-----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, M11c7HI+oPR6s75+zMMJzYipH0phuRZvmMK18UcnULcoR23k9abGwRAQxz7ZLcKA 2CZQu10LXRJ7nkmzEt9HxA== 0000073290-98-000022.txt : 19981016 0000073290-98-000022.hdr.sgml : 19981016 ACCESSION NUMBER: 0000073290-98-000022 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980831 FILED AS OF DATE: 19981015 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOMERICA INC CENTRAL INDEX KEY: 0000073290 STANDARD INDUSTRIAL CLASSIFICATION: DENTAL EQUIPMENT & SUPPLIES [3843] IRS NUMBER: 952645573 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-08765 FILM NUMBER: 98726193 BUSINESS ADDRESS: STREET 1: 1533 MONROVIA AVENUE CITY: NEWPORT BEACH STATE: CA ZIP: 92663 BUSINESS PHONE: 714-645-2111 MAIL ADDRESS: STREET 1: 1533 MONROVIA AVENUE CITY: NEWPORT BEACH STATE: CA ZIP: 92663 FORMER COMPANY: FORMER CONFORMED NAME: NMS PHARMACEUTICALS INC DATE OF NAME CHANGE: 19871130 FORMER COMPANY: FORMER CONFORMED NAME: NUCLEAR MEDICAL SYSTEMS INC DATE OF NAME CHANGE: 19830216 FORMER COMPANY: FORMER CONFORMED NAME: NUCLEAR INSTRUMENTS INC DATE OF NAME CHANGE: 19720508 10QSB 1 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER Section 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended August 31, 1998 Commission File No. 0-8765 --------------- ------ BIOMERICA, INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 95-2645573 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1533 Monrovia Avenue, Newport Beach, California 92663 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code: (714) 645-2111 - ------------------------------------------------------------------------------- (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 ----- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 3,966,802 shares of common Stock as of October 8, 1998. BIOMERICA, INC. INDEX Part I Financial Statements: Statement of Operations - Three Months Ended August 31, 1998 and 1997.....................................2 Balance Sheet - August 31, 1998................................3 & 4 Statement of Cash Flows Three Months Ended August 31, 1998 and 1997........................5 Statement of Changes in Shareholders' Equity - Three Months Ended August 31, 1998.................................6 Notes to Financial Statements....................................7-9 Management's Discussion and Analysis of Financial Condition and Selected Financial Data..................................10 & 11 Part II Other Information.................................................12 Signatures........................................................12 PART I - FINANCIAL INFORMATION SUMMARIZED FINANCIAL INFORMATION BIOMERICA, INC. CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended August 31, 1998 1997 ---------------- --------------- Net sales.............................................. $2,156,005 $ 2,304,027 Cost of sales ....................................... 1,311,476 1,326,682 --------------- --------------- Gross profit ........................................ 844,529 977,345 Operating Expenses: Selling, general and administrative ................. 774,435 759,427 Research and development ............................ 115,452 103,372 -------------- -------------- 889,887 862,799 Other Expense (income): Interest expense .................................... 1,979 9,473 Other (income) expense, net ......................... (61,244) (48,325) -------------- -------------- Income before minority interest in net profits of consolidated subsidiaries and income taxes .......... 13,907 153,398 Minority interest in net (profits) of consolidated subsidiaries ........................... (28,196) (1,734) -------------- -------------- (Loss) income before taxes............................. (14,289) 151,664 Income Taxes........................................... 2,400 14,378 -------------- -------------- NET (LOSS) INCOME...................................... ($16,689) $ 137,286 ============== ============== Per share data: Net income (basic) ..................................$ .00 $ .04 ============== ============== Net income (diluted) ................................$ .00 $ .03 ============== ============== Weighted average number of common and common equivalent shares outstanding: Basic ............................................... 3,974,909 3,896,802 ============== ============== Diluted ............................................. 4,009,578 4,056,618 ============== ==============
BIOMERICA, INC. CONSOLIDATED BALANCE SHEET
August 31, 1998 ------------- Assets Current Assets Cash and cash equivalents ................................................. $ 1,802,009 Available for-sale securities ............................................. 240,911 Accounts receivable, less allowance for doubtful accounts ................. 1,648,132 Inventory ................................................................. 2,840,740 Notes receivable .......................................................... 40,885 Prepaid expenses and other ................................................ 107,930 -------------- Total Current Assets ............................................. 6,680,607 Inventory, non-current...................................................... 24,000 Land held for investment.................................................... 46,000 Property and Equipment, less accumulated depreciation and amortization...... 447,815 Intangible assets, net of accumulated amortization.......................... 461,900 Other Assets................................................................ 6,756 -------------- $ 7,667,078 ============== The accompanying notes are an integral part of these statements
BIOMERICA, INC. CONSOLIDATED BALANCE SHEET
August 31, 1998 --------------- Liabilities and Shareholders' Equity Current Liabilities Line of credit $ 100,000 Accounts payable and accrued liabilities.............................. 1,013,355 Accrued compensation ................................................. 420,779 ---------------- Total Current Liabilities ......................................... 1,534,134 Minority interest....................................................... 2,480,133 Shareholders' Equity Shareholder loan ..................................................... (57,000) Unrealized holding gain on available for-sale securities ............. 37,059 Common stock, $.08 par value authorized 10,000,000 shares, issued and outstanding 3,970,352 in 1998 and 3,896,802 in 1997 ..... 317,628 Additional paid-in-capital ........................................... 12,503,940 Accumulated deficit .................................................. (9,148,816) ---------------- Total Shareholders' Equity.............................................. 3,652,811 ---------------- Total Liabilities and Equity............................................$ 7,667,078 ================ The accompanying notes are an integral part of these statements.
BIOMERICA, INC. CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended August 31, 1998 and 1997
1998 1997 --------------- ------------- Cash flows from operating activities: Net (loss) income.................................................$ (16,689) $ 137,286 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization .................................. 58,860 80,978 Realized gain on sale of available for-sale securities ......... (39,936) (28,156) Minority interest in net profits of consolidated subsidiaries .. 28,196 2,765 Options issued for services rendered ........................... 2,619 0 Changes in current assets and liabilities: Accounts Receivable .......................................... (41,444) (15,201) Inventories .................................................. (306,188) (132,739) Prepaid expenses and other current assets .................... 16,567 4,511 Accounts payable and other accrued liabilities ............... 206,871 68,330 Accrued compensation ......................................... (24,267) (9,085) -------------- -------------- Net cash (used by) provided by operating activities............... (115,411) 108,689 -------------- -------------- Cash flows from investing activities: Sale of available for-sale securities .......................... 113,041 99,389 Increase in notes receivable ................................... (12,400) (9,100) Purchases of property and equipment ............................ (10,473) (37,198) Other assets ................................................... 17,158 11,178 Purchases of intangible assets ................................. (26,675) (860) Shareholder loan repayment ..................................... 14,000 0 -------------- -------------- Net cash provided by investing activities......................... 94,651 63,409 -------------- -------------- Cash flows from financing activities: Principal payments on line of credit ........................... 0 (25,000) Payments of long-term debt and capital lease obligations ....... 0 (50,804) Investments by minority interests .............................. (5,491) 0 Exercise of stock options ...................................... 0 8,254 Stock repurchase ............................................... (12,315) 0 -------------- -------------- Net cash used in financing activities............................. (17,806) (67,550) -------------- -------------- Net increase (decrease) in cash and cash equivalents.............. (38,566) 104,548 -------------- -------------- Cash at beginning of quarter...................................... 1,840,575 1,706,151 -------------- ------------- Cash at end of quarter............................................ $ 1,802,009 $ 1,810,699 ============== ============== The accompanying notes are an integral part of these statements.
BIOMERICA, INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE THREE MONTHS ENDED AUGUST 31, 1998
Unrealized Gain on Common Stock Additional Available- Accumu- -------------------------- Number of Paid-In For-Sale Shareholder Lated Shares Amount Capital Securities Loan (Deficit) Total ------------ ----------- ------------ ----------- ----------- ------------ ------------- Balance at May 31, 1998 3,978,302 $ 318,264 $12,513,000 $ 57,902 (71,000) $(9,132,127) $ 3,686,039 Compensation espense 2,619 2,619 Change in unrealized gain on available for sale securities (20,843) (20,843) Stock repurchase (7,950) (636) (11,679) (12,315) Repayment of Shareholder loan 14,000 14,000 Net loss (16,689) (16,689) ------------ ----------- ------------ ----------- ----------- ------------ ------------ Balance at August 31, 1998 3,896,802 $ 317,628 $12,503,940 $ 37,059 $ (57,000) $(9,148,816) $ 3,652,811 ============= =========== ============ =========== =========== ============ ============ Note: The authorized capital stock consists of 10,000,000 shares of common stock, par value $.08 per share.
NOTES TO FINANCIAL STATEMENTS August 31, 1998 (1) Reference is made to Note 1 of the Notes to Financial Statements contained in the Company's Annual Report on Form 10-KSB for the fiscal year ended May 31, 1998, for a summary of significant accounting policies utilized by the Company. (2) The information set forth in these statements is unaudited and may be subject to normal year-end adjustments. The information reflects all adjustments which, in the opinion of management, are necessary to present a fair statement of results of operations of Biomerica, Inc., for the periods indicated. It does not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flow in conformity with generally accepted accounting principles. (3) Results of operations for the interim periods covered by this Report may not necessarily be indicative of results of operations for the full fiscal year. (4) Reference is made to Note 3 of the Notes to Financial Statements contained in the Company's Annual Report on Form 10-KSB for the fiscal year ended May 31, 1998, for a description of the investments in affiliates and consolidated subsidiaries. (5) Reference is made to Notes 5 & 10 of the Notes to Financial Statements contained in the Company's Annual Report on Form 10-KSB for the fiscal year ended May 31, 1998, for information on commitments and litigation. (6) Aggregate market value of available-for-sale securities exceeded aggregate cost by approximately $37,059 at August 31, 1998. (7) Earnings Per Share ------------------ In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per Share ("EPS"). SFAS No. 128 requires dual presentation of basic EPS and diluted EPS on the face of all income statements issued after December 15, 1997 for all entities with complex capital structures. Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities. All periods presented have been restated to adopt the provisions of SFAS No. 128. The following table illustrates the required disclosure of the reconciliation of the numerators and denominators of the basic and diluted EPS computations.
For the Three Months Ended August 31, 1998 ---------------------------------------------------- Income Shares Per Share (Numerator) (Denominator) Amount ------------- -------------- -------------- Basic EPS - Loss available to common Shareholders .......................... $ (16,689) 3,974,909 $ (.00) =============== Effect of dilutive securities - Options... - 34,669 -------------- --------------- Diluted EPS - Loss available to common share- holders plus assumed conversions ...... $ (16,689) 4,009,578 $ (.00) ============== =============== =============== For the Three Months Ended August 31 , 1997 ---------------------------------------------------- Income Shares Per Share (Numerator) (Denominator) Amount -------------- -------------- --------------- Basic EPS - Income available to common shareholders .......................... $ 137,286 3,896,802 $ 0.04 =============== Effect of dilutive securities - Options... - 159,816 --------------- -------------- Diluted EPS - Income available to common share- holders plus assumed conversions ...... $ 137,286 4,056,618 $ 0.03 =============== =============== ===============
(8) New Disclosure Standards In June 1997, SFAS No. 130 ("SFAS 130"), "Comprehensive Income" was issued which is effective for fiscal years beginning after December 15, 1997 and requires reclassification of earlier financial statements for comparative purposes. SFAS 130 requires that changes in the amounts of certain items, including foreign currency translation adjustments and gains and losses on certain securities, be shown in the financial statements. SFAS 130 does not require a specific format for the financial statement in which comprehensive income is reported, but does require that an amount representing total comprehensive income be reported in that statement. The Company does not expect that the implementation of SFAS 130 will have a material effect upon the Company's financial statements. The effect of adopting SFAS 130 has not yet been determined by the Company. In June 1997, SFAS No. 131 ("SFAS 131"), "Disclosures about Segments of an Enterprise and Related Information" was issued. This statement will change the way public companies report information about segments of their business in their annual financial statements and requires them to report selected segment information in their quarterly reports issued to shareholders. It also requires entity-wide disclosures about the product, services an entity provides, the material countries in which it holds assets and reports revenues, and its major customers. SFAS 131 is effective for fiscal years beginning after December 15, 1997. The Company does not expect that the implementation of SFAS 131 will have a material effect upon the Company's financial statements. The effect of adopting SFAS 131 has not yet been determined by management of the Company. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND SELECTED FINANCIAL DATA The statements in this Report on Form 10-QSB and other statements made by Biomerica, Inc. that relate to future plans, events or performance are forward- looking statements which involve risks and uncertainties. Actual results, events or performance may differ materially from those anticipated in any forward-looking statements as a result of a variety of factors, including those set forth in this Report on Form 10-QSB. Results of Operations Consolidated net sales for Biomerica were $2,156,005 for the first quarter of fiscal 1999 as compared to $2,304,027 for the same period in the previous year. This represents a decrease of $148,022, or 6%. Lancer sales increased by $92,519 over the previous fiscal year. Lancer's management continues to search for and add new distributors, private label customers, and sales representatives, as well as investigate new products that could contribute to its product line. Biomerica sales decreased by $239,729 primarily due to a slow down of foreign sales. AIT had a sales decline of $812. Cost of sales decreased by $15,206, or 1%. Lancer's cost of sales increased $51,548 due to their higher sales. Biomerica's cost of goods decreased $57,722 and AIT's cost of goods decreased $9,032. Biomerica's cost of goods decreased as a result of lower sales, which was offset in part by higher wages. AIT's cost of goods decreased primarily due to better efficiency and lower payroll costs. Selling, general and administrative costs increased by $15,008, or 2%. Lancer had increased selling, general and administrative costs of $19,003 due to an expansion of sales territories and costs related to increased sales. Biomerica had an increase of $16,940 primarily due to increased payroll and related expenses. AIT had a decrease of $20,935 due to decreased personnel and other related costs. Research and development increased by $12,080, or 12%. Lancer had a decrease in research and development costs of $7,320 due to a reclassification of wage costs to cost of sales. Biomerica had increased costs of $19,250 due to higher wages and related costs. AIT had an increase of $150. Interest expense decreased by $7,494 compared to the previous year due to lower debt at Lancer. Other income increased due primarily to increased gain on sales of marketable securities at Biomerica. Please refer to Note 3 in the Notes to the Consolidated Financial Statements in the report on Form 10-KSB for the year ended May 31, 1998, for a more in- depth discussion of subsidiaries. Liquidity and Capital Resources As of August 31, 1998, the Company had cash and available-for-sale securities in the amount of $2,042,920 and working capital of $5,146,473. Biomerica is currently able to meet its costs of operations through both collection of trade accounts receivable and its working capital position. Lancer is currently able to meet its costs of operations through collection of trade accounts receivable, its working capital position and its line of credit. Biomerica alone has no material capital commitments. At August 31, 1998, Lancer had a $300,000 line of credit with a bank. Borrowings are made at prime plus 1% (9.5% at August 31, 1998) and are limited to specified percentages of eligible accounts receivable. The unused portion available under the line of credit at August 31, 1998 was $153,318. The line of credit expires on December 1, 1998. Lancer is not required to maintain compensating balances in connection with this borrowing arrangement. PART II. OTHER INFORMATION Item 1. Legal Proceedings. Inapplicable. Item 2. Changes in Securities. Inapplicable. Item 3. Defaults Upon Senior Securities. Inapplicable. Item 4. Submission of Matters to a Vote of Security Holders. Inapplicable. Item 5. Other Information. Inapplicable. Item 6. Exhibits and Reports on Form 8-K. None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has fully caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: October 9, 1998 BIOMERICA, INC. By: /S/ Zackary S. Irani ----------------------------- Zackary Irani President, Chief Executive Officer EX-27 2
5 3-MOS MAY-31-1999 AUG-31-1998 1,802,009 240,911 1,772,055 123,923 2,840,740 6,680,607 3,135,328 2,687,513 7,667,078 1,534,134 0 0 0 317,628 3,335,183 7,667,078 2,156,005 2,156,005 1,311,476 1,311,476 0 0 1,979 (14,289) 2,400 (16,689) 0 0 0 (16,689) .00 .00
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