-----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, T+hHjLMSV0KrxmUnzc8YBQOKZty73KtyZsLlPMnn4VGqPj3pRnZTt0v6nQiioIvG X3CKKLsvbeuoACyo4HQxDg== 0000912057-96-012378.txt : 19960617 0000912057-96-012378.hdr.sgml : 19960617 ACCESSION NUMBER: 0000912057-96-012378 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960614 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SURVIVAL TECHNOLOGY INC CENTRAL INDEX KEY: 0000095676 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 520898764 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05958 FILM NUMBER: 96581158 BUSINESS ADDRESS: STREET 1: 2275 RESEARCH BLVD STREET 2: STE 100 CITY: ROCKVILLE STATE: MD ZIP: 20850 BUSINESS PHONE: 3019261800 MAIL ADDRESS: STREET 1: 2275 RESEARCH BLVD SUITE 100 CITY: ROCKVILLE STATE: MD ZIP: 20850 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended APRIL 30, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file Number 0-5958 SURVIVAL TECHNOLOGY, INC. ------------------------- (Exact name of registrant as specified in its charter) DELAWARE 52-0898764 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2275 RESEARCH BLVD., ROCKVILLE, MD 20850 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (301) 926-1800 - -------------------------------------------------- Registrant's telephone 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 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. CLASS OUTSTANDING AS OF MAY 31, 1996 - ---------------------------- ------------------------------ Common Stock, $.10 par value 3,088,300 Shares 2 SURVIVAL TECHNOLOGY, INC. FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 1996 Page No. -------- PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements (Unaudited) Consolidated Condensed Balance Sheets as of April 30, 1996 and July 31, 1995 ............... 3 Consolidated Condensed Statements of Income for the Three-Month and Nine-Month Periods Ended April 30, 1996 and 1995......................... 4 Consolidated Condensed Statements of Cash Flows for the Nine Months Ended April 30, 1996 and 1995........................................ 5 Notes to Consolidated Condensed Financial Statements ..................................... 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............. 7 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K .................. 10 SIGNATURES ................................................. 11 3 SURVIVAL TECHNOLOGY, INC. CONSOLIDATED CONDENSED BALANCE SHEETS PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements April 30, July 31, 1996 1995 (unaudited) (audited) ----------- ----------- ASSETS Current assets Cash $ 82,400 $ 503,600 Receivables 6,110,300 5,852,700 Inventories 4,182,000 3,829,800 Prepaid expenses and other assets 436,600 336,100 Deferred income taxes 1,030,900 1,030,900 ----------- ----------- Total current assets 11,842,200 11,553,100 ----------- ----------- Fixed assets 25,620,200 24,581,300 Less accumulated depreciation 11,240,200 10,372,400 ----------- ----------- 14,380,000 14,208,900 ----------- ----------- Patents and licenses at cost less amortization of $635,700 and $517,200 1,864,800 1,916,800 Other noncurrent assets 13,500 36,300 ----------- ----------- $28,100,500 $27,715,100 ----------- ----------- ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Note payable to bank $ 1,633,900 $ 3,917,000 Note payable to Syntex 788,400 800,000 Current portion of long-term debt 400,500 492,600 Accounts payable 2,757,800 1,016,800 Restructuring reserve 477,000 450,000 Other liabilities and accrued expenses 1,528,400 1,208,400 ----------- ----------- Total current liabilities 7,586,000 7,884,800 Note payable to Syntex 588,400 Other long-term debt 1,031,700 897,200 Deferred revenue 375,000 250,000 Other noncurrent liabilities 606,700 489,200 Deferred income taxes 1,455,000 1,455,000 ----------- ----------- Total liabilities 11,054,400 11,564,600 ----------- ----------- Shareholders' equity Common stock, $.10 par value; 10,000,000 shares authorized; 3,087,000 and 3,085,400 shares issued and outstanding 308,700 308,500 Paid-in capital in excess of par value 5,083,500 5,072,700 Retained earnings 11,653,900 10,769,300 ----------- ----------- Total shareholders' equity 17,046,100 16,150,500 ----------- ----------- $28,100,500 $27,715,100 ----------- ----------- ----------- ----------- See accompanying notes to consolidated condensed financial statements. 4 SURVIVAL TECHNOLOGY, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended April 30, April 30, ------------------------ -------------------------- 1996 1995 1996 1995 ---------- ---------- ----------- ----------- Net sales $8,897,300 $5,592,000 $22,761,600 $17,004,100 Cost of sales 6,731,700 3,693,000 16,433,400 11,580,000 ---------- ---------- ----------- ----------- Gross profit 2,165,600 1,899,000 6,328,200 5,424,100 ---------- ---------- ----------- ----------- Selling, general & administrative expense 943,900 900,300 2,719,800 2,985,200 Research & development expense 126,700 287,300 487,600 848,100 Restructuring charge 94,000 Depreciation and amortization expense 445,400 428,200 1,335,400 1,155,600 ---------- ---------- ----------- ----------- 1,516,000 1,615,800 4,636,800 4,988,900 ---------- ---------- ----------- ----------- Operating income 649,600 283,200 1,691,400 435,200 ---------- ---------- ----------- ----------- Other expense: Interest expense (72,700) (111,000) (320,200) (264,000) Other income 1,800 67,300 55,600 146,000 ---------- ---------- ----------- ----------- (70,900) (43,700) (264,600) (118,000) ---------- ---------- ----------- ----------- Income before income taxes 578,700 239,500 1,426,800 317,200 Provision for income taxes 219,900 85,400 542,200 114,200 ---------- ---------- ----------- ----------- Net income $ 358,800 $ 154,100 $ 884,600 $ 203,000 ---------- ---------- ----------- ----------- ---------- ---------- ----------- ----------- Per common share: Net income $ .12 $ .05 $ .28 $ .07 ----- ----- ----- ----- ----- ----- ----- ----- Average number of common shares outstanding 3,114,300 3,106,700 3,111,500 3,102,300 --------- --------- --------- ---------
See accompanying notes to consolidated condensed financial statements. 5 SURVIVAL TECHNOLOGY, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended April 30, -------------------------- 1996 1995 ----------- ----------- Cash flows from operating activities: Net income $ 884,600 $ 203,000 Adjustments to reconcile net income to net cash provided by (used for) operating activities Depreciation and amortization 1,335,400 1,155,600 Loss on fixed asset disposals 900 Deferred lease incentives (22,700) (22,700) (Increase) decrease in receivables (257,600) 858,500 Increase in inventories (352,200) (2,094,900) Increase in prepaid expenses and other assets (100,500) (104,500) Increase in accounts payable 1,741,000 544,100 Increase in restructuring reserve 27,000 Increase (decrease) in other liabilities and accrued expenses 320,000 (262,600) ----------- ----------- Net cash used for operating activities (3,575,900) (276,500) ----------- ----------- Cash flows from investing activities: Purchases of fixed assets (1,410,400) (2,828,200) Purchases of patents and licenses (66,400) (173,600) Decrease in other noncurrent assets 5,500 41,500 ----------- ----------- Net cash used for investing activities (1,471,300) (2,941,500) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: (Payments) proceeds on note payable to bank (2,283,100) 3,533,900 Payments on note payable to Syntex (600,000) (600,000) Proceeds (payments) on long-term debt 42,400 (62,600) Increase in deferred revenue 125,000 Increase in other noncurrent liabilities 140,200 Proceeds from fixed asset dispositions 38,700 Proceeds from issuance of common stock 11,000 ----------- ----------- Net cash (used for) provided by financing activities (2,525,800) 2,871,300 ----------- ----------- Net (decrease) increase in cash $ (421,200) $ 206,300 ----------- ----------- ----------- ----------- Cash at beginning of period $ 503,600 $ 65,000 Cash at end of period 82,400 271,300 ----------- ----------- Net (decrease) increase in cash $ (421,200) $ 206,300 ----------- ----------- ----------- ----------- See accompanying notes to consolidated condensed financial statements. 6 SURVIVAL TECHNOLOGY, INC. FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 1996 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS A. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company's financial position as of April 30, 1996 and July 31, 1995, the results of its operations for the three-month and nine-month periods ended April 30, 1996 and 1995, and its cash flows for the nine-month periods ended April 30, 1996 and 1995. The results of operations for the three-month and nine-month periods ended April 30, 1996 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 1996. B. The significant accounting principles and practices followed by the Company are set forth in Note 1 of the Notes to Consolidated Financial Statements in the Survival Technology, Inc. Annual Report on Form 10-K for the year ended July 31, 1995. C. Inventories consisted of the following: April 30, July 31, 1996 1995 ----------- ----------- Components and subassemblies $ 3,280,000 $ 2,780,200 Material, labor and overhead costs in process 1,085,900 605,100 Finished goods 32,300 674,800 ----------- ----------- 4,398,200 4,060,100 Inventory reserve (216,200) (230,300) ----------- ----------- Total $ 4,182,000 $ 3,829,800 ----------- ----------- ----------- ----------- D. During the fourth quarter of fiscal 1995, the Company's Board of Director's approved a restructuring plan to explore various alternatives relating to occupancy cost reductions at the corporate headquarters in Rockville, MD which resulted in a $450,000 charge against earnings. The Company is currently exploring options related to reducing occupancy costs at its corporate office facility in Rockville, Maryland. As part of this plan, the Company initiated certain organizational changes during the first quarter of fiscal 1996 resulting in additional charges of $94,000 related to employee severance payments in fiscal 1996. The following table sets forth the Company's restructuring reserve as of April 30, 1996: RESTRUCTURING RESERVE Relocation of facilities $ 450,000 Employee severance accrual 94,000 Cash payments for severance (67,000) --------- $ 477,000 --------- --------- E. STI entered into a loan agreement with the CIT Group/Equipment Financing, Inc. ("CIT") in May 1995. This arrangement consists of a series of loans for the acquisition of production molds, high speed component preparation and filling equipment and facility renovations not to exceed a maximum aggregate of $3 million. During the second quarter, STI received proceeds ($445,300) from CIT for a second loan within the series of loans. Loan proceeds to date totalled $1.5 million of which $1.3 million was outstanding at April 30, 1996, at a weighted average interest rate of 8.8%. 7 SURVIVAL TECHNOLOGY, INC. FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 1996 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations THE QUARTER AND NINE MONTHS IN REVIEW The Company reported net income of $358,800 ($.12 per share) on sales of $8.9 million for the third quarter of fiscal 1996 compared with net income of $154,100 ($.05 per share) on sales of $5.6 million in the same period of fiscal 1995. Net income totalled $884,600 ($.28 per share) on sales of $22.8 million compared with net income of $203,000 ($.07 per share) on sales of $17 million for the nine months ended April 30, 1996 and 1995, respectively. Revenues increased $3.3 million (59%) during the current quarter and $5.8 million (34%) during the first nine months of fiscal 1996 on the strength of higher EpiPen-Registered Trademark- auto-injector and U.S. military product sales. Commercial products and services generated revenues of $5.1 million and $11.1 million for the quarter and nine months ended April 30, 1996. This represents increases of $1.8 million (56%) in the current quarter and $1.5 million (15%) in the first nine months of fiscal 1996 when compared with the same periods in fiscal 1995. The current quarter increase was primarily attributable to the timing of CytoGuard-Registered Trademark- sales ($808,600) and the introduction of the company's second new product launched in fiscal 1996, the Epi E-Z Pen-TM-, which generated revenue of $735,000. Increased sales ($577,300 or 10%) of STI's EpiPen-Registered Trademark- auto-injector coupled with the Epi E-Z Pen product introduction were the principal contributors to the sales increase during the first nine months of the current fiscal year. Other contract manufacturing and R&D revenues for the first nine months of fiscal 1996 continued at a comparable level to the same period in fiscal 1995. The EpiPen and Epi E-Z Pen are automatic injectors that contain epinephrine which are indicated for immediate use by persons in the emergency treatment for severe allergic reactions to bee stings, insect bites and ingestion of certain foods. The Epi E-Z Pen is a smaller, more streamlined auto-injector that is easier to use than previous injectors and resembles an ordinary fountain pen with a pocket clip for easy carrying. Revenues from these products totalled $3.1 million in the third quarter and $7.6 million for the first nine months of fiscal 1996. This represents revenue increases of $762,500 (33%) and $1.3 million (21%) over the corresponding prior year periods. These increases can be attributed to the expanded promotional efforts over the last several years by Center Laboratories, Inc. ("Center"), STI's exclusive distributor of the EpiPen. The Company anticipates EpiPen sales to continue improving over prior year levels with Center's continuing expansion of marketing efforts in the U.S. and international markets coupled with the recent introduction of the new Epi E-Z Pen. Military sales increased $1.5 million (63%) to $3.8 million in the current quarter and $4.3 million (59%) to $11.6 million in the first nine months of fiscal 1996 when compared with the concurrent prior year periods. These increases were due to shipments of military auto-injectors during the current quarter coupled with additional services provided as part of the Industrial Base Maintenance Contract with the U.S. Department of Defense ("DoD"). Revenues under this DoD contract more than doubled to $3.3 million for the quarter and $10.9 million for the nine months ended April 30, 1996 when compared with the same periods last year. Product deliveries included the Diazepam auto-injector which was approved by the U.S. Food and Drug Administration ("FDA") in December 1995. Revenues for this new injector were approximately $1 million through the first nine months of fiscal 1996 with fourth quarter deliveries expected to generate an additional $1.5 million in sales. Additional services provided to the DoD included the pre-stocking of critical components at STI's St. Louis manufacturing facility to enhance readiness and mobilization capability. STI's intensified efforts to expand sales of its military products into international markets has resulted in orders from new customers that are expected to generate $725,000 in revenue during the fourth quarter of fiscal 1996. 8 SURVIVAL TECHNOLOGY, INC. FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 1996 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Gross margins decreased to 24% in the current quarter and 28% for the nine months ended April 30, 1996 compared to 34% for the quarter and 32% for the nine months ended April 30, 1995. These decreases are due to various factors including component supply issues which disrupted production in the first half of the current quarter coupled with higher military product sales which have inherently lower margins. The Company is working to improve gross margins through new commercial development and supply agreements along with the completion of several manufacturing cost reduction programs currently in progress. Selling, general and administrative expenses increased $43,600 (5%) in the current quarter but decreased $265,400 (9%) in the first nine months of fiscal 1996 when compared with the same prior year periods. The current quarter increase resulted from a higher concentration of marketing activity within the Company's commercial business unit. This increase only partially offset the current year decrease which related to the absence of certain administrative costs related to organizational changes and lower bad debt expense. Research and development expenditures decreased $160,600 (56%) and $360,500 (43%) in the third quarter and first nine months of fiscal 1996 when compared with the same periods in fiscal 1995. This was due to the timing of expenditures related to certain projects which have been deferred to later in the current year and into fiscal 1997. This will result in lower R&D expenses in fiscal 1996 when compared to fiscal 1995 with the outlook to fiscal 1997 to be comparable to historical levels. Depreciation and amortization increased $17,200 (4%) and $179,800 (16%) for the quarter and nine months ended April 30, 1996 when compared with the same periods in fiscal 1995. As previously reported, these increases were anticipated due to increased levels of capital expenditures made over the last two fiscal years. As part of the restructuring plan adopted in the fourth quarter of fiscal 1995, the Company initiated certain organizational changes during the first quarter of fiscal 1996 resulting in additional charges of $94,000 related to employee severance payments in fiscal 1996. See Note D in Notes to Consolidated Condensed Financial Statements. The Company is continuing to explore options related to reducing occupancy costs at its corporate office facility in Rockville, Maryland. Other expense increased $27,200 in the third quarter and $146,600 for the first nine months of fiscal 1996 when compared with the same periods in fiscal 1995. Interest expense declined $38,300 (35%) during the third quarter due to lower levels of bank borrowings. This was more than offset by the absence of an income tax refund recorded during the third quarter of fiscal 1995 as well as lower royalty income for the quarter and nine months ended April 30, 1996. STI receives royalty income from the sale of its Medical Device Division to Brunswick Biomedical Corporation in fiscal 1994. Interest expense for the first nine months of fiscal 1996 increased $56,200 (21%) over the same prior year period due to higher levels of bank borrowings necessary to fund inventory purchases in support of higher sales levels and to fund continuing capital investment programs. LIQUIDITY AND CAPITAL RESOURCES The Company has a $5 million line of credit agreement ("Agreement") with Merrill Lynch Business Financial Services Inc. ("MLBFS") through September 1996. Outstanding borrowings under the Agreement totalled $1.6 million at April 30, 1996. The Agreement places a $5 million limit on capital expenditures in any one fiscal year which have aggregated $1.4 million for the nine months ended April 30, 1996. The Company relies on its line of credit facility to satisfy its working capital and capital expenditure requirements. The Company has a Loan Agreement pursuant to which Syntex Laboratories, Inc. agreed to lend STI $5.4 million to finance working capital requirements and 9 SURVIVAL TECHNOLOGY, INC. FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 1996 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) capital expenditures designed to increase the production capacity of the Company's Cartrix syringe system. The outstanding loan balance bears interest at the same rate of interest the Company pays on its current commercial line of credit facility. Principal payments continued for the calendar quarter ended March 31, 1996 at the minimum of $200,000 per quarter and $600,000 through the first nine months of fiscal 1996 reducing the outstanding loan balance to $788,400 at April 30, 1996. To assist the Company's previously reported capital investment program, STI entered into a loan agreement with the CIT Group/Equipment Financing, Inc. ("CIT") in May 1995. This arrangement consists of a series of loans for the acquisition of production molds, high speed component preparation and filling equipment and facility renovations not to exceed a maximum aggregate of $3 million. During the current year, STI received proceeds ($445,300) from CIT for a second loan under this credit facility. Loan proceeds to date totalled $1.5 million of which $1.3 million was outstanding at April 30, 1996, at a weighted average interest rate of 8.8%. BALANCE SHEET REVIEW Working capital increased $587,900 (16%) to $4,256,200 at April 30, 1996 from $3,668,300 at July 31, 1995. Receivables remained relatively constant increasing $257,600 (4%) while inventory levels increased $352,200 (9%) in support of higher sales levels anticipated for the fourth quarter. These sales will include the new products introduced earlier in fiscal 1996, the Epi E-Z Pen and the Diazepam auto-injectors. Prepaid expenses and other current assets increased $100,500 (30%) primarily resulting from the prepayment to the FDA for annual user fees. The deferred income tax asset remained constant at $1,030,900. Note payable to bank decreased $2.3 million (58%) during the first nine months primarily from the liquidation of a DoD receivable late in the current quarter for the DoD component prestocking program. These monies were subsequently disbursed early in the fourth quarter to reduce the accounts payable balance which had increased $1.7 million (171%) resulting mainly from the acquisition of these military auto-injector specific components. Proceeds from operations during the first nine months of fiscal 1996 contributed to the remaining decrease in note payable to bank as well as providing the necessary funding to reduce the note payable to Syntex by $600,000 (43%). Scheduled quarterly payments were made to Syntex. See "Liquidity and Capital Resources" above. Other long-term debt, including the current portion, remained relatively constant increasing $42,400 (3%). Additional borrowings under the CIT loan agreement were partially offset by payments made on the initial CIT loan (see "Liquidity and Capital Resources") and capital lease obligations. Other liabilities and accrued expenses increased $320,000 (26%) due in part to an accrual for income taxes payable while the restructuring reserve increased $27,000 (6%), net of employee severance payments associated with the previously discussed organizational changes. Deferred revenue increased $125,000 (50%) due to proceeds ($375,000) from Center partially offset by recognition of the remaining revenue ($250,000) of a development contract closed-out during the first quarter. The Company received an advance from Center in the amount of $375,000 to assist in the capital investment program associated with the Epi E-Z Pen. This will be paid back to Center through credits on future product deliveries commencing in September 1996. Capital expenditures totalled $1.4 million through the first nine months of fiscal 1996 which consisted primarily of improvements designed to automate and validate current production processes at the Company's St. Louis manufacturing facility. The timing of capital expenditures to keep pace with prior year levels is contingent on the Company's ability to identify outside sources of capital. Shareholder's equity increased $895,600 (6%) on the strength of net income for the nine months ended April 30, 1996. 10 SURVIVAL TECHNOLOGY, INC. FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 1996 PART II - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibits: (3.1) Amended By-Laws through May 10, 1996. Filed herewith. (27) Financial Data Schedule. Filed herewith. (b) Reports on Form 8-K: On March 20, 1996, the Company reported that the Estate of Stanley J. Sarnoff ("Estate"), which owns approximately 61% of the Company's outstanding stock, had entered into an agreement to sell such shares to Brunswick Biomedical Corporation ("Brunswick"). On April 30, 1996, the Company reported a change in control in the Registrant with the closing on April 15, 1996 of the above stock purchase agreement to sell the Estate shares to Brunswick. 11 SURVIVAL TECHNOLOGY, INC. FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 1996 SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly cause this report to be signed on its behalf by the undersigned thereunto duly authorized. SURVIVAL TECHNOLOGY, INC. Registrant June 14, 1996 By: /S/James H. Miller - ------------- -------------------------- Date James H. Miller President and Chief Executive Officer (Principal Executive Officer) June 14, 1996 By: /S/Jeffrey W. Church - ------------- -------------------------- Date Jeffrey W. Church Sr. Vice President-Finance and Chief Financial Officer (Principal Financial and Accounting Officer) SURVIVAL TECHNOLOGY, INC. EXHIBIT INDEX FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 1996 Exhibit No. Description of Exhibit - ----------- ---------------------- (3.1) Amended By-Laws through May 10, 1996. (27) Financial Data Schedule. EX-3.1 2 EX-3.1 Exhibit No. 3.1 SURVIVAL TECHNOLOGY, INC. BY-LAWS (Restated Through May 10, 1996) ARTICLE 1 OFFICES 1.1. The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. 1.2. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE 2 MEETINGS OF STOCKHOLDERS 2.1. All meetings of the Stockholders shall be held at such place, within or without the State of Delaware, as shall be fixed from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. 2.2. An annual meeting of Stockholders shall be held on the first day of November, if not a legal holiday, and if a legal holiday then on the next secular day following, at 10:00 a.m., local time, or at such other date and time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which meeting the Stockholders shall elect a Board of Directors and transact such other business as may properly be brought before the meeting. 2.3. Special meetings of the Stockholders for any purpose or purposes may be called at any time by the Board of Directors and shall be called by the President or Secretary at the request in writing of holders of stock having a majority in voting power of the entire capital stock of the Corporation issued and outstanding and entitled to be voted at such meeting. Such request shall state the purpose or purposes of the proposed meeting. Business transacted at any special meeting of Stockholders, other than procedural matters and matters relating to the conduct of the meeting, shall be limited to the purpose or purposes stated in - 2 - the notice of the meeting pursuant to Section 4 of this Article II of these By-Laws. 2.4. Written notice of the annual or any special meeting of the Stockholders shall be given to each Stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. The notice shall state the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which such meeting has been called. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the Stockholder at his address as it appears on the records of the Corporation. 2.5. At all meetings of the Stockholders the holders of stock having a majority in voting power of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the Stockholders, the holders of stock having a majority of the voting power of the stock entitled to vote thereat who are present in person or represented by proxy shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Stockholder of record entitled to vote at the meeting. 2.6. When a quorum is present at any meeting, all elections for the Board of Directors shall be decided by a plurality of the votes cast and all other questions shall be decided by a majority of the votes cast, except as otherwise required by statute or as provided for in the Certificate of Incorporation or these Bylaws. Abstentions shall not be considered to be votes cast. 2.7. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of Stockholders, a complete list of the Stockholders entitled to vote at the meeting, arranged in alphabetical order, and - 3 - showing the address of each such Stockholder and the number of shares registered in the name of each such Stockholder. Such list shall be open to the examination of any Stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any Stockholder who is present. 2.8. Any action required by statute to be taken at any annual or special meeting of Stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such Stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which holders of all of the outstanding stock entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those Stockholders who have not consented in writing. 2.9. Votes by written ballot at any meeting of stockholders may be conducted by one or more inspectors, appointed for that purpose, either by the Board of Directors or by the chairman of the meeting. The inspector or inspectors may decide upon the qualifications of voters and the validity of proxies, and may count the votes and declare the result. ARTICLE 3 BOARD OF DIRECTORS 3.1. The business of the Corporation shall be managed by its Board of Directors, which may exercise all such powers of the Corporation and all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the Stockholders. 3.2. The number of Directors that shall constitute the whole Board shall be the number from - 4 - time to time fixed by the Board of Directors, which number shall not be less than one. The Board by resolution may from time to time increase or decrease the number of Directors to any number not less than one, provided that any reduction in the number of Directors shall not have the effect of shortening the term of any Director in office at the time such resolution becomes effective. The phrase "the whole Board," as used in these By-Laws, shall refer to the total number of Directors which the Corporation would have if there were no vacancies. The Directors shall be elected at the Annual Meeting of the Stockholders, except as provided in Section 3 of this Article, and each Director elected shall hold office until removal or resignation or until his successor is elected and qualified. A director may resign at any time by giving written notice to the Chairman of the Board, to the Chief Executive Officer or to the Secretary. Unless otherwise stated in such notice of resignation, the acceptance thereof shall not be necessary to make it effective; and such resignation shall take effect at the time specified therein or, in the absence of such specification, it shall take effect upon the receipt thereof. 3.3. Vacancies and newly created directorships resulting from any increase in the authorized number of Directors may be filled by a majority of the Directors then in office, though less than a quorum, or by a sole remaining Director, and the Directors so chosen shall hold office until the next annual election and until their successors are duly elected and qualified. If at any time there are no Directors in office, by reason of death, resignation or other cause, then any Stockholders or any executor or administrator or other fiduciary entrusted with like responsibility for the estate of a Stockholder may call a special meeting of the Stockholders to elect a Board of Directors. If at the time of filling any vacancy or any newly created directorship, the Directors then in office shall constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any Stockholder or Stockholders holding at least ten percent of the total number of the shares outstanding at the time and having the right to vote for such Directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the Directors chosen by the Directors then in office. - 5 - MEETINGS OF THE BOARD OF DIRECTORS 3.4. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. 3.5. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board. A meeting of the Board of Directors for the election of officers and the transaction of such other business as may come before it may be held without notice immediately following the annual meeting of stockholders. 3.6. Special meetings of the Board may be called by the Chairman of the Board, the Chief Executive Officer or upon the written request of a majority of the whole Board on two days' notice to each Director, either personally or by telephone, or on four days' notice by mail (computed from the date of mailing). Any such notice may be waived and shall be deemed waived by any Director who signs a written waiver of such notice before or after the time stated therein. 3.7. At all meetings of the Board, a majority of the Directors constituting the whole Board shall constitute a quorum for the transaction of business, and the vote of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute, the Certificate of Incorporation or these By-Laws. If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. 3.8. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board or committee. - 6 - 3.9. A director of the Corporation who is present at a meeting of the Board of Directors when a vote on any matter is taken is deemed to have assented to the action taken unless he votes against or abstains from the action taken, or unless at the beginning of the meeting or promptly upon arrival, the director objects to the holding of the meeting or the transacting of specified business at the meeting. Any such dissenting votes, abstentions or objections shall be entered in the minutes of the meeting. THE CHAIRMAN OF THE BOARD AND THE VICE-CHAIRMAN OF THE BOARD 3.10. The Board of Directors, at its first meeting following the annual meeting of Stockholders in each year, or at such other time when there shall be a vacancy, shall elect one of its members as Chairman of the Board, and may elect one of its members as Vice-Chairman of the Board; each to serve for one year or until his successor is elected and qualified. The Chairman of the Board shall preside at all meetings of the Stockholders and of the Board of Directors and shall perform such other duties as may be required of him by the Board of Directors and by these By-Laws. The Vice-Chairman of the Board, if one is elected, shall, in the absence of the Chairman of the Board, preside at the meetings of the Stockholders and of the Board of Directors and shall perform such other duties as may be required of him by the Board of Directors. In the absence of the Chairman of the Board and the Vice-Chairman, if any, those members of the Board who are present shall choose from among themselves a person to preside at the meeting of the Board. COMMITTEES OF DIRECTORS 3.11. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may, by resolution passed by a majority of the whole Board, designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution and as limited by the Sixth Article, Section 2, of the Certificate of Incorporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the - 7 - Corporation to be affixed to all papers which may require it. In the absence or disqualification of any member of such committee or committees, except as otherwise provided to the extent that there shall have been designated alternate members who shall be present, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors as requested by the Board of Directors. COMPENSATION OF DIRECTORS 3.12. The Board of Directors shall have the authority to fix the compensation to be paid to Directors. The Directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors, or of any committee of the Board of Directors, in addition to a fixed sum for attendance at each such meeting and/or a stated salary as Director or committee member. Unless otherwise provided by the Board of Directors, no such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. 3.13. Any or all of the Directors may be removed for cause or for no cause by the Stockholders. One or more of the Directors may be removed for cause by a majority of the whole Board. ARTICLE 4 OFFICERS 4.1. The Board of Directors shall elect the officers of the Corporation, which shall be a Chief Executive Officer, a President, a Secretary and a Treasurer, at the first meeting of the Board following each annual meeting of the Stockholders. The Board may from time to time also elect one or more Vice-Presidents in such gradations as the Board of Directors may determine, Assistant Vice-Presidents, Assistant Secretaries, Assistant Treasurers and such other officers and agents as it shall deem necessary, or it may delegate the authority to appoint such officers and agents to an officer subject to the - 8 - control of the Board of Directors. Any number of offices may be held by the same person. 4.2. Unless otherwise provided in the resolution of election or appointment, the officers of the Corporation shall hold office until their successors are chosen and qualified or until their earlier resignation or removal. Any officer may resign at any time by giving written notice to the Chief Executive Officer or the Secretary. Unless otherwise stated in such notice of resignation, the acceptance thereof shall not be necessary to make it effective; and such resignation shall take effect at the time specified therein or, in the absence of such specification, it shall take effect upon the receipt thereof. Any officer, servant or agent of the Corporation may be removed at any time with or without cause by the Board of Directors or by the officer having power to appoint the successor of the person being removed. Any vacancy occurring in any office of the Corporation may be filled by the Board of Directors or otherwise as provided in this Article. 4.3. The officers of the Corporation shall receive such compensation for their services as the Board of Directors may determine. The Board of Directors may delegate its authority to determine compensation to a committee or designated officers of the Corporation. 4.4. The duties and powers of the officers of the Corporation shall be as provided in these By-Laws or as defined in the resolutions appointing them, or shall be those duties and powers customarily exercised by corporate officers holding such offices. 4.5. The Chief Executive Officer of the Corporation shall have general charge and supervision of its business. He shall preside at all meetings of the Stockholders and at meetings of the Board of Directors in the absence of the Chairman and the Vice-Chairman of the Board, if any; shall see that all orders and resolutions of the Board of Directors are carried into effect; and shall have such other powers and duties as normally pertain to his office or as shall be prescribed by the Board of Directors. 4.6. Unless otherwise specified by the Board of Directors, the President of the Corporation shall be the Chief Executive Officer of the Corporation. If a person other than the Chief Executive Officer, the - 9 - President shall have such powers and perform such duties as may be assigned from time-to-time by the Board of directors or by the Chief Executive Officer. 4.7. The Vice-Presidents, if any, shall perform such duties and have such powers as the Board of Directors may from time to time prescribe by standing or special resolution, or the Chief Executive Officer may from time to time provide, subject to the powers and the control of the Board of Directors. 4.8. The Secretary of the Corporation or an Assistant Secretary, as designated by the Chairman of the Board or other presiding officer, or another person so designated, shall act as secretary and record the minutes of meetings of the Board of Directors and committees thereof and of the Stockholders. Unless given by another authorized officer, the Secretary shall give, or cause to be given, notices of all meetings of stockholders and directors and of such committees as directed by the Board of Directors. The Secretary shall have charge of such books and papers as the Board of Directors may require. The Secretary or any Assistant Secretary is authorized to certify copies of extracts from minutes and of documents in the Secretary's charge and anyone may rely on such certified copies to the same effect as if such copies were originals and may rely upon any statement of fact concerning the Corporation certified by the Secretary (or any Assistant Secretary). The Secretary shall have custody of the corporate seal of the Corporation and shall have authority to affix the same to any instrument requiring it and, when so affixed, it may be attested by the Secretary's signature. The Board of Directors may give general or special authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. The Secretary shall perform all acts incident to the office of Secretary, subject to the control of the Board of Directors, the Chairman of the Board or the Chief Executive Officer, under whose supervision the Secretary shall be. 4.9. The Assistant Secretary, if there be any, or, if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other - 10 - duties and have such other powers as the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the Secretary may from time to time prescribe. 4.10. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and may deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such banks, trust companies or other depositories, as the Board of Directors may select or as may be selected by an officer, employee or agent of the Corporation to whom such power may from time to time be delegated by the Board of Directors. He shall perform such other duties and have such other powers as may be prescribed by the Board of Directors or the Chief Executive Officer, under whose supervision he shall be. The Treasurer may act with the assistance of such Assistant Treasurers, if any, or such other employees of the Company as he may reasonably designate. 4.11. The Assistant Treasurer, if there be any, or, if there be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Treasurer, and shall perform such other duties and have such other powers as the Board of Directors, the Chief Executive Officer, or the Treasurer may from time to time prescribe. 4.12. Checks, notes, drafts, other commercial instruments, assignments, guarantees of signatures and contracts (except as otherwise provided herein or by law) shall be executed by the Chief Executive Officer, the President, any Vice President or such officers or employees or agents as the Board of Directors or any of such designated officers may direct. 4.13. The Chief Executive Officer, the President, any Vice President or the Secretary may authorize any endorsement on behalf of the Corporation to be made by such mechanical means or stamps as any of such officers may deem appropriate. - 11 - ARTICLE 5 CERTIFICATES OF STOCK 5.1. Every holder of stock in the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice-President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation certifying the number of shares owned by him in the Corporation. Where a certificate is countersigned (1) by a transfer agent other than the Corporation or its employee, or (2) by a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or it were such officer, transfer agent or registrar at the date of issue. LOST CERTIFICATES 5.2. The Board of Directors may in its discretion direct, or vest in the officers of the Corporation the power to direct, that a new certificate or certificates be issued in place of any certificate or certificates theretofore issued by the Corporation and alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require, or vest in the officers of the Corporation the power to require, that the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. The Corporation may refuse to issue a new certificate except as ordered by the Court of Chancery of Delaware. - 12 - TRANSFERS OF STOCK 5.3. The Board of Directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars. The Board of Directors may make such further rules and regulations as it may deem expedient concerning the issue, transfer and registration of stock certificates of the Corporation. 5.4. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. FIXING RECORD DATE 5.5. In order that the Corporation may determine the Stockholders entitled to notice of or to vote at any meeting of Stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of Stockholders of record entitled to notice of or to vote at a meeting of Stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. REGISTERED STOCKHOLDERS 5.6. The Corporation shall be entitled to recognize a person registered as the owner of shares on its books as being the owner of such shares for the purpose of receiving dividends, voting those shares, and being accorded all other rights and liabilities of an owner of shares, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or - 13 - other notice thereof, except as otherwise provided by the laws of Delaware. Every Stockholder shall furnish to the Corporation his address, and the Corporation may rely for all purposes upon the address of such Stockholder so furnished to it. If any Stockholder shall not furnish the Corporation with his address, his address shall be presumed to be at the registered office of the Corporation, in its care. ARTICLE 6 GENERAL PROVISIONS DIVIDENDS 6.1. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. 6.2. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interest of the Corporation, and the Directors may modify or abolish any such reserve in the manner in which it was created. FISCAL YEAR 6.3. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors. CORPORATE SEAL 6.4. The corporate seal shall be in such form as the Board of Directors may prescribe. VOTING OF STOCK IN OTHER CORPORATIONS 6.5. Any shares of stock or other securities in any other corporation or organization, with respect to which the Corporation may from time to time have the right to vote or to give approvals, ratifications or consents may be represented and voted at any meeting of security holders of such other corporation or - 14 - organization, or approvals, ratifications or consents may be given with respect thereto, by the Chief Executive Officer of the Corporation or by the proxy or proxies appointed by the Chief Executive Officer, or by any other person appointed by resolution of the Board of Directors, of which resolution a certified copy under the seal of the Corporation shall be conclusive evidence. POSITION WITH CORPORATION NOT TO IMPOSE DUTY TO REFRAIN FROM EXERCISING RIGHTS 6.6. No person who is an officer, Director or controlling Stockholder of the Corporation shall be deemed to be under any disability, by reason of his status as such officer, Director or controlling Stockholder, from exercising as against the Corporation any rights or privileges whatsoever which he may enjoy under the terms of any provision of any certificate of incorporation, by-law, resolution or contract, in his personal capacity (including his capacity as a fiduciary for another person or persons); and any such officer, Director or controlling Stockholder may exercise any such rights or privileges as fully as if such person were no such officer, Director or controlling Stockholder. ARTICLE 7 AMENDMENTS 7.1. These By-Laws may be altered, amended or repealed or new By-Laws may be adopted by the Stockholders or by the whole Board of Directors at any regular meeting of the Stockholders or of the whole Board of Directors, or at any special meeting of the Stockholders or of the whole Board of Directors if notice of such alteration, amendment, repeal or adoption of new By-Laws be contained in the notice of such special meeting. By-Laws adopted by the Stockholders may be altered, amended or repealed by the whole Board of Directors unless the By-Laws so adopted by the Stockholders expressly provide to the contrary. EX-27 3 EXHIBIT 27 - FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED CONDENSED BALANCE SHEETS AND STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS JUL-31-1996 AUG-01-1996 APR-30-1996 82,400 0 6,118,300 8,000 4,182,000 11,842,200 25,620,200 11,240,200 28,100,500 7,586,000 0 0 0 308,700 16,737,400 28,100,500 22,761,600 22,761,600 16,433,400 21,070,200 (55,600) 11,500 320,200 1,426,800 542,200 0 0 0 0 884,600 0.28 0.28
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