<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1996 COMMISSION FILE NUMBER: 0-7101
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INAMED CORPORATION
State of Incorporation: Florida I.R.S. Employer
Identification No.: 59-0920629
3800 Howard Hughes Parkway, Suite #900, Las Vegas, Nevada 89109
Telephone Number: (702) 791-3388
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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
----- -----
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On March 31, 1996 there were 7,602,317 Shares of the Registrant's Common
Stock Outstanding.
This document contains 15 pages.
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<PAGE>
INAMED CORPORATION AND SUBSIDIARIES
FORM 10-Q
Quarter Ended March 31, 1996
TABLE OF CONTENTS
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Unaudited Consolidated Income Statements 5
Unaudited Consolidated Statements of Cash Flows 6
Notes to the Unaudited Consolidated
Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
PART II - OTHER INFORMATION 14
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1.
INAMED CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION> (Unaudited)
March 31, 1996 December 31, 1995
-------------- -----------------
<S> <C> <C>
Assets
------
Current assets:
Cash and cash equivalents $18,525,773 $ 2,807,327
Trade accounts receivable, net of allowance for
doubtful accounts and returns and allowances
of $6,543,068 at March 31, 1996 and
$6,641,177 at December 31, 1995 11,656,286 10,470,375
Notes receivable - trade 179,476 157,534
Related party notes receivable 2,566 385,508
Inventories 18,713,112 17,695,847
Prepaid expenses and other current assets 1,581,643 1,825,213
Income tax refund receivable 112,300 95,580
Deferred income taxes 2,012,592 2,014,589
----------- -----------
Total current assets 52,783,748 35,451,973
----------- -----------
Property and equipment, at cost:
Machinery and equipment 9,067,846 8,923,564
Furniture and fixtures 3,778,009 3,714,717
Leasehold improvements 7,751,614 7,567,208
----------- -----------
20,597,469 20,205,489
Less accumulated depreciation
and amortization (9,776,123) (9,234,166)
----------- -----------
Net property and equipment 10,821,346 10,971,323
----------- -----------
Notes receivable, net of allowance of $1,066,958
at March 31, 1996 and December 31, 1995 2,043,816 2,047,535
Intangible assets, net 1,622,774 1,658,926
Other assets, at cost 381,830 255,187
----------- -----------
Total assets $67,653,514 $50,384,944
----------- -----------
----------- -----------
</TABLE>
(continued)
The Notes to Financial Statements are an integral part of this statement.
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<PAGE>
INAMED CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
March 31, 1996 December 31, 1995
-------------- -----------------
<S> <C> <C>
Liabilities and Stockholders' (Deficit) Equity
----------------------------------------------
Current liabilities:
Current installments of long-term debt $ 38,847 $ 51,735
Notes payable to bank 1,113,656 1,273,476
Related party notes payable 63,044 1,759,417
Accounts payable 13,182,560 20,093,073
Accrued liabilities:
Salaries, wages, and payroll taxes 3,808,488 9,559,348
Interest 1,487,129 1,609,947
Self-insurance 1,108,632 1,130,632
Stock option compensation 68,714 68,714
Other 1,242,060 2,200,860
Royalties payable 2,328,314 1,430,115
Income taxes payable 798,607 1,812,818
Deferred income taxes 93,624 10,065
------------ ------------
Total current liabilities 25,333,675 41,000,200
------------ ------------
Long-term debt, excluding current installments 76,552 89,437
Deferred grant income 1,080,611 1,114,735
Deferred income taxes 120,928 239,177
Litigation settlement 9,152,000 9,152,000
Convertible notes payable 35,000,000 493,511
Commitments and contingencies
Stockholders' (deficit) equity:
Common stock, $0.01 par value.
Authorized 20,000,000 shares;
issued and outstanding 7,602,317 76,024 76,027
Additional paid-in capital 9,960,175 9,963,635
Cumulative translation adjustment 746,426 882,146
Accumulated deficit (13,892,877) (12,625,924)
------------ ------------
Stockholders' (deficit) equity (3,110,252) (1,704,116)
------------ ------------
Total liabilities and stockholders'
(deficit) equity $ 67,653,514 $ 50,384,944
------------ ------------
------------ ------------
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
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<PAGE>
INAMED CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
Net sales $20,402,033 $21,744,875
Cost of goods sold 7,772,723 6,334,312
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Gross profit 12,629,310 15,410,563
----------- -----------
Operating expenses:
Marketing 5,947,051 5,381,079
General and administrative 6,431,668 7,608,602
Research and development 1,175,973 1,066,375
----------- -----------
Total operating expenses 13,554,692 14,056,056
----------- -----------
Operating income (loss) (925,382) 1,354,507
----------- -----------
Other income (expense):
Interest income 277,770 356,647
Interest expense (853,874) (128,743)
Foreign currency transaction gains (losses) (94,000) 263,743
Miscellaneous income 143,174 119,211
----------- -----------
Net other income (expense) (526,930) 610,858
----------- -----------
Income (loss) before income tax expense (benefit) (1,452,312) 1,965,365
Income tax expense (benefit) (185,359) 824,869
----------- -----------
Net income (loss) $(1,266,953) $ 1,140,496
----------- -----------
----------- -----------
Net income (loss) per share of common stock $(.17) $.15
----------- -----------
----------- -----------
Weighted average common shares outstanding 7,602,431 7,491,821
----------- -----------
----------- -----------
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
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<PAGE>
INAMED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Three Months ended March 31, 1996 and 1995
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (1,266,953) $ 1,140,496
------------ -----------
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation of property and equipment 496,522 758,659
Amortization of intangible assets 36,006 77,699
Deferred income taxes (29,782) 358,633
Changes in assets and liabilities:
Trade accounts receivable (1,251,235) (2,215,168)
Notes receivable (59,839) 417,166
Inventories (1,196,717) (1,310,035)
Prepaid expenses and other current assets 223,745 967,447
Income tax refund receivable (18,545) 1,840
Other assets (126,954) (10,105)
Accounts payable (6,868,324) (2,029,370)
Accrued salaries, wages and payroll taxes (5,716,087) 2,680,724
Accrued interest (122,818) --
Accrued self-insurance (22,000) 1,006,027
Other accrued liabilities (950,646) (935,272)
Royalties payable 898,199 (69,497)
Income taxes payable (1,010,902) 332,878
------------ -----------
Total adjustments (15,719,377) 31,626
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Net cash provided by
(used in) operating activities (16,986,330) 1,172,122
------------ -----------
Cash flows from investing activities:
Purchases of property and equipment (521,259) (1,314,472)
------------ -----------
Net cash used in investing activities (521,259) (1,314,472)
------------ -----------
</TABLE>
(continued)
The Notes to Financial Statements are an integral part of this statement.
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<PAGE>
INAMED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Three Months ended March 31, 1996 and 1995
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
1996 1995
----------- ---------
<S> <C> <C>
Cash flows from financing activities:
Increases in notes payable and long-term debt $34,506,489 $ --
Principal repayment of notes payable
and long-term debt (157,958) (472,651)
(Increase) decrease in related party receivables 382,942 (166,611)
Increase (decrease) in related party payables (1,696,373) 896
Net change in deferred grant income (16,394) (18,629)
Repurchases and retirements of common stock (3,463) --
Issuance of common stock -- 84,500
Cash overdraft -- 348,782
----------- ---------
Net cash provided by (used in)
financing activities 33,015,243 (223,713)
----------- ---------
Effect of exchange rate changes on cash 210,792 (307,888)
----------- ---------
Net increase (decrease) in cash
and cash equivalents 15,718,446 (673,951)
Cash and cash equivalents at beginning of period 2,807,327 673,951
----------- ---------
Cash and cash equivalents at end of period $18,525,773 $ --
----------- ---------
Supplemental disclosure of cash flow information:
Cash paid during the quarter for:
Interest $ 43,771 $ 139,874
----------- ---------
----------- ---------
Income taxes $ 1,150,437 $ 382,998
----------- ---------
----------- ---------
</TABLE>
Disclosure of accounting policy:
For purposes of the consolidated statement of cash flows, the Company
considers all certificates of deposit to be cash equivalents.
The Notes to Financial Statements are an integral part of this statement.
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<PAGE>
INAMED CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
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NOTE 1 - INTERIM FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements include all
adjustments (consisting only of normal recurring accruals) which are, in
the opinion of management, necessary for fair presentation of the results
of operations for the periods presented. Interim results are not
necessarily indicative of the results to be expected for a full year.
Certain information and footnote disclosures normally included in
financial statements, prepared in accordance with generally accepted
accounting principles, have been condensed or omitted as allowed by Form
10-Q. The accompanying unaudited consolidated financial statements should
be read in conjunction with the Company's consolidated financial statements
for the year ended December 31, 1995 as filed with the Securities and
Exchange Commission on Form 10-K.
NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
THE COMPANY
INAMED Corporation's subsidiaries are McGhan Medical Corporation and CUI
Corporation, which develop, manufacture and sell medical devices
principally for the plastic and general surgery fields; BioEnterics
Corporation which develops, manufactures and sells medical devices and
associated instrumentation to the bariatric and general surgery fields;
Biodermis Corporation which develops, produces and distributes premium
products for dermatology, wound care and burn treatment; Bioplexus
Corporation which is a development company that develops, produces and
distributes specialty medical products for use by the general surgery
profession; Flowmatrix Corporation which manufactures high quality silicone
components and devices for INAMED's wholly-owned subsidiaries and
distributes an international line of proprietary silicone products;
Medisyn Technologies Corporation which focuses on the development and
promotion of the merits of the use of silicone chemistry in the fields of
medical devices, pharmaceuticals and biotechnology; INAMED Development
Company, which is engaged in the research and development of new medical
devices using silicone-based technology; McGhan Limited, an Irish
corporation which manufactures medical devices principally for the plastic
and general surgery fields; Medisyn Technologies, Ltd. and Chamfield Ltd.,
Irish corporations which specialize in the development of silicone
materials for use by INAMED's wholly-owned subsidiaries; and INAMED B.V., a
Netherlands corporation, INAMED B.V.B.A., a Belgium corporation, INAMED
GmbH, a German corporation, INAMED S.R.L., an Italian corporation, INAMED
Ltd., a United Kingdom corporation, INAMED S.A.R.L., a French corporation,
INAMED, S.A., a Spanish corporation, INAMED do Brazil, a Brazilian
corporation, INAMED Medical Group, a Japanese corporation, and McGhan
Medical Asia Pacific, a Hong Kong corporation, which all sell medical
devices on a direct sales basis in the various countries in which they are
located.
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of INAMED
Corporation and its wholly-owned subsidiaries (collectively referred to as
the Company). All significant intercompany balances and transactions have
been eliminated in consolidation.
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<PAGE>
INAMED CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996 (CONTINUED)
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NET INCOME PER SHARE
Net income per share is based upon the weighted average number of shares
outstanding during each of the respective periods. Common stock
equivalents are excluded since their inclusion would immaterially affect
the calculation or would be antidilutive.
RECLASSIFICATION
Certain reclassifications were made to the 1995 consolidated financial
statements to conform to the 1996 presentation.
NOTE 3 - INVENTORIES
Inventories are summarized as follows:
March 31, 1996 December 31, 1995
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Raw materials $ 2,842,637 $ 2,513,862
Work in process 4,526,526 3,773,579
Finished goods 11,853,924 12,167,768
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19,223,087 18,455,209
Less allowance for
obsolescence (509,975) (759,362)
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$18,713,112 $17,695,847
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NOTE 4 - CONVERTIBLE NOTES PAYABLE
In January 1996, the Company completed a private placement
offering by issuing three-year secured convertible, non-callable notes due
March 31, 1999 bearing an interest rate of 11%. The Company received $35
million in proceeds from the offering to be used for the anticipated
litigation settlement, for capital investments and improvements to expand
production capacity, and for working capital purposes. Of the proceeds
received from the offering, $15 million was deposited to escrow for
litigation settlement purposes.
The notes become convertible into shares of common stock at the
option of the noteholders on April 22, 1996. The conversion rate is one
share of common stock for each $10 principal amount of notes.
Alternatively, the notes may automatically convert into shares of common
stock upon the occurrence of certain events in connection with the
certification of the Company's Mandatory Class. In April 1996 the Company
completed the registration of 3.5 million shares of its common stock in
direct response to the private placement offering requirements.
Under the terms of the note agreement, the Company may obtain up
to $5 million in structured debt or make an equity offering without
restriction. However, the terms of the note agreement restrict the
Company's ability to make a debt offering.
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<PAGE>
INAMED CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996 (CONTINUED)
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Note 5 - Commitments and Contingencies
INAMED and/or its subsidiaries are defendants in numerous State court
actions and a Federal class action in the United States District Court,
Northern District of Alabama, Southern Division, under Chief Judge Sam C.
Pointer, Jr., U.S. District Court, regarding Master File No. C892-P-10000-S
(Silicone Gel Breast Implants Product Liability Litigation MDL 926). The
claims are for general and punitive damages substantially exceeding
provisions made in the Company's consolidated financial statements. The
accompanying consolidated financial statements have been prepared assuming
that the Company will withstand the financial results of said litigation.
Several U.S. based manufacturers negotiated a settlement with the
Plaintiffs' Negotiating Committee ("PNC"), and on March 29, 1994 filed a
Proposed Non-Mandatory Class Action Settlement in the Silicone Breast
Implant Products Liability (the "Settlement Agreement") providing for
settlement of the claims as to the class (the "Settlement") as described in
the Settlement Agreement. The Settlement Agreement provides for resolution
of any existing or future claims, including claims for injuries not yet
known, under any Federal or State law, from any claimant who received a
silicone breast implant prior to June 1, 1993. A fairness hearing for the
non-mandatory class was held before Judge Pointer on August 18, 1994. On
September 1, 1994, Judge Pointer gave final approval to the non-mandatory
class action settlement.
The Company was not originally a party to the Settlement Agreement.
However, on April 8, 1994 the Company and the PNC reached an agreement
which would join the Company into the Settlement. The agreement reached
between the Company and the PNC added great value to the Settlement by
enabling all plaintiffs and U.S. based manufacturers to participate in the
Settlement, and facilitating the negotiation of individual contributions by
the Company, Minnesota Mining and Manufacturing Company ("3M"), and Union
Carbide Corporation which total more than $440 million.
Under the terms of the Settlement Agreement, the parties stipulate and
agree that all claims of the Settlement Class against the Company regarding
breast implants and breast implant materials shall be fully and finally
settled and resolved on the terms and conditions set forth in the
Settlement Agreement.
Under the terms of the Settlement Agreement, the Company will pay $1
million to the Settlement fund for each of 25 years starting three years
after Settlement approval by the Court. The Company recorded a pre-tax
charge of $9.1 million in the fourth quarter of 1993. The charge
represents the present value (discounted at 8%) of the Company's settlement
of $25 million over a payment period of 25 years.
Under the Settlement, $1.2 billion had been provided for "current
claims" (disease compensation claims). In May, 1995, Judge Pointer
completed a preliminary review of current claims which had been filed as of
September, 1994, in compliance with deadlines set by the court. Judge
Pointer determined that based on the preliminary review, it appears that
projected amounts of eligible current claims exceed the $1.2 billion
provided in the Settlement. The Settlement provided that in the event of
such over subscription, the amounts to be paid to eligible current
claimants would be reduced and claimants would have a right to "opt-out" of
the Settlement at that time.
On October 1, 1995, Judge Pointer finalized details of a scaled-back
breast implant injury settlement involving defendants Bristol-Myers Squibb,
Baxter International, and 3M, allowing plaintiffs to reject this settlement
and file their own lawsuits if they believe payments are too low. On
November 14, 1995, McGhan Medical and Union Carbide were added to this list
of settling defendants to achieve the Bristol, Baxter, 3M, McGhan and Union
Carbide Revised Settlement Program (the "Revised Settlement Program").
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<PAGE>
INAMED CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996 (CONTINUED)
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At March 31, 1996, the Company's reasonable estimate of its liability to
fund the Revised Settlement Program is a range between $9.1 million, the
original estimate as noted above, and $50 million, with no amount within
the range a better estimate. Due to the uncertainty of the ultimate
resolution and acceptance of the Revised Settlement Program by the PNC, as
well as a lack of information related to the total claims, the financial
statements do not reflect any additional provision for the litigation
settlement.
The Company has opposed the plaintiffs' claims in these complaints and
other similar actions, and continues to deny any wrongdoing or liability to
the plaintiffs of any kind. However, the extensive burdens and expensive
litigation the Company would continue to incur related to these matters
prompted the Company to work toward and enter into the Settlement which
insures a more satisfactory method of resolving claims of women who have
received the Company's breast implants.
Management's commitment to the Settlement does not alter the Company's
need for complete resolution sought under a mandatory ("non-opt-out")
settlement class (the "Mandatory Class"). Therefore, the Company has
petitioned the United States District Court, Northern District of Alabama,
Southern Division, for certification of a Mandatory Class under the
provisions of Federal Rule of Civil Procedure.
The Company was a defendant with 3M in a case involving three plaintiffs
in Houston, Texas, in March 1994, in which the jury awarded the plaintiffs
$15 million in punitive damages and $12.9 million in damages plus fees and
costs. However, the decision was reversed in March 1995 resulting in no
financial responsibility on the part of the Company.
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<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
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RESULTS OF OPERATIONS
Net sales as an aggregate were $20.4 million during the first three
months of 1996 which represents a 6% decrease from the first three months
of 1995. Domestic sales growth was adversely affected during the first
three months of 1996 by shortages of raw materials and by changes made by
the Company in certain manufacturing processes and procedures in order to
achieve regulatory approvals and attain higher standards of control. The
Company expects international sales to continue to represent an increasing
percentage of net sales, since this market is experiencing increasing
demand. Management anticipates the market growth, continued increase in
production capacity, both domestically and internationally, and expansion
of the international sales force will allow an increase in sales growth
throughout the remainder of 1996.
Gross profit was 62% of net sales for the first three months of 1996
compared to 71% for the corresponding period in 1995. Management
anticipates that the Company may experience future quarters with higher
costs of production as modifications are made to accommodate changing FDA
views and related regulations.
Marketing expense as a percentage of net sales was 29% in the first three
months of 1996, compared to 25% for the first three months of 1995. This
increase is primarily due to the domestic demand for product in excess of
current production capabilities, which has required marketing personnel to
expend greater efforts in managing the placement of inventory in the field.
General and administrative expenses as a percentage of net sales were 32%
in the first three months of 1996 compared to 35% in the first three months
of 1995. Management expects future general and administrative expenses to
grow proportionally with sales, and to be reactive to litigation expense.
Research and development expenses increased from $1,066,375 in the first
quarter of 1995 to $1,175,973 in the first quarter of 1996, reflecting the
Company's continuing commitment to developing new and improved medical
products for use by the medical profession and the public. As a percentage
of net sales, this expense was 5% in the first three months of 1995 and 6%
in the first three months of 1996. Diversification into other facets of
medical devices through use of new technology remains a goal of the
Company. R & D expenses are expected to increase throughout 1996 as the
Company is also increasing research and development overseas due to the FDA
backlog on approval of new devices in the United States.
Interest expense increased for the first three months of 1996 in
comparison with interest expense for the same period of 1995. This was
primarily due to the interest incurred on the Company's convertible notes
payable which were issued in January 1996.
The Company continues to incur increased costs related to obtaining FDA
and European Economic Community approvals for the Company's products. The
Company is continuing to address FDA regulations related to pre-market
approval of silicone mammary implants, and anticipates ongoing investment
of employee hours and Company funds to facilitate compliance with all FDA
regulations as determined by PMA studies and any new regulations which may
be adopted. The FDA is expected to issue a call for PMA applications for
saline-filled breast implants in 1998. The Company has agreed to conduct
clinical trials and is collecting data in anticipation of FDA action.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
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Management anticipates strong market growth, continued increases in
production capacity domestically and internationally, and expansion of the
international sales force will contribute to a trend of sales growth
throughout the remainder of 1996.
FINANCIAL CONDITION
During the first three months of 1996 INAMED Corporation has maintained
its position as one of the largest medical device companies serving the
plastic, reconstructive and general surgical markets world-wide. In order
to meet increased international product needs, the Company has increased
production of its products in Europe through expansion at its manufacturing
plant in Ireland which supplies the majority of the products for the
Company's international market. The Irish facility works closely with the
Company's subsidiaries in Europe to develop new products for that market.
Internationally, the Company has significantly increased its market share
due to the use of direct sales methods rather than distributors wherever
financially advantageous to do so. The Company currently has direct
marketing subsidiaries in ten international countries.
The cash balance has increased since December 31, 1995, and the current
ratio was 2.1 to 1 at March 31, 1996, compared to the ratio at December 31,
1995 of 0.9 to 1. The majority of the Company's cash flows in the first
three months of 1996 were generated by the issuance of convertible notes as
discussed in Note 4 to the financial statements, and by product sales.
Growth, regulatory activities and legal expenses continue to use a
significant amount of available cash resources.
In June of 1990, the Company established a $4.5 million comprehensive
financing package for working capital with a major bank that utilizes the
domestic accounts receivable, inventories and certain other assets as
collateral. In December of 1990, the line of credit was increased to $5.3
million. The line of credit agreement expired August 31, 1993 and was
extended through March 31, 1996. In January 1996, the obligation to the
bank was satisfied.
In April 1994, the Company increased its international line of credit
with a major Dutch bank. The current line is approximately 2.2 million
Guilders and is collateralized by the accounts receivable, inventories and
certain other assets of INAMED B.V. The line of credit expires on June 30,
1996. As of March 31, 1996, approximately 1.6 million Guilders had been
drawn on the line of credit. The interest rate on the line of credit is
European prime discount rate plus 2.5% per annum, at a minimum of 7% per
annum.
The Company is actively working to establish a global banking
relationship with goals to strengthen its consolidated financial position.
McGhan Limited continues to receive grants from the Irish Industrial
Development Authority ("IDA") which include reimbursement for qualified
training expenses, leasehold improvements and capital improvement costs at
the Company's operation in Ireland. Additionally, McGhan Limited has
obtained approval for additional grants from the European Economic
Community "Industry R & D Initiative" for approved research and development
programs for up to $1 million. The Company believes that additional
approvals will be achieved in future years.
-13-
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a defendant in breast implant litigation as
discussed in Note 5 to the unaudited consolidated financial
statements.
ITEMS 2. THROUGH 5.
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(1) Form 8-K, dated January 23, 1996
(2) Form 8-K, dated April 19, 1996
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<PAGE>
INAMED CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
INAMED CORPORATION
By /s/Donald K. McGhan
----------------------------------
Donald K. McGhan
Chairman of the Board and President
Dated: May 15, 1996
-------------------------------
-15-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 18,525,773
<SECURITIES> 0
<RECEIVABLES> 18,378,830
<ALLOWANCES> 6,543,068
<INVENTORY> 18,713,112
<CURRENT-ASSETS> 52,783,748
<PP&E> 20,597,469
<DEPRECIATION> 9,776,123
<TOTAL-ASSETS> 67,653,514
<CURRENT-LIABILITIES> 25,333,675
<BONDS> 0
0
0
<COMMON> 10,036,199
<OTHER-SE> (13,146,451)
<TOTAL-LIABILITY-AND-EQUITY> 67,653,514
<SALES> 20,402,033
<TOTAL-REVENUES> 20,402,033
<CGS> 7,772,723
<TOTAL-COSTS> 21,327,415
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