-----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, Vf4x4zE5QVBbG82QHCU7CCtEoUGw+qmNyjGI2H7hmi505DTTIaeWytFTdESXGXn9 ci2EUIpiAXZ8dHj70RC9Aw== 0000830736-98-000028.txt : 19980814 0000830736-98-000028.hdr.sgml : 19980814 ACCESSION NUMBER: 0000830736-98-000028 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOPOOL INTERNATIONAL INC CENTRAL INDEX KEY: 0000830736 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 581729436 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-14257 FILM NUMBER: 98686502 BUSINESS ADDRESS: STREET 1: 6025 NICOLLE ST SUITE A CITY: VENTURA STATE: CA ZIP: 93003 BUSINESS PHONE: 8056540643 MAIL ADDRESS: STREET 1: 6025 NICOLLE STREET CITY: VENTURA STATE: CA ZIP: 93003 FORMER COMPANY: FORMER CONFORMED NAME: CYTRX BIOPOOL LTD DATE OF NAME CHANGE: 19890716 10QSB 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-QSB /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 1998 Commission file number 0-17714 BIOPOOL INTERNATIONAL, INC. (Exact name of Registrant as specified in its charter) Delaware 58-1729436 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 6025 Nicolle Street, Ventura, (805) 654-0643 California 93003 (Registrant's telephone (Address of principal executive offices) number including area code) _____________________________________________________ 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 proceeding 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. Outstanding at June 30, 1998, Common Stock, $.01 par value per share, 8,686,986 shares. PART I. FINANCIAL INFORMATION Item 1. Financial Statements BIOPOOL INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 DECEMBER 31, 1997 (Unaudited) - ----------------------------------------------------------------------------- (in thousands except share data) ASSETS Current assets Cash $ 1,091 $ 1,376 Accounts receivable, net 2,923 2,677 Inventories 3,869 3,784 Prepaid expenses and other current assets 470 286 - ----------------------------------------------------------------------------- Total current assets 8,353 8,123 Property and equipment 6,608 6,583 Less accumulated depreciation (2,605) (2,398) - ----------------------------------------------------------------------------- Property and equipment, net 4,003 4,185 Other assets 1,352 1,370 - ----------------------------------------------------------------------------- TOTAL ASSETS $13,708 $13,678 - ----------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and other payables $ 1,896 $ 1,688 Debt 918 964 - ----------------------------------------------------------------------------- Total current liabilities 2,814 2,652 Long-term debt, net 1,414 1,873 Deferred tax liability 108 108 Stockholders' equity: Common stock, $.01 par value, 50,000,000 shares authorized; 8,673,686 and 8,648,828 shares issued and out- standing in 1998 and 1997, respectively 87 86 Other stockholders' equity 9,285 8,959 - ----------------------------------------------------------------------------- Total stockholders' equity 9,372 9,045 - ----------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $13,708 $13,678 - ----------------------------------------------------------------------------- See accompanying notes to consolidated financial statements.
BIOPOOL INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ending Six Months Ending June 30, June 30, 1998 1997 1998 1997 - ----------------------------------------------------------------------------- (in thousands except share data) Sales $ 3,881 $ 4,243 $ 7,719 $ 8,346 Costs and expenses Cost of sales 2,303 2,535 4,625 5,020 Selling, general, administrative 1,139 1,094 2,176 2,137 Research and development 111 96 227 205 Restructuring costs 95 -- 138 -- Other 14 (14) 14 (33) Interest expense 56 75 116 163 - ----------------------------------------------------------------------------- Income before taxes 163 457 423 854 Income tax expense 18 107 96 194 - ----------------------------------------------------------------------------- Net income $ 145 $ 350 $ 327 $ 660 - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Earnings per share: Basic $ 0.02 $ 0.05 $ 0.04 $ 0.08 Diluted $ 0.02 $ 0.04 $ 0.04 $ 0.07
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ending June 30, 1998 1997 - ----------------------------------------------------------------------------- (in thousands) Operating activities $ 365 $ 260 Investing activities (145) (466) Financing activities (483) (435) Effect of exchange rates (22) (204) - ----------------------------------------------------------------------------- Net increase (decrease) in cash $ (285) $ (845) - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- See accompanying notes to consolidated financial statements.
BIOPOOL INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. 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-QSB 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 six-month period ended June 30, 1998, are not necessarily indicative of the results that may be expected for the year ended December 31, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 1997. The balance sheet at December 31, 1997, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. 2. Inventories
June 30, December 31, 1998 1997 (in thousands) Raw materials $ 1,136 $ 821 Work in process 1,615 1,661 Finished products 1,118 1,302 ------------------------ $ 3,869 $ 3,784
3. Earnings per Share During the year ended December 31, 1997, the Company adopted SFAS No. 128, "Earnings Per Share," which required a change in the method used to compute earnings per share. Under this new standard, primary and fully diluted earnings per share were replaced with "Basic" and "Diluted" earnings per share. For Biopool, basic earnings per share amounts under the new standard were $0.01 per share higher than the primary earnings per share previously presented for the 1997 periods. As required by SFAS No. 128, all prior period amounts have been restated to conform to the new presentation. Basic earnings per share is based upon the weighted-average number of common shares outstanding. Diluted earnings per share is based upon the weighted average number of common shares and dilutive potential common shares outstanding. Potential common shares are outstanding options under the Company's stock option plans and outstanding warrants, which are included under the treasury stock method. BIOPOOL INTERNATIONAL, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS Results of Operations Sales were $3.9 million for the three-month period and $7.7 million for the six-month period ended June 30, 1998, compared with $4.2 million and $8.3 million for the corresponding periods of 1997, respectively. Sales of hemostasis products for the six months ended June 30, 1998, were approximately 3% above last year, and the overall decline in sales was solely attributed to our BCA business. Approximately $375,000, or 60%, of the year-to-date decline in sales was the result of the unavailability of a finished product (BayRho ) from a single supplier as previously reported. This product became backordered in February without notice, and management has been advised by the manufacturer that this product may not be available again until September of this year. In spite of repeated efforts, the Company still has no alternative source for a product equivalent to BayRho . Prolonged disruption in the supply of this product will likely lead to the loss of customers for, and future sales of, this product, and such loss could continue to have an adverse impact on the Company's sales and results of operations. Additionally, international sales were down approximately $280,000 for the six-month period ended June 30, 1998, when compared with the prior year, in part as a result of the loss of business through certain key distributors in Europe. The Company's management is seeking to add new distributors or other strategic business arrangements in these markets. On July 13, 1998, the Company announced the appointment of a new vice president of marketing and business development in an effort to improve future sales. Cost of sales decreased $232,000 for the three months and $395,000 for the six months ended June 30, 1998, compared with the respective 1997 periods as a result of lower sales. As a percentage of sales, year-to-date cost of sales remained relatively flat at approximately 60%. This percentage should improve with the anticipated cost savings associated with the closure of the Canadian facilities, and management continues to pursue additional cost reductions. Selling, general and administrative expenses increased $45,000 and $39,000 for the three months and six months ended June 30, 1998, compared with the same periods of 1997. The first six months of 1997 included approximately $80,000 of incremental costs associated with the transition of the then newly acquired BCA business. The increased costs for the 1998 periods were due to increased company-wide selling and marketing expenditures and general wage increases, as well as increased allowance for BCA doubtful accounts receivable. On December 23, 1997, the Company announced the restructuring of its operations by closing its facilities in Canada and consolidating the operations of its subsidiary, Biopool Canada Inc., with operations conducted at the Company's facilities in Ventura, California. Restructuring charges of $342,000 were recorded in the fourth quarter of 1997 and $43,000 in the first quarter of 1998. The transfer of technology, manufacturing, and administrative functions was completed June 30, 1998, for additional second quarter charges of $95,000. Management anticipates cost savings from the consolidation beginning in the third quarter of 1998. Interest expense for the three months and six months ended June 30, 1998, decreased $19,000 and $47,000, respectively, from the same prior year periods as a result of lower outstanding loan balances. Total debt outstanding at June 30, 1998, was $2.3 million versus $3.3 million a year ago. Income tax expense for the 1997 periods include benefits related to utilization of domestic NOL carryforwards. All NOL benefits were exhausted during 1997. Income taxes for the second quarter of 1998 included a tax benefit associated with certain restructuring charges accrued in the fourth quarter of 1997. Financial Condition The Company's liquidity and capital resources remained strong into the second quarter of 1998. Working capital as of June 30, 1998, was $5.5 million, with a current ratio of 3.0 to 1.0. Approximately $505,000 of cash was used to pay down debt during the first six months of 1998. The total debt to equity ratio at June 30, 1998, was 25%. The Company's management believes that the current availability of cash, lines of credit, working capital, and cash flow from operations are adequate to meet the Company's needs for at least the next twelve months. The Company continues to seek potential acquisitions and sources of capital to finance such acquisitions, although it has no commitments for either at this time. In addition, the Company repurchased 13,300 shares of its Common Stock on the open market during the month of June 1998 at an average purchase price of $1.24 per share. The Company also purchased an additional 5,000 shares at an average price of $1.34 per share during the first two weeks of July 1998, all pursuant to the Company's stock repurchase program as announced June 5, 1998. BIOPOOL INTERNATIONAL, INC. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders (a) The Registrant's Annual Meeting of Stockholders was held on June 3, 1998. (b) The following directors were elected for the ensuing year at the Annual Meeting: Michael D. Bick, Ph.D. N. Price Paschall Douglas L. Ayer James H. Chamberlain No other director's term of office continued after the Annual Meeting. (c) The matters voted upon at the Annual Meeting, the number of votes cast for, against, or withheld, as well as the number of abstentions and non-votes as to each such matter were as follows: 1. The election of Michael D. Bick, Ph.D., as a director: 6,692,338 votes for; 35,550 votes against; 0 votes withheld; 0 abstentions; 1,944,996 non-votes. 2. The election of Douglas L. Ayer as a director: 6,695,438 votes for; 32,450 votes against; 0 votes withheld; 0 abstentions; 1,994,996 non-votes. 3. The election of N. Price Paschall as a director: 6,695,438 votes for; 32,450 votes against; 0 votes withheld; 0 abstentions; 1,994,996 non-votes. 4. The election of James H. Chamberlain, as a director: 6,695,438 votes for; 32,450 votes against; 0 votes withheld; 0 abstentions;1,994,996 non-votes. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (11) Statements regarding computation of earnings per share. (b) Reports on Form 8-K. Form 8-K dated June 18, 1998. Item 5 - Other Events - Registration of Securities Under Rights Agreement Dated as of June 12, 1998. Item 7 - Financial Statements and Exhibits 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. Date: August 13, 1998 BIOPOOL INTERNATIONAL, INC. ------------------------- -------------------------------- (Registrant) /s/ Michael D. Bick, Ph.D. -------------------------------- Michael D. Bick, Ph.D. Chief Executive Officer and Chairman of the Board /s/ Robert K. Foote -------------------------------- Robert K. Foote Chief Financial Officer and Corporate Secretary EX-11 2 EXHIBIT 11 BIOPOOL INTERNATIONAL, INC. Statement Regarding Computation of Per Share Earnings Six Months Ended June 30, (in thousands except per share data)
1998 1997 Numerator for basic and diluted earnings per share - net income $ 327 $ 660 ------ ------ Denominator: Denominator for basic earnings per share - weighted-average shares 8,674 8,595 Effect of dilutive securities - employee stock options and warrants 190 538 ------ ------ Denominator for diluted earnings per share - adjusted weighted-average shares 8,864 9,133 ------ ------ BASIC EARNINGS PER SHARE $ 0.04 $ 0.08 DILUTED EARNINGS PER SHARE $ 0.04 $ 0.07
EX-27 3
5 6-MOS DEC-31-1998 JUN-30-1998 1,091,000 0 2,923,000 0 3,869,000 8,353,000 6,608,000 2,605,000 13,708,000 2,814,000 0 0 0 87,000 9,285,000 13,708,000 7,719,000 7,719,000 4,625,000 7,180,000 0 0 116,000 423,000 96,000 327,000 0 0 0 327,000 0.04 0.04
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