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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
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 0-22879
BIORELIANCE CORPORATION
(Exact name of the registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 52-1541583
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9900 BLACKWELL ROAD
ROCKVILLE, MARYLAND 20850
(Address of principal executive offices) (Zip code)
</TABLE>
Registrant's telephone number, including area code:
(301) 738-1000
- --------------------------------------------------------------------------------
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 October 30, 1997, 7,650,238 shares of registrant's Common Stock, par
value $.01 per share, were outstanding.
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BIORELIANCE CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
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<S> <C>
PART I FINANCIAL INFORMATION
Item 1 - Financial Statements:
Consolidated Balance Sheets as of December 31, 1996 and
September 30, 1997..............................................................3
Consolidated Statements of Income for the Three Months
and Nine Months Ended September 30, 1996 and 1997...............................4
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1996 and 1997...............................................5
Notes to Consolidated Financial Statements......................................6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................................8
PART II OTHER INFORMATION..................................................................13
SIGNATURES..................................................................................15
</TABLE>
2
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIORELIANCE CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30
DECEMBER 31, 1997
1996 (UNAUDITED)
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................................ $ 2,965 $ 10,881
Marketable securities.................................................... -- 23,421
Accounts receivable, net................................................. 13,645 17,361
Other current assets..................................................... 1,204 1,516
Deferred income taxes.................................................... 355 331
---------- ----------
Total current assets.............................................. 18,169 53,510
Property and equipment, net................................................ 14,945 14,617
Intangible assets, net..................................................... 468 299
Deposits and other assets.................................................. 246 318
Deferred income taxes...................................................... 1,999 405
---------- ----------
Total assets...................................................... $ 35,827 $ 69,149
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt........................................ $ 1,555 $ 1,512
Accounts payable......................................................... 1,900 1,775
Accrued employee compensation and benefits............................... 2,213 2,857
Other accrued liabilities................................................ 2,160 2,766
Customer advances........................................................ 4,067 4,648
Deferred income taxes.................................................... 859 997
---------- ----------
Total current liabilities......................................... 12,754 14,555
Long-term debt............................................................. 7,082 5,877
Note payable to stockholder................................................ 1,900 --
---------- ----------
Total liabilities................................................. 21,736 20,432
---------- ----------
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock, $.01 par value: 6,900,000 shares
authorized; 6,470,121 and no shares issued and outstanding............ 65 --
Common stock, $.01 par value: 15,000,000 shares authorized;
339,930 and 7,641,274 shares issued and outstanding.................. 3 76
Additional paid-in capital............................................... 20,073 52,630
Accumulated deficit...................................................... (6,211) (3,382)
Equity adjustment from foreign currency translation...................... 161 (607)
---------- ----------
Total stockholders' equity........................................ 14,091 48,717
---------- ----------
Total liabilities and stockholders' equity........................ $ 35,827 $ 69,149
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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BIORELIANCE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- ---------------------
1996 1997 1996 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenue................................................. $ 9,228 $ 11,696 $ 25,462 $ 36,060
--------- --------- --------- ---------
Expenses:
Cost of sales........................................ 6,158 7,294 17,269 22,321
Selling, general and administrative............... 1,953 2,374 5,504 7,703
Research and development............................ 248 347 827 973
Nonrecurring charge.................................. 160 -- 421 --
--------- --------- --------- ---------
8,519 10,015 24,021 30,997
--------- --------- --------- ---------
Income from operations.................................. 709 1,681 1,441 5,063
Interest and other (income) expense, net................ 249 (131) 581 186
--------- --------- --------- ---------
Income before income taxes.............................. 460 1,812 860 4,877
Provision for income taxes.............................. 205 761 373 2,048
--------- --------- --------- ---------
Net income.............................................. 255 1,051 487 2,829
Preferred stock dividends............................... 35 -- 105 --
--------- --------- --------- ---------
Net income available to common
stockholders........................................ $ 220 $ 1,051 $ 382 $ 2,829
========= ========= ========= =========
Net income per common and common
equivalent share ................................... $ 0.04 $ 0.14 $ 0.07 $ 0.44
========= ========= ========= =========
Weighted average common and common
equivalent shares outstanding....................... 5,180 7,566 5,162 6,477
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
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BIORELIANCE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------
1996 1997
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income...................................................................... $ 487 $ 2,829
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................................... 1,857 2,333
Loss on disposal of fixed assets............................................ -- 163
Deferred income taxes, net.................................................. 359 1,756
Changes in current assets and liabilities:
Accounts receivable, net................................................ (4,120) (4,859)
Other current assets.................................................... (156) (319)
Accounts payable........................................................ 199 (108)
Accrued employee compensation and benefits.............................. (268) 645
Other accrued liabilities............................................... 768 686
Customer advances....................................................... 2,109 1,641
Deposits and other assets................................................... (12) 367
--------- ---------
Net cash provided by operating activities.......................... 1,223 5,134
--------- ---------
Cash flows from investing activities:
Purchases of marketable securities.............................................. -- (23,421)
Purchases of equipment.......................................................... (945) (2,710)
Acquisition of BIOMEVA GmbH, net of cash acquired............................... (2,752) --
--------- ---------
Net cash used in investing activities.............................. (3,697) (26,131)
--------- ---------
Cash flows from financing activities:
Net proceeds from initial public offering...................................... -- 32,464
Proceeds from exercise of stock options........................................ 19 101
Proceeds from debt............................................................. 1,800 --
Payments on debt............................................................... (358) (581)
Proceeds from (payments on) note payable to stockholder........................ 1,900 (1,900)
Payments on capital lease obligations.......................................... (621) (667)
--------- ---------
Net cash provided by financing activities.......................... 2,740 29,417
--------- ---------
Effect of exchange rate changes on cash and cash equivalents...................... 9 (504)
--------- ---------
Net increase in cash and cash equivalents......................................... 275 7,916
Cash and cash equivalents, beginning of period.................................... 693 2,965
--------- ---------
Cash and cash equivalents, end of period.......................................... $ 968 $ 10,881
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
5
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BIORELIANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) DESCRIPTION OF THE BUSINESS
BioReliance Corporation (the "Company") is a contract research organization
providing nonclinical testing and contract manufacturing services for biologics
to biotechnology and pharmaceutical companies worldwide.
(2) INTERIM FINANCIAL STATEMENTS PRESENTATION
The accompanying interim financial statements are unaudited and have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC") regarding interim financial reporting.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements,
and therefore these consolidated financial statements should be read in
conjunction with the audited consolidated financial statements, and the notes
thereto, included in the Company's Registration Statement on Form S-1. In the
opinion of management, the consolidated financial statements for the
three-month and nine-month periods ended September 30, 1997 and 1996 include
all normal and recurring adjustments which are necessary for a fair
presentation of the results of the interim periods. The results of operations
for the three-month and nine-month periods ended September 30, 1997 are not
necessarily indicative of the results for the entire year ending December 31,
1997.
(3) REVENUE RECOGNITION
Revenue recognized from commercial contracts, which are principally
fixed-price or fixed-rate, is recorded using the percentage-of-completion or
the completed-contract method, depending on the nature and duration of the
contract. The percentage-of-completion method is used for nonclinical testing
services that are completed generally in greater than three days and for
manufacturing contracts that do not provide for delivery of product. The
completed-contract method is used for nonclinical testing services that are
completed generally within three days and for contract manufacturing services
that provide for delivery of product. The percentage of completion is
determined using total project costs as a cost input measure. Revenue
recognized from government contracts, which are principally
cost-plus-fixed-fee, is recognized in an amount equal to reimbursable costs
plus a pro-rata portion of the earned fee. Losses, if any, are provided for at
the time at which they become known.
(4) NET INCOME PER SHARE
Net income per share has been computed using the weighted average common
shares and common share equivalents outstanding during each period. Common
share equivalents include
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convertible preferred stock and stock options. Common share equivalents are
excluded from the computation in periods in which they have an anti-dilutive
effect, and net income available to common stockholders is adjusted accordingly
for the effect of cumulative dividends on convertible preferred stock.
Pursuant to the requirements of the SEC, common shares and common share
equivalents issued or granted by the Company at prices below the initial public
offering price (see Note 5) during the 12 months immediately preceding the
filing of the initial Registration Statement and through the effective date of
such Registration Statement have been calculated using the treasury stock
method based upon the initial public offering price and have been included for
all periods presented regardless of whether they are dilutive. The difference
between primary and fully diluted net income per share is not significant for
all periods presented.
(5) INITIAL PUBLIC OFFERING
On August 1, 1997, the Company completed its initial public offering of
2,102,014 shares of its common stock (plus an additional 297,986 shares by a
selling stockholder) at an offering price of $15.00 per share. On August 7,
1997, the underwriters exercised an option to purchase an additional 315,302
shares. The net proceeds to the Company from the public offering and the
exercise of the over-allotment option by the underwriters, after deducting the
underwriting discounts and commissions and offering expenses payable by the
Company, were approximately $32.5 million. Upon the closing of the offering,
all outstanding shares of the Company's convertible preferred stock were
automatically converted into 4,778,072 shares of common stock.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Private Securities Litigation Reform Act provides a "safe harbor"
for forward-looking statements. Certain statements included in this Quarterly
Report on Form 10-Q are forward-looking. Such forward-looking statements, in
addition to information contained in Management's Discussion and Analysis of
Financial Condition and Results of Operations and elsewhere in this Form 10-Q,
are based on the Company's current expectations and are subject to a number of
risks and uncertainties that could cause actual future results to differ
significantly from results expressed or implied in any forward-looking
statements contained herein or that may be made from time to time by, or on
behalf of, the Company. Information presented in this Form 10-Q should be read
in conjunction with the Company's Registration Statement on Form S-1 filed with
the Securities and Exchange Commission, including the risk factors contained
therein.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH THREE MONTHS ENDED
SEPTEMBER 30, 1996
Revenue was $11.7 million in the three months ended September 30,
1997, an increase of 26.7% over revenue of $9.2 million in the three months
ended September 30, 1996. The increase was attributable primarily to volume
growth in BioTesting Services and, to a lesser extent, volume growth in MAGENTA
Corporation.
Cost of sales was $7.3 million in the three months ended September 30,
1997, an increase of 18.4% over cost of sales of $6.2 million in the three
months ended September 30, 1996. The increase was attributable primarily to
increased labor, materials and indirect expenses.
Selling, general and administrative expense was $2.4 million in the
three months ended September 30, 1997, an increase of 21.6% over selling,
general and administrative expense of $2.0 million in the three months ended
September 30, 1996. This increase was due to additional administrative and
sales personnel and increased information systems, legal and other professional
services expense.
Research and development expense was $347,000 in the three months
ended September 30, 1997, an increase of 39.9% over research and development
expense of $248,000 in the three months ended September 30, 1996. The increase
primarily was attributable to increased labor and materials used for
development of molecular toxicology, quantitative polymerase chain reaction
("PCR") and cell-based virus detection assays and of large-scale
biomanufacturing processes.
In 1996, the Company incurred a nonrecurring charge against operations
in connection with the settlement of a dispute with a landlord relating to the
termination of a lease. In this regard, there was no charge in the three
months ended September 30, 1997 and a charge of $160,000 in the three months
ended September 30, 1996.
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Operating income was $1.7 million in the three months ended September
30, 1997, an increase of 137.1% over operating income of $709,000 in the three
months ended September 30, 1996. The increase primarily was due to the
leverage achieved from the increase in revenue on a high fixed cost structure.
The Company earned net interest and other income of $131,000 in the
three months ended September 30, 1997, compared to net interest and other
expense of $249,000 in the three months ended September 30, 1996. The
improvement was due primarily to interest income earned in 1997 on the
investment of the funds received from the initial public offering.
The provision for income taxes was $761,000 in the three months ended
September 30, 1997, compared to a provision of $205,000 in the three months
ended September 30, 1996. The effective tax rate was 42.0% for the three
months ended September 30, 1997 and 44.6% for the three months ended September
30, 1996. The tax rate was higher in 1996 primarily due to an increase in the
valuation allowance related to foreign net operating losses with no
corresponding allowance in 1997.
Net income was $1.1 million in the three months ended September 30,
1997, an increase of 312.2% over net income of $255,000 in the three months
ended September 30, 1996. The improvement primarily was due to increased
operating income.
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1996
Revenue was $36.1 million in the nine months ended September 30, 1997,
an increase of 41.6% over revenue of $25.5 million in the nine months ended
September 30, 1996. The increase was attributable primarily to volume growth
in BioTesting Services, the inclusion of revenue from BIOMEVA GmbH ("BIOMEVA")
in the first six months of the year ended June 30, 1997 with no corresponding
revenue in the first six months of the prior year (reflecting the timing of
BIOMEVA's acquisition in July 1996) and, to a lesser extent, volume growth in
MAGENTA Corporation.
Cost of sales was $22.3 million in the nine months ended September 30,
1997, an increase of 29.3% over cost of sales of $17.3 million in the nine
months ended September 30, 1996. The increase was attributable primarily to
increased labor, materials, indirect expenses and facilities expenses,
including expenses for BIOMEVA in the six months ended June 30, 1997 with no
corresponding expense for BIOMEVA in the six months ended June 30, 1996.
Selling, general and administrative expense was $7.7 million in the
nine months ended September 30, 1997, an increase of 40.0% over selling,
general and administrative expense of $5.5 million in the nine months ended
September 30, 1996. This increase was due primarily to additional
administrative and sales personnel and increased information systems, legal and
other professional services expense.
Research and development expense was $973,000 in the nine months ended
September 30, 1997, an increase of 17.7% over research and development expense
of $827,000 in the nine
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months ended September 30, 1996. The increase primarily was attributable to
increased labor and materials used for development of molecular toxicology,
quantitative PCR and cell-based virus detection assays and large-scale
biomanufacturing processes.
In 1996, the Company incurred a nonrecurring charge against operations
in connection with the settlement of a dispute with a landlord relating to the
termination of a lease. In this regard, there was no charge in the nine months
ended September 30, 1997 and a charge of $421,000 in the nine months ended
September 30, 1996.
Operating income was $5.1 million in the nine months ended September
30, 1997, an increase of 251.4% over operating income of $1.4 million in the
nine months ended September 30, 1996. The increase primarily was due to the
leverage achieved from the increase in revenue on a high fixed cost structure
and, to a lesser extent, on the inclusion of operating income from BIOMEVA in
the first six months of 1997 with no corresponding operating income in the
first six months of 1996.
Net interest and other expense was $186,000 in the nine months ended
September 30, 1997, a decrease of 68.0% compared to net interest and other
expense of $581,000 in the nine months ended September 30, 1996. The decrease
in net expense was due primarily to interest income earned on the investment of
the net proceeds from the initial public offering in August 1997 with no
corresponding interest income in 1996.
The provision for income taxes was $2.0 million in the nine months
ended September 30, 1997, compared to a provision of $373,000 in the nine
months ended September 30, 1996. The effective tax rate was 42.0% in the nine
months ended September 30, 1997 and 43.4% in the nine months ended September
30, 1996. The tax rate was higher in 1996 primarily due to an increase in the
valuation allowance related to foreign net operating losses with no
corresponding allowance in 1997.
Net income was $2.8 million in the nine months ended September 30,
1997, an increase of 480.9% over net income of $487,000 in the nine months
ended September 30, 1996. The improvement primarily was due to increased
operating income.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Company had cash and cash equivalents of
$10.9 million, compared to cash and cash equivalents of $3.0 million at
December 31, 1996. In addition, the Company had investments in marketable
securities of $23.4 million at September 30, 1997. These increases were the
result of the net proceeds received from the Company's initial public offering
in August 1997.
The Company generated cash flows from operations of $5.1 million in
the nine months ended September 30, 1997, compared to $1.2 million in the nine
months ended September 30, 1996. Net income, as adjusted for depreciation and
amortization, loss on disposal of fixed assets and deferred income taxes,
provided $7.1 million and $2.7 million in the nine months ended
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September 30, 1997 and 1996, respectively. The increase in depreciation and
amortization in the nine months ended September 30, 1997 compared to the nine
months ended September 30, 1996, was due primarily to the addition of BIOMEVA
in the first six months of 1997, with no corresponding depreciation for BIOMEVA
in the first six months of 1996, and the expansion of the Company's laboratory
facilities. Current assets and liabilities used cash of $2.3 million and $1.5
million in the nine months ended September 30, 1997 and 1996, respectively.
Working capital increased to $39.0 million at September 30, 1997,
compared to $5.4 million at December 31, 1996. The increase in working capital
primarily was due to the investment of the net proceeds received from the
Company's initial public offering.
The Company spent $2.7 million for capital expenditures for the nine
months ended September 30, 1997, compared to $1.5 million (including $0.6
million of expenditures financed by leases) in the nine months ended September
30, 1996. The increase in capital expenditures reflects the Company's
investment in information systems and expansion of the Company's laboratory
facilities and the related equipment. The major facilities expenditures in
1997 were for the expansion of the Company's BioTesting Services into Germany.
The new German laboratory has been certified by the German regulatory
authorities and, during the third quarter, completed its first client studies.
In October 1997, the Company entered into a lease agreement with a
developer to construct and lease a facility adjacent to the Company's
BioTesting Services facility in Rockville, Maryland. The new facility will be
used to consolidate existing research and development and administrative
activities and to provide expanded capacity for BioAnalytical Services.
Long-term debt was $5.9 million at September 30, 1997, compared to
long-term debt of $7.1 million at December 31, 1996. On October 31, 1997, the
Company refinanced its mortgage loan, promissory note and revolving loan
agreement with NationsBank at an interest rate at LIBOR plus 1.25% to 2.0%,
depending on the achievement of certain financial results. At September 30,
1997, $3.3 million was outstanding under the mortgage loan, $1.4 million was
outstanding under the promissory note, and there were no outstanding balances
under the revolving loan agreement with NationsBank. At September, 30, 1997,
the Company had $1.0 million available under its line of credit agreement with
NationsBank.
On August 1, 1997, the Company completed an initial public offering of
2,102,014 shares of its Common Stock (plus an additional 297,986 shares by a
selling stockholder) at an offering price of $15.00 per share. On August 7,
1997, the underwriters exercised an option to purchase an additional 315,302
shares. The net proceeds to the Company from the public offering and the
exercise of the over-allotment option by the underwriters, after deducting the
underwriting discounts and commissions and offering expenses payable by the
Company, were approximately $32.5 million. Upon the closing of the offering,
all outstanding shares of the Company's convertible preferred stock were
automatically converted into 4,778,072 shares of common stock.
At September 30, 1997, the Company had commitments to spend $993,000
for computer systems software and integration related to the development of new
information and telecommunication systems and $195,000 for laboratory
equipment.
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The Company expects to continue expanding its operations through
internal growth, geographic expansion and possible strategic acquisitions. The
Company expects that such activities will be funded from existing cash, cash
equivalents and marketable securities; cash flows from operations; and bank
borrowings and lease financing. Although the Company has no agreements or
arrangements in place with respect to any future acquisition, there may be
acquisition or other growth opportunities that require additional external
financing, and the Company may, from time to time, seek to obtain funds from
public or private issuances of equity or debt securities. There can be no
assurances that such financing will be available on terms acceptable to the
Company.
Based on its current operating plan, the Company believes that
available cash, cash equivalents and marketable securities; cash flows from
operations; and unused bank borrowings under its credit agreement will be
sufficient to meet its foreseeable cash needs.
EFFECT OF NEW ACCOUNTING PRONOUNCEMENT
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128"). This statement establishes standards for computing and presenting
earnings per share ("EPS"), simplifying previous standards for computing EPS
and making them comparable to international standards. It replaces the
presentation of primary EPS with a presentation of basic EPS, and requires dual
presentation of basic and diluted EPS on the face of the income statement for
all entities with complex capital structures. Basic EPS excludes dilution and
is computed by dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock
or resulted in the issuance of common stock that then shared in the earnings of
the entity. SFAS 128 requires restatement of all prior period EPS data
presented and is effective for financial statements issued for periods ending
after December 15, 1997, including interim periods. Earlier application is not
permitted.
The Company will adopt this statement during the fourth quarter of
1997, as required. Accordingly, all prior period EPS data will be restated. To
illustrate the effect of adoption, the Company has elected to disclose pro
forma basic and diluted EPS amounts computed using SFAS 128, as permitted by
the standard. The pro forma basic and diluted EPS for the three months and the
nine months ended September 30, 1996 and 1997 are set forth below:
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------------- --------------------------
1996 1997 1996 1997
-------- --------- --------- --------
<S> <C> <C> <C> <C>
Basic earnings per share $ 0.49 $ 0.20 $ 0.88 $ 1.33
Diluted earnings per share $ 0.04 $ 0.14 $ 0.07 $ 0.44
</TABLE>
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PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company's Registration Statement on Form S-1 (File Number
333-25071) relating to the initial public offering of 2,102,014 shares (plus an
additional 297,986 shares by a selling stockholder) of the Company's common
stock was declared effective by the Securities and Exchange Commission on July
28, 1997. The offering commenced on July 29, 1997. On August 7, 1997, the
underwriters exercised an over-allotment option to purchase an additional
315,302 shares from the Company. The managing underwriters were Morgan Stanley
& Co., Incorporated and Hambrecht & Quist LLC.
The aggregate proceeds of the offering to the Company were
$36,260,000. The underwriters' discounts and commissions paid by the Company
were $2,538,000, and other expenses paid by the Company were $1,257,000. The
net proceeds received by the Company were $32,464,000.
As of September 30, 1997 the Company has used the net proceeds from
the offering as follows:
<TABLE>
<S> <C>
Purchases of information systems hardware
and software $273,000
Purchases of laboratory equipment 81,000
--------
$354,000
========
</TABLE>
At September 30, 1997, $23,421,000 of the net proceeds were invested
in short-term United States government securities, and the balance was invested
in money market funds pending the purchase of additional United States
government securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
On July 24, 1997, the stockholders of the Company approved a
resolution by written consent in accordance with Section 228 of the Delaware
General Corporation Law approving the BioReliance Corporation 1997 Incentive
Plan in the form approved by the Board of Directors and filed as an exhibit to
the Company's Registration Statement on Form S-1.
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ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
14
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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.
Dated: November 12, 1997
BioReliance Corporation
(Registrant)
By /s/ CAPERS W. MCDONALD
----------------------
Capers W. McDonald
President and Chief Executive Officer
By /s/ CARL C. SCHWAN
---------------------
Carl C. Schwan
Senior Vice President,
Chief Financial Officer,
Treasurer and Assistant Secretary
(Principal Financial and Accounting Officer)
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 3RD QUARTER
10-Q CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH SCHEDULE S-1
REGISTRATION STATEMENT
</LEGEND>
<CIK> 0001036629
<NAME> BIORELIANCE CORPORATION
<MULTIPLIER> 1,000
<S> <C>
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0
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</TABLE>
