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Previous: MUNICIPAL BOND TRUST SERIES 54, 485B24E, 1995-11-09 |
Next: TIMBERLINE SOFTWARE CORPORATION, 10QSB, 1995-11-09 |
<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1995
/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File No. 0-10005
BIOCHEM INTERNATIONAL INC.
A DELAWARE CORPORATION IRS EMPLOYER IDENTIFICATION
NO. 39-1272816
Address Telephone Number
W238 N1650 Rockwood Drive (414) 542-3100
Waukesha, WI 53188-1199
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 / /
The number of shares outstanding of the Company's Common Stock, par value $.02,
on September 30, 1995 was 13,086,284.
Page 1 of 8
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIOCHEM INTERNATIONAL INC.
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
September 30 June 30
1995 1995
----------------- -------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and equivalents $ 4,478,901 $ 2,628,445
Accounts receivable, less $116,653 and $100,000 allowance
for doubtful accounts, respectively 3,704,669 3,751,377
Inventories 2,964,371 2,686,501
Deferred income taxes 795,425 1,470,000
Prepaid expenses 34,438 43,538
----------- -----------
Total Current Assets 11,977,804 10,579,861
Deferred income taxes 180,000 180,000
Property, plant and equipment, net 1,422,403 1,437,690
Related party receivable 101,828 101,828
Other 5,483 5,483
----------- -----------
Total Assets $13,687,518 $12,304,862
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade $ 1,801,812 $ 1,463,067
Accrued liabilities:
Salaries, wages and commissions 411,093 502,055
Other 188,865 226,413
----------- -----------
Total current liabilities 2,401,770 2,191,535
Stockholders' equity:
Common Stock, $.02 par value 261,726 261,666
Additional Paid-in Capital 11,699,348 11,698,173
Retained Deficit (675,325) (1,846,512)
----------- -----------
Total Stockholders' Equity 11,285,749 10,113,327
----------- -----------
Total liabilities and stockholders' equity $13,687,518 $12,304,862
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 2 of 8
<PAGE> 3
BIOCHEM INTERNATIONAL INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30
1995 1994
------------ ------------
<S> <C> <C>
Revenues:
Net sales $ 6,678,377 $ 5,953,784
Other income 85,487 27,702
------------ ------------
Total Revenues 6,763,864 5,981,486
Costs and Expenses:
Cost of goods sold 2,915,969 2,672,025
Selling, general and administrative 1,711,576 1,367,359
Engineering, research and development 279,732 160,015
Interest -- 51,686
------------ ------------
Total Costs and Expenses 4,907,277 4,251,085
------------ ------------
Income before income tax expense $ 1,856,587 $ 1,730,401
Income tax expense:
Current 10,825 10,025
Deferred 674,575 670,800
----------- ------------
Net Income $ 1,171,187 $ 1,049,576
============ ============
Net Income per Common Share $ .09 $ .08
===== =====
Weighted Average Number of Common
Shares Outstanding 13,086,284 13,083,284
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 3 of 8
<PAGE> 4
BIOCHEM INTERNATIONAL INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,171,187 $ 1,049,576
Adjustments to reconcile net cash provided
by operating activities:
Deferred interest -- 51,686
Depreciation 74,900 40,662
Deferred income taxes 674,575 670,800
Change in assets and liabilities:
Accounts receivable 46,708 (114,281)
Inventories (277,870) (24,779)
Prepaid expenses and other 9,100 3,284
Accounts payable and accrued liabilities 210,235 (694,523)
------------ ------------
Net cash provided by operating activities 1,908,835 982,425
------------ ------------
Cash flows from investing activities:
Property, plant and equipment additions (59,614) (52,645)
------------ ------------
Cash flows from financing activities:
Issuance of common stock 1,235 2,500
------------ ------------
Net increase in cash and equivalents 1,850,456 932,280
Cash and equivalents:
Beginning of period 2,628,445 1,756,578
------------ ------------
End of period $ 4,478,901 $ 2,688,858
============ ============
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $ -- $ --
======= ========
Cash paid during the period for income taxes $10,825 $ 10,025
======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4 of 8
<PAGE> 5
BIOCHEM INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS
1. The accompanying unaudited financial statements should be read in
conjunction with the Company's 1995 Annual Report on Form 10-KSB. In
the opinion of management, all adjustments necessary to a fair
statement of operations and financial position of the Company have
been included in the accompanying statements of operations and balance
sheets. All adjustments made to the interim financial statements were
of a normal, recurring nature.
The year-end condensed balance sheet data was derived from audited
financial statements, but does not include all disclosures required by
generally accepted accounting principles.
2. Inventories are comprised of:
<TABLE>
<CAPTION>
September 30 June 30
1995 1995
---- ----
<S> <C> <C>
Finished goods $ 200,521 $ 311,751
Loaner and demonstration 915,681 804,708
Work in process 818,872 644,977
Purchased material 1,029,297 925,065
------------ ------------
$ 2,964,371 $ 2,686,501
============ ============
</TABLE>
3. Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
September 30 June 30
1995 1995
---- ----
<S> <C> <C>
Land $ 88,200 $ 88,200
Building 724,699 724,699
Leasehold improvements 126,841 126,841
Machinery and equipment 1,170,481 1,110,868
Office furniture and equipment 207,993 207,993
------------ ------------
2,318,214 2,258,601
Less accumulated depreciation 895,811 820,911
------------ ------------
$ 1,422,403 $ 1,437,690
============ ============
</TABLE>
4. Net Income Per Share:
Net income per common and common equivalent share is computed based on
the weighted average common shares outstanding, including common stock
equivalents.
Page 5 of 8
<PAGE> 6
BIOCHEM INTERNATIONAL INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Financial Condition
Working capital at September 30, 1995 was $9,756,000 as compared to $8,388,000
at June 30, 1995. The increase in working capital is primarily a function of
the cash flow from operating activities. The cash and equivalents balance has
increased due to the positive cash flows the company experienced during the
first three months of fiscal 1996.
Company management believes that sales revenues to be generated by current
products and anticipated new product introductions, and financing arrangements
currently in place will be sufficient to meet future cash needs.
Results of Operations
Net sales for the three-month period ended September 30, 1995 increased 12%
over the corresponding prior year period. This increase results from an
increase in sales to both our domestic customers and our OEM customers. The
increase in the domestic market is primarily due to continued sales of our
handheld pulse oximeter. This oximeter continues to be very well received in
the marketplace, and has allowed us to enter some domestic markets, such as
emergency medicine, which we did not serve in the past. The handheld pulse
oximeter sales to the OEM customers, both domestic and international, are also
strong, and account for the balance of the increase in sales.
Other income for the three-month period ended September 30, 1995 consists
primarily of interest income.
Cost of goods sold as a percentage of net sales was approximately 43.7% during
the three-month period ended September 30, 1995 compared to 44.9% for the
corresponding period ended September 30, 1994. This fluctuation is
attributable primarily to decreased raw material costs.
Selling, general and administrative expenses were 25.6% of net sales in the
three-month period ending September 30, 1995 compared to 23.0% during the same
period of the prior year. The increase was primarily incurred in the sales &
marketing and domestic sales departments. We have increased staffing in our
domestic sales departments, adding two new sales territories in fiscal 1996, to
support and improve the above mentioned increase in sales. Additionally, BCI
has been spending more on its marketing efforts, to better promote both our
name and our products.
The increase in engineering, research and development expenditures noted during
the three-month period ended September 30, 1995 of 74.8% when compared to the
similar period in the prior year reflects increases in expenses related to
payroll, outside consultants and miscellaneous project expenses. The increase
in payroll expenses is the result of additional staffing when comparing the
first quarter of fiscal 1996 to the same period in fiscal 1995. BCI has also
increased spending on new product development and we have increased the use of
outside consultants.
Page 6 of 8
<PAGE> 7
There was no interest expense in the three-month period ended September 30,
1995. The long-term debt and related accrued interest were paid off in full
during the third quarter of fiscal 1995.
In fiscal 1994, BCI International adopted the provisions of SFAS 109,
"Accounting for Income Taxes", which required our booking of a deferred tax
asset. SFAS 109 is an accounting regulation promulgated by the Financial
Accounting Standards Board (FASB), an accounting board that sets standards for
uniformity of accounting reports issued by businesses. The deferred tax asset
and related effect on profits was determined based on the difference between
the financial statement and tax bases of assets and liabilities using enacted
tax rates in effect for the years in which the differences are expected to
reverse. BCI's asset is based primarily on the projected future value of its
net operating loss (NOL) carryforward. In the current year, this deferred tax
asset is being amortized monthly, based on projected utilization of its NOL.
During the three-month period ending September 30, 1995, deferred income tax
expense was recognized in the amount of $674,575.
All other costs and expenses of the Company remained relatively constant when
comparing the first three months of fiscal 1996 to that of fiscal 1995.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) The following Form 8-K was filed with the Commission during the quarter
ended September 30. 1995:
(1) Form 8-K dated July 25, 1995:
Item 5. Other Events: The Company announced termination of
negotiations for the proposed acquisition of the company by John McDonough
Page 7 of 8
<PAGE> 8
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 9, 1995 By
-----------------------------
David H. Sanders
Chairman of the Board and
Chief Executive Officer
Dated: November 9, 1995 By
-----------------------------
Frank A. Katarow
President and Chief
Operating Officer
Dated: November 9, 1995 By
-----------------------------
Ann M. Johnson
Vice President
of Finance and Operations
Page 8 of 8
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 4,479
<SECURITIES> 0
<RECEIVABLES> 3,704
<ALLOWANCES> 0
<INVENTORY> 2,964
<CURRENT-ASSETS> 11,978
<PP&E> 2,318
<DEPRECIATION> 896
<TOTAL-ASSETS> 13,687
<CURRENT-LIABILITIES> 2,402
<BONDS> 0
<COMMON> 262
0
0
<OTHER-SE> 11,024
<TOTAL-LIABILITY-AND-EQUITY> 13,687
<SALES> 6,678
<TOTAL-REVENUES> 6,678
<CGS> 2,916
<TOTAL-COSTS> 2,916
<OTHER-EXPENSES> 1,991
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,856
<INCOME-TAX> 685
<INCOME-CONTINUING> 1,171
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,171
<EPS-PRIMARY> 0.09
<EPS-DILUTED> 0.09
</TABLE>
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