-----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, B3B+6LEA0zqgVgY1TwKSDMt8BCM6q6VpM/VNhSKZwZLApLTtW7J7E7EfcWfzVhyt ac3K46UUk0Hj/jCskrSJPQ== 0000073290-97-000002.txt : 19970115 0000073290-97-000002.hdr.sgml : 19970115 ACCESSION NUMBER: 0000073290-97-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961130 FILED AS OF DATE: 19970114 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: 1934 Act SEC FILE NUMBER: 000-08765 FILM NUMBER: 97505499 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 November 30, 1996 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: 3,882,402 shares of common Stock as of January 14, 1997. BIOMERICA, INC. INDEX PART I Financial Statements: Statements of Operations - Three Months and Six Months Ended November 30, 1996 and 1995 ..................................2 Balance Sheet - November 30, 1996 ............................3 & 4 Statements of Cash Flows Six Months Ended November 30, 1996 and 1995 .......................5 Statements of Changes in Shareholders' Equity - Six Months Ended November 30, 1996 ................................6 Notes to Financial Statements .....................................7 Management's Discussion and Analysis of Financial Condition and Selected Financial Data ...................................8 & 9 PART II Other Information ................................................10 Signatures .......................................................10 PART I - FINANCIAL INFORMATION SUMMARIZED FINANCIAL INFORMATION BIOMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended Three Months Ended November 30, November 30, 1996 1995 1996 1995 ----------- ----------- ----------- ------------ Net Sales............................... $ 4,553,025 $4,602,576 $2,279,638 $ 2,273,288 Cost of sales......................... 2,595,976 2,480,762 1,281,588 1,197,794 ------------ ----------- ----------- ------------ Gross profit.......................... 1,957,049 2,121,814 998,050 1,075,494 ------------ ----------- ----------- ------------ Operating Expenses: Selling, general and administrative... 1,551,104 1,657,510 804,714 822,325 Research and development.............. 124,995 148,882 62,421 74,890 ------------ ----------- ----------- ------------ 1,676,099 1,806,392 867,135 897,215 ------------ ----------- ----------- ------------ Other Expense (income): Interest expense...................... 31,879 57,147 15,076 31,672 Other (income), net................... (25,579) (27,688) (13,403) (3,334) ------------ ----------- ----------- ------------ Gain before minority interest in net profits of consolidated subsidiaries and income taxes......... 274,650 285,963 129,242 149,941 Minority interest in net (profits) of consolidated subsidiaries (25,918) (128,070) (21,579) (54,753) ----------- ----------- ----------- ------------ Income before taxes................... 248,732 157,893 107,663 95,188 Income taxes.......................... 17,847 2,400 3,982 0 ----------- ----------- ----------- ------------ NET INCOME........................... $ 230,885 $ 155,493 $ 103,681 $ 95,188 =========== =========== =========== ============ Net income per share.................... $ .07 $ .05 $ .03 $ .03 =========== =========== =========== ============= Weighted average shares outstanding.................... 3,526,469 3,441,007 3,538,602 3,441,819 The accompanying notes are an integral part of these statements.
BIOMERICA, INC. CONSOLIDATED BALANCE SHEET
November 30, 1996 ------------ Assets Current Assets Cash and cash equivalents................................................$ 911,419 Available for-sale securities............................................ 273,768 Accounts receivable, less allowance for doubtful accounts................ 1,674,879 Inventory................................................................ 2,271,619 Notes receivable......................................................... 19,505 Prepaid expenses and other............................................... 106,863 ------------ Total Current Assets .................................................... 5,258,053 Inventory, non-current..................................................... 37,000 Land held for investment................................................... 46,000 Property and Equipment, less accumulated depreciation and amortization..... 440,499 Intangible assets, net of accumulated amortization......................... 527,296 Other Assets............................................................... 9,796 ------------ $ 6,318,644 ============ The accompanying notes are an integral part of these statements.
BIOMERICA, INC. CONSOLIDATED BALANCE SHEET
November 30, 1996 ------------- Liabilities and Shareholders' Equity Current Liabilities Current portion of note payable to bank ........................ $ 320,000 Accounts payable and accrued liabilities ....................... 575,471 Long-term debt and capital lease obligations (current portion) . 22,902 Other liabilities .............................................. 150,581 Accrued compensation ........................................... 599,526 Line of credit ................................................. 250,000 ------------- Total Current Liabilities ................................... 1,918,480 Long term portion of capital lease obligations.................... 4,074 Minority interest................................................. 2,139,842 Shareholders' Equity Common stock ................................................... 283,926 Additional paid-in-capital ..................................... 11,452,984 Unrealized holding gain on available for sale securities ....... 8,857 Accumulated deficit ............................................ (9,489,519) ------------- Total Shareholders' Equity........................................ 2,256,248 ------------- Total Liabilities and Equity...................................... $ 6,318,644 ============= The accompanying notes are an integral part of these statements.
BIOMERICA, INC. CONSOLIDATED STATEMENT OF CASH FLOWS SIX MONTHS ENDED NOVEMBER 30, 1996 AND 1995
1996 1995 -------------- ------------ Cash flows from operating activities: Net income......................................................... $ 230,885 $ 155,493 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ................................... 124,571 158,071 Minority interest in net profits of consolidated subsidiaries ... 25,918 128,070 Changes in current assets and liabilities: Accounts Receivable ........................................... 113,175 40,898 Inventories ................................................... (236,068) (316,915) Prepaid expenses and other current assets ..................... 6,443 9,275 Accounts payable and other accrued liabilities ................ 23,649 (26,000) Accrued compensation .......................................... 73,012 3,902 -------------- ------------ Net cash provided by operating activities.......................... 361,585 152,794 -------------- ------------ Cash flows from investing activities: Purchases of property and equipment ............................. (63,727) (60,578) Other assets .................................................... 10,272 196 Purchases of intangible assets .................................. 0 (3,839) -------------- ------------ Net cash used in investing activities.............................. (53,455) (64,221) -------------- ------------ Cash flows from financing activities: Issuance of stock ............................................... 55,000 0 Net payments under line of credit agreement ..................... 0 (225,000) Investments by minority interests ............................... 0 20,250 Payments of short-term borrowings and long-term debt ............ 0 (11,464) Principal payments on note payable to bank ...................... (120,000) (210,000) Payments of long-term debt and capital lease obligations ........ (10,519) 0 Exercise of stock options ....................................... 55,980 13,600 -------------- ------------ Net cash used in financing activities.............................. (19,539) (412,614) -------------- ------------ Net increase (decrease) in cash and cash equivalents............... 288,591 (324,041) -------------- ------------ Cash at beginning of year.......................................... 622,828 694,564 -------------- ------------ Cash at end of six months.......................................... $ 911,419 $ 370,523 ============== ============ The accompanying notes are an integral part of these statements.
BIOMERICA, INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE SIX MONTHS ENDED NOVEMBER 30, 1996
Unrealized Gain on Common Stock Additional Available- Retained -------------------------- Number of Paid-In For-Sale Earnings Shares Amount Capital Securities (Deficit) Total ----------- ------------ ------------ ------------ ------------ ------------ Balance at May 31, 1996 3,465,819 $ 277,266 $11,348,664 $ 90,687 $(9,720,404) $ 1,996,213 Change in unrealized gain on available for sale securities (81,830) (81,830) Issuance of stock 27,500 2,200 52,800 55,000 Exercise of employee stock options 55,750 4,460 51,520 55,980 Net gain 230,885 230,885 ----------- ------------ ------------ ------------ ------------ ------------ Balance at November 30, 1996 3,549,069 $ 283,926 $11,452,984 $ 8,857 $(9,489,519) $ 2,256,248 =========== ============ ============ ============ ============ ============ Note: The authorized capital stock consists of 10,000,000 shares of common stock, par value $.08 per share. The accompanying notes are an integral part of these statements.
NOTES TO FINANCIAL STATEMENTS November 30, 1996 (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, 1996, 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 Notes 2 & 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, 1996, for a description of the investments in affiliates and consolidated subsidiaries. (5)Reference is made to Note 5, 6, 11 and 12 of the Notes to Financial Statements contained in the Company's Annual Report on Form 10-KSB for the fiscal year ended May 31, 1996, for information on commitments and litigation. (6)Aggregate market value of available-for-sale securities exceeded aggregate cost by approximately $8,857 at November 30, 1996. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND SELECTED FINANCIAL DATA RESULTS OF OPERATIONS Consolidated net sales for Biomerica were $4,553,025 for the six months ended November 30, 1996 as compared to $4,602,576 for the same period in the previous fiscal year. This represents a decrease of $49,551 (1%). For the quarter then ended November 30, 1996, sales were $2,279,638 as compared to $2,273,288. This represents an increase of $6,350. Biomerica's sales for the six months reflected an increase of $316,771 and for the quarter an increase of $68,219. AIT had increases of $21,302 and $14,435 for the six months and quarter, respectively. However, these increases were offset by decreases at Lancer of $387,624 for the six months and $76,304 for the quarter. The decreases at Lancer were attributable to manufacturing processing and mold problems, which have resulted in lost sales and delayed deliveries. The manufacturing problems have been identified and corrected. As part of the correction process, the Company is reworking a substantial portion of its inventory. To vitalize Lancer operations, Lancer has hired Mr. Robert Bothamley as Executive Vice President of Lancer. In his capacity, he will be in charge of the Mexicali manufacturing operation, acquisition and corporate finance. Mr. Bothamley previously was the Chief Financial Officer for Coldwell Banker, responsible for all aspects of planning and financial arrangements. Mr. Bothamley is a Certified Public Accountant and holds the MBA degree from UCLA and a BA degree in Economics from Occidental College. In addition, Mr. Bothamley's fluency in Spanish will facilitate communication with the manufacturing staff at Mexicali, Mexico. Sales at Biomerica increased primarily due to increased international sales. No sales have as yet been generated from the development of `rapid tests'' such as the 10 minute ulcer test (H. pylori). Cost of sales increased from $2,480,762 to $2,595,976 for the six months and from $1,197,794 to $1,281,588 for the three months. These represent increases of $115,214 (5%) and $83,794 (7%) for the six months and three months, respectively. Lancer realized higher cost of sales as a percentage of sales due to the manufacturing processing problems and the cost to rework the inventory. Biomerica also recognized higher cost of sales due in part to higher sales of some items with lower margins. Selling, general and administrative expenses decreased from $1,657,510 to $1,551,104, or $106,406 (6%) for the six months and from $822,325 to $804,714, or $17,611 (2%) for the three months. The decrease was attributable to decreased expenses at Lancer due to lower wages, professional fees and catalog costs. These were due to management's decision to lower costs to offset the manufacturing problems that caused lower sales. Research and development decreased for the six months from $148,882 to $124,995, or $23,887 (16%) and for the three months from $74,890 to $62,421, or $12,469 (17%). Lancer had decreased expenses of $35,059 for the six months which were offset by increases at Biomerica. For the three months Lancer had decreases of $21,076, again offset by increases at Biomerica. The decreases at Lancer were attributable to lower wages. Biomerica's increases were due to work on new products. Interest expense was lower for the six months by $25,268 and by $16,596 for the three months. This was due to reduced debt and interest rates at Lancer. Minority interest in net losses of consolidated subsidiaries represents minority interests in the gain of Lancer's and AIT's other shareholders. Please refer to Notes 2 and 3 in the Notes to the Consolidated Financial Statements in the report on Form 10KSB for the year ended May 31, 1996, for a more in-depth discussion on affiliates and subsidiaries. LIQUIDITY AND CAPITAL RESOURCES As of November 30, 1996, the Company had cash and available-for-sale securities in the amount of $1,185,187. 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. Effective October 10, 1995, Lancer arranged for a restructuring of its note payable. The note was divided into a new term note, with an original balance of $645,000 and a line of credit with an original balance of $400,000. The new note payable is for a term of two years and requires monthly principal and interest payments of $18,889. Interest is at prime plus 1% (9.25% at August 31, 1996). All unpaid and accrued interest are due and payable on November 1, 1997. 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. The annual meeting of the Company's stockholders was held on November 12, 1996. The only matter voted upon at the meeting was the election of directors. This matter was set forth in the proxy statement dated September 4, 1996, as filed with the Securities and Exchange Commission pursuant to Regulation 14 under the Securities Act of 1934. All directors for election indicated in the proxy were elected. The number of votes cast were as follows: Name For Against ---- --- ------- Joseph H. Irani 3,074,140 27,744 Dr. Philip B. Kaplan 3,074,434 27,450 Dr. Robert A. Orlando 3,074,434 27,450 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: January 12, 1997 BIOMERICA, INC. By: /S/ Joseph H. Irani ----------------------- Joseph H. Irani, President Chief Executive Officer EX-27 2
5 6-MOS MAY-31-1997 JUN-01-1996 NOV-30-1996 911,419 273,768 1,815,818 140,939 2,271,619 5,258,053 2,987,879 2,547,380 6,318,644 1,918,480 0 0 0 283,926 1,972,322 6,318,644 4,553,025 4,553,025 2,595,976 2,595,976 0 0 31,879 248,732 17,847 230,885 0 0 0 230,885 .07 .07
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