-----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, OHhk/uGD0ntDOEQhZDqtWMzddikUe+yi8J6E4Tqv/QHQuzlUw4RPYNW9MqDvK08U o6Ug1xGTn5GPzzoGqCf/WQ== 0000736822-97-000004.txt : 19970416 0000736822-97-000004.hdr.sgml : 19970416 ACCESSION NUMBER: 0000736822-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19970415 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMMUCOR INC CENTRAL INDEX KEY: 0000736822 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 222408354 STATE OF INCORPORATION: GA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14820 FILM NUMBER: 97581425 BUSINESS ADDRESS: STREET 1: 3130 GATEWAY DR STREET 2: PO BOX 5625 CITY: NORCROSS STATE: GA ZIP: 30091 BUSINESS PHONE: 4044412051 MAIL ADDRESS: STREET 1: 3130 GATEWAY DR STREET 2: P O BOX 5625 CITY: NORCROSS STATE: GA ZIP: 30091 10-Q 1 FORM 10-Q Securities and Exchange Commission Washington, D. C. 20549 (Mark One) X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended : February 28, 1997 OR _ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number : 0-14820 IMMUCOR, INC. (Exact name of registrant as specified in its charter) Georgia 22-2408354 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3150 Gateway Drive P.O. Box 5625 Norcross, Georgia 30091-5625 (Address of principal executive offices) (Zip Code) Registrant's telephone number : (770) 441-2051 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. As of April 10, 1997: Common Stock, $.10 Par Value - 8,078,484 IMMUCOR, INC. Condensed Consolidated Balance Sheets February 28, May 31, ASSETS 1997 1996 (Unaudited) (Audited) Current assets: Cash and cash equivalents $17,991,910 $20,533,422 Accounts receivable, net 10,960,599 8,953,473 Inventories 6,751,972 5,932,923 Income tax receivable 73,640 37,119 Deferred income taxes 319,350 312,627 Other 1,271,913 707,623 Total current assets 37,369,384 36,477,187 Long-term investment 1,000,000 1,000,000 Prop., plant and equip., at cost 9,042,562 6,285,912 less accumulated depreciation (3,825,341) (3,029,388) 5,217,221 3,256,524 Other 722,013 646,994 Excess of cost over net tangible assets acquired 12,388,176 5,826,153 $56,696,794 $47,206,858 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank loans $488,079 $283,335 Accounts payable 3,095,956 2,656,538 Income taxes payable 545,762 263,480 Accrued salaries and wages 510,491 594,853 Other accrued liabilities 368,487 154,607 Total current liabilities 5,008,775 3,952,813 Long-term debt 11,080,937 3,908,795 Deferred income taxes 463,260 Shareholders' equity: Common stock, $.10 par value 807,848 805,438 Additional paid-in capital 21,598,528 21,485,849 Retained earnings 19,453,123 18,029,010 Cumulative translation adjustment(1,715,677) (975,047) Total equity 40,143,822 39,345,250 $56,696,794 $47,206,858 See accompanying notes. IMMUCOR, INC. Condensed Consolidated Statements of Income (Unaudited) Three Months Ended Nine Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, 1997 1996 1997 1996 Net sales $9,639,697 $8,073,228 $25,953,819 $22,831,459 Cost of sales 3,933,315 3,155,882 10,591,331 8,630,135 Gross profit 5,706,382 4,917,346 15,362,488 14,201,324 Research & development: Instrument 131,220 133,143 182,732 373,798 General 156,206 124,056 415,704 367,788 Selling, general and administrative 4,534,505 3,684,671 12,353,208 10,388,531 Total operating expenses 4,821,931 3,941,870 12,951,644 11,130,117 Income from operations 884,451 975,476 2,410,844 3,071,207 Other income 211,576 292,814 596,877 676,865 Interest expense (138,386) (68,650) (243,361) (237,978) Other expense (257,157) (272,765) (250) Total other (183,967) 224,164 80,751 438,637 Income before income taxes 700,484 1,199,640 2,491,595 3,509,844 Provision for income taxes 356,259 411,484 1,067,482 1,175,728 Net income $344,225 $788,156 $1,424,113 $2,334,116 Net income per common and common equivalent s $0.04 $0.09 $0.17 $0.27 Weighted average number of common and common equivalent shares outstanding 8,518,645 8,884,564 8,588,320 8,801,288 See accompanying notes. IMMUCOR, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended February 28, February 29, 1997 1996 OPERATING ACTIVITIES: Net income $1,424,113 $2,334,116 Adjustments to reconcile net income to net cash provided by operations: Depreciation 837,863 758,308 Amortization 154,402 170,423 Changes in assets and liabilities: Accounts receivable (1,241,780) (700,801) Inventories (330,485) (305,836) Other assets (224,723) (143,213) Accounts payable 303,375 (5,093) Other current liabilities (18,803) (231,290) Cash provided by operating activities 903,962 1,876,614 INVESTING ACTIVITIES: Purchase of/deposits on property and equipment (1,947,674) (1,224,209) Cash paid for acquisition, net of cash acquired (4,366,734) Other 13,560 12,406 Cash used in investing activities (6,300,848) (1,211,803) FINANCING ACTIVITIES: Proceeds from (repayment of) line of credit (62,413) 21,956 Proceeds from issuance of long term debt 4,228,163 Repayment of bank loans (995,748) (1,065,191) Exercise of stock options 115,090 1,168,080 Cash provided by financing activities 3,285,092 124,845 Effect of exchange rate changes on cash (429,718) (99,162) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,541,512) 690,494 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 20,533,422 18,741,681 CASH AND CASH EQUIVALENTS AT END OF PERIOD $17,991,910 $19,432,175 Noncash investing and financing activities: Fair value of assets acquired $2,234,240 Cost in excess of assets acquired 7,319,927 Liabilities assumed (959,270) Notes issued for assets acquired (4,228,163) Net cash paid for acquisition $4,366,734 See accompanying notes. IMMUCOR, INC. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 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 three and nine month periods ended February 28, 1997 are not necessarily indicative of the results that may be expected for the year ending May 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended May 31, 1996. 2. Inventories are stated at the lower of first-in, first-out cost or market: As of February 28, 1997 As of May 31, 1996 Raw materials and supplies $2,051,545 $2,104,677 Work in process 677,922 741,723 Finished goods 4,022,505 3,086,523 3. Net income per common share: Net income per common share is computed using the weighted average number of common shares and dilutive common share equivalents outstanding during the respective periods. There is no significant difference between primary and fully diluted per share amounts. 4. Purchase of Dominion Biologicals Limited On December 11, 1996, the Company acquired all of the issued and outstanding common stock of Dominion Biologicals Limited for $8,456,326 (CDN$11,482,000), plus acquisition costs and warrants to purchase 478,417 and 150,000 shares of the Company's common stock for $12.00 and $11.98, respectively. The acquisition was financed from the proceeds of a bank loan of $4,228,163 (CDN$5,741,000) and from the issuance of subordinated promissory notes totaling $4,228,163 (CDN$5,741,000), due three years from the closing date. The Company accounted for this transaction as a purchase business combination. The results of the operations of Dominion Biologicals Limited since December 11, 1996 are included in the 1997 Consolidated Statements of Income. The preliminary purchase price allocation is as follows: Current assets $1,383,356 Property, plant & equipment, net 850,885 Intangible assets - goodwill 7,319,926 Less: Liabilities assumed (959,270) Purchase price $8,594,897 The pro forma unaudited results of operations for the nine months ended February 28, 1997 and February 29, 1996, assuming consummation of the purchase as of June 1, 1995, including financing from the proceeds of a bank loan and issuing subordinated promissory notes and warrants to purchase common stock, are as follows: Nine Months Ended Feb. 28, Feb. 29, 1997 1996 Net sales $27,758,464 $25,481,851 Net income 1,394,610 2,225,268 Net income per common share: Primary .16 .26 Fully diluted .16 .25 5. In February 1997, the Financial Accounting Standards Board issued Statement No. 128, Earnings per Share, which is required to be adopted on May 31, 1998. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating primary earnings per share, the dilutive effect of stock options will be excluded. The impact is expected to result in an increase in primary earnings per share for the three months ended February 28, 1997 and February 29, 1996 of $.00 and $.01 per share, respectively, and for the nine months ended February 28, 1997 and February 29, 1996 of $.01 and $.03 per share, respectively. The impact of Statement 128 on the calculation of fully diluted earnings per share for these quarters is not expected to be material. IMMUCOR, INC. ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Any statements contained herein that are not historical fact are forward- looking statements within the meaning of the new Private Securities Litigation Reform Act of 1995, and involve risks and uncertainties. Information on the potential factors which could affect the Company's actual results of operations are included in its filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the fiscal year ended May 31, 1996. Financial Condition and Liquidity: As of February 28, 1997, the Company's cash position totaled $17,991,900. For the nine months ended February 28, 1997, the Company generated cash from operating activities of $904,000 and repaid $992,600 (1,500,000 DM) of bank debt in Germany. On December 11, 1996, the Company acquired all of the issued and outstanding common stock of Dominion Biologicals Limited for $8,456,300 (CDN$11,482,000), plus acquisition costs and warrants to purchase 478,417 and 150,000 shares of the Company's common stock for $12.00 and $11.98, respectively. The acquisition was financed from the proceeds of a bank loan of $4,228,200 (CDN$5,741,000) and from the issuance of subordinated promissory notes totaling $4,228,200 (CDN$5,741,000), due three years from the closing date. In December, the Company completed the first phase of its facilities expansion at its U.S. offices in Norcross, Georgia. The expansion provides an additional 10,000 square feet of manufacturing, laboratory and office space. The planned expenditures include leasehold improvements and furnishings totaling approximately $1,000,000. Through February 28, 1997, the Company spent approximately $550,000. Management believes that the Company's current cash balance, internally generated funds, and amounts available under the lines of credit are sufficient to support operations for the foreseeable future. Management also believes additional credit lines would be available should the need arise. Results of Operations: Net sales Net sales for the three months ended February 28, 1997, totaled $9,639,700, an increase of 19% over last year's $8,073,200. Current year results include $1,014,000 in net sales from the operations of Dominion Biologicals Limited (see Financial Condition and Liquidity). Most of the remaining increase was generated by the Company's European operations. For the nine months ended February 28, 1997, net sales were $25,953,800 (including Dominion's $1,014,000) compared to $22,831,500 in the prior year. The Company believes higher levels of marketing activity in the US and in Europe have generated increased market share. Gross profit As a percent of sales, gross profit declined for the three and nine month periods ended February 28, 1997, when compared to the same three and nine month periods in 1996. The decline in gross profit margin is principally attributable to the Company's efforts to emphasize longer term market share growth by focusing efforts on large national accounts which demand lower product pricing due to increased purchasing volume. Operating expenses When compared to the prior year three and nine month periods, general research and development costs increased $32,200 and $47,900, respectively, with $26,900 of the additional research expense resulting from the acquisition of Dominion Biologicals Limited (see Financial Condition and Liquidity). Selling, general and administrative expense for the three and nine month periods ended February 28, 1997, increased $849,800 and $1,964,700, respectively, compared to the 1996 periods. Part of the increase was caused by the inclusion of Dominion Biologicals Limited ($258,800). The remaining increase was principally due to the addition of sales, marketing and other support personnel both in the US and in Europe, higher trade show, advertising and other costs related to the company's instrument development programs, including the recent launch of the IMAGN(registered trademark) 2000. Other income and expense Other income declined during the quarter ended February 28, 1997, principally due to a decrease in the Company's cash and short term investing activities since the beginning of the fiscal year. Interest expense grew $69,700 during the three months ended February 28, 1997, as a result of the acquisition of Dominion Biologicals Limited. This increase was partially offset by the Company reducing its outstanding principal loan balance in Germany (see Financial Condition and Liquidity). The increase in other expense of $257,200 in the current year three month period was caused by currency transaction losses recorded in Europe. An increase in the value of the US dollar during the period required the recognition of a loss in value of US dollar liabilities converted from local European currency. Provision for Income Taxes As a percent of pretax income, the provision for income taxes increased during the three and nine month periods ended February 28, 1997, principally due to the earnings of Dominion Biologicals Limited being subject to a higher income tax rate in Canada than the US tax rate. In addition, the provision increased because of the need to provide for income taxes on increased profits in Germany, which are taxed at higher rates than income in the U.S. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) The Company has filed the following exhibits with this report: 11.1 Statement re computation of per share earnings. (b) On December 16, 1996, the Company filed a Form 8-K dated December 11, 1996, relating to Item 2, the acquisition of Dominion Biologicals Limited. 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. IMMUCOR, INC. (Registrant) Date: April 14, 1997 \s\Edward L. Gallup_____________Edward L. Gallup, President \s\Richard J. Still_______________ Richard J. Still, Senior Vice President - Finance (Principal Accounting Officer) EX-11 2 IMMUCOR, INC. EXHIBITS Exhibit 11.1 Statement re computation of per share earnings. Primary income per share calculations: Three Months Ended Nine Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, 1997 1996 1997 1996 Net income $344,225 $788,156 $1,424,113 $2,334,116 Weighted average number of common shares and common share equivalents are as follows: Weighted average common shares outstanding 8,075,767 7,907,620 8,061,960 7,830,203 Shares issued from assumed exercise of dilutive options and warrants 442,878 745,471 526,360 780,028 Weighted average number of shares outstanding (as adjusted) 8,518,645 8,653,091 8,588,320 8,610,231 Net income per common and common equivalent share $0.04 $0.09 $0.17 $0.27 Fully diluted income per share calculations: Three Months Ended Nine Months Ended Feb. 28, Feb. 29, Feb. 28, Feb. 29, 1997 1996 1997 1996 Net income $344,225 $788,156 $1,424,113 $2,334,116 Weighted average number of common shares and common share equivalents are as follows: Weighted average common shares outstanding 8,075,767 7,907,620 8,061,960 7,830,203 Shares issued from assumed exercise of dilutive options and warrants 442,878 976,944 537,223 971,085 Weighted average number of shares outstanding (as adjusted) 8,518,645 8,884,564 8,599,183 8,801,288 Net income per common and common equivalent share $0.04 $0.09 $0.17 $0.27 Note: shares issued from assumed exercise of options and warrants include the numberof incremental shares which result from applying the "treasury stock method" for options and warrants. EX-27 3
5 9-MOS MAY-31-1997 FEB-28-1997 17,991,910 0 10,960,599 0 6,751,972 37,369,384 9,042,562 3,825,341 56,696,794 5,008,775 11,080,937 0 0 807,848 39,335,974 56,696,794 25,953,819 25,953,819 10,591,331 10,591,331 12,951,644 0 243,361 2,491,595 1,067,482 1,424,113 0 0 0 1,424,113 .17 .17
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