<PAGE>
================================================================================
UNITED STATES
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
Commission File Number: 0-23093
BORON, LEPORE & ASSOCIATES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 22-2365997
(State or other jurisdiction (I.R.S. Employer
of Incorporation or organization) Identification No.)
17-17 ROUTE 208 NORTH, FAIR LAWN, NEW JERSEY 07410
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (201) 791-7272
Indicate by check mark ("X") whether the Registrant: (1) has filed all reports
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--------- ---------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT MAY 9, 2000
----- --------------------------
Common stock, par value $.01 share 12,277,134
================================================================================
<PAGE>
BORON, LEPORE & ASSOCIATES, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets at March 31, 2000 (unaudited)
and December 31, 1999........................................ 3
Consolidated Statements of Operations for the Three Months
Ended March 31, 2000 and 1999 (unaudited).................... 4
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2000 and 1999 (unaudited).................... 5
Notes to Consolidated Financial Statements..................... 6-7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 8-11
Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 11
PART II OTHER INFORMATION
Item 1: Legal Proceedings..................................... 12
Item 2: Changes in Securities................................. 12
Item 3: Defaults in Senior Securities......................... 12
Item 4: Submission of Matters to a Vote of Security Holders... 12
Item 5: Other Information..................................... 12
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits 13
27 Financial Data Schedules
(b) Reports on Form 8-K 13
Signatures..................................................... 14
Exhibit Index
</TABLE>
2
<PAGE>
BORON, LEPORE & ASSOCIATES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
--------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................... $ 38,745 $ 44,631
Accounts receivable, net............................ 37,253 27,567
Prepaid expenses and other current assets........... 2,013 1,387
-------- --------
Total current assets.......................... 78,011 73,585
Furniture, fixtures an equipment, at cost, net of
accumulated depreciation of $5,029 and $4,391 at
March 31, 2000 and December 31, 1999, respectively.... 6,887 7,397
Intangible assets,net................................... 35,979 36,476
Other assets............................................ 728 686
-------- --------
Total assets.................................. $121,605 $118,144
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................... $ 4,233 $ 3,568
Accrued payroll..................................... 2,533 1,532
Accrued expenses.................................... 9,133 8,536
Deferred revenue.................................... 10,142 9,808
-------- --------
Total current liabilities..................... 26,041 23,444
-------- --------
Commitments and contingencies -- --
Stockholders' equity:
Common stock, $.01 par value, 50,000 shares
authorized; 16,938 issued and 12,277 outstanding
at March 31, 2000; 16,938 issued and 12,302
outstanding at December 31, 1999.................. 169 169
Treasury stock, at cost, 4,661 and 4,636 shares at
March 31, 2000 and December 31, 1999,
respectively...................................... (27,189) (26,989)
Additional paid-in capital.......................... 118,789 118,789
Retained earnings................................... 3,795 2,731
-------- --------
Total stockholders' equity.................... 95,564 94,700
-------- --------
Total liabilities and stockholders' equity.... $121,605 $118,144
======== ========
</TABLE>
The accompanying notes are an integral part of
these consolidated balance sheets.
3
<PAGE>
BORON, LEPORE & ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
----------------------
2000 1999
---- ----
<S> <C> <C>
Revenues......................................... $37,114 $33,849
Cost of sales.................................... 27,453 24,983
------- -------
Gross profit..................................... 9,661 8,866
------- -------
Selling, general and administrative expenses..... 8,581 10,373
Goodwill impairment charge....................... -- 754
------- -------
Total expenses................................ 8,581 11,127
------- -------
Operating income (loss).......................... 1,080 (2,261)
Interest income.................................. 694 384
------- -------
Income (loss) before provision (benefit) for
income taxes................................... 1,774 (1,877)
Provision (benefit) for income taxes............. 710 (750)
------- -------
Net income (loss)................................ $ 1,064 $(1,127)
======= =======
Net income (loss) per common and common
equivalent share:
Basic........................................ $ 0.09 $ (0.09)
======= =======
Diluted...................................... $ 0.09 $ (0.09)
======= =======
Weighted average number of common and common
equivalent shares:
Basic........................................ 12,300 12,691
======= =======
Diluted...................................... 12,475 12,691
======= =======
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
4
<PAGE>
BORON, LEPORE & ASSOCIATES, INC.
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 (loss)................................... $ 1,064 $(1,127)
Adjustments to reconcile net income (loss) to net
cash (used in) provided by operating activities:
Depreciation and amortization..................... 1,086 922
Provision for doubtful accounts and credit memo
reserves........................................ 25 100
Goodwill impairment charge........................ -- 754
Deferred income taxes............................. (100) (300)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable........ (9,712) 6,239
Increase in prepaid expenses and other current
assets.......................................... (626) (1,107)
Decrease in intangible assets..................... -- 370
Decrease in other assets.......................... 58 6
Increase (decrease) in accounts payable and
accrued expenses................................ 2,312 (168)
Increase in deferred revenue...................... 335 1,870
------- -------
Net cash (used in) provided by operating
activities.................................... (5,558) 7,559
------- -------
Cash Flows From Investing Activities:
Purchases of furniture, fixtures and equipment...... (128) (1,007)
Business acquisitions, contingent consideration..... -- (5,700)
------- -------
Net cash used in investing activities........... (128) (6,707)
------- -------
Cash Flows From Financing Activities:
Purchase of treasury stock.......................... (200) --
Proceeds from exercise of stock options............. -- 118
------- -------
Net cash (used in) provided by financing
activities.................................... (200) 118
------- -------
(Decrease) increase in cash and cash
equivalents................................... (5,886) 970
Cash and cash equivalents, beginning of period.......... 44,631 36,924
------- -------
Cash and cash equivalents, end of period................ $38,745 $37,894
======= =======
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest............................................ $ -- $ --
Taxes............................................... $ 654 $ 441
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
5
<PAGE>
BORON, LEPORE & ASSOCIATES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION:
Boron, LePore & Associates, Inc. (the "Company" or "BLP") provides
integrated marketing, educational and sales services to the healthcare
industry.
The accompanying consolidated financial statements are unaudited and have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. The foregoing financial information reflects all adjustments
which are, in the opinion of management, necessary for a fair presentation of
the results for the periods presented. All such adjustments are of a normal and
recurring nature. These results, however, are not necessarily indicative of the
results to be expected for the full fiscal year. The financial statements should
be read in conjunction with the summary of significant accounting policies and
notes to financial statements contained in the Company's Form 10-K as filed with
the Securities and Exchange Commission.
(2) EARNINGS (LOSS) PER SHARE:
The following table reconciles income (loss) and share amounts used to calculate
basic earnings (loss) per share and diluted earnings (loss) per share.
<TABLE>
<CAPTION>
Three months ended
March 31,
-----------------------
(In thousands, except per share data) 2000 1999
---- ----
<S> <C> <C>
Numerator:
Net income (loss) - Diluted....................... $ 1,064 $(1,127)
======= =======
Net income (loss) - Basic......................... $ 1,064 $(1,127)
======= =======
Denominator:
Weighted average shares outstanding - Basic 12,300 12,691
Incremental shares from assumed conversions of
options......................................... 175 --
------- -------
Weighted average shares outstanding - Diluted 12,475 12,691
======= =======
Earnings (loss) per share - Basic..................... $ 0.09 $ (0.09)
======= =======
Earnings (loss) per share - Diluted................... $ 0.09 $ (0.09)
======= =======
</TABLE>
6
<PAGE>
BORON, LEPORE & ASSOCIATES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Cont.)
(Unaudited)
(3) PROVISION FOR RESTRUCTURING AND OTHER SEVERANCE:
During 1999, the Company incurred two provisions for restructuring and other
severance based on approved management plans. During the second quarter of
1999, the Company recorded a provision for restructuring in the amount of $1,700
and during the fourth quarter of 1999, the Company recorded a provision for
restructuring and other severance in the amount of $1,220. The fourth quarter
provision was net of a $280 reversal related to the second quarter provision.
The second quarter provision related to a workforce reduction of approximately
90 employees, the downsizing or closing of certain office locations and other
related costs which represent approximately 67%, 21% and 12%, respectively, of
the total provision. The fourth quarter provision related to the wind-down of
the Company's teleservice business in Norfolk, Virginia, including a workforce
reduction of approximately 75 employees and the disposition of certain assets,
and a management change which represent approximately 12%, 60% and 28%,
respectively, of the total provision. During the three months ended March 31,
2000, the actual cash payments and charges related to these restructurings
amounted to approximately $492. The total balance of the combined
restructuring reserves at March 31, 2000 was approximately $1,795.
(4) SEGMENT INFORMATION:
The Company's management considers its business to be a single business entity
- - the providing of outsourced marketing, educational and sales services to the
pharmaceutical industry. The Company's services generally are utilized by
customers and people associated with the pharmaceutical industry and the medical
profession. Management evaluates its product offerings on a revenue basis, which
is presented below, and profitability is generally evaluated on an enterprise-
wide basis due to shared infrastructures.
<TABLE>
<CAPTION>
For the
Three Months Ended
March 31,
---------------------
2000 1999
---- ----
<S> <C> <C>
Revenues:
Marketing and educational services........................ $18,291 $17,402
Field sales force logistics services...................... 15,944 9,343
Contract sales services and other......................... 2,879 7,104
------- -------
Total revenues........................................ $37,114 $33,849
======= =======
</TABLE>
7
<PAGE>
BORON, LEPORE & ASSOCIATES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Boron, LePore & Associates, Inc. ("BLP" or the "Company") provides integrated
marketing, educational and sales services to the healthcare industry which
include promotional and other meetings, medical education, product marketing,
contract sales and field sales force logistics; including a variety of internet-
based solutions. Substantially all of our customers are large pharmaceutical
companies seeking to communicate their messages to physicians and other
healthcare professionals on a cost-effective basis. We are a leading provider
of peer-to-peer meetings. Our service offerings also include promotional and
educational content development, accredited medical education programs and
symposia, web-cast programs, visiting faculty meetings, clinical advisory
panels, field sales force logistic services, and to a lesser extent, contract
sales.
Our objective, is to enhance our position as a leading provider of peer-to-
peer and other meetings, continue to expand our educational services,
selectively expand and add complimentary services to our array of other
outsourced promotional, marketing and logistical services and expand the market
for our field sales force logistics services. The principal elements of our
strategy are to: (i) offer integrated solutions that include promotional,
educational, marketing and logistical services, including a variety of internet-
based solutions related to these services; (ii) increase business with existing
customers; (iii) obtain new customers; (iv) target new audiences; and (v) pursue
strategic acquisitions.
We believe that the increase in business with existing customers and the
addition of new customers reflect increased recognition of peer-to-peer meeting
programs as an effective promotional technique and increased levels of marketing
and educational spending in the pharmaceutical industry. Our portfolio of
services includes symposia, medical education, product marketing and field sales
force logistics services. The expansion of these services resulted primarily
from the acquisition of two medical education providers during 1998 and a
contract with a large pharmaceutical company to provide field sales force
logistics services which was recently renewed through December 2001.
During 1999, we restructured our operations to improve operational
efficiencies and to better align costs and expenses with anticipated revenues.
As part of these efforts we reduced our work force, closed certain office
locations and initiated the wind-down of our teleservice business in Norfolk,
Virginia. In April 2000, we entered into an agreement with a third party to
lease a portion of our teleservice center and certain related assets. We are
pursuing the disposition of the remaining assets formerly used in the
teleservice center. We continue to use a portion of the Norfolk, Virginia
facility for telerecruiting for our conferencing services and other
administrative support.
In November 1999, we renewed our field sales force logistics contract with a
large pharmaceutical company for another two years through December 2001. The
contract provides for a management fee component and a fee-for-service
component. The management fee for 2001 is subject to negotiation. There can be
no assurance that the management fee for such year will be negotiated on terms
acceptable to us (which failure to so negotiate the management fee would result
in the termination of the contract on December 31, 2000).
During 1999, we considered strategic alternatives and retained the services of
Bear, Stearns & Co., Inc, as our investment advisor. During the third quarter
of 1999, we decided not to pursue a sale or recapitalization transaction at that
time. We may reconsider such a transaction in the future.
8
<PAGE>
During March 2000, a customer notified us that it would be terminating its
contract sales service contract on May 31, 2000. During 1999 and for the three
month period ended March 31, 2000, such contract represented $15.4 million or
10.3% and $2.5 million or 6.7% of our revenues, respectively.
Certain of our services, particularly symposia and field sales force
logistics, have lower gross margin percentages than our historical peer-to-peer
meeting business, while other services, particularly educational conferencing
and medical education content development, have higher gross margin percentages
than our historical peer-to-peer meeting business. As such, the mix of business
generated from individual services could impact our operating profit percentage.
Our operating performance objective is to further enhance our operating profit
through efficiency efforts, become selective in pursuing noncore, low margin
services, carefully manage operating expenses, improve our mix of revenue and
increase our overall revenue. We believe our efforts in 1999, along with our
strong balance sheet and cash position, have resulted in a stabilization of our
business and will enable us to capitalize on opportunities in the evolving
pharmaceutical services marketplace. However, there can be no assurance that we
will achieve our operating performance objective.
RESULTS OF OPERATIONS
The following table sets forth as a percentage of revenues certain items
reflected in the Company's Statements of Operations for the periods indicated.
<TABLE>
<CAPTION>
Three months ended
March 31,
-------------------
2000 1999
---- ----
<S> <C> <C>
Revenues................................................. 100.0% 100.0%
Cost of sales............................................ 74.0 73.8
------ -------
Gross profit............................................. 26.0 26.2
------ -------
Selling, general and administrative expenses............. 23.1 30.7
Goodwill impairment charge............................... -- 2.2
------ -------
Total expenses....................................... 23.1 32.9
------ -------
Operating income (loss).................................. 2.9 (6.7)
Interest income.......................................... 1.9 1.2
------ -------
Income (loss) before provision (benefit) for income taxes 4.8 (5.5)
Provision (benefit) for income taxes..................... 1.9 (2.2)
------ -------
Net income (loss)........................................ 2.9% (3.3)%
====== =======
</TABLE>
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO
THE THREE MONTHS ENDED MARCH 31, 1999
Revenues increased $3.3 million, or 10%, from $33.8 million in the three-
month period ended March 31, 1999 to $37.1 million in the three-month period
ended March 31, 2000. This growth primarily resulted from an increase of
$6.6 million in field sales force logistics services revenue and an increase of
$0.9 million in marketing and educational services revenue, offset by
a $4.2 million decrease in contract sales services revenue.
Cost of sales increased $2.5 million, or 10%, from $25.0 million in the three-
month period ended March 31, 1999 to $27.5 million in the three-month period
ended March 31, 2000. Cost of sales as a percentage of revenues increased from
73.8% in the prior year period to 74.0% in the current year period. The
increase in cost of sales as a percentage of revenues was primarily due to the
increased proportion of field sales force logistics services revenue which has a
lower average gross profit than our historical business due to a higher
proportion of production costs which are passed through to the customer with
little or no markup.
9
<PAGE>
Selling, general and administrative expenses decreased $1.8 million, or 17%,
from $10.4 million in the three-month period ended March 31, 1999 to
$8.6 million in the three-month period ended March 31, 2000. This decrease was
due to the cost of personnel reductions of approximately $0.9 million and a
decrease in other operating costs of approximately $0.9 million. Selling,
general and administrative expenses decreased as a percentage of revenues from
30.7% in the prior year period to 23.1% in the current year period. This
decrease is primarily the result of the aforementioned improved operational
efficiencies as a result of the 1999 restructuring plans.
During the three-month period ended March 31, 1999, we determined that the
remaining goodwill balance of $754,000 associated with the acquisition of
Decision Point, Inc. in January 1998 was impaired. As a result, we incurred a
charge to write-down the asset value to zero during the three-month period ended
March 31, 1999. As a percentage of revenues, this charge represented 2.2% of
revenues for the three-month period ended March 31, 1999.
Operating income (loss) increased $3.4 million, or 148%, from a loss of
$2.3 million in the three-month period ended March 31, 1999 to income of
$1.1 million in the three-month period ended March 31, 2000. Operating income
(loss) as a percentage of revenues increased from a loss of 6.7% in the prior
year period to income of 2.9% in the current year period. The increase in
operating income as a percentage of revenues was primarily due to the
aforementioned decrease in selling, general and administrative and noncash
charge to write-down an impaired asset as a percentage of revenues.
Interest income was $0.4 million in the three-month period ended March 31,
1999 compared to $0.7 million in the three-month period ended March 31, 2000.
This increase in interest income was primarily due to our higher average cash
balance and higher interest rates in the current year period as compared to the
prior year period.
The provision (benefit) for income taxes for the three-month periods ended
March 31, 2000 and March 31, 1999 reflect estimated Federal and state income tax
expense (benefit).
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2000, we had $52.0 million in net working capital, an increase of
$1.9 million from December 31, 1999. Our primary sources of liquidity as of
March 31, 2000 consisted of cash and cash equivalents and accounts receivable.
Our accounts receivable turnover averaged 89, 57 and 93 days for the periods
ended March 31, 2000, December 31, 1999 and December 31, 1998. The allowance for
doubtful accounts and credit memo reserves was $1.4 million at March 31, 2000,
$1.3 million at December 31, 1999 and $0.5 million at December 31, 1998. The
increase from December 31, 1999 to March 31, 2000 was due to more prepayments of
accounts receivable balances as of December 31, 1999.
During the three months ended March 31, 2000, we used $5.6 million in
operating activities as compared to $7.6 million generated from operating
activities during the same period in 1999. This change resulted primarily from
the increase in accounts receivable at March 31, 2000. We believe our ability
to generate cash flow from operations is inversely related to our revenue
growth. As such, during periods of revenue growth we will use cash, whereas
during periods of slow growth or decline we believe we will be able to generate
cash from operations.
During the three months ended March 31, 2000, we used $0.1 million of cash in
investing activities to purchase computer, telephone and office equipment.
Financing activities during the three-month period ended March 31, 2000 used
$0.2 million of cash in the repurchase of our common stock. During 1999, our
Board of Directors authorized us to repurchase up to 1,000,000 shares of our
common stock through December 31, 2000. We have repurchased 452,500 shares
through March 31, 2000.
10
<PAGE>
YEAR 2000
During 1999, we completed our Year 2000 program to identify and correct the
areas of our computer systems and our operations that could be affected by the
Year 2000 issue. As a result of such effort, our computer systems and software
programs are functioning properly and our business and operations have not been
affected by the Year 2000 issue. Our costs associated with our Year 2000
program, excluding any costs that we may incur as a result of the failure of any
third parties to become Year 2000 compliant, was approximately $300,000 in
total.
There is still a possibility that some computer systems and software programs
may not function properly later in the year 2000 and beyond. In the event we
are unable to fix a serious Year 2000 problem, there could be an interruption or
failure of our operations. Likewise, in the event our suppliers are unable to
fix a material Year 2000 problem, a resulting interruption or failure of their
business could also negatively impact us.
NEW ACCOUNTING PRONOUNCEMENTS:
None
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
Certain statements contained in this report, including statements regarding
the anticipated development of our business, the intent, belief or current
expectations of our Company, our directors or our officers, primarily with
respect to our business model and future operating performance of our business,
including expectations regarding the possible cost savings associated with our
restructuring plan in current and future periods, trends in the mix of
educational and marketing services revenues toward more value-added products,
the possible effects aimed at improving costs and efficiencies, expectations
regarding certain field force logistics relationships and related revenues and
profits, and regarding results in future periods, operating performance and
growth in 2000, the effects of loss of revenue and the magnitude and timing of
revenues from new and existing clients, and expectations regarding business
units within our business, and other statements contained herein regarding
matters that are not historical facts, are "forward-looking" statements (as such
term is defined in the Private Securities Litigation Reform Act of 1995).
Because such statements are subject to risks and uncertainties, actual results
may differ materially from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ materially from
those expressed or implied by such forward-looking statements include, but are
not limited to: uncertainties regarding implementation of the restructuring
plan, continuation of trends in educational and marketing services, risks
relating to the market for our services, our ability to secure new contracts for
our contract sales organization, acceptance of our new services, difficulties
inherent in locating acquisition candidates and consummating acquisitions, and
those risks and uncertainties contained under the heading "Risk Factors" on
page 6 of our Registration Statement on Form S-1 as amended, as filed with the
Securities and Exchange Commission.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
None.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Thomas S. Boron, a former stockholder and officer of the Company, filed a
complaint on March 27, 1998 in the United States District Court for the District
of New Jersey against the Company, Patrick G. LePore and Gregory F. Boron,
senior officers and directors of the Company, and Michael W. Foti and
Christopher J. Sweeney, former officers of the Company, alleging, among other
matters, securities and common law fraud and breach of contract in connection
with the settlement of contractual arrangements with Thomas S. Boron in December
1996. The damages sought by Thomas S. Boron are not stated in the complaint.
The Company's By-laws provide for mandatory indemnification of the Company's
officers and former officers to the fullest extent authorized by the Delaware
General Corporation Law against all expenses incurred in proceedings in which an
officer or former officer is involved as a result of serving or having served as
an officer, director or employee of the Company. The Company believes the
allegations of Thomas S. Boron are without merit and intends to contest them
vigorously. The Company believes that the matter may involve significant
litigation-related expenses but that it will not have a material adverse effect
on its financial condition or results of operations; there can be no assurance,
however, that this will be the case.
On or about May 25, 1999, a stockholder of the Company filed a putative
class action lawsuit against the Company and certain of the Company's officers
in the United States District Court for the District of New Jersey. The suit
alleges that the Company, certain of its officers and directors, and certain
institutional stockholders violated the federal securities laws by making
material misrepresentations and omissions in certain public disclosures related
to, among other things, the secondary offering made by the Company in May 1998,
the Company's acquisition of Decision Point, Inc. in January 1998, the
termination of the Company's relationship with Glaxo-Wellcome, and the impact of
various events on the Company's earnings. On November 22, 1999 an amended class
action complaint was filed on behalf of five stockholders of the Company
containing substantially the same allegations. The suit seeks unspecified
damages. On February 17, 2000, the Company filed a motion to dismiss all claims
asserted against it and its officers and directors. The motion to dismiss
remains pending before the court and the Company is not in a position to make
any estimates regarding the probable outcome of the case. The Company believes
that the plaintiff's claims are without merit and intends to vigorously defend
the lawsuit.
In addition, the Company, from time to time, is involved in legal proceedings
incurred in the normal course of business. The Company believes none of these
proceedings will have a material adverse effect on the financial condition or
liquidity of the Company.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
12
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None.
13
<PAGE>
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.
BORON, LEPORE & ASSOCIATES, INC.
Date: May 12, 2000 By: /s/ Patrick G. LePore
-----------------------------------------------------
Patrick G. LePore
Chief Executive Officer
and Chairman of the Board
(Principal Executive Officer)
Date: May 12, 2000 By: /s/ Anthony J. Cherichella
-----------------------------------------------------
Anthony J. Cherichella
Chief Financial Officer, Secretary and
Treasurer (Principal Financial and Accounting Officer)
14
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
27 Financial Data Schedule
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S BALANCE SHEET AT MARCH 31, 2000 AND STATEMENTS OF OPERATIONS 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> 38,745
<SECURITIES> 0
<RECEIVABLES> 38,649
<ALLOWANCES> 1,396
<INVENTORY> 0
<CURRENT-ASSETS> 2,013
<PP&E> 11,916
<DEPRECIATION> 5,029
<TOTAL-ASSETS> 121,605
<CURRENT-LIABILITIES> 26,041
<BONDS> 0
0
0
<COMMON> 169
<OTHER-SE> 95,395
<TOTAL-LIABILITY-AND-EQUITY> 121,605
<SALES> 0
<TOTAL-REVENUES> 37,114
<CGS> 27,453
<TOTAL-COSTS> 27,453
<OTHER-EXPENSES> 8,581
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,774
<INCOME-TAX> 710
<INCOME-CONTINUING> 1,064
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,064
<EPS-BASIC> 0.09
<EPS-DILUTED> 0.09
</TABLE>
