<PAGE> 1
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 Quarter Ended September 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission File Number 0-6516
DATASCOPE CORP.
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(Exact name of registrant as specified in its charter)
Delaware 13-2529596
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14 Philips Parkway, Montvale, New Jersey 07645-9998
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 391-8100
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Former name, former address and former fiscal year, if changed since last
report:
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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Number of Shares of Company's Common Stock outstanding as of October 31, 1995:
16,106,980.
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DATASCOPE CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
NET SALES
Sales increased 10% in the first quarter of fiscal 1996 as compared to
the first quarter last year.
Results for the quarter reflect continued growth of the Cardiac Assist
Division, InterVascular, the Company's subsidiary that produces vascular
grafts, and renewed sales growth of the Patient Monitoring Division.
Cardiac Assist made the principal contribution to increased sales and
earnings as strong worldwide demand continued for intra-aortic balloon
catheters. Sales of Patient Monitoring products increased reflecting
strong international sales growth of all major products including
Passport(R) and Point of View(R) monitors.
The Company announced that the U.S. market launch of the VasoSeal
vascular hemostasis device is planned for the upcoming meeting of the
American Heart Association in Anaheim, California which begins November
13, 1995. As previously reported on October 2, 1995, the U.S. Food and
Drug Administration (FDA) approved the Company's application to market
VasoSeal, a vascular hemostasis device for use after diagnostic
angiography and coronary angioplasty. VasoSeal has been used extensively
overseas and is the first device of its kind to receive FDA approval and
the only such device on the U.S. market at this time. VasoSeal will be
sold by the Collagen Products Division through a newly organized
dedicated direct field force consisting of sales personnel and clinical
education specialists.
The weakening of the U.S. dollar compared to major European currencies
increased sales by approximately $700 thousand in the first quarter of
fiscal 1996, compared to the corresponding period last year.
GROSS PROFIT (NET SALES LESS COST OF SALES)
The gross profit percentage was 65.4% of sales in the first quarter of
fiscal 1996 compared to 64.6% of sales in the first quarter last year
with the improvement primarily attributable to an improved mix of sales.
RESEARCH AND DEVELOPMENT (R&D)
As a percentage of sales, R&D expenses amounted to 12.2% in the first
quarter of fiscal 1996 compared to 10.7% in the first quarter of fiscal
1995, as R&D activity increased in all businesses. Total R&D expenses in
the first quarter of fiscal 1996 increased 26% in comparison to the first
quarter last year.
<PAGE> 3
SELLING, GENERAL & ADMINISTRATIVE EXPENSES (SG&A)
As a percentage of sales, SG&A expenses were 45.1% in the first quarter
of fiscal 1996, slightly lower than the 45.2% for the corresponding
period last year.
SG&A expenses increased $1.9 million or 10% in the first quarter of
fiscal 1996 compared to the corresponding period last year. The increase
was primarily attributable to sales and marketing expenditures relating
to higher sales volume for Cardiac Assist and InterVascular, and start-up
costs associated with the U.S. market launch of VasoSeal.
The weakening of the U.S. dollar compared to major European currencies
increased SG&A expenses by approximately $400 thousand in the first
quarter of fiscal 1996 compared to the corresponding period last year.
INTEREST INCOME AND EXPENSE
The higher interest income in the first quarter of fiscal 1996 was
attributable to a higher average investment portfolio and an increase in
interest rates.
OTHER INCOME AND EXPENSE
Other expenses were minimal in the first quarter of both fiscal years
1996 and 1995.
The Company enters into foreign exchange forward contracts to hedge a
major portion of its foreign currency exposures, primarily related to
certain receivables denominated in foreign currencies. The hedging has
reduced the Company's exposure to fluctuations in foreign currencies. The
net foreign exchange transaction gain or loss is reported in other income
and expense. Forward foreign exchange contracts outstanding at September
30, 1995 totaled $1.7 million, all of which were in European currencies,
with maturities that do not exceed 12 months.
LIQUIDITY AND CAPITAL RESOURCES
The Company continued to improve its strong financial position during the
first three months of fiscal 1996. Working capital was $113.0 million at
September 30, 1995, $2.3 million higher than the $110.7 million at June
30, 1995.
The current ratio at September 30, 1995 was 4.2:1 compared to 4.3:1 at
June 30, 1995. Cash provided by operating activities was $7.9 million in
the first quarter of fiscal 1996 compared to $9.3 million in the
corresponding period last year. The decreased amount of cash provided by
operations in the first quarter of fiscal 1996 as compared to the first
quarter last year was primarily attributable to increased inventory to
support the higher sales level and lower reduction in accounts
receivable. Cash was used to purchase $3.2 million of plant and equipment
in the first quarter of both fiscal 1996 and fiscal 1995.
Management believes that the Company's financial resources are sufficient
to meet its projected cash requirements. The moderate rate of current
U.S. inflation has not significantly affected the Company.
<PAGE> 4
DATASCOPE CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPT 30, JUNE 30,
1995 1995
(unaudited) (a)
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<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents 2,214 3,096
Marketable securities 59,156 53,165
Accounts receivable, less allowance for doubtful
accounts of $1,223 and $1,273 40,969 45,590
Inventories (Note 2) 39,528 36,499
Prepaid expenses and other current assets 6,038 5,880
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Total Current Assets 147,905 144,230
Property, Plant and Equipment, net of accumulated
depreciation of $33,898 and $32,681 44,793 44,278
Marketable Securities, non-current 9,281 9,354
Other Assets 9,689 9,001
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211,668 206,863
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable 8,662 7,644
Accrued expenses 14,215 14,149
Accrued compensation 8,884 9,384
Taxes on income 3,176 2,309
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Total Current Liabilities 34,937 33,486
Other Liabilities 10,227 10,058
Stockholders' Equity (Note 3)
Preferred stock, par value $1.00 per share:
Authorized 5,000,000 shares;
Issued and outstanding, none -- --
Common stock, par value $.01 per share:
Authorized, 45,000,000 shares; Issued and
outstanding, 16,095,425 and 16,070,689 shares 161 161
Additional paid-in capital 42,174 41,837
Retained earnings 124,449 121,347
Cumulative translation adjustments (280) (26)
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166,504 163,319
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211,668 206,863
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</TABLE>
(a) Derived from audited financial statements
See notes to consolidated financial statements
<PAGE> 5
Datascope Corp. and Subsidiaries
Statements of Consolidated Earnings
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1995 1994
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<S> <C> <C>
NET SALES 45,900 41,600
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Costs and Expenses:
Cost of sales 15,861 14,731
Research and development
expenses 5,611 4,451
Selling, general and
administrative expenses 20,694 18,808
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42,166 37,990
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OPERATING EARNINGS 3,734 3,610
Other (Income) Expense:
Interest income (1,015) (527)
Interest expense 18 3
Other, net 135 13
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(862) (511)
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EARNINGS BEFORE TAXES ON INCOME 4,596 4,121
Taxes on Income 1,494 1,360
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NET EARNINGS 3,102 2,761
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Earnings Per Share (Note 3) 0.19 0.17
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Weighted Average Number of Common
and Common Equivalent Shares
Outstanding (Note 3) 16,428 16,163
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</TABLE>
See notes to consolidated financial statements
<PAGE> 6
DATASCOPE CORP. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(DOLLARS IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1995 1994
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<S> <C> <C>
OPERATING ACTIVITIES:
Net cash provided by operating activities 7,862 9,258
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INVESTING ACTIVITIES:
Capital expenditures (3,203) (3,166)
Purchases of short-term marketable securities (27,872) (21,610)
Maturities of short-term marketable securities 21,954 14,672
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Net cash used in investing activities (9,121) (10,104)
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FINANCING ACTIVITIES:
Net cash provided by financing activities 227 48
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Effect of exchange rates on cash 150 (146)
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Decrease in cash and cash equivalents (882) (944)
Cash and cash equivalents, beginning of period 3,096 2,082
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Cash and cash equivalents, end of period 2,214 1,138
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SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid (refunded) during the period for:
Income taxes 708 (727)
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</TABLE>
See notes to consolidated financial statements
<PAGE> 7
DATASCOPE CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated balance sheet as of September 30, 1995 and the statements of
consolidated earnings and cash flows for the three month periods ended September
30, 1995 and 1994 have been prepared by the Company, without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) have been made that are necessary to present fairly the financial
position, results of operations and cash flows for all periods presented.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that the condensed consolidated
financial statements included herein be read in conjunction with the financial
statements and notes included in the Company's June 30, 1995 annual report to
shareholders. The results of operations for the period ended September 30, 1995
are not necessarily indicative of a full year's operations.
The presentation of certain prior year information has been reclassified to
conform with the current year presentation.
2. INVENTORIES
Inventories are stated at the lower of cost, determined on a first-in, first-out
basis, or market.
<TABLE>
<CAPTION>
(In thousands)
Sept 30, June 30,
1995 1995
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<S> <C> <C>
Materials $15,729 15,452
Work in Process 8,048 6,592
Finished Goods 15,751 14,455
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$39,528 36,499
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</TABLE>
3. STOCKHOLDERS' EQUITY
Changes in the components of stockholders' equity for the three months ended
September 30, 1995 are as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Net income 3,102
Translation adjustments (254)
Proceeds on the exercise of options to purchase
24,736 shares of common stock 337
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Total increase in stockholders' equity 3,185
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</TABLE>
<PAGE> 8
Part II:
Item 6 Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K. No reports on Form 8-K have
been filed during the quarter for which this report
is filed.
EX-27 Financial Data Schedule
<PAGE> 9
Form 10-Q
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.
DATASCOPE CORP.
Registrant
By: /s/ Lawrence Saper
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Lawrence Saper
Chairman of the Board
and President
By: /s/ Murray Pitkowsky
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Murray Pitkowsky
Senior Vice President and Secretary
Dated: November 13, 1995
<PAGE> 10
EXHIBIT INDEX
Exhibit No. Description Page No.
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EX-27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEETS AND STATEMENTS OF CONSOLIDATED EARNINGS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,214
<SECURITIES> 59,156
<RECEIVABLES> 42,192
<ALLOWANCES> (1,223)
<INVENTORY> 39,528
<CURRENT-ASSETS> 147,905
<PP&E> 78,691
<DEPRECIATION> (33,898)
<TOTAL-ASSETS> 211,668
<CURRENT-LIABILITIES> 34,937
<BONDS> 0
<COMMON> 161
0
0
<OTHER-SE> 166,343
<TOTAL-LIABILITY-AND-EQUITY> 211,668
<SALES> 45,900
<TOTAL-REVENUES> 45,900
<CGS> 15,861
<TOTAL-COSTS> 15,861
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18
<INCOME-PRETAX> 4,596
<INCOME-TAX> 1,494
<INCOME-CONTINUING> 3,102
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,102
<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.19
</TABLE>
