33,196) ----------- --------- Cash Flows from Investing Activities: Capital expenditures (97,980) (5,210) ----------- --------- Net cash used in investing activities (97,980) (5,210) ----------- --------- Cash Flows from Financing Activities: Notes payable (301) (817) ----------- --------- Net cash used in financing activities (301) (817) ----------- --------- Net increase (decrease) in cash and cash equivalents 189,086 (39,223) Cash and cash equivalents at beginning of year 1,125,589 739,460 ----------- --------- Cash and cash equivalents at end of period $ 1,314,675 $ 700,237 =========== ========= Supplemental Disclosures of Cash Flow and Non-cash Flow Information: Cash paid for interest $ 3,445 $ 2,319 =========== =========
See notes to consolidated financial statements. 5 THE LANGER BIOMECHANICS GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS May 31, 1997 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS A) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation, have been included. Operating results for the period ended May 31, 1997 are not necessarily indicative of the results that may be expected for the year ending February 28, 1998. For further information, refer to the consolidated statements and footnotes thereto in the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 1997. B) Income Per Share Net income per common share and common share equivalent is computed based on the weighted average number of common shares outstanding during the periods presented. Per share amounts include the effect of common stock equivalents comprised of stock options granted under the Company's qualified and non-qualified stock plans and warrants, except where the effect would be anti-dilutive. C) Provision for Income Taxes The provision for income taxes, on domestic operations, for periods ended May 31, 1997 and May 25, 1996 were calculated at an effective annual tax rate of 4.5% and 9%, respectively, reflecting the utilization of available net operating loss carryforwards and also taking into account the "Alternative Minimum Tax". Provision for income taxes on foreign operations were estimated at 25%. 6 THE LANGER BIOMECHANICS GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENT (continued) NOTE 2 - INVENTORIES The Company did not take a physical inventory as of May 31, 1997. Inventories and cost of sales for the interim period were based on the Company's perpetual inventory records. May 31, 1997 February 28, 1997 ------------ ----------------- (unaudited) Inventories consist of: Raw materials $ 739,734 $706,184 Work-in-process 216,578 156,421 Finished goods 106,998 119,353 ---------- -------- Total Inventories 1,063,310 981,958 Less: Allowance for obsolescence 59,612 59,612 ---------- -------- Net Inventories $1,003,698 $922,346 ========== ======== NOTE 3 - SEASONALITY Revenues derived from the Company's sale of orthotic devices, a substantial portion of the Company's operations, have historically been significantly higher in the warmer months of the year. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three months ended May 31,1997, as compared with three months ended May 25, 1996. Revenues Sales of $2,515,285 for the first quarter ended May 31, 1997 were $2,718 or 0.1% above prior-year's sales of $2,512,567. The effect of the approximately 3.5% price increase in the quarter ended May 31, 1997 was partially offset by a continuing product mix change primarily to a lower price, lower feature orthotic product when compared with the quarter ended May 25, 1996. Gross Profit Gross profit for the current-year's first quarter was $1,007,505 (40.1% of sales), as compared to the prior-year's first quarter gross profit of $1,041,267 (41.4% of sales). The decrease was due primarily to lower volumes of higher priced, broader featured orthotic products and the effect of the product mix change referred to above. Selling, General and Administrative Expenses For the three months ended May 31, 1997, selling, general and administrative expenses decreased $45,121 or 4.4% to $984,520, from the prior-year's comparable quarter of $1,029,641. Decreased promotion expenses and other direct selling expenses associated with special product offerings versus the prior comparable period more than offset increases in salaries and consulting expenses in the quarter ended May 31, 1997. Research and Development Expense The Company incurred no research and development costs for the three months ended May 31, 1997 and May 25, 1996. Other Income and Expense Other income consists primarily of income generated from investments and service charge income generated from the Company's accounts receivable. Net other income was $20,924 for the first quarter of the current fiscal year as compared with $15,731 in the comparable prior-year's quarter, representing a 33.0% increase. Most of the increase was due to interest earned on increased cash balances. Net Income The Company earned $42,613 or $.02 per share for the recently-concluded quarter as compared to a net income of $23,938 or $.01 per share generated in the prior-year's first quarter. The favorable results were primarily due to lower operating expenses and increased interest income, more than offsetting lower gross profit versus the comparable prior fiscal period. 8 Liquidity and Capital Resources Working capital, as of May 31, 1997, was $2,063,939 versus $2,049,766 at February 28, 1997, an increase of $14,173. While cash, inventory and other assets increased $189,086, $81,352 and $7,282, respectively, receivables decreased $30,492 and current liabilities increased $233,055. Cash balances at May 31, 1997 of $1,314,675 were $189,086 above the February 28, 1997 balance of $1,125,589. The Company's accounts receivable decreased $30,492. Increasing this cash inflow were net income of $42,613, an increase in accounts payable and accrued liabilities of $231,741 and depreciation and amortization of $48,511. The Company believes its capital position is adequate to meet anticipated cash needs for the next twelve months and beyond. 9 Part II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 11. Statement Re: Computation of Per Share Earnings (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. The Langer Biomechanics Group, Inc. --------------------------------------- (REGISTRANT) DATE: July 7, 1997 By: /s/ GARY L GRAHN --------------------------------------- Gary L. Grahn President and Chief Executive Officer By: /s/ THOMAS F. BELLEAU --------------------------------------- Thomas F. Belleau Vice President - Finance and Chief Financial Officer (Principal Financial Officer) 10 EX-11 2 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS THE LANGER BIOMECHANICS GROUP, INC. AND SUBSIDIARIES COMPUTATION OF PER SHARE AMOUNTS EXHIBIT 11 For the three months ended May 31, 1997 and May 25, 1996 May 31, 1997 May 25, 1996 ------------ ------------ Primary: Net income $ 42,613 $ 23,938 ---------- ---------- Weighted average number of common shares 2,584,281 2,581,281 Assumed number of shares issued from common share equivalents 75,757 70,238 ---------- ---------- Weighted average number of common and common equivalent shares 2,660,038 2,651,519 ---------- ---------- Net income per share: Primary $ 0.02 $ 0.01 ========== ========== Fully Diluted: Net income $ 42,613 $ 23,938 ---------- ---------- Weighted average number of common shares 2,584,281 2,581,281 Assumed number of shares issued from common share equivalents 79,048 74,783 ---------- ---------- Weighted average number of common and common equivalent shares 2,663,329 2,656,064 ---------- ---------- Net income per share: Fully Diluted $ 0.02 $ 0.01 ========== ========== EX-27 3 FINANCIAL DATA SCHEDULE
5 3-MOS FEB-28-1997 MAY-31-1997 1,314,675 0 1,401,075 20,000 1,003,698 4,006,288 2,759,148 2,197,431 4,745,576 1,942,349 0 0 0 51,686 2,283,601 4,745,576 2,515,285 2,515,285 1,507,780 1,507,780 984,520 0 3,445 43,909 1,296 42,613 0 0 0 42,613 .02 .02
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