-----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, BlxDz22R2LDrGn8nRdaF74nRSZxywJwGJcut1xieJFHzceCEgTZgm8dAtv86xAH4 jLpohmUpqJ/mpdODyS5xnA== 0000864906-00-000002.txt : 20000516 0000864906-00-000002.hdr.sgml : 20000516 ACCESSION NUMBER: 0000864906-00-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LUNAR CORP CENTRAL INDEX KEY: 0000864906 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 391200501 STATE OF INCORPORATION: WI FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-18643 FILM NUMBER: 634612 BUSINESS ADDRESS: STREET 1: 313 W BELTLINE HIGHWAY CITY: MADISON STATE: WI ZIP: 53713 BUSINESS PHONE: 6082742663 MAIL ADDRESS: STREET 1: 726 HEARTLAND TRAIL CITY: MADISON STATE: WI ZIP: 53717-1915 10-Q 1 QUARTERLY REPORT FOR QUARTER ENDING 03/31/00 UNITED STATES 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 March 31, 2000 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-18643 LUNAR CORPORATION (Exact name of registrant as specified in its charter) Wisconsin 3845 39-1200501 (State of (Primary Standard Industry (IRS Employer Incorporation) Classification Code Number) Identification No.) 726 Heartland Trail Madison, Wisconsin 53717 608-828-2663 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) 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 / / As of April 30, 2000, 8,573,705 shares of the registrant's Common Stock, $0.01 par value, were outstanding. LUNAR CORPORATION AND SUBSIDIARIES FORM 10-Q For the quarterly period ended March 31, 2000 TABLE OF CONTENTS ----------------- PART I - FINANCIAL INFORMATION Page ---- Item 1. Financial statements Consolidated Balance Sheets March 31, 2000, and June 30, 1999 . . . . . . . . . . . . . 3 Consolidated Statements of Operations Three and Nine Months Ended March 31, 2000 and 1999. . . . . . . . . . . . . . . . . . . . . . . . . . 5 Consolidated Statements of Cash Flows Nine Months Ended March 31, 2000 and 1999. . . . . . . . . . . . . . . . . . . . . . . . . . 6 Notes to Consolidated Financial Statements. . . . . . . . . 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . .11 PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . .12 Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . .12 Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . .12 Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . .12 Item 4. Submission of Matters to a Vote of Security Holders . . . .12 Item 5. Other Information . . . . . . . . . . . . . . . . . . . . .13 Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . .13 SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14 EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 PART 1. FINANCIAL INFORMATION ITEM 1. Financial Statements LUNAR CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets - --------------------------------------------------------------------------- Assets - --------------------------------------------------------------------------- March 31, June 30, 2000 1999 (Unaudited) (Audited) - --------------------------------------------------------------------------- Current Assets: Cash and cash equivalents $ 5,766,992 $13,666,163 Marketable securities 11,547,202 4,311,834 Receivables: Trade, less allowance for doubtful accounts of $3,209,000 at March 31, 2000 and $3,524,000 at June 30, 1999 25,213,953 25,316,044 Short-term financed accounts receivable 4,545,343 4,848,186 Other 915,666 407,056 - --------------------------------------------------------------------------- 30,674,962 30,571,286 Inventories 12,307,398 13,655,779 Deferred Income Taxes 2,451,000 1,992,000 Other Current Assets 252,945 431,931 - --------------------------------------------------------------------------- Total Current Assets 63,000,499 64,628,993 Property, Plant and Equipment--At Cost: Land 1,927,260 2,088,118 Buildings and improvements 9,998,780 2,287,356 Furniture and fixtures 1,424,616 1,055,780 Machinery and other equipment 10,664,758 9,368,111 Construction in progress 0 6,787,950 - --------------------------------------------------------------------------- 24,015,414 21,587,315 Less Accumulated Depreciation and Amortization 7,097,670 6,354,858 - --------------------------------------------------------------------------- 16,917,744 15,232,457 - --------------------------------------------------------------------------- Long-term Financed Accounts Receivable 4,626,734 4,488,753 Long-term Marketable Securities 14,471,889 11,233,298 Patents and Other Intangibles, Net of Accumulated Amortization of $711,000 at March 31, 2000 and $603,000 at June 30, 1999 433,688 463,270 Other 360,501 117,390 - --------------------------------------------------------------------------- $99,811,055 $96,164,161 =========================================================================== See accompanying notes to consolidated financial statements LUNAR CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets - --------------------------------------------------------------------------- Liabilities and Shareholders' Equity - --------------------------------------------------------------------------- March 31, June 30, 2000 1999 (Unaudited) (Audited) - --------------------------------------------------------------------------- Current Liabilities: Accounts payable $5,661,143 $9,133,277 Customer advances and deferred income 2,717,855 1,573,523 Income taxes payable 2,469,156 2,682,104 Accrued liabilities: Commissions payable 1,772,571 2,009,340 Compensation payable 681,324 658,821 Property, payroll, and other taxes 671,393 250,150 Accrued warranty and installation expenses 3,107,272 3,118,000 Other 421,892 393,537 - --------------------------------------------------------------------------- Total Current Liabilities 17,502,606 19,818,752 Shareholders' Equity: Common stock--authorized 25,000,000 shares of $.01 par value; issued and outstanding 8,620,805 shares at March 31, 2000 and 8,598,580 at June 30, 1999 86,208 85,986 Capital in excess of par value 23,450,244 23,454,316 Retained Earnings 59,069,332 52,922,982 Accumulated Comprehensive Income (297,335) (117,875) - --------------------------------------------------------------------------- 82,308,449 76,345,409 - --------------------------------------------------------------------------- $99,811,055 $96,164,161 =========================================================================== See accompanying notes to consolidated financial statements LUNAR CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) - --------------------------------------------------------------------------- Three months ended Nine Months Ended March 31, March 31, March 31, March 31, 2000 1999 2000 1999 - --------------------------------------------------------------------------- Revenues $22,211,300 $19,749,021 $68,685,521 $65,983,823 Cost of sales 12,171,582 11,701,195 38,795,288 37,255,038 - --------------------------------------------------------------------------- Gross Profit 10,039,718 8,047,826 29,890,233 28,728,785 - --------------------------------------------------------------------------- Operating Expenses Research and development 1,337,355 1,803,950 4,283,226 5,618,143 Selling and marketing 5,275,876 6,687,570 15,975,888 19,035,645 General and administrative 1,036,436 1,131,034 3,172,285 3,525,061 - --------------------------------------------------------------------------- 7,649,667 9,622,554 23,431,399 28,178,849 - --------------------------------------------------------------------------- Income (Loss) from Operations 2,390,051 (1,574,728) 6,458,834 549,936 - --------------------------------------------------------------------------- Other Income (Expense): Interest income 545,190 443,310 1,522,453 1,136,193 Other - Net 373,329 (8,088) 800,063 370,126 Settlement of lawsuit 0 0 0 (579,555) - --------------------------------------------------------------------------- 918,519 435,222 2,322,516 926,764 - --------------------------------------------------------------------------- Income (Loss) Before Income Taxes 3,308,570 (1,139,506) 8,781,350 1,476,700 Income Tax Expense (Benefit) 993,000 (315,000) 2,635,000 411,000 - --------------------------------------------------------------------------- Net Income (Loss) $ 2,315,570 $ (824,506) $ 6,146,350 $ 1,065,700 =========================================================================== Basic Earnings per Share $0.27 ($0.10) $0.72 $0.12 =========================================================================== Diluted Earnings per Share $0.26 ($0.10) $0.70 $0.12 =========================================================================== Weighted Average Number of Common Shares 8,601,684 8,607,330 8,593,698 8,623,714 =========================================================================== Weighted Average Number of Common and Dilutive Potential Common Shares 8,878,488 8,607,330 8,777,509 8,793,191 =========================================================================== See accompanying notes to consolidated financial statements LUNAR CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) - --------------------------------------------------------------------------- Nine months ended March 31, March 31, 2000 1999 - --------------------------------------------------------------------------- Cash Flows from Operating Activities: Net income $6,146,350 $1,065,700 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 1,890,833 1,599,603 Deferred income taxes (459,000) (433,000) Gain on sale of building (288,900) 0 Write-off patents 0 159,959 Changes in assets and liabilities: Receivables (234,768) (7,319,920) Inventories 1,348,381 (979,018) Other current assets 178,986 (64,514) Accounts payable (3,559,823) 524,257 Customer advances and deferred income 1,144,332 416,638 Accrued liabilities 224,604 1,474,355 Income taxes payable (82,130) (1,093,192) - --------------------------------------------------------------------------- Net Cash Provided by (Used in) Operating Activities 6,308,865 (4,649,132) - --------------------------------------------------------------------------- Cash Flows from Investing Activities: Purchases of marketable securities (13,027,717) 0 Sales and maturities of marketable securities 2,221,900 13,784,230 Additions to property, plant and equipment (4,854,312) (4,373,961) Proceeds from sale of building 1,665,178 0 Additions to patents and other intangibles (78,418) (98,978) - --------------------------------------------------------------------------- Net Cash Provided by (Used in) Investing Activities (14,073,369) 9,311,291 - --------------------------------------------------------------------------- Cash Flows from Financing Activities: Proceeds from exercise of stock options 220,333 41,187 Repurchase of common stock (355,000) (1,576,600) - -------------------------------------------------------------------------- Net Cash Used in Financing Activities (134,667) (1,535,413) - -------------------------------------------------------------------------- Net Increase (Decrease) in Cash and Cash Equivalents (7,899,171) 3,126,746 Cash and Cash Equivalents at Beginning of Period 13,666,163 4,608,427 - -------------------------------------------------------------------------- Cash and Cash Equivalents at End of Period $ 5,766,992 $ 7,735,173 ========================================================================== Supplemental Disclosure of Cash Flow Information: Income taxes paid $ 3,215,677 $1,679,995 ========================================================================== See accompanying notes to consolidated financial statements LUNAR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) BASIS OF PRESENTATION The consolidated financial statements of Lunar Corporation presented herein, without audit except for balance sheet information at June 30, 1999, have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in Lunar's Annual Report on Form 10-K for the year ended June 30, 1999. The consolidated balance sheet as of March 31, 2000, the consolidated statements of operations for the three and nine months ended March 31, 2000 and 1999, and the consolidated statements of cash flows for the nine months ended March 31, 2000 and 1999 are unaudited but, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments)necessary for a fair presentation of results for these interim periods. Lunar has reclassified the presentation of certain prior year information to conform with the current presentation format. The results of operations for the three and nine months ended March 31, 2000, are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2000. (2) INVENTORIES Inventories are stated at the lower of cost or market; cost is determined principally by the first-in, first-out method. Inventories are broken down as follows: - --------------------------------------------------------------------------- March 31, June 30, 2000 1999 (Unaudited) (Audited) - --------------------------------------------------------------------------- Finished goods and work in process $ 7,747,782 $ 7,125,027 Materials and purchased parts 4,559,616 6,530,752 ----------- ----------- $12,307,398 $13,655,779 =========== =========== (3) SHAREHOLDERS' EQUITY On April 22, 1997, Lunar approved a stock repurchase program pursuant to which it may repurchase up to 1,000,000 shares of its common stock from time to time based upon market conditions and other factors. Lunar has repurchased 419,400 shares under this program as of April 30, 2000. (4) EARNINGS PER SHARE The difference between the weighted average number of common shares and the weighted average number of common and dilutive potential common shares is due to the effect of dilutive stock options. (5) COMPREHENSIVE INCOME (LOSS) Effective July 1, 1998, Lunar adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" which establishes standards to report and display comprehensive income and its components in a full set of general purpose financial statements. Lunar's comprehensive income was as follows: Three Months Ended Nine Months Ended March 31, March 31, 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Net Income (Loss) $2,315,570 $ (824,506) $6,146,350 $1,065,700 Other Comprehensive Income: Unrealized adjustment in marketable securities (27,148) (24,383) (91,771) 60,484 Foreign currency translation adjustments (55,581) (29,980) (87,689) 13,228 ---------- ---------- ---------- ---------- Comprehensive income (Loss) $2,232,841 $ (878,869) $5,966,890 $1,139,412 ========== ========== ========== ========== (6) SETTLEMENT OF LAWSUIT Lunar settled a lawsuit with Osteometer Meditech A/S and Rapiscan Security Systems Inc. during the quarter ended September 30, 1998. Lunar incurred expenses of $579,555 in the quarter ended September 30, 1998 comprised of legal expenses, a settlement payment, and a patent write-off related to this settlement. Item 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Equipment sales and other revenue increased 12% to $22,211,000 in the three months ended March 31, 2000 from $19,749,000 in the three months ended March 31, 1999. For the nine months ended March 31, 2000, equipment sales and other revenue increased 4% to $68,686,000 from $65,984,000 in the nine months ended March 31, 1999. Sales by product line are summarized as follows: Revenues by Product (in thousands) Three Months Ended Nine Months Ended ------------------------- ------------------------- March 31, March 31, March 31, March 31, 2000 1999 2000 1999 ------------ ------------ ----------- ---------- X-ray densitometry $12,805 $12,488 $38,264 $42,390 Ultrasound densitometry 2,119 2,171 8,216 5,948 Orthopedic Imaging 4,575 2,716 14,279 11,202 Service Revenue 2,379 1,750 6,536 5,186 Other 333 624 1,391 1,258 ------------ ------------ ----------- --------- $22,211 $19,749 $68,686 $65,984 ============ ============ =========== ========== X-ray densitometry sales in nine months ended March 31, 2000 declined compared to the same period last year as a result of a decrease in the number of units sold. The increase in ultrasound densitometry revenue is primarily due to the introduction of the Achilles Express in May 1999. The increase in Orthopedic Imaging sales for the three and nine months ended March 31, 2000 is primarily due to increased unit sales of the E-Scan dedicated MRI system. The increase in service revenue is attributable to a growing installed base of densitometers and MRI equipment in the United States. Gross profit as a percentage of equipment sales averaged approximately 45% and 44% in the three and nine month periods ended March 31, 2000, respectively, compared to 41% and 44% in the three and nine month periods ended March 31, 1999, respectively. The higher margins in the three months ended March 31, 2000 primarily result from an increase in sales of the PRODIGY x-ray densitometer which has a higher margin than Lunar's other table densitometers. Research and development expenditures decreased to $1,337,000 in the three months ended March 31, 2000 from $1,804,000 in the three months ended March 31, 1999, and decreased to $4,283,000 in the nine months ended March 31, 2000 from $5,618,000 in the nine months ended March 31, 1999. Current fiscal year expenses were lower due to the completion of development work associated with the Prodigy and Achilles Express bone densitometers in fiscal year 1999. Selling and marketing expenses were $5,276,000 in the three months ended March 31, 2000, compared to $6,688,000 in the three months ended March 31, 1999, representing a decrease to 24% from 34% as a percentage of revenues. For the nine months ended March 31, 2000, selling and marketing expenses were $15,976,000 compared to $19,036,000 for the nine months ended March 31, 1999, representing a decrease to 23% from 29% as a percentage of revenues. One reason for the decline in sales and marketing expenses is that Lunar increased the allowance for doubtful accounts by $1,000,000 in the quarter ended March 31, 1999, in anticipation of possible losses on its portfolio of Brazilian receivables. These decreases are also attributable to reduced spending on document translations, advertising, literature creation, and a reduced headcount in the Marketing Department. General and administrative expenses decreased to $1,036,000 in the three months ended March 31, 2000 from $1,131,000 in the three months ended March 31, 1999, and decreased to $3,172,000 in the nine months ended March 31, 2000 from $3,525,000 in the nine months ended March 31, 1999. In May 1999 Lunar sold the business and related assets of Bona Fide, Ltd. which contributed to lower general and administrative expenses in fiscal year 2000. Interest income was $545,000 and $1,522,000 in the three and nine months ended March 31, 2000, respectively, compared to $443,000 and $1,136,000 in the three and nine months ended March 31, 1999, respectively. The increase is due to improved collection experience on interest associated with financed receivables and higher amounts invested in marketable securities. The effective tax rate averaged 30% in both the three and nine month periods ended March 31, 2000, compared to the 28% in the three and nine month periods ended March 31, 1999. The rate for the three and nine month periods ended March 31, 2000 and 1999 is below the 34% federal statutory rate as a result of tax-exempt interest income and the tax benefit of the foreign sales corporation offset by the provision for state income taxes. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents decreased $7,899,000 to $5,767,000 in the nine months ended March 31, 2000, due to increased investments in marketable securities. Lunar has a $26,019,000 laddered portfolio of high-grade, readily marketable municipal bonds with various maturities not exceeding 48 months. Total cash and marketable securities increased by $2,575,000 during the nine months ended March 31, 2000. Lunar has financed the sale of its equipment to Brazilian customers for more than eight years and has approximately $7,916,000 in outstanding receivables from Brazilian customers as of March 31, 2000. During fiscal years 1998 and 1997 Lunar sold approximately $15,000,000 of Brazilian accounts receivable to two finance companies of which approximately $2,534,000 is outstanding as of March 31, 2000. The two finance companies have maximum recourse of $684,000 against Lunar related to these receivables. All of the Brazilian accounts receivable are denominated in U.S. dollars. In January 1999 the Brazilian government allowed its currency, the real, to freely trade against the U.S. dollar which resulted in a 49% devaluation of the real as compared to the U.S. dollar. Lunar has incurred some payment delays from Brazilian customers and lower sales in Brazil as a result of this devaluation. Lunar has renegotiated longer payment terms for a majority of these Brazilian customers that purchased equipment prior to March 31, 1999. Total financed Brazilian accounts receivable declined to $7,916,000 from $8,091,000 at June 30, 1999. Inventories decreased 10% to $12,307,000 at March 31, 2000 from $13,656,000 at June 30, 1999, as a result of management's focus on reducing inventory levels. Management expects inventory levels to decline further during the next year. Lunar purchased a 25-acre parcel of land in January 1998 for $1,949,000 and began construction of an assembly, warehouse, and office building in October 1998. Lunar moved its assembly operations and warehouse to the new building in July 1999 and moved its office personnel in October 1999. Lunar does not have any pending material commitments for capital expenditures. Management believes the current level of cash and short-term investments is adequate to finance Lunar's operations for the foreseeable future. NEW ACCOUNTING PRONOUNCEMENTS SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" is effective for financial statements for periods beginning after June 15, 2000. SFAS No. 133 establishes accounting and reporting standards for derivative instruments and hedging activities. Lunar does not expect this statement to have a material effect on its financial statements. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Lunar's exposure to market risk for changes in interest rates relate primarily to Lunar's investment portfolio. Lunar does not use derivative financial instruments in its investment portfolio. Lunar places its investments with high credit quality issuers and, by policy, limits the amount of credit exposure to any one issuer. As stated in its policy, Lunar is adverse to principal loss and ensures the safety and preservation of its invested funds by limiting default risk, market risk, and reinvestment risk. Lunar mitigates default risk by investing in only high credit quality securities. The portfolio includes only marketable securities with active secondary or resale markets to ensure portfolio liquidity. All investments mature, by policy, in 48 months or less. Lunar uses forward currency contracts in its management of foreign currency exposures. The contracts are in the European EURO and generally have maturities that do not exceed three months. Realized gains and losses on such contracts are included in other income at the time the hedged transaction occurs. There were no deferred gains or losses at March 31, 2000. These contracts are with major financial institutions thereby minimizing the risk of credit loss. The table below provides information about Lunar's market sensitive financial instruments and constitutes a "forward-looking statement." All items described below are non-trading and are stated in U.S. dollars. During fiscal year ended June 30, ---------------------------------------- Maturity Dates 2000 2001 2002 2003 - --------------------------------------------------------------------------- ASSETS Cash Equivalents Variable taxable rate $5,138,450 Average taxable interest rate 5.24% Variable tax-exempt rate $ 628,542 Average tax-exempt rate 3.66% Marketable securities Fixed tax-exempt rate $5,070,000 $9,671,100 $6,950,000 4,160,000 Average tax-exempt rate 4.15% 4.21% 4.21% 4.72% Forward contract EURO denominated $3,567,540 Contracted exchange rate 0.9642:1 (US$ to EUR) PART II - OTHER INFORMATION LUNAR CORPORATION AND SUBSIDIARIES Item 1. Legal Proceedings On May 21, 1998 Lunar filed suit in the Federal Court of Canada-Trial Division against International Medical Research Ottawa("IMRO") for infringement of Lunar's Canadian patent number 1,323,090. IMRO manufactures and sells ultrasound bone densitometers in Canada and has manufactured ultrasound densitometers for Norland Medical Systems, Inc. for distribution and sales throughout the world. The parties have been involved in settlement discussions but no definitive settlement agreement has been reached. On January 20, 1999 Lunar brought suit against EG&G Astrophysics Research Corporation and its parent company EG&G, Inc. (collectively referred to as "EG&G") in the United States District Court for the Western District of Wisconsin for infringement of U.S. patent number 5,841,832 (the 832 patent) by EG&G's dual-energy baggage scanners. In October 1999, the parties reached an agreement to resolve this litigation. Under the terms of the agreement, EG&G pays royalties to Lunar for all sales of products that utilize the technology claimed in the 832 patent. OTHER MATTERS: Lunar is a defendant from time to time in actions arising out of its ordinary business operations. There are no other legal proceedings known to Lunar at this time, which it believes, would likely have a material adverse impact on the results of operations, financial condition or cash flows of Lunar. To Lunar's knowledge, there are no material legal proceedings to which any director, officer, affiliate or more than 5% shareholder of Lunar (or any associate of the foregoing persons) is a party adverse to Lunar or any of its subsidiaries or has a material interest adverse to Lunar. Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS: In addition to the historical information presented in this quarterly report, Lunar has made and will make certain forward-looking statements in this report, other reports filed by Lunar with the Securities and Exchange Commission, reports to stockholders and in certain other contexts relating to future net sales, costs of sales, other expenses, profitability, financial resources, or products and production schedules. Statements relating to the foregoing or that predict or indicate future events and trends and which do not relate solely to historical matters identify forward-looking statements. Forward-looking statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are based on management's beliefs as well as assumptions made by and information currently available to management. Accordingly, Lunar's actual results may differ materially from those expressed or implied in such forward-looking statements due to known and unknown risks and uncertainties that exist in Lunar's operations and business environment, including, among other factors, technical risks associated with the development of new products, regulatory policies in the United States and other countries, reimbursement policies of public and private health care payors, introduction and acceptance of new drug therapies, competition from existing products and from new products or technologies, the failure by Lunar to produce anticipated cost savings or improve productivity, the timing and magnitude of capital expenditures and acquisitions, currency exchange risks, economic and market conditions in the United States, Europe and the rest of the world, changes in customer spending levels, the cost and availability of raw materials, and other risks associated with Lunar's operations. Although Lunar believes that its forward-looking statements are based on reasonable assumptions, there can be no assurance that actual results, performance or achievements will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. Lunar disclaims any obligation to update any such factors or to publicly announce any revisions to any of the forward-looking statements contained herein to reflect future events or developments. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits furnished: (27.1) Financial Data Schedule, March 31, 2000 (27.2) Financial Data Schedule, March 31, 1999 (b) Reports on Form 8-K No reports on Form 8-K were filed by Lunar during the quarter ended March 31, 2000. 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. LUNAR CORPORATION (Registrant) Date: May 11, 2000 /s/ Richard B. Mazess --------------------- Richard B. Mazess President(Principal Executive Officer) Date: May 11, 2000 /s/ Robert A. Beckman --------------------- Robert A. Beckman Vice President of Finance and Treasurer (Principal Financial and Accounting Officer) LUNAR CORPORATION AND SUBSIDIARIES Exhibit Index For the Quarterly Period Ended March 31, 2000 No. Description - ---- ----------- 27.1 Financial Data Schedule, March 31, 2000 27.2 Financial Data Schedule, March 31, 1999 EX-27.1 2 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 This schedule contains summary financial information extracted from Form 10-Q for the nine months ended March 31, 2000, and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS JUN-30-2000 MAR-31-2000 5,767 26,019 38,511 3,209 12,307 63,000 24,015 7,098 99,811 17,503 0 86 0 0 82,222 99,811 68,686 68,686 38,795 62,227 (800) 0 0 8,781 2,635 6,146 0 0 0 6,146 .72 .70
EX-27.2 3 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 This schedule contains summary financial information extracted from Form 10-Q for the nine months ended March 31, 1999, and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS JUN-30-1999 MAR-31-1999 7,735 16,899 43,144 4,383 14,267 61,696 16,390 6,137 91,028 15,788 0 86 0 0 75,153 91,028 65,984 65,984 37,255 65,434 209 0 0 1,477 411 1,066 0 0 0 1,066 .12 .12
-----END PRIVACY-ENHANCED MESSAGE-----