<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
COMMISSION FILE NUMBER 1-11831
SABRATEK CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
36-3700639
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
5601 WEST HOWARD STREET
NILES, ILLINOIS 60714
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(847) 647-2760
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") during the preceding 12 months (or for such shorter
period that the registrants were required to file such reports), and (2) have
been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
As of May 11, 1998, 10,541,557 shares of Sabratek Corporation's Common Stock
were outstanding.
<PAGE> 2
SABRATEK CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION
Page
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Item 1. Financial Statements
Balance Sheets
March 31, 1998 (Unaudited) and December 31, 1997.................... 3
Statements of Operations
Three Months Ended March 31, 1998 and 1997 (Unaudited).............. 4
Statements of Cash Flows
Three Months Ended March 31, 1998 and 1997 (Unaudited).............. 5
Notes to Financial Statements (Unaudited)........................... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................... 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings................................................... 12
Item 6. Exhibits and Reports on Form 8-K.................................... 12
</TABLE>
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SABRATEK CORPORATION
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
---- ----
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash & cash equivalents $13,102 $19,598
Investments in marketable securities 4,003 5,004
Receivables:
Trade, net of allowance for doubtful accounts
of $605 and $503 at March 31, 1998
and December 31, 1997, respectively 20,066 15,293
Other 156 208
------- -------
Total receivables 20,222 15,501
------- -------
Inventories 17,801 13,719
Other current assets 776 821
------- -------
Total current assets 55,904 54,643
------- -------
Property, plant and equipment, net 3,733 3,546
Notes receivable 620 233
Intangible assets, net 15,228 12,644
Other 102 101
------- -------
$75,587 $71,167
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt, including capital lease obligation $ 4 $ 25
Accounts payable 4,471 3,718
Payroll & commissions 855 2,039
Warranty 304 304
Accrued expense 439 300
Other 177 102
------- -------
Total current liabilities 6,250 6,488
------- -------
Long-term obligations 568 264
------- -------
Total liabilities 6,818 6,752
------- -------
Stockholders' equity:
Common stock, par value $.01, issued and
outstanding; 10,516,978 at March 31, 1998,
10,325,280 at December 31, 1997 105 103
Additional paid-in capital 73,739 71,344
Other (11) (12)
Accumulated other comprehensive income 40 44
Accumulated deficit (5,104) (7,064)
------- -------
Total stockholders' equity 68,769 64,415
------- -------
$75,587 $71,167
======= =======
</TABLE>
See accompanying notes to financial statements
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SABRATEK CORPORATION
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1998 1997
-------------------
<S> <C> <C>
Net sales $15,156 $7,467
Cost of sales 6,728 3,027
-------------------
Gross margin 8,428 4,440
Selling, general and administrative expenses 5,666 3,499
-------------------
Operating income 2,762 941
Other income (expense):
Interest income 215 143
Interest expense (5) (5)
Other - (12)
-------------------
Net income before taxes 2,972 1,067
Provision for income taxes 1,012 21
-------------------
Net income $ 1,960 $1,046
===================
Basic income per share $ 0.19 $ 0.13
===================
Basic weighted average shares outstanding 10,398 8,287
===================
Diluted income per share $ 0.17 $ 0.11
===================
Diluted weighted average shares outstanding 11,723 9,499
===================
</TABLE>
See accompanying notes to financial statements.
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SABRATEK CORPORATION
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
March 31, March 31,
1998 1997
--------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,960 $ 1,046
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 492 133
Deferred compensation 1 -
Tax effect of stock option exercises 1,012 -
Non-cash expense - 31
Provision for bad debts 102 69
Changes in assets and liabilities:
Receivables (4,823) (2,989)
Other receivable - 125
Inventories (4,082) (1,264)
Other current assets 45 -
Accounts payable 753 (781)
Accrued liabilities (1,045) 660
Long term obligations 304 -
Other 74 (228)
--------------------
Net cash used in operating activities (5,207) (3,198)
--------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant, equipment (329) (206)
Issuance of note receivable (387) (602)
Purchase of intangible assets (2,934) -
Sale and maturity of marketable securities 997 867
Purchase of Rocap, Inc., net of cash acquired - (1,283)
--------------------
Net cash used in investing activities (2,653) (1,224)
--------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt - (1)
Payments of capital lease, net (21) (41)
Proceeds from exercise of stock options and warrants 1,385 389
--------------------
Net cash provided by financing activities 1,364 347
--------------------
Decrease in cash (6,496) (4,075)
Cash and cash equivalents at beginning of period 19,598 10,447
--------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $13,102 $ 6,372
====================
</TABLE>
See accompanying notes to financial statements
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SABRATEK CORPORATION
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1997
(UNAUDITED)
(1) FINANCIAL STATEMENTS
The financial statements included herein have been prepared by the Company,
without audit, and include all adjustments of a normal recurring nature which
are, in the opinion of management, necessary for fair presentation of the
results of operations for the three month period ended March 31, 1998 pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures in these financial statements are adequate
to make the information presented not misleading. These financial statements
should be read in conjunction with the Company's financial statements and the
notes thereto included in the Company's Form 10-K filed by the Company with the
Securities and Exchange Commission for the year ended December 31, 1997. The
results of operations for the three month period ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998.
(2) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest during the three month periods ended March 31, 1998
and 1997 was $5,012 and $5,138, respectively.
(3) STOCK OPTIONS
During the three month period ended March 31, 1998, the Company issued
108,445 shares, in aggregate, of common stock upon the exercise of stock
options pursuant to the Sabratek Corporation Amended and Restated 1993 Stock
Option Plan (the "Plan"). The option exercises resulted in proceeds to the
Company of $968,223, in aggregate. In addition, 1,879 shares of common stock
were issued pursuant to the Company's Stock Purchase Plan resulting in
aggregate proceeds of $45,919.
Options for a total of 1,800 shares of common stock were granted during
the three month period pursuant to the Plan at an exercise price equal to the
fair market value on the date of grant. The stock options vest over a
multi-year period.
(4) WARRANTS
During the three month period ended March 31, 1998, the Company issued
81,374 shares, in aggregate, of common stock upon the exercise of warrants.
The warrant exercises resulted in proceeds to the Company of $370,832, in
aggregate.
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(5) COMPREHENSIVE INCOME
During the quarter ended March 31, 1998, the Company adopted Statement of
financial Accounting Standards ("SFAS No. 130"), "Reporting Comprehensive
Income." SFAS No. 130 establishes standards for reporting and display of
comprehensive income and its components (revenue, expenses, gains and losses)
in a full set of general-purpose financial statements, and requires a total for
comprehensive income to be provided in condensed financial statements of
interim periods. Comprehensive income includes all changes in stockholders'
equity during the period except those resulting from investments by owners and
distributions to owners. Comprehensive income (loss) for the quarters ended
March 31, 1998 and 1997 consisted of the following:
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
Net income $1,960 $1,046
Other comprehensive income (loss):
Unrealized holding losses arising during the period (7) (4)
Less: reclassification adjustment
for amounts realized in net income 3 -
------ ------
Net unrealized loss (4) (4)
------ ------
Comprehensive income $1,956 $1,042
====== ======
</TABLE>
(6) SUBSEQUENT EVENTS
In April, 1998, the Company sold in a private placement, 6% Convertible
Notes ("Notes") in an aggregate principal amount of $85,000,000. The Notes are
unsecured and mature on April 15, 2005. Interest is payable at a fixed rate of
6% on April 14 and October 15 of each year, commencing on October 15, 1998. The
Notes are convertible at any time prior to maturity at the option of the holder
into shares of common stock of the Company at a conversion price of $40.46 per
share. The Company may redeem the Notes, in whole or in part, at any time after
April 18, 2001.
(7) RECENT ACCOUNTING PRONOUNCEMENTS
In June, 1997, the Financial Accounting Standards Board also issued
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information." The Company is required to adopt
this new standard for periods ending after fiscal 1997, but is not required to
be reported in the interim financial statements in the first year of
application. This statement establishes standards in the way companies are to
report information about operating segments. It also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. The Company is currently evaluating the impact of this standard on
disclosures required in its financial statements.
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<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company's founding vision and strategic focus is the creation of a
virtual hospital room for the alternate-site health care market. From its
inception in 1989 through mid-1992, the Company was in its development stage
and engaged primarily in research and development, product engineering and
activities related to obtaining clearance from the FDA for its first product,
the 3030 Stationary Pump. The Company has six years of operating history and,
although profitable since the third quarter of 1996, experienced significant
operating losses from its inception through mid-1996. Upon receiving FDA
clearance for the 3030 Stationary Pump in mid-1992, the Company focused its
efforts on creating a domestic and international sales and marketing network,
as well as a manufacturing capability, to assist in the distribution of its
first product to the alternate-site health care market. Concurrent with these
sales and marketing activities, the Company continued to fund the research,
development and regulatory clearance activities of other device and software
products.
The Company commercially launched the 6060 Ambulatory Pump and related
disposable supplies in late 1995 and both MediVIEW(R) and the PumpMaster(R) in
late 1996. Since then, the Company has continued its sales and marketing
activities domestically and internationally for the distribution of its
products and continued to fund the research and development of additional
products. On February 25, 1997, the Company acquired substantially all the
assets of Rocap, Inc. which produces and markets pre-packaged injectable
prescription pharmaceuticals and pre-filled flush syringes. In addition, the
Company derives revenues from the servicing of products, sale of accessories
and sale of extended warranties.
The Company sells its products both directly to alternate-site and
acute-care providers, as well as to third-party distributors. The Company's
distributors and customers may make bulk purchases which may cause fluctuations
in quarterly revenues. The Company also markets and sells its products
internationally and, as a result, its revenues may be affected by fluctuations
in exchange rates. Failure to obtain regulatory approval for the distribution
of new products domestically or in international markets, or adverse regulatory
changes, may also affect the revenues of the Company.
The Company has entered into strategic partnerships, including Unitron and
GDS, which provide components of the virtual hospital room. Management intends
to pursue additional acquisition and partnering opportunities in order to
further accelerate the development of the virtual hospital room.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 VS. THREE MONTHS ENDED MARCH 31, 1997
Net sales. Net sales increased $7.7 million to $15.2 million for the
three month period ended March 31, 1998 as compared to $7.5 million for the
three month period ended March 31, 1997, an increase of 103%. The increase is
attributable to several factors; incremental unit sales volume of the 3030
Stationary Pump and 6060 Ambulatory Pump and their respective disposables, an
increase in the average per unit selling price due to a higher ratio of direct
sales versus dealer sales, the addition of the Rocap product line in February,
1997, additional sales of the MediVIEW(R) and PumpMaster(R) products, and the
sale of certain
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<PAGE> 9
licensed products from GDS Technology, Inc.
Cost of Sales. Cost of sales increased $3.7 million to $6.7 million for
the three month period ended March 31, 1998 as compared to $3.0 million for the
three month period ended March 31, 1997, an increase of 122%. The increase for
the three month period is primarily attributable to direct product costs
associated with incremental unit sales volume of the 3030 and 6060 infusion
pumps and related disposables, as well as the addition of the Rocap product
line. To a lessor extent, the increase for the three month period is
attributable to costs relating to the expansion of production capacity.
Gross Margin. Gross margin increased $4.0 million to $8.4 million for the
three month period ended March 31, 1998 as compared to $4.4 million for the
three month period ended March 31, 1997, an increase of 90%. The increase for
the three month period is due primarily to the incremental unit sales volume
and the per unit contribution thereon, including the allocation of fixed
manufacturing costs over a greater number of units. Gross margin as a percent
of sales decreased to 56% for the three month period ended March 31, 1998, as
compared to 59% for the three month period ended March 31, 1997. The decrease
in percentage is attributable to the lower average gross margin generated from
the Rocap product line.
Selling General and Administrative Expenses. Selling, general and
administrative expenses increased $2.2 million to $5.7 million for the three
month period ended March 31, 1998 as compared to $3.5 million for the three
month period ended March 31, 1997, an increase of 62%. The increase for the
three month period is due primarily to the expansion of the Company's direct
sales force and clinical support staff and associated travel. Also contributing
to the increase for the three month period ended March 31, 1998 was a full
quarter of expenses relating to the Rocap product line, and the addition of
administrative and management personnel. Selling, general and administrative
expenses as a percent of sales decreased to 37% for the three month periods
ended March 31, 1998 as compared to 47% for the three month periods ended March
31, 1997.
Operating Income. Operating income increased $1.8 million to $2.8 million
for the three month period ended March 31, 1998 as compared to $941,000 for the
three month period ended March 31, 1997, an increase of 194%. Operating income
as a percent of sales increased to 18% for the three month period ended March
31, 1998 as compared to 13% for the three month period ended March 31, 1997.
The increase in operating income is due primarily to incremental gross margin
generated by increased unit sales volume of new and existing products, as
described above.
Interest Income. Interest income increased $72,000 to $215,000 for the
three month period ended March 31, 1998 as compared to $143,000 for the three
month period ended March 31, 1997, and increase of 50%. The increase is
attributable to a higher average amount of cash available for investment as
compared to that of the comparative period. The Company completed a secondary
public offering in April, 1997 which resulted in proceeds to the Company of
approximately $22 million, after underwriting discounts and commissions.
Interest Expense. Interest expense remained unchanged at $5,000 for both
the three month period ended March 31, 1998 and the three month period ended
March 31, 1997. The aggregate principal balance of capital lease obligations
and debt on which interest expense is recorded, remained substantially
unchanged.
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Provision for Income Taxes. The provision for income taxes increased to
$1.0 million for the three month period ended March 31, 1998 as compared to
$21,000 for the three month period ended March 31, 1997. The provision for
income taxes for the three month period ended March 31, 1998 reflects an
estimated 34% effective annual tax rate, after adjusting for allowable net
operating loss carryforwards. The provision for income taxes for the three
month period ended March 31, 1997 ultimately was reversed by year end 1997 as
no federal or state tax or alternative minimum tax was incurred due to
allowable net operating loss carryforwards and certain permanent book versus
tax differences.
Net Income. Net income increased $914,000 to $2.0 million for the three
month period ended March 31, 1998 as compared to $1.0 million for the three
month period ended March 31, 1997, an increase of 87%. The increase in net
income was achieved primarily as a result of incremental gross margin generated
by increased unit sales volume of new and existing products, as discussed
above. Also contributing to the increase in net income was the decrease in
general and administrative expenses, as a percent of sales. The increase in net
income was partially offset by an increase in the provision for income taxes of
approximately $1.0 million.
LIQUIDITY AND CAPITAL RESOURCES
In April, 1998, the Company completed the private sale of 6% Convertible
Notes in an aggregate principal amount of $85,000,000 maturing in 2005. The
interest is fixed and is payable semi-annually. The notes are convertible into
the Company's common stock at a conversion price of $40.46 at anytime . The
Company may redeem the notes at anytime after April 18, 2001. Net proceeds to
the Company were approximately $82.0 million and such proceeds were used to
purchase investment grade securities.
As of March 31, 1998, the Company had approximately $17.1 million in cash,
cash equivalents, and investments in marketable securities, and had net working
capital of approximately $49.7 million. In March, 1997, the Company entered
into a credit agreement with a financial institution with up to $9.5 million of
available borrowing. As of April 30, 1998, no borrowing has been made under
the credit agreement.
The Company used cash in its operations of approximately $5.2 million for
the three months ended March 31, 1998. Cash used in operations for the period
exceeds the Company's operating income for the same period due, primarily, to
the growth in trade accounts receivable and inventories as a result of actual
and anticipated growth in sales volume.
During the third quarter of 1997, the Company entered into strategic
partnerships with Unitron and GDS. The Company's agreements with Unitron and
GDS resulted in payments of $11.0 million in cash license fees, in aggregate.
In addition, should the Company decide to exercise its right to acquire either
Unitron or GDS, such acquisitions could require additional outlays of cash.
In September, 1997, the Company initiated a hedging program through the
use of forward contracts to minimize foreign currency fluctuation exposure. As
of April 30, 1998, the aggregate U.S. dollar amount of the contracts is
$1,460,092 and such contracts expire at various dates through September, 1998.
Future liquidity and capital resources could be adversely influenced by
certain factors, including the Company's dependence on a relatively new
customer base, regulatory or legislative changes pertaining to
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<PAGE> 11
health care, product liability exposure regarding the delivery of medication,
dependence on future product development, and others. There can be no assurance
that the Company will not require additional financing and, in the future, seek
additional funds through bank facilities, debt or equity offerings and to the
extent such additional financing is not available, the Company could suffer
material adverse effects to its financial condition and the results of its
operations.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On February 5, 1997, SIMS Deltec filed a complaint in the United States
District Court for the District of Minnesota alleging that Sabratek's
manufacture, use and/or sale of the MediVIEW(R) software in conjunction with
its infusion pumps infringes on a patent entitled "Systems and Methods of
Communicating with Ambulatory Medical Devices Such as Drug Delivery Devices"
previously issued to SIMS Deltec. Subsequently, SIMS Deltec filed other
pleadings that raised additional claims against Sabratek and three of its
employees including trade secret misappropriation, unfair competition and
interference with SIMS Deltec's customers. SIMS Deltec seeks injunctive
relief, unspecified monetary damages and costs. In addition, SIMS Deltec filed
for a preliminary injunction against Sabratek seeking to prevent on a
preliminary basis Sabratek's manufacture and sale of the MediVIEW(R) system.
On August 4, 1997, the District Court denied the motion for preliminary
injunction. Additionally, one of the claims against a Sabratek employee has
been dismissed with prejudice. The Company and the individual defendants
intend to vigorously defend against the allegations made by SIMS Deltec.
Protracted litigation or an adverse outcome in this matter could have a
material adverse impact on the Company's business, financial condition and
results of operations.
In addition, Sabratek has filed a complaint against SIMS Deltec in the
United States District Court for the Northern District of Illinois alleging
that SIMS Deltec employees have made misstatements about Sabratek's products.
Sabratek has stated claims under the Federal Lanham Act to stop SIMS Deltec's
improper disparagement and has requested preliminary and permanent injunctive
relief, monetary damages and costs.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Page Incorporation
Exhibit Number (if by Reference
Number Description of Documents applicable) (if applicable)
- ------ ------------------------ ----------- ---------------
<S> <C> <C> <C>
3.1 Articles of Incorporation +
3.2 ByLaws +
10.1 Agreement with Americorp Financial, Inc. re: +
Leasing Services, dated March 22, 1995
10.1.1 Amendment, dated September 16, 1996, to +++
Agreement with Americorp Financial, Inc.
10.2 Agreement with Clintec Nutrition Company re: +
Development Agreement, dated September 1, 1995
10.3 Intentionally Omitted
10.4 Intentionally Omitted
</TABLE>
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<TABLE>
<CAPTION>
Page Incorporation
Exhibit Number (if by Reference
Number Description of Documents applicable) (if applicable)
- ------ ------------------------ ----------- ---------------
<S> <C> <C> <C>
10.5 Distributorship Agreement with CO-Medical, +
Inc., dated February 17, 1992
10.6 Distributorship Agreement with Clinical +
Technology Inc., dated August 1, 1992
10.7 Intentionally Omitted
10.8 Intentionally Omitted
10.9 Distributorship Agreement with Advanced +
Medical, Inc., dated September 1, 1991
10.10 Distributorship Agreement with Healthcare +
Technology, dated October 9, 1991
10.11 Intentionally Omitted
10.12 Intentionally Omitted
10.13 Pump Contract with Chartwell Home Therapies, +
dated November 22, 1993
10.14 Sales Agreement with Pharmacy Corporation of +
America, dated March 17, 1995
10.15 Sales & Marketing Agreement with Alpha +
Group, dated November 6, 1995
10.16 Foreign Distributorship Agreement with +
MED-O-GEN INC., dated September 22, 1995
10.17 Foreign Distributorship Agreement with Yoon Duk +
Separation Technology, dated April 17, 1995
10.18 Foreign Distributorship Agreement with Upwards +
Biosystems Ltd., dated March 8, 1995
10.19 Foreign Distributorship Agreement with Grupo +
Grifols, S.A., dated September 17, 1993
10.20 Foreign Distributorship Agreement with JMS +
Company, dated March 22, 1996
10.21 Foreign Distributorship Agreement with Brasimpex +
10.22 Foreign Distributorship Agreements with +
Medicare (s) PTE LTD., dated February 10, 1995
10.23 Intentionally Omitted
10.24 Intentionally Omitted
10.25 Master Lease Agreement with Comdisco, Inc., +
dated August 9, 1994
10.26 Stock Option Plan +
10.27 Lease for Real Property located at 5601 West +
Howard,
</TABLE>
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<TABLE>
<CAPTION>
Page Incorporation
Exhibit Number (if by Reference
Number Description of Documents applicable) (if applicable)
- ------ ------------------------ ----------- ---------------
<S> <C> <C> <C>
Niles, Illinois, dated as of May 31, 1994
10.27.1 Amendment, dated October 30, 1996, to Lease +++
for Real Property located at 5601 West Howard,
Niles, Illinois
10.28 Employment Agreement for K. Shan Padda +
10.29 Employment Agreement for Anil Rastogi +
10.30 Asset Purchase Agreement, dated February 25, ++
1997, by and among Sabratek Corporation;
Rocap, Inc. and Elliott Mandell
10.31 Employment Agreement for Stephen L. Holden ++++
10.32 Employment Agreement for Elliott Mandell ++
10.33 Lease Agreement for property located at 11 ++++
Sixth Road, Woburn, Massachusetts, dated
February 1, 1997
10.34 Lease Agreement for property located at 5 ++++
Constitution Way, Woburn, Massachusetts, dated
June 26, 1995
10.35 Lease Agreement for property located at 1629 +++++
Prime Court, Suite 100, Orlando, Florida,
dated March 11, 1997
11.1 Statement re: computation of per share earnings E-1
27 Financial Data Schedule E-2
</TABLE>
+ Incorporated by reference to the Company's Registration Statement on Form
S-1, declared effective by the Commission on June 21, 1996 (File No.
333-3866).
++ Incorporated by reference to the Company's Current Report on Form 8-K
filed with the Commission on March 11, 1997.
+++ Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996 filed with the Commission on
March 31, 1997.
++++ Incorporated by reference to the Company's Registration Statement on Form
S-1, declared effective by the Commission on April 4, 1997 (File No.
333-23437).
+++++ Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997 filed with the Commission on May 15,
1997.
(b) Reports on Form 8-K
The Company's current report on Form 8-K, dated February 25, 1997 (filed
March 12, 1997), is incorporated herein by this reference.
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<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SABRATEK CORPORATION
Date: May 14, 1998 By: /s/ K. Shan Padda
------------------------------------------
K. Shan Padda
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the undersigned, in his capacity as the principal
financial officer of the registrant.
Date: May 14, 1998 By: /s/ Stephen L. Holden
------------------------------------------
Stephen L. Holden
Principal Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the undersigned, in his capacity as the chief
accounting officer of the registrant.
Date: May 14, 1998 By: /s/ Scott Skooglund
------------------------------------------
Scott Skooglund
Chief Accounting Officer
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EXHIBIT 11.1
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
March 31, 1998 March 31, 1997
<S> <C> <C>
Net income (in thousands) $1,960 $1,046
==============================
Weighted average common shares outstanding 10,397,714 8,286,846
==============================
Basic income per share $0.19 $0.13
==============================
Dilutive effect of options and warrants
outstanding under treasury-stock method 1,325,296 1,212,082
------------------------------
11,723,010 9,498,928
==============================
Diluted income per share $0.17 $0.11
==============================
</TABLE>
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<TABLE> <S> <C>
<ARTICLE> 5
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