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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[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
For the transition period from ____________ to ____________
Commission File Number 0-27316
Molecular Devices Corporation
(Exact name of registrant as specified in its charter)
Delaware 94-2914362
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1311 Orleans Drive
Sunnyvale, California 94089
(Address of principal executive offices, including zip code)
(408) 747-1700
(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
--- ---
As of May 11, 2000, 9,752,778 shares of the Registrant's Common Stock were
outstanding.
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MOLECULAR DEVICES CORPORATION
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1999
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
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<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2000 and December 31, 1999 .............................................. 3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 2000 and 1999 ........................................ 4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2000 and 1999 ........................................ 5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS .............................. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ............................................... 8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK ................................................................. 20
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS ....................................................... 22
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS ............................... 22
ITEM 3. DEFAULTS UPON SENIOR SECURITIES ......................................... 22
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS ........................................................ 22
ITEM 5. OTHER INFORMATION ....................................................... 22
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ........................................ 22
SIGNATURE .................................................................................... 23
</TABLE>
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PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
MOLECULAR DEVICES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------- ------------
ASSETS: (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $27,467 $28,192
Accounts receivable, net 18,688 17,416
Inventories 9,632 7,918
Deferred tax asset 2,465 2,465
Other current assets 816 721
------- -------
Total current assets 59,068 56,712
Equipment and leasehold improvements, net 4,527 2,776
Other assets 6,467 5,263
------- -------
$70,062 $64,751
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,231 $ 2,624
Accrued liabilities 4,419 3,957
Deferred revenue 1,338 1,386
------- -------
Total current liabilities 9,988 7,967
Stockholders' equity:
Preferred stock, no par value; 3,000,000 authorized
no shares issued or outstanding -- --
Common stock, $.001 par value; 30,000,000
shares authorized; 9,745,251 and 9,661,960
shares issued and outstanding at March 31, 2000
and December 31, 1999, respectively 10 10
Additional paid-in capital 45,454 44,661
Deferred compensation (46) (154)
Retained Earnings 15,344 12,740
Accumulated other comprehensive loss (688) (473)
------- -------
Total stockholders' equity 60,074 56,784
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$70,062 $64,751
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
3
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MOLECULAR DEVICES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
2000 1999
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<S> <C> <C>
REVENUES $17,068 $13,507
COST OF REVENUES 6,250 5,264
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GROSS MARGIN 10,818 8,243
------- -------
OPERATING EXPENSES:
Research and development 1,888 1,590
Selling, general and administrative 5,083 3,865
------- -------
Total operating expenses 6,971 5,455
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INCOME FROM OPERATIONS 3,847 2,788
Other income, net 387 421
------- -------
INCOME BEFORE TAXES 4,234 3,209
Income tax provision 1,630 1,235
------- -------
NET INCOME $ 2,604 $ 1,974
======= =======
BASIC NET INCOME PER SHARE $ 0.27 $ 0.21
======= =======
DILUTED NET INCOME PER SHARE $ 0.25 $ 0.20
======= =======
SHARES USED IN COMPUTING BASIC NET INCOME PER SHARE 9,706 9,528
======= =======
SHARES USED IN COMPUTING DILUTED NET INCOME PER SHARE 10,596 9,963
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
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MOLECULAR DEVICES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
2000 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,604 $ 1,974
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 299 189
Amortization of deferred compensation 109 108
Amortization of goodwill and developed technology 79 --
(Increase) decrease in assets:
Accounts receivable (1,272) (34)
Inventories (1,714) (518)
Deferred tax asset -- (450)
Other current assets (95) 94
Increase (decrease) in liabilities:
Accounts payable 1,606 727
Accrued liabilities 462 (1,051)
Deferred revenue (48) 80
------- -------
Net cash provided by operating activities 2,030 1,119
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,050) 12
Other assets (1,283) (89)
------- -------
Net cash used in investing activities (3,333) (77)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock, net 793 377
------- -------
Net cash provided by financing activities 793 377
------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH: (215) (161)
------- -------
Net increase (decrease) in cash and cash equivalents (725) 1,258
Cash and cash equivalents at beginning of period 28,192 32,689
------- -------
Cash and cash equivalents at end of period $27,467 $33,947
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
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MOLECULAR DEVICES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission ("SEC") applicable to interim financial information. Certain
information and footnote disclosures included in financial statements prepared
in accordance with generally accepted accounting principles have been omitted in
these interim statements as allowed by such SEC rules and regulations. The
balance sheet at December 31, 1999 has been derived from audited financial
statements, but does not include all disclosures required by generally accepted
accounting principles. However, we believe that the disclosures are adequate to
make the information presented not misleading. The unaudited condensed
consolidated financial statements included in this Form 10-Q should be read in
conjunction with the audited consolidated financial statements and notes
thereto, for the fiscal year ended December 31, 1999, included in our Annual
Report on Form 10-K for the fiscal year ended December 31, 1999, as filed with
the SEC on March 28, 2000.
The unaudited condensed consolidated financial statements included herein
reflect all adjustments (which include only normal, recurring adjustments) which
are, in the opinion of management, necessary to state fairly the results for the
periods presented. The results for the three-month period ended March 31, 2000
are not necessarily indicative of the results to be expected for the entire
fiscal year ending December 31, 2000.
NOTE 2. RECENT ACCOUNTING PRONOUNCEMENT
In December 1999, the SEC issued Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements, referred to as SAB 101. SAB 101 summarizes
the SEC staff's views in applying generally accepted accounting principles to
revenue recognition. We are currently in the process of evaluating SAB 101 and
what effect it may have on our financial statements. Accordingly, we have not
determined whether SAB 101 will have a material impact on our financial position
or results of operations. In the event that the implementation of SAB 101
requires us to report a change in accounting principles related to our revenue
recognition policy, we would be required to report such change no later than the
quarter ending June 30, 2000.
NOTE 3. COMPREHENSIVE INCOME
Statement of Financial Accounting Standards No. 130 requires unrealized gains or
losses on our foreign currency translation adjustments, which are reported
separately in stockholders' equity, to be included in other comprehensive
income. Comprehensive income was approximately $2.5 million and $1.9 million for
the three-month periods ended March 31, 2000 and 1999, respectively.
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NOTE 4. INVENTORIES
Inventories consist of (in thousands):
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
(unaudited)
<S> <C> <C>
Finished goods $3,528 $3,167
Work in process 1,764 548
Raw materials and subassemblies 4,340 4,203
------- -------
$9,632 $7,918
======= =======
</TABLE>
NOTE 5. NET INCOME PER SHARE
Basic net income per share is computed using the weighted average number of
shares of common stock outstanding and diluted net income per share is computed
using the weighted average number of shares of common stock outstanding and
dilutive common equivalent shares from outstanding stock options (using the
treasury stock method). Computation of earnings per share is as follows (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
2000 1999
------- ------
(unaudited)
<S> <C> <C>
Net Income $ 2,604 $1,974
======= ======
Denominator for basic EPS - weighted average common shares
outstanding 9,706 9,528
Effect of dilutive securities - employee stock options 890 435
------- ------
Denominator for diluted EPS - weighted average common shares
outstanding plus dilutive securities 10,596 9,963
======= ======
BASIC NET INCOME PER SHARE $ 0.27 $ 0.21
======= ======
DILUTED NET INCOME PER SHARE $ 0.25 $ 0.20
======= ======
</TABLE>
NOTE 6. SECONDARY OFFERING
We have filed a registration statement with the SEC for a proposed public
offering of 1,600,000 shares of Common Stock, including shares to be offered by
us and a selling stockholder. This registration statement has not yet become
effective.
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MOLECULAR DEVICES CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Except for the historical information contained herein, the following discussion
contains "forward-looking statements" that involve risks and uncertainties. For
this purpose, any statements contained in this Form 10-Q that are not statements
of historical fact may be deemed to be forward-looking statements. Words such as
"believes," "anticipates," "plans," "expects," "will" and similar expressions
are intended to identify forward-looking statements. There are a number of
important factors that could cause the results of Molecular Devices Corporation
to differ materially from those indicated by these forward-looking statements
including, among others, those discussed below and under the caption "Factors
that May Affect Future Results," as well as those identified in our Annual
Report on Form 10-K for the year ended December 31, 1999 as filed with the SEC
on March 28, 2000.
The following discussion should be read in conjunction with the unaudited
condensed consolidated financial statements and notes thereto included in Part I
- - Item 1 of this Quarterly Report and the audited consolidated financial
statements and notes thereto and Management's Discussion and Analysis of
Financial Condition and Results of Operations for the year ended December 31,
1999 contained in our Annual Report on Form 10-K for the year ended December 31,
1999 as filed with the SEC on March 28, 2000. The results for the first quarter
of 2000 are not necessarily indicative of the results to be expected for the
entire fiscal year ending December 31, 2000.
Results of Operations - Three months ended March 31, 2000 and 1999
REVENUES. Revenues for the first quarter of 2000 increased 26% to $17.1 million
from $13.5 million in the first quarter of 1999. Our MAXline and Cell Analysis
product families both generated increased levels of revenue while our Threshold
product family revenues decreased slightly period to period. MAXline revenues
increased due primarily to the strength of our new SPECTRAmax products
introduced in the first quarter of 2000 (the SPECTRAmax PLUS 384 and Gemini XS)
as well as to our Skatron liquid handling product line acquired during the
second quarter of 1999. Cell Analysis revenues increased primarily due to the
continued worldwide strength of our FLIPR products, primarily the FLIPR 384.
Increased volume of these Cell Analysis products was partially offset by a steep
decline in volume of our Cytosensor products period to period.
GROSS MARGIN. Our gross margins improved from 61.0% in the first quarter of 1999
to 63.4% in the first quarter of 2000. This increased margin performance was
primarily due to increased sales of higher margin SPECTRAmax and FLIPR products
discussed above.
RESEARCH AND DEVELOPMENT. Research and development spending for the first
quarter of 2000 increased 19% to $1.9 million (11.1% of revenues) from $1.6
million (11.8% of revenues). This increased spending was primarily the result of
additional personnel required to support the development of new products and
product line extensions.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses for the first quarter of 2000 increased 32% to $5.1 million (29.8% of
revenues) from $3.9 million (28.6% of revenues). This increased spending is
primarily the result of additional expenditures on marketing, sales and service
related activities, most notably additional personnel, as we continued our
efforts to expand worldwide market coverage.
8
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OTHER INCOME (NET). Net other income for the first quarter of 2000 decreased by
8% to $387,000 from $421,000 due to a decreased average cash balance period to
period as a result of the Skatron acquisition in the second quarter of 1999.
INCOME TAX PROVISION. We recorded income tax provisions of $1.6 million for the
first quarter of 2000 and $1.2 million for the first quarter of 1999 based on an
effective tax rate of 38.5%.
LIQUIDITY AND CAPITAL RESOURCES
We had cash and cash equivalents of $27.5 million at March 31, 2000 compared to
$28.2 million at December 31, 1999. We have typically financed our operations
primarily from cash flows provided by operating activities which contributed $2
million during the first quarter of 2000. Additionally, $793,000 was provided by
financing activities during the quarter, all of which was related to stock
option exercises. These two sources of cash were offset by $3.3 million used
during the quarter in investing activities. The cash flow from operations was
primarily a function of our earnings and increased accounts payable partially
offset by short-term working capital needs for accounts receivables and
inventory. The cash used in investing activities was primarily due to: (1) $2
million spent on capital expenditures as a result of our facilities expansion in
Sunnyvale, California and, (2) $1.3 million invested in other assets, primarily
$1.1 million invested in a company developing a new technology.
We believe that our existing cash and investment securities and anticipated cash
flow from our operations will be sufficient to support our current operating
plan for the foreseeable future. Our forecast of the period of time through
which our financial resources will be adequate to support our operations is a
forward-looking statement that involves risks and uncertainties, and actual
results could vary as a result of a number of factors. We have based this
estimate on assumptions that may prove to be wrong. Our future capital
requirements will depend on many factors, including:
o the progress of our research and development;
o the number and scope of our research programs;
o market acceptance and demand for our products;
o the costs that may be involved in enforcing our patent claims and other
intellectual property rights;
o potential acquisition and technology licensing opportunities;
o manufacturing capacity requirements; and
o the costs of expanding our sales, marketing and distribution capabilities
both in the United States and abroad.
We have generated sufficient cash flow from operations to fund our capital
requirements since our initial public offering in 1995. However, we cannot
assure you that we will not require additional financing in the future to
support our existing operations or potential acquisition and technology
licensing opportunities that may arise. Therefore, we may in the future seek to
raise additional funds through bank facilities, debt or equity offerings or
other sources of capital.
9
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Our cash and investments policy emphasizes liquidity and preservation of
principal over other portfolio considerations. We select investments that
maximize interest income to the extent possible given these two constraints. We
satisfy liquidity requirements by investing excess cash in securities with
different maturities to match projected cash needs and limit concentration of
credit risk by diversifying our investments among a variety of high
credit-quality issuers.
RECENT ACCOUNTING PRONOUNCEMENT
In December 1999, the SEC issued Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements, referred to as SAB 101. SAB 101 summarizes
the SEC staff's views in applying generally accepted accounting principles to
revenue recognition. We are currently in the process of evaluating SAB 101 and
what effect it may have on our financial statements. Accordingly, we have not
determined whether SAB 101 will have a material impact on our financial position
or results of operations.
FACTORS THAT MAY AFFECT FUTURE RESULTS
Our business, financial condition and results of operations are subject to
various risk factors, including those described below and elsewhere in this
report.
VARIATIONS IN THE AMOUNT OF TIME IT TAKES FOR US TO SELL OUR PRODUCTS AND
COLLECT ACCOUNTS RECEIVABLE AND THE TIMING OF CUSTOMER ORDERS MAY CAUSE
FLUCTUATIONS IN OUR OPERATING RESULTS, WHICH COULD CAUSE OUR STOCK PRICE TO
DECLINE.
The timing of capital equipment purchases by customers is expected to be uneven
and difficult to predict. Our products represent major capital purchases for our
customers. We estimate that the average order price for our MAXline products is
$17,000, and that the average order price for our FLIPR products is $350,000.
Accordingly, our customers generally take a relatively long time to evaluate our
products, and a significant portion of our revenues is typically derived from
sales of a small number of relatively high-priced products. Purchases are
generally made by purchase orders and not long-term contracts. Delays in receipt
of anticipated orders for our relatively high priced products could lead to
substantial variability from quarter to quarter. Furthermore, we have
historically received purchase orders and made a significant portion of each
quarter's product shipments near the end of the quarter. If that pattern
continues, even short delays in the receipt of orders or shipment of products at
the end of a quarter could have a material adverse effect on results of
operations for that quarter.
We expend significant resources educating and providing information to our
prospective customers regarding the uses and benefits of our products. Because
of the number of factors influencing the sales process, the period between our
initial contact with a customer and the time when we recognize revenue from that
customer, if ever, varies widely. Our sales cycles typically range from three to
six months, but can be much longer. During these cycles, we commit substantial
resources to our sales efforts in advance of receiving any revenue, and we may
never receive any revenue from a customer despite our sales efforts.
The relatively high purchase price for a customer order contributes to
collection delays that result in working capital volatility. While the terms of
most of our purchase orders require payment within 30 days of product shipment,
in the past we have experienced significant collection delays. We cannot predict
whether we will continue to experience similar or more severe delays.
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The capital spending policies of our customers have a significant effect on the
demand for our products. Those policies are based on a wide variety of factors,
including resources available to make purchases, spending priorities, and
policies regarding capital expenditures during industry downturns or
recessionary periods. Any decrease in capital spending by our customers
resulting from any of these factors could harm our business.
WE DEPEND ON ORDERS THAT ARE RECEIVED AND SHIPPED IN THE SAME QUARTER AND
THEREFORE HAVE LIMITED VISIBILITY OF FUTURE PRODUCT SHIPMENTS.
Our net sales in any given quarter depend upon a combination of orders received
in that quarter for shipment in that quarter and shipments from backlog. Our
products are typically shipped within 30 to 90 days of purchase order receipt.
As a result, we do not believe that the amount of backlog at any particular date
is indicative of our future level of sales. Our backlog at the beginning of each
quarter does not include all product sales needed to achieve expected revenues
for that quarter. Consequently, we are dependent on obtaining orders for
products to be shipped in the same quarter that the order is received. Moreover,
customers may reschedule shipments, and production difficulties could delay
shipments. Accordingly, we have limited visibility of future product shipments,
and our results of operations are subject to significant variability from
quarter to quarter.
MANY OF OUR CURRENT AND POTENTIAL COMPETITORS HAVE SIGNIFICANTLY GREATER
RESOURCES THAN WE DO, AND INCREASED COMPETITION COULD IMPAIR SALES OF OUR
PRODUCTS.
We operate in a highly competitive industry and face competition from companies
that design, manufacture and market instruments for use in the life sciences
research industry, from genomic, pharmaceutical, biotechnology and diagnostic
companies and from academic and research institutions and government or other
publicly-funded agencies, both in the United States and abroad. We may not be
able to compete effectively with all of these competitors. Many of these
companies and institutions have greater financial, engineering, manufacturing,
marketing and customer support resources than we do. As a result, our
competitors may be able to respond more quickly to new or emerging technologies
or market developments by devoting greater resources to the development,
promotion and sale of products, which could impair sales of our products.
Moreover, there has been significant merger and acquisition activity among our
competitors and potential competitors. These transactions by our competitors and
potential competitors may provide them with a competitive advantage over us by
enabling them to rapidly expand their product offerings and service capabilities
to meet a broader range of customer needs. Many of our customers and potential
customers are large companies that require global support and service, which may
be easier for our larger competitors to provide.
We believe that competition within the markets we serve is primarily driven by
the need for innovative products that address the needs of customers. We attempt
to counter competition by seeking to develop new products and provide quality
products and services that meet customers' needs. We cannot assure you, however,
that we will be able to successfully develop new products or that our existing
or new products and services will adequately meet our customers' needs.
Rapidly changing technology, evolving industry standards, changes in customer
needs, emerging competition and frequent new product and service introductions
characterize the markets for our products. To remain competitive, we will be
required to develop new products and periodically enhance our existing products
in a timely manner. We are facing increased competition as new companies
entering the market with new technologies compete, or will compete, with our
products and future products. We cannot assure you that one or more of our
competitors will not succeed in developing or marketing technologies or products
that are more effective or commercially attractive than our products
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or future products, or that would render our technologies and products obsolete
or uneconomical. Our future success will depend in large part on our ability to
maintain a competitive position with respect to our current and future
technologies, which we may not be able to do. In addition, delays in the launch
of our new products may result in loss of market share due to our customers'
purchases of competitors' products during any delay.
IF WE ARE NOT SUCCESSFUL IN DEVELOPING NEW AND ENHANCED PRODUCTS, WE MAY LOSE
MARKET SHARE TO OUR COMPETITORS.
The life sciences instrumentation market is characterized by rapid technological
change and frequent new product introductions. Over 70% of our revenues in 1999
were derived from the sale of products that were introduced in the last three
years, and our future success will depend on our ability to enhance our current
products and to develop and introduce, on a timely basis, new products that
address the evolving needs of our customers. We may experience difficulties or
delays in our development efforts with respect to new products, and we may not
ultimately be successful in developing them. Any significant delay in releasing
new systems could adversely affect our reputation, give a competitor a
first-to-market advantage or cause a competitor to achieve greater market share.
In addition, our future success depends on our continued ability to develop new
applications for our existing products. If we are not able to complete the
development of these applications, or if we experience difficulties or delays,
we may lose our current customers and may not be able to attract new customers,
which could seriously harm our business and our future growth prospects.
WE MUST EXPEND A SIGNIFICANT AMOUNT OF TIME AND RESOURCES TO DEVELOP NEW
PRODUCTS AND IF THESE PRODUCTS DO NOT ACHIEVE COMMERCIAL ACCEPTANCE, OUR
OPERATING RESULTS MAY SUFFER.
We expect to spend a significant amount of time and resources to develop new
products and refine existing products. In light of the long product development
cycles inherent in our industry, these expenditures will be made well in advance
of the prospect of deriving revenue from the sale of new products. Our ability
to commercially introduce and successfully market new products is subject to a
wide variety of challenges during this development cycle that could delay
introduction of these products. In addition, since our customers are not
obligated by long-term contracts to purchase our products, our anticipated
product orders may not materialize, or orders that do materialize may be
canceled. As a result, if we do not achieve market acceptance of new products,
our operating results will suffer. In particular, while FLIPR and CLIPR reagent
kits have recently been introduced to the market, they have had only limited
sales to date and have not yet been widely commercially accepted. We cannot
predict whether these or other new products that we expect to introduce will
achieve commercial acceptance. Our products are generally priced higher than
competitive products, which may impair commercial acceptance.
IF WE DELIVER PRODUCTS WITH DEFECTS, OUR CREDIBILITY WILL BE HARMED AND THE
SALES AND MARKET ACCEPTANCE OF OUR PRODUCTS WILL DECREASE.
Our products are complex and sometimes have contained errors, defects and bugs
when introduced. If we deliver products with errors, defects or bugs, our
credibility and the market acceptance and sales of our products would be harmed.
Further, if our products contain errors, defects or bugs, we may be required to
expend significant capital and resources to alleviate such problems. Defects
could also lead to product liability as a result of product liability lawsuits
against us or against our customers. We have agreed to indemnify our customers
in some circumstances against liability arising from defects in our products. In
the event of a successful product liability claim, we could be obligated to pay
damages significantly in excess of our product liability insurance limits.
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THE RECENT ISSUANCE BY THE SEC OF AN ACCOUNTING BULLETIN RELATED TO REVENUE
RECOGNITION, SAB 101, MAY HAVE A MATERIAL ADVERSE IMPACT ON OUR FINANCIAL
PERFORMANCE.
In December 1999, the SEC issued Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements, referred to as SAB 101. SAB 101 summarizes
the SEC staff's views in applying generally accepted accounting principles to
revenue recognition in financial statements. We are currently in the process of
evaluating SAB 101 and what effect it may have on our financial statements.
Accordingly, we have not determined whether SAB 101 will have a material impact
on our financial position or results of operations. In the event that the
implementation of SAB 101 requires us to report a change in accounting
principles related to our revenue recognition policy, we would be required to
report such change no later than the quarter ending June 30, 2000. In addition
to other uncertain risks related to SAB 101, it is possible that SAB 101 will
result in increased fluctuations in our quarterly operating results and increase
the likelihood that we may fail to meet the expectations of securities analysts
for any period.
MOST OF OUR CURRENT AND POTENTIAL CUSTOMERS ARE FROM THE PHARMACEUTICAL AND
BIOTECHNOLOGY INDUSTRIES AND ARE SUBJECT TO RISKS FACED BY THOSE INDUSTRIES.
We derive a significant portion of our revenues from sales to pharmaceutical and
biotechnology companies. We expect that sales to pharmaceutical and
biotechnology companies will continue to be a primary source of revenues for the
foreseeable future. As a result, we are subject to risks and uncertainties that
affect the pharmaceutical and biotechnology industries, such as pricing
pressures as third-party payors continue challenging the pricing of medical
products and services, government regulation and uncertainty of technological
change, and reduction and delays in research and development expenditures by
companies in these industries.
In addition, our future revenues may be adversely affected by the ongoing
consolidation in the pharmaceutical and biotechnology industries, which will
reduce the number of our potential customers. Furthermore, we cannot assure you
that the pharmaceutical and biotechnology companies that are our customers will
not develop their own competing products or in-house capabilities.
OUR PRODUCTS COULD INFRINGE ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS, WHICH
MAY CAUSE US TO ENGAGE IN COSTLY LITIGATION AND, IF WE ARE NOT SUCCESSFUL, COULD
ALSO CAUSE US TO PAY SUBSTANTIAL DAMAGES AND PROHIBIT US FROM SELLING OUR
PRODUCTS.
Third parties may assert infringement or other intellectual property claims
against us. We may have to pay substantial damages, including treble damages,
for past infringement if it is ultimately determined that our products infringe
a third party's proprietary rights. Further, any legal action against us could,
in addition to subjecting us to potential liability for damages, prohibit us
from selling our products before we obtain a license to do so from the party
owning the intellectual property, which, if available at all, may require us to
pay substantial royalties. Even if these claims are without merit, defending a
lawsuit takes significant time, may be expensive and may divert management
attention from other business concerns. There may be third-party patents that
may relate to our technology or potential products. Any public announcements
related to litigation or interference proceedings initiated or threatened
against us could cause our stock price to decline. We believe that there may be
significant litigation in the industry regarding patent and other intellectual
property rights. If we become involved in litigation, it could consume a
substantial portion of our managerial and financial resources.
13
<PAGE> 14
WE MAY NEED TO INITIATE LAWSUITS TO PROTECT OR ENFORCE OUR PATENTS, WHICH WOULD
BE EXPENSIVE AND, IF WE LOSE, MAY CAUSE US TO LOSE SOME OF OUR INTELLECTUAL
PROPERTY RIGHTS, WHICH WOULD REDUCE OUR ABILITY TO COMPETE IN THE MARKET.
We rely on patents to protect a large part of our intellectual property and our
competitive position. In order to protect or enforce our patent rights, we may
initiate patent litigation against third parties, such as infringement suits or
interference proceedings. Litigation may be necessary to:
o assert claims of infringement;
o enforce our patents;
o protect our trade secrets or know-how; or
o determine the enforceability, scope and validity of the proprietary rights
of others.
Lawsuits could be expensive, take significant time and divert management's
attention from other business concerns. They would put our patents at risk of
being invalidated or interpreted narrowly and our patent applications at risk of
not issuing. We may also provoke third parties to assert claims against us.
Patent law relating to the scope of claims in the technology fields in which we
operate is still evolving and, consequently, patent positions in our industry
are generally uncertain. We cannot assure you that we will prevail in any of
these suits or that the damages or other remedies awarded, if any, will be
commercially valuable. During the course of these suits, there may be public
announcements of the results of hearings, motions and other interim proceedings
or developments in the litigation. If securities analysts or investors perceive
any of these results to be negative, it could cause our stock price to decline.
THE RIGHTS WE RELY UPON TO PROTECT OUR INTELLECTUAL PROPERTY UNDERLYING OUR
PRODUCTS MAY NOT BE ADEQUATE, WHICH COULD ENABLE THIRD PARTIES TO USE OUR
TECHNOLOGY AND WOULD REDUCE OUR ABILITY TO COMPETE IN THE MARKET.
Our success will depend in part on our ability to obtain commercially valuable
patent claims and to protect our intellectual property. Our patent position is
generally uncertain and involves complex legal and factual questions. Legal
standards relating to the validity and scope of claims in our technology field
are still evolving. Therefore, the degree of future protection for our
proprietary rights is uncertain.
The risks and uncertainties that we face with respect to our patents and other
proprietary rights include the following:
o the pending patent applications we have filed or to which we have exclusive
rights may not result in issued patents or may take longer than we expect to
result in issued patents;
o the claims of any patents which are issued may not provide meaningful
protection;
o we may not be able to develop additional proprietary technologies that are
patentable;
o the patents licensed or issued to us or our customers may not provide a
competitive advantage;
o other companies may challenge patents licensed or issued to us or our
customers;
14
<PAGE> 15
o patents issued to other companies may harm our ability to do business;
o other companies may independently develop similar or alternative
technologies or duplicate our technologies; and
o other companies may design around technologies we have licensed or
developed.
In addition to patents, we rely on a combination of trade secrets, nondisclosure
agreements and other contractual provisions and technical measures to protect
our intellectual property rights. Nevertheless, these measures may not be
adequate to safeguard the technology underlying our products. If they do not
protect our rights, third parties could use our technology, and our ability to
compete in the market would be reduced. In addition, employees, consultants and
others who participate in the development of our products may breach their
agreements with us regarding our intellectual property, and we may not have
adequate remedies for the breach. We also may not be able to effectively protect
our intellectual property rights in some foreign countries. For a variety of
reasons, we may decide not to file for patent, copyright or trademark protection
or prosecute potential infringements of our patents. We also realize that our
trade secrets may become known through other means not currently foreseen by us.
Notwithstanding our efforts to protect our intellectual property, our
competitors may independently develop similar or alternative technologies or
products that are equal or superior to our technology and products without
infringing on any of our intellectual property rights or design around our
proprietary technologies.
WE OBTAIN SOME OF THE COMPONENTS AND SUBASSEMBLIES INCLUDED IN OUR SYSTEMS FROM
A SINGLE SOURCE OR A LIMITED GROUP OF SUPPLIERS, AND THE PARTIAL OR COMPLETE
LOSS OF ONE OF THESE SUPPLIERS COULD CAUSE PRODUCTION DELAYS AND A SUBSTANTIAL
LOSS OF REVENUE.
We rely on outside vendors to manufacture many components and subassemblies.
Certain components, subassemblies and services necessary for the manufacture of
our systems are obtained from a sole supplier or limited group of suppliers,
some of which are our competitors. Additional components, such as optical,
electronic and pneumatic devices, are currently purchased in configurations
specific to our requirements and, together with certain other components, such
as computers, are integrated into our products. We maintain only a limited
number of long-term supply agreements with our suppliers.
Our reliance on a sole or a limited group of suppliers involves several risks,
including the following:
o we may be unable to obtain an adequate supply of required components;
o we have reduced control over pricing and the timely delivery of components
and subassemblies; and
o our suppliers may be unable to develop technologically advanced products to
support our growth and development of new systems.
For example, we currently rely on a single supplier of disposable plastic tips
used with our FLIPR384 system, and we have in the past experienced delays and
customer dissatisfaction due to our supplier's inability to deliver an adequate
supply of tips. We cannot predict whether we will encounter additional similar
delays in the future. Our current supplier and known potential alternative
suppliers of disposable plastic tips used with our FLIPR384 system are our
competitors.
15
<PAGE> 16
Because the manufacturing of certain of these components and subassemblies
involves extremely complex processes and requires long lead times, we may
experience delays or shortages caused by suppliers. We believe that alternative
sources could be obtained and qualified, if necessary, for most sole and limited
source parts. However, if we were forced to seek alternative sources of supply
or to manufacture such components or subassemblies internally, we may be forced
to redesign our systems, which could prevent us from shipping our systems to
customers on a timely basis. Some of our suppliers have relatively limited
financial and other resources. Any inability to obtain adequate deliveries, or
any other circumstance that would restrict our ability to ship our products,
could damage relationships with current and prospective customers and could harm
our business.
WE MAY ENCOUNTER MANUFACTURING AND ASSEMBLY PROBLEMS OR DELAYS, WHICH COULD
RESULT IN LOST REVENUE.
We assemble our systems in our manufacturing facilities located in Sunnyvale,
California and Norway. Our manufacturing and assembly processes are highly
complex and require sophisticated, costly equipment and specially designed
facilities. As a result, any prolonged disruption in the operations of our
manufacturing facilities could seriously harm our ability to satisfy our
customer order deadlines. If we cannot deliver our systems in a timely manner,
our revenues will likely suffer.
Our product sales depend in part upon manufacturing yields. We currently have
limited manufacturing capacity and experience variability in manufacturing
yields. We are currently manufacturing high throughput instruments in-house, in
limited volumes and with largely manual assembly. If demand for our high
throughput instruments increases, we will either need to expand our in-house
manufacturing capabilities or outsource to other manufacturers. If we fail to
deliver our products in a timely manner, our relationships with our customers
could be seriously harmed, and revenue would decline.
As we develop new products, we must transition the manufacture of a new product
from the development stage to commercial manufacturing. We have only recently
transitioned GEMINI XS and SPECTRAmax PLUS384 from the development stage to
commercial manufacturing, and we have only recently begun the transition process
for the CLIPR system. We cannot predict whether we will be able to complete
these transitions on a timely basis and with commercially reasonable costs. We
cannot assure you that manufacturing or quality control problems will not arise
as we attempt to scale-up our production for any future new products or that we
can scale-up manufacturing and quality control in a timely manner or at
commercially reasonable costs. If we are unable to consistently manufacture our
products on a timely basis because of these or other factors, our product sales
will decline.
WE MAY HAVE DIFFICULTY MANAGING OUR GROWTH.
We expect to continue to experience significant growth in the number of our
employees and customers and the scope of our operations. This growth may
continue to place a significant strain on our management and operations. Our
ability to manage this growth will depend upon our ability to broaden our
management team and our ability to attract, hire and retain skilled employees.
Our success will also depend on the ability of our officers and key employees to
continue to implement and improve our operational and other systems, to manage
multiple, concurrent customer relationships and to hire, train and manage our
employees. Our future success is heavily dependent upon growth and acceptance of
new products. If we cannot scale our business appropriately or otherwise adapt
to anticipated growth and new product introductions, a key part of our strategy
may not be successful.
16
<PAGE> 17
WE RELY UPON DISTRIBUTORS FOR PRODUCT SALES AND SUPPORT OUTSIDE NORTH AMERICA.
In 1999 approximately 17% of our sales were made through distributors. We often
rely upon distributors to provide customer support to the ultimate end users of
our products. As a result, our success depends on the continued sales and
customer support efforts of our network of distributors. The use of distributors
involves certain risks, including risks that distributors will not effectively
sell or support our products, that they will be unable to satisfy financial
obligations to us and that they will cease operations. Any reduction, delay or
loss of orders from our significant distributors could harm our revenues. We
also do not currently have distributors in a number of significant international
markets that we have targeted and will need to establish additional
international distribution relationships. There can be no assurance that we will
engage qualified distributors in a timely manner, and the failure to do so could
have a material adverse effect on our business, financial condition and results
of operations.
IF WE CHOOSE TO ACQUIRE NEW AND COMPLEMENTARY BUSINESSES, PRODUCTS OR
TECHNOLOGIES INSTEAD OF DEVELOPING THEM OURSELVES, WE MAY BE UNABLE TO COMPLETE
THESE ACQUISITIONS OR MAY NOT BE ABLE TO SUCCESSFULLY INTEGRATE AN ACQUIRED
BUSINESS OR TECHNOLOGY IN A COST-EFFECTIVE AND NON-DISRUPTIVE MANNER.
Our success depends on our ability to continually enhance and broaden our
product offerings in response to changing technologies, customer demands and
competitive pressures. To this end, from time to time we have acquired
complementary businesses, products, or technologies instead of developing them
ourselves and may choose to do so in the future. We do not know if we will be
able to complete any acquisitions, or whether we will be able to successfully
integrate any acquired business, operate it profitably or retain its key
employees. Integrating any business, product or technology we acquire could be
expensive and time consuming, disrupt our ongoing business and distract our
management. In addition, in order to finance any acquisitions, we might need to
raise additional funds through public or private equity or debt financings. In
that event, we could be forced to obtain financing on terms that are not
favorable to us and, in the case of equity financing, that may result in
dilution to our shareholders. If we are unable to integrate any acquired
entities, products or technologies effectively, our business will suffer. In
addition, any amortization of goodwill or other assets or charges resulting from
the costs of acquisitions could harm our business and operating results.
WE DEPEND ON OUR KEY PERSONNEL, THE LOSS OF WHOM WOULD IMPAIR OUR ABILITY TO
COMPETE.
We are highly dependent on the principal members of our management, engineering
and scientific staff. The loss of the service of any of these persons could
seriously harm our product development and commercialization efforts. In
addition, research, product development and commercialization will require
additional skilled personnel in areas such as chemistry and biology, software
engineering and electronic engineering. Our corporate headquarters is located in
Sunnyvale, California, where demand for personnel with these skills is extremely
high and is likely to remain high. As a result, competition for and retention of
personnel, particularly for employees with technical expertise, is intense and
the turnover rate for these people is high. If we are unable to hire, train and
retain a sufficient number of qualified employees, our ability to conduct and
expand our business could be seriously reduced. The inability to retain and hire
qualified personnel could also hinder the planned expansion of our business.
17
<PAGE> 18
WE ARE DEPENDENT ON INTERNATIONAL SALES AND OPERATIONS, WHICH EXPOSES US TO
FOREIGN CURRENCY EXCHANGE RATE, POLITICAL AND ECONOMIC RISKS.
We maintain facilities in Norway, the United Kingdom and Germany, and sales to
customers outside the U.S. accounted for approximately 39% our revenues in 1999.
We anticipate that international sales will continue to account for a
significant portion of our revenues.
All of our sales to international distributors are denominated in U.S. dollars.
All of our direct sales in the United Kingdom, Germany and Canada are
denominated in local currencies and totaled $13.9 million (22% of total
revenues) in 1999. To the extent that our sales and operating expenses are
denominated in foreign currencies, our operating results may be adversely
affected by changes in exchange rates. Historically, foreign exchange gains and
losses have been immaterial to our results of operations. However, we cannot
predict whether these gains and losses will continue to be immaterial,
particularly as we increase our direct sales outside North America. Owing to the
number of currencies involved, the substantial volatility of currency exchange
rates, and our constantly changing currency exposures, we cannot predict the
effect of exchange rate fluctuations on our future operating results. We do not
engage in foreign currency hedging transactions.
Our reliance on international sales and operations exposes us to foreign
political and economic risks, including:
o political, social and economic instability;
o trade restrictions and changes in tariffs;
o import and export license requirements and restrictions;
o difficulties in staffing and managing international operations;
o disruptions in international transport or delivery;
o difficulties in collecting receivables; and
o potentially adverse tax consequences.
If any of these risks materialize, our international sales could decrease and
our foreign operations could suffer.
OUR OPERATING RESULTS FLUCTUATE AND ANY FAILURE TO MEET FINANCIAL EXPECTATIONS
MAY DISAPPOINT SECURITIES ANALYSTS OR INVESTORS AND RESULT IN A DECLINE IN OUR
STOCK PRICE.
We typically experience a decrease in the level of sales in the first calendar
quarter as compared to the fourth quarter of the preceding year because of
budgetary and capital equipment purchasing patterns in the life sciences
industry. We also typically experience a decrease in revenues in the third
quarter compared to the second quarter, related to seasonality primarily
associated with lower European and academic sales during the summer months.
Our quarterly operating results have fluctuated in the past, and we expect they
will fluctuate in the future as a result of many factors, some of which are
outside of our control. In particular, if sales levels in a
18
<PAGE> 19
particular quarter do not meet expectations, we may not be able to adjust
operating expenses sufficiently quickly to compensate for the shortfall, and our
results of operations for that quarter may be seriously harmed. We manufacture
our products based on forecasted orders rather than to outstanding orders. Our
manufacturing procedures may in certain instances create a risk of excess or
inadequate inventory levels if orders do not match forecasts. In addition, our
expense levels are based, in part, on expected future sales, and we generally
cannot quickly adjust operating expenses. For example, research and development
and general and administrative expenses are not affected directly by variations
in revenue.
It is possible that in some future quarter or quarters, our operating results
will be below the expectations of securities analysts or investors. In this
event, the market price of our common stock may fall abruptly and significantly.
Because our revenue and operating results are difficult to predict, we believe
that period-to-period comparisons of our results of operations are not a good
indication of our future performance.
OUR STOCK PRICE IS VOLATILE, WHICH COULD CAUSE SHAREHOLDERS TO LOSE A
SUBSTANTIAL PART OF THEIR INVESTMENT IN OUR STOCK.
The stock market in general, and the stock prices of technology companies in
particular, have recently experienced volatility which has often been unrelated
to the operating performance of any particular company or companies. Over the
last twelve months, our stock price has ranged from $23.25 to $122.35. Our stock
price could decline regardless of our actual operating performance, and
shareholders could lose a substantial part of their investment as a result of
industry or market-based fluctuations. In the past, our stock has traded
relatively thinly. If a more active public market for our stock is not
sustained, it may be difficult for shareholders to resell shares of our common
stock. Because we do not anticipate paying cash dividends on our common stock
for the foreseeable future, stockholders will not be able to receive a return on
their shares unless they sell them.
THE MARKET PRICE OF OUR COMMON STOCK WILL LIKELY FLUCTUATE IN RESPONSE TO A
NUMBER OF FACTORS, INCLUDING THE FOLLOWING:
o our failure to meet the performance estimates of securities analysts;
o changes in financial estimates of our revenues and operating results or
buy/sell recommendations by securities analysts;
o the timing of announcements by us or our competitors of significant
products, contracts or acquisitions or publicity regarding actual or
potential results or performance thereof; and
o general stock market conditions, other economic or external factors.
PROVISIONS OF OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY INHIBIT A TAKEOVER,
WHICH COULD LIMIT THE PRICE INVESTORS MIGHT BE WILLING TO PAY IN THE FUTURE FOR
OUR COMMON STOCK.
Provisions in our certificate of incorporation and bylaws may have the effect of
delaying or preventing an acquisition, merger in which we are not the surviving
company or changes in our management. For example, our certificate of
incorporation gives our board of directors the authority to issue shares of
preferred stock and to determine the price, rights, preferences and privileges
and restrictions, including voting rights, of those shares without any further
vote or action by our stockholders. The rights of the holders of common stock
will be subject to, and may harmed by, the rights of the holders of any shares
of preferred stock that may be issued in the future. The issuance of preferred
stock may delay, defer or
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<PAGE> 20
prevent a change in control, as the terms of the preferred stock that might be
issued could potentially prohibit our consummation of any merger,
reorganization, sale of substantially all of our assets, liquidation or other
extraordinary corporate transaction without the approval of the holders of the
outstanding shares of preferred stock. The issuance of preferred stock could
also have a dilutive effect on our stockholders. In addition, because we are
incorporated in Delaware, we are governed by the provisions of Section 203 of
the Delaware General Corporation Law. These provisions may prohibit large
stockholders, in particular those owning 15% or more of the outstanding voting
stock, from consummating a merger or combination involving us. These provisions
could limit the price that investors might be willing to pay in the future for
our common stock.
OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN OUR
FORWARD-LOOKING STATEMENTS.
This report contains forward-looking statements within the meaning of the
federal securities laws that relate to future events or our future financial
performance. When used in this report, you can identify forward-looking
statements by terminology such as "anticipate," "believe," "continue,"
"estimate," "expect," "intend," "may," "plan," "potential," "predict," "should,"
"will" and the negative of these terms or other comparable terminology. These
statements are only predictions. Our actual results could differ materially from
those anticipated in our forward-looking statements as a result of many factors,
including those set forth here under "Factors That May Affect Future Results"
and elsewhere in this report.
Although we believe that the expectations reflected in our forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Neither we nor any other person assumes
responsibility for the accuracy and completeness of these statements. We assume
no duty to update any of the forward-looking statements after the date of this
report or to conform these statements to actual results.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk, including changes in interest rates and foreign
currency exchange rates. The primary objective of our investment activities is
to preserve principal while at the same time maximizing the income we receive
from our investments without significantly increasing risk. A discussion of our
accounting policies for financial instruments and further disclosures relating
to financial institutions is included in the Summary of Significant Accounting
Policies note in the Notes to Consolidated Financial Statements included in our
Annual Report on Form 10-K for the fiscal year ended December 31, 1999.
Our interest income is sensitive to changes in the general level of interest
rates, primarily U.S. interest rates. In this regard, changes in U.S. interest
rates affect the interest earned on our cash equivalents. We invest our excess
cash primarily in demand deposits with United States banks and money market
accounts and short-term securities. These securities, consisting of commercial
paper and U.S. government agency securities, are carried at market value, which
approximate cost, typically mature or are redeemable within 90 days, and bear
minimal valuation risk. We have not experienced any significant losses on these
investments.
We are exposed to changes in exchange rates primarily in the United Kingdom,
Germany and Canada. All export sales, with the exception of sales into Canada,
are denominated in U.S. dollars and bear no exchange rate risk. However, a
strengthening of the U.S. dollar could make our products less
20
<PAGE> 21
competitive in overseas markets. Gains and losses resulting from foreign
currency transactions in Canada have historically been immaterial. Translation
gains and losses related to our foreign subsidiaries in the United Kingdom and
Germany are accumulated as a separate component of Stockholder's equity. Those
gains and losses have historically been immaterial.
21
<PAGE> 22
MOLECULAR DEVICES CORPORATION
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
We entered into employment arrangements with each of Dr. Joseph D. Keegan, Mr.
Timothy A. Harkness and Mr. John S. Senaldi pursuant to which we are obligated
to issue to each such officer shares of Molecular Devices Corporation Common
Stock in exchange for services rendered. As a result of these arrangements, we
issued shares of our Common Stock to these officers on the dates and amounts
indicated below in reliance on the exemption from registration afforded by
Section 4(2) of the Securities Act of 1993, as amended.
<TABLE>
<CAPTION>
Number of Shares Date of Issue
---------------- -------------
<S> <C> <C>
Dr. Keegan 3,750 03/31/00
Mr. Harkness 1,250 01/09/00
Mr. Senaldi 312 02/06/00
</TABLE>
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by us during the quarter ended March
31, 2000.
22
<PAGE> 23
SIGNATURE
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.
MOLECULAR DEVICES CORPORATION
By: /s/ Timothy A. Harkness
--------------------------------------
Vice President, Finance and Chief
Financial Officer
(Duly Authorized and Principal
Financial and Accounting Officer)
Date: May 15, 2000
23
<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2000 AND THE CONDENSED
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 24,467
<SECURITIES> 0
<RECEIVABLES> 19,061
<ALLOWANCES> 373
<INVENTORY> 9,632
<CURRENT-ASSETS> 59,068
<PP&E> 10,853
<DEPRECIATION> 6,326
<TOTAL-ASSETS> 70,062
<CURRENT-LIABILITIES> 9,988
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 60,064
<TOTAL-LIABILITY-AND-EQUITY> 70,062
<SALES> 17,068
<TOTAL-REVENUES> 17,068
<CGS> 6,250
<TOTAL-COSTS> 6,250
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,234
<INCOME-TAX> 1,630
<INCOME-CONTINUING> 2,604
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,604
<EPS-BASIC> 0.27
<EPS-DILUTED> 0.25
</TABLE>
