-----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, UxcNzNLRaoJk6wAXWiCJiesUVp9ydOMbKeSYNL6d3w7YK9Byd1mTfYVpTTPmS8AA O6dSTadcuNZkopGsjBcQyg== 0000950132-95-000441.txt : 19951208 0000950132-95-000441.hdr.sgml : 19951208 ACCESSION NUMBER: 0000950132-95-000441 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: RESPIRONICS INC CENTRAL INDEX KEY: 0000780434 STANDARD INDUSTRIAL CLASSIFICATION: 3842 IRS NUMBER: 251304989 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16723 FILM NUMBER: 95589427 BUSINESS ADDRESS: STREET 1: 1001 MURRY RIDGE DR CITY: MURRYSVILLE STATE: PA ZIP: 15668 BUSINESS PHONE: 4127330200 MAIL ADDRESS: STREET 1: 1001 MURRY RIDGE DRIVE CITY: MURRYSVILLE STATE: PA ZIP: 15668 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) X Quarterly Report pursuant to section 13 or 15(d) of the Securities - Exchange Act of 1934 for the quarterly period ended September 30, 1995 ----------------- 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 No. 000-16723 RESPIRONICS, INC. (Exact name of registrant as specified in its charter) Delaware 25-1304989 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 1001 Murry Ridge Dr. Murrysville, Pennsylvania 15668 (Address of principal executive offices) (Zip Code) (Registrant's Telephone Number, including area code) 412-733-0200 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 and (2) has been subject to such filing requirements for at least the past 90 days. Yes X No . - - As of October 31, 1995, there were 16,819,111 shares of Common Stock of the registrant outstanding. 1 INDEX RESPIRONICS, INC. PART I - FINANCIAL INFORMATION - - - - - ------------------------------ Item 1. Financial Statements (Unaudited). Consolidated balance sheets -- September 30, 1995 and June 30, 1995. Consolidated statements of operations -- Three months ended September 30, 1995 and 1994. Consolidated statements of cash flows-- Three months ended September 30, 1995 and 1994. Notes to consolidated financial statements -- September 30, 1995. Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition PART II - OTHER INFORMATION - - - - - --------------------------- Item 1. Legal Proceedings. Item 2. Changes in Securities. Item 3. Defaults Upon Senior Securities. Item 4. Submission of Matters to a Vote of Security Holders. Item 5. Other Information. Item 6. Exhibits and Reports on Form 8-K. SIGNATURES - - - - - ---------- 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements CONSOLIDATED BALANCE SHEETS (UNAUDITED) RESPIRONICS, INC. AND SUBSIDIARIES
September 30 June 30 1995 1995 --------------------------- ASSETS CURRENT ASSETS Cash and short-term investments $13,918,896 $16,126,904 Trade accounts receivable, less allowance for doubtful accounts of $750,000 and $700,000 20,413,400 19,448,187 Inventories 16,675,789 13,136,664 Prepaid expenses and other 2,093,949 1,951,358 Deferred income tax benefits 2,200,595 2,200,595 ----------- ----------- TOTAL CURRENT ASSETS 55,302,629 52,863,708 PROPERTY, PLANT AND EQUIPMENT Land 2,734,337 2,589,117 Building 8,707,993 8,674,675 Machinery and equipment 15,167,404 14,155,510 Furniture and office equipment 10,023,892 9,394,000 Leasehold improvements 939,327 577,175 ----------- ----------- 37,572,953 35,390,477 Less allowances for depreciation and amortization 16,309,657 15,443,041 ----------- ----------- 21,263,296 19,947,436 Funds held in trust for construction of new facility 720,106 710,929 OTHER ASSETS 2,792,308 2,668,592 COST IN EXCESS OF NET ASSETS OF BUSINESS ACQUIRED 1,808,588 1,847,905 ----------- ----------- $81,886,927 $78,038,570 =========== ===========
See notes to consolidated financial statements. 3
September 30 June 30 1995 1995 ------------ ------------ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 3,822,181 $ 4,858,554 Accrued compensation and related expenses 3,013,479 3,827,187 Accrued expenses 3,220,616 2,694,298 Income taxes 3,365,036 1,572,121 Current portion of long-term obligations 495,455 498,150 ----------- ----------- TOTAL CURRENT LIABILITIES 13,916,767 13,450,310 LONG-TERM OBLIGATIONS 5,440,396 5,537,996 MINORITY INTEREST 646,199 681,068 COMMITMENTS SHAREHOLDERS' EQUITY Common Stock, $.01 par value; authorized 40,000,000 shares; issued and outstanding 16,811,155 shares at September 30, 1995 and 16,744,785 shares at June 30, 1995 168,112 167,448 Additional capital 19,549,410 19,254,977 Retained earnings 42,166,043 38,946,771 ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 61,883,565 58,369,196 ----------- ----------- $81,886,927 $78,038,570 =========== ===========
See notes to consolidated financial statements. 4 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) RESPIRONICS, INC. AND SUBSIDIARIES
Three months ended September 30 1995 1994 ------------------------- Net sales $26,674,675 $21,669,809 Cost of goods sold 11,514,510 9,470,731 ----------- ----------- 15,160,165 12,199,078 General and administrative expense 4,016,803 3,168,640 Sales, marketing and commission expense 4,523,786 3,884,167 Research and development expense 1,692,907 1,470,779 Interest expense 50,054 47,060 Other income (315,760) (212,863) ----------- ----------- 9,967,790 8,357,783 ----------- ----------- INCOME BEFORE INCOME TAXES 5,192,375 3,841,295 Income taxes 1,973,103 1,421,279 ----------- ----------- NET INCOME $ 3,219,272 $ 2,420,016 =========== =========== Earnings per share $ 0.18 $ 0.14 =========== =========== Weighted Average Number of Shares Used in Computing Earnings Per Share 17,858,788 17,274,522
See notes to consolidated financial statements. 5 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) RESPIRONICS, INC. AND SUBSIDIARIES
Three months ended September 30 1995 1994 ------------------------- OPERATING ACTIVITIES Net income $ 3,219,272 $2,420,016 Adjustments to reconcile net income to net cash (used) provided by operating activities: Depreciation and amortization 905,933 863,222 Provision for losses on accounts receivable 50,000 75,000 Changes in operating assets and liabilities: Increase in accounts receivable (1,015,213) (136,806) Increase in inventories and prepaid expenses (3,681,716) (817,944) Increase in other assets (123,716) (60,772) Decrease in accounts payable (1,036,373) (740,659) Decrease in accrued compensation and related expenses (813,708) (440,108) Increase in accrued expenses 526,318 18,132 Increase in accrued income taxes 1,792,915 1,405,485 ----------- ----------- NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES (176,288) 2,585,566 INVESTING ACTIVITIES Purchase of property, plant and equipment (2,182,476) (1,455,536) Increase in funds held in trust for construction of new facility (9,177) (4,807) ----------- ----------- NET CASH USED BY INVESTING ACTIVITIES (2,191,653) (1,460,343) FINANCING ACTIVITIES Reduction in long-term obligations (100,295) (74,833) Issuance of common stock 295,097 99,766 Decrease in minority interest (34,869) (3,519) ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 159,933 21,414 ----------- ----------- (DECREASE) INCREASE IN CASH AND SHORT-TERM INVESTMENTS (2,208,008) 1,146,637 Cash and short-term investments at beginning of period 16,126,904 12,384,054 ----------- ----------- CASH AND SHORT-TERM INVESTMENTS AT END OF PERIOD $13,918,896 $13,530,691 =========== ===========
See notes to consolidated financial statements. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) RESPIRONICS, INC. AND SUBSIDIARIES SEPTEMBER 30, 1995 NOTE A -- BASIS OF PRESENTATION The accompanying unaudited 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 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 months ended September 30, 1995 are not necessarily indicative of the results that may be expected for the year ended June 30, 1996. 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 June 30, 1995. NOTE B -- INVENTORIES The composition of inventory is as follows:
September 30 June 30 1995 1995 -------------- ------------ Raw materials $ 10,539,409 $ 7,960,573 Work-in-process 1,356,807 1,105,010 Finished goods 4,779,573 4,071,081 -------------- ------------ $ 16,675,789 $ 13,136,664 ============== ============
7 Item 2. Management's Discussion and Analysis of Result of Operations and Financial Condition RESULTS OF OPERATIONS Net sales for the quarter ended September 30, 1995 were $26,675,000 representing a 23% increase over the $21,670,000 recorded for the quarter ended September 30, 1994. The increase in net sales was primarily attributable to increases in total unit and dollar sales for the Company's obstructive sleep apnea products. In addition, sales of the Company's face masks and other patient interface devices used as accessories for its obstructive sleep apnea and ventilatory support units increased significantly in both unit and dollar terms. Finally, sales of the Company's ventilatory support units also increased in both unit and dollar terms as well. The Company's gross profit was 57% of net sales for the quarter ended September 30, 1995 as compared to 56% for the quarter ended September 30, 1994. This improvement was due primarily to the Company's ability to limit the growth of manufacturing and manufacturing support costs to rates less than the rate of sales increase achieved. General and administrative expenses were $4,017,000 (15% of net sales) for the quarter ended September 30, 1995 as compared to $3,169,000 (15% of net sales) for the quarter ended September 30, 1994. The increase in absolute dollars was due primarily to increased legal fees incurred relating to the previously disclosed action brought against the Company by a competitor, Rescare Limited. The increase was also due, to a lesser extent, to a larger provision made during the quarter for year end profit sharing bonuses based on financial results achieved and to increased staffing. Sales, marketing and commission expenses were $4,524,000 (17% of net sales) for the quarter ended September 30, 1995 as compared to $3,884,000 (18% of net sales) for the quarter ended September 30, 1994. This increase in absolute dollars was due primarily to costs associated with trade shows, salary expenses for new employees, and commission expenses based on higher sales levels achieved. Research and development expenses were $1,693,000 (6% of net sales) for the quarter ended September 30, 1995 as compared to $1,471,000 (7% of net sales) for the quarter ended September 30, 1994. This increase in absolute dollars reflects the extensive new product development efforts currently underway to support new product introductions in the Company's major product groups. Several new products were introduced during the current quarter, and other new product introductions are scheduled for the remainder of fiscal year 1996 with initial distribution in international markets until regulatory approval in the United States is obtained. 8 The Company's effective income tax rate was 38% for the quarter ended September 30, 1995 as compared to 37% for the quarter ended September 30, 1994. Changes in the Company's effective income tax rate are due primarily to changes in the relative proportion of the Company's taxable income attributable to its United States operation versus taxable income attributable to its Hong Kong and Peoples Republic of China operations because the United States operation pays income taxes at a higher rate (approximately 41% before available income tax credits) than do the Hong Kong and Peoples Republic of China operations. For the quarter to quarter comparison, the proportion of taxable income attributable to the United States operation increased. As a result of the factors described above, the Company's net income was $3,219,000 (12% of net sales) for the quarter ended September 30, 1995 as compared to $2,420,000 (11% of net sales) for the quarter ended September 30, 1994. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES The Company had working capital of $41,386,000 at September 30, 1995 and $39,413,000 at June 30, 1995. Net cash used by operating activities was $176,000 for the three months ended September 30, 1995 as compared to net cash provided by operating activities of $2,586,000 for the three months ended September 30, 1994. The net use of cash for the current quarter was due primarily to increases in inventory and accounts receivable and decreases in accounts payable and accrued compensation in amounts greater than the changes in those accounts during the first quarter of last fiscal year. The increase in inventory was due to the Company's purchase of raw materials for certain of its new products, including those introduced during the current quarter and those scheduled for introduction during the remainder of the fiscal year and to the completion of stocking of the Company's warehouse in Reno, Nevada. This warehouse opened in March 1995. Net cash used by investing activities was $2,192,000 for the three months ended September 30, 1995 as compared to $1,460,000 for the three months ended September 30, 1994. Essentially all of the cash used by investing activities for both periods represented capital expenditures, including the purchase of production equipment, computer and telecommunications equipment, and office equipment. The funding for capital expenditures in the current quarter was provided by accumulated cash and short-term investment balances, and in last year's first quarter was provided by positive cash flows from operating activities and by accumulated cash and short-term investment balances. The Company believes that positive cash flow from operating activities projected for the remainder of the fiscal year, the availability of the full amount of funds under its commercial bank line of credit, and its accumulated cash and short-term investments will be sufficient to meet its current and presently 9 anticipated future needs for the remainder of fiscal year 1996 for operating activities, investing activities, and financing activities (primarily consisting of payments on long-term debt ). 10 PART 2 OTHER INFORMATION Item 1: Legal Proceedings - - - - - ------- ----------------- Not applicable Item 2: Change in Securities - - - - - ------- -------------------- (a) Not applicable (b) Not applicable Item 3: Defaults Upon Senior Securities - - - - - ------- ------------------------------- (a) Not applicable (b) Not applicable Item 4: Submission of Matters to a Vote of Security Holders - - - - - ------- --------------------------------------------------- Not applicable Item 5: Other Information - - - - - ------- ----------------- Not applicable Item 6: Exhibits and Reports on Form 8-K - - - - - ------- -------------------------------- (a) Exhibits Not applicable (b) Reports on Form 8-K Not applicable 11 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. RESPIRONICS, INC. Date: November 10, 1995 /s/ Daniel J. Bevevino ______________________ ________________________ Daniel J. Bevevino Controller, and Chief Financial and Accounting Officer Signing on behalf of the registrant and as Chief Financial and Accounting Officer 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS 3-MOS JUN-30-1996 JUN-30-1995 JUL-01-1995 JUL-01-1994 SEP-30-1995 SEP-30-1994 13,918,896 13,530,691 0 0 21,163,400 15,673,091 750,000 600,000 16,675,789 8,614,250 55,302,629 42,232,689 37,572,953 30,870,271 16,309,657 12,793,133 81,886,927 61,601,500 13,916,767 9,419,601 0 0 168,112 163,658 0 0 0 0 61,715,743 46,580,233 81,886,927 61,601,500 26,674,675 21,669,809 26,674,675 21,669,809 11,514,510 9,470,731 11,514,510 9,470,731 9,917,736 8,310,723 0 0 50,054 47,060 5,192,375 3,841,295 1,973,103 1,421,279 3,219,272 2,420,016 0 0 0 0 0 0 3,219,272 2,420,016 0.18 0.14 0.18 0.14
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