-----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, TUgFk6Bm6s+EFkGIqU/XMAVrPcfctysdG7v3xshkb0BtUzQhhhxxH2scY2ax7+EE fa3m0shyiigb8z7prjTzAQ== 0000898430-96-001444.txt : 19960426 0000898430-96-001444.hdr.sgml : 19960426 ACCESSION NUMBER: 0000898430-96-001444 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960229 FILED AS OF DATE: 19960425 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MYCOGEN CORP CENTRAL INDEX KEY: 0000813742 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE SERVICES [0700] IRS NUMBER: 953802654 STATE OF INCORPORATION: CA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11643 FILM NUMBER: 96550717 BUSINESS ADDRESS: STREET 1: 5501 OBERLIN DR CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6194538030 MAIL ADDRESS: STREET 1: 5501 OBERLIN DRIVE CITY: SAN DIEGO STATE: CA ZIP: 92121 10-Q/A 1 AMENDMENT NO. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A AMENDMENT [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 29, 1996 ----------------- 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 number: 0-15881 ------- MYCOGEN CORPORATION ------------------------------------------------------------------ (Exact name of registrant as specified in its charter) California 95-3802654 - ---------------------- ------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5501 Oberlin Drive, San Diego, California 92121 - ------------------------------------------ ------------------------ (Address of principal executive offices) (Zip Code) (619) 453-8030 --------------------------------------- (Registrant's telephone number, including area code) Not Applicable -------------- (Former name or former address, 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 ---- ---- 30,570,160 shares of Common Stock were outstanding as of March 31, 1996. AMENDMENT NO. 1 The undersigned registrant hereby amends Item 1. Financial Statements of its Form 10-Q for the quarterly period ended February 29, 1996 filed on April 12, 1996 as set forth in the pages attached. 1 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. Mycogen Corporation ------------------- (Registrant) Date: April 25, 1996 /s/ James A. Baumker --------------- ----------------------- James A. Baumker Executive Vice President Chief Financial Officer 2 Part 1 - FINANCIAL INFORMATION Item 1. Financial Statements Mycogen Corporation Interim Consolidated Condensed Statements of Operations (Amounts in thousands, except per share data)
Three months ended Six months ended February 29, February 28, February 29, February 28, 1996 1995 1996 1995 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) Net operating revenues................... $ 35,575 $27,661 $ 47,624 $37,170 Contract and other revenues.............. 2,580 1,715 4,151 3,611 -------- ------- -------- ------- Total revenues..................... 38,155 29,376 51,775 40,781 -------- ------- -------- ------- Costs and expenses: Cost of operating revenues............. 23,446 16,997 31,269 23,242 Selling, general and administrative.... 11,250 8,024 19,431 15,039 Research and development............... 5,080 5,025 9,659 10,221 Amortization of intangible assets...... 480 540 1,084 1,033 Special charges........................ 22,890 -- 22,890 -- -------- ------- -------- ------- Total costs and expenses........... 63,146 30,586 84,333 49,535 -------- ------- -------- ------- Operating loss .......................... (24,991) (1,210) (32,558) (8,754) Interest income and expense, net....... 625 324 773 888 Exchange gain ......................... 16 47 23 12 -------- ------- -------- ------- Net loss................................. (24,350) (839) (31,762) (7,854) Dividends on preferred stock............. (194) (373) (578) (742) -------- ------- -------- ------- Net loss applicable to common shares..... $(24,544) $(1,212) $(32,340) $(8,596) ======== ======= ======== ======= Net loss per common share................ $ (1.00) $ (.06) $ (1.47) $ (.45) ======== ======= ======== ======= Weighted average number of shares........ 24,426 19,138 21,937 19,118 ======== ======= ======== =======
See accompanying Notes to Interim Consolidated Condensed Financial Statements. 3 Mycogen Corporation Consolidated Condensed Balance Sheets (Dollars in thousands, except share data)
February 29, August 31, 1996 1995 Assets (Unaudited) (Note) ------------ ---------- Current assets: Cash and cash equivalents......................................... $ 38,924 $ 5,687 Securities available-for-sale..................................... 36,429 11,913 Accounts and notes receivable, net of allowances.................. 35,659 27,402 Inventories....................................................... 62,985 33,633 Other current assets.............................................. 5,031 1,267 --------- --------- Total current assets............................................ 179,028 79,902 Net property, plant and equipment................................... 48,362 49,646 Net intangible assets............................................... 23,716 17,759 Other assets........................................................ 14,077 12,301 --------- --------- Total assets........................................................ $ 265,183 $ 159,608 ========= ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable.................................................. $ 14,787 $ 6,760 Accrued compensation and related taxes............................ 4,186 3,553 Deferred revenues................................................. 33,044 5,670 Other current liabilities......................................... 10,878 5,225 --------- --------- Total current liabilities....................................... 62,895 21,208 Long-term liabilities............................................... 7,085 3,291 Minority interest................................................... -- 21,406 Stockholders' equity: Common stock, $.001 par value, 40,000,000 shares authorized; 30,534,281 and 19,400,764 shares issued and outstanding at February 29, 1996 and August 31, 1995, respectively............. 31 19 Additional paid in capital........................................ 329,686 216,436 Deficit........................................................... (134,514) (102,752) --------- --------- Total stockholders' equity...................................... 195,203 113,703 --------- --------- Total liabilities and stockholders' equity.......................... $ 265,183 $ 159,608 ========= =========
Note: The balance sheet at August 31, 1995 has been derived from the audited financial statements at that date. See accompanying Notes to Interim Consolidated Condensed Financial Statements. 4 Mycogen Corporation Interim Consolidated Condensed Statements of Cash Flows (Dollars in thousands)
Six months ended February 29, February 28, 1996 1995 ------------ ------------ (Unaudited) Operating activities: Net loss.................................................... $(31,762) $ (7,854) Items which did not use cash: Special charges .......................................... 20,890 -- Depreciation ............................................. 2,472 2,487 Amortization of intangible assets......................... 1,084 1,033 Other expense not requiring cash.......................... 1,003 335 Changes in operating assets and liabilities: Accounts and notes receivable............................. 4,935 (377) Inventories............................................... (10,666) (18,127) Prepaid expenses.......................................... (1,473) (259) Accounts payable.......................................... 1,005 1,467 Deferred revenues......................................... 19,128 14,345 Other current liabilities................................. (4,847) (3,281) -------- -------- Cash provided by (used in) operating activities......... 1,769 (10,231) -------- -------- Investing activities: Proceeds from sales of available-for-sale securities........ 13,420 2,000 Proceeds from maturities of available-for-sale securities... 564 4,462 Purchases of available-for-sale securities.................. (38,431) -- Capital expenditures........................................ (1,990) (3,650) Prepaid contract manufacturing.............................. -- (6,758) Change in intangibles and other assets...................... (793) (742) -------- -------- Cash used in investing activities....................... (27,230) (4,688) -------- -------- Financing activities: Net change in short-term borrowings......................... -- 3,800 Proceeds from long-term borrowings.......................... -- 2,500 Payments on long-term borrowings............................ (208) (95) Proceeds from sale of common stock.......................... 58,744 169 -------- -------- Cash provided by financing activities..................... 58,536 6,374 -------- -------- Effect of exchange rate changes on cash and cash equivalents.. 162 275 -------- -------- Increase (decrease) in cash and cash equivalents.............. 33,237 (8,270) Cash and cash equivalents at beginning of period.............. 5,687 8,681 -------- -------- Cash and cash equivalents at end of period.................... $ 38,924 $ 411 ======== ========
See accompanying Notes to Interim Consolidated Condensed Financial Statements. 5 PART I - FINANCIAL INFORMATION - ------------------------------ Item 1. Financial Statements (continued). Mycogen Corporation ------------------- Notes to Interim Consolidated Condensed Financial Statements General - ------- The accompanying financial statements include the accounts of Mycogen Corporation, and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The interim financial statements have been prepared by the Company, without audit, according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (which include only normal recurring adjustments) necessary to state fairly the financial position, results of operations and cash flows as of and for the periods indicated. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Annual Report and Form 10-K of the Company for the fiscal year ended August 31, 1995. The Company's business is highly seasonal. Operating revenues are expected to be concentrated principally in the quarters ending in February and May as a result of the North American agricultural growing season. Consequently, operating revenues and results of operations for the three months ended and six months ended February 29, 1996 are not indicative of operating revenues and results to be expected for a full fiscal year. Acquisition of United AgriSeeds, Inc. - ------------------------------------- In February 1996, the Company issued 4,453,334 shares of common stock to DowElanco in exchange for $26.4 million in cash and all of the shares in DowElanco's seed business, United AgriSeeds, Inc. ("UAS"). The principal seed products of UAS are corn and soybean. As of February 29, 1996 DowElanco owned 14,088,366 shares of the Company's common stock or 46.14%, and may acquire additional shares of the Company's common stock subject to certain restrictions. The acquisition of UAS is accounted for as a purchase and, accordingly, the assets and liabilities of UAS are included in the Consolidated Balance Sheet as of February 29, 1996. The results of operations of UAS from the date of acquisition will be reflected in the consolidated financial statements of the Company commencing with the third fiscal quarter. The acquisition resulted in a purchase price allocation to in-process technology of $2.6 million, which was written-off upon acquisition. The following consolidated, pro forma, unaudited summary of operations data for the six months ended February 29, 1996 and February 28, 1995 assumes that the acquisition occurred on September 1, 1995 and 1994, respectively. 6
Six months ended ----------------------------------- February 29, February 28, (In thousands, except per share data) 1996 1995 --------------- -------------- Total revenues $ 68,809 $ 57,838 Net loss applicable to common shares $ (28,731) $ (7,315) Net loss per common share $ (1.10) $ (.31)
These pro forma results may not be indicative of the results of operations that would have been reported if the transactions had occurred on the dates indicated, or which may be reported in the future. These results do not include the nonrecurring special charge of $2.6 million related to the write-off of acquired in-process technology. Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of - ----------------------------------------------------------------------- The Company's Seed Segment recognized impairment losses and exit costs totaling $11.7 million and $.9 million, respectively, during the quarter ended February 29, 1996 as a result of management's decision to dispose of or sell certain corn production plants and related assets that do not meet quality production standards in connection with a plan to upgrade the quality of seed production. The asset disposals will occur during the third quarter of 1996. The production plants are expected to be sold during 1996 and 1997. The fair values of the assets were based on letters of intent from prospective buyers and management estimates. The impairment losses and exit costs are included in special charges in the Consolidated Statement of Operations. The carrying amount of the assets held for sale total $3.5 million, of which $2.3 million is included in other current assets and $1.2 million is included in other long-term assets in the Consolidated Balance Sheet at February 29, 1996. Exit costs totaling $.9 million are included in other current liabilities at February 29, 1996. Purchase and Write-off of In-Process Technology - ----------------------------------------------- In January 1996, the Company agreed to reacquire certain rights in oil seed technology from SVO Specialty Products, a subsidiary of Lubrizol, for $8.0 million. Of the $8.0 million in rights acquired, $7.2 million was allocated to certain technologies not yet completed and, therefore, was written-off as in- process technology on the acquisition date. The Company made an initial payment of $2.0 million and will pay $2.5 million and $3.5 million in January 1997 and 1998, respectively. Common Shares Issued for Lubrizol's Interest in MPS and Conversion of Preferred - ------------------------------------------------------------------------------- Stock - ----- In January 1996, The Lubrizol Corporation ("Lubrizol") sold its 19.46% ownership interest in Mycogen Plant Sciences (formerly MPS, now "Mycogen Seeds") to the Company for 1,538,008 shares of common stock. In a simultaneous transaction, Lubrizol converted 3,158 shares of Series A Senior Convertible Cumulative Preferred Stock, representing their entire interest in preferred stock, into 1,815,274 shares of common stock at a rate of $17.398 per share which was based on 25% over the average closing price of the Company's common stock for the 60 days prior to the conversion. At February 29, 1996 there were 3,940 shares authorized for issuance of Series A Preferred Stock, $.001 par value, and no outstanding shares. At August 31, 1995 there were 3,100 shares issued to Lubrizol and outstanding with an aggregate liquidation preference of $31 million. 7 In February 1996 Lubrizol sold its entire interest in the Company, 9,502,348 shares of common stock or 36.58%, to DowElanco for $126 million. DowElanco is a joint venture partnership between Dow Chemical and Ely Lilly and Company engaged in the discovery, development, manufacture and distribution of agricultural products used in crop protection and production, and for industrial pest control. Supplemental Schedule of Non-Cash Investing and Financing Activities - -------------------------------------------------------------------- In conjunction with the acquisition of UAS and the remaining ownership interest in Mycogen Seeds in 1996, and an acquisition in 1995, non-cash investing and financing activities were allocated as follows:
Six months ended ----------------------------------- (In thousands) February 29, February 28, 1996 1995 --------------- --------------- Business acquisitions: Fair value of assets acquired, other than cash $ 55,692 $ 1,350 Liabilities assumed (20,573) - Liabilities and acquisition costs incurred (2,512) - Minority interest purchased from Lubrizol 21,406 - Common stock issued (54,013) (1,350) --------------- --------------- Net cash paid for acquisitions $ - $ - =============== =============== Other non-cash investing and financing activities are as follows: Six months ended ----------------------------------- (In thousands) February 29, February 28, 1996 1995 --------------- --------------- Technology rights acquired by incurring directly related liabilities $ 6,000 $ - =============== =============== Dividends on preferred stock $ 578 $ 742 =============== =============== Common stock issued upon conversion of convertible preferred stock $ 31,582 $ - =============== =============== Inventories - ----------- Inventories are comprised of: February 29, August 31, (In thousands) 1996 1995 --------------- -------------- Raw materials and supplies $ 5,580 $ 5,895 Work in process 12,231 3,578 Finished goods 45,174 24,160 =============== ============== Total $ 62,985 $ 33,633 =============== ==============
8 Accumulated Depreciation and Amortization - ----------------------------------------- Accumulated depreciation of property, plant and equipment was $16.2 million and $16.7 million at February 29, 1996 and August 31, 1995, respectively. Accumulated amortization of intangible assets was $7.8 and $6.8 million at February 29, 1996 and August 31, 1995, respectively. Income Taxes - ------------ No provision for income tax is recognized for the three and six months ended February 29, 1996 since the Company anticipates that the effective tax rate for the year ending August 31, 1996 will be zero due to the available net operating loss carryforwards. Net Loss Per Common Share - ------------------------- Net loss per common share for the three and six months ended February 29, 1996 and February 28, 1995 is determined by deducting dividends on preferred stock from net loss and dividing the net result by the weighted average number of common shares outstanding during the respective period. The dilutive effect of common shares issuable under stock options was less than 3% and was not included in the computation of primary earnings per share. Research and Development Arrangement - ------------------------------------ In December 1995, the Company entered into an agreement with Pioneer to develop transgenic crops with built-in resistance. Under the agreement, Pioneer purchased 3,000,000 shares of the Company's common stock for $30 million and provided $10 million in research and development funding. Pioneer will provide an additional $11 million in funding near the end of 1998. Pioneer will receive non-exclusive rights to all Bt crop protection technology and associated technologies codeveloped by the Company and Pioneer during the next 10 years. The Company and Pioneer are able to market their own products resulting from the collaboration, royalty-free, in North America. Pioneer will pay a royalty to Mycogen for jointly developed technology that it markets through seed products outside of North America. The Company has exclusive world wide rights to license jointly developed technology to third parties. No proprietary seed lines will be shared by the companies. Contract revenues recognized under this agreement totaled $.7 million for the three and six months ended February 29, 1996. Deferred revenues of $9.3 million are included in the Consolidated Balance Sheet at February 29, 1996. 9 -----END PRIVACY-ENHANCED MESSAGE-----