<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 29, 1996
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 0-9428
ADAC LABORATORIES
---- ------------
(Exact name of registrant as specified in its charter)
California 94-1725806
---------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
540 Alder Drive
Milpitas, California 95035
-------------------- -----
(Address of principal executive offices) (Zip Code)
(408) 321-9100
--------------
(Registrant's telephone number including area code)
Not Applicable
--- ----------
(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
-
Number of shares of Common Stock, no par value, outstanding at February 3, 1997,
18,090,270.
(This document contains a total of 15 pages)
<PAGE>
ADAC LABORATORIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three
Months Ended
-------------
<S> <C> <C>
December 29, December 31,
1996 1995
------------ ------------
REVENUES, NET:
Product $51,604 $39,708
Service 16,761 15,280
------- -------
68,365 54,988
------- -------
COST OF REVENUES:
Product 30,040 24,560
Service 10,798 9,330
------- -------
40,838 33,890
------- -------
GROSS PROFIT 27,527 21,098
------- -------
OPERATING EXPENSES:
Marketing and sales 10,737 8,174
Research and development 3,249 2,891
General and administrative 4,246 3,580
Goodwill amortization 198 198
------- -------
18,430 14,843
------- -------
OPERATING INCOME 9,097 6,255
------- -------
INTEREST AND OTHER EXPENSE, NET (1,102) (806)
------- -------
INCOME BEFORE PROVISION FOR INCOME TAXES 7,995 5,449
Provision for income taxes (2,902) (1,908)
------- -------
NET INCOME $ 5,093 $ 3,541
======= =======
</TABLE>
Net income per share $ 0.27 $ 0.20
======= =======
Number of shares used
in per share calculations 19,150 17,710
======= =======
Dividends per share $ 0.12
=======
The accompanying notes are an integral part of the condensed consolidated
financial statements.
3
<PAGE>
ADAC LABORATORIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
December 29, September 29,
1996 1996
(Unaudited)
------------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,687 $ 3,081
Accounts receivable, net of allowance
for returns and doubtful accounts 86,722 80,654
Inventories 36,039 31,975
Deferred income taxes 5,385 8,095
Prepaid expenses and other current assets 11,387 11,027
-------- --------
TOTAL CURRENT ASSETS 145,220 134,832
Service parts, net 15,285 15,482
Fixed assets, net 8,369 8,393
Capitalized software, net 12,035 11,656
Goodwill, net 10,703 10,901
Other assets, net 4,700 5,364
-------- --------
TOTAL ASSETS $196,312 $186,628
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks $ 32,200 $ 27,226
Accounts payable 16,296 13,923
Dividends payable 2,137
Deferred revenues 11,791 13,302
Customer deposits and advance billings 2,351 2,302
Accrued compensation 9,131 7,825
Other accrued liabilities 13,445 13,797
-------- --------
TOTAL CURRENT LIABILITIES 85,214 80,512
Non-current deferred income taxes 2,275 2,275
Non-current liabilities and deferred credits 3,539 4,370
-------- --------
TOTAL LIABILITIES 91,028 87,157
-------- --------
SHAREHOLDERS' EQUITY:
Preferred stock, no par value:
Authorized: 5,000 shares;
Issued and outstanding: none
Common stock, no par value:
Authorized: 50,000 shares;
Issued and outstanding: 18,048 shares as of
December 29, 1996 and 17,781 shares as of
September 29, 1996, respectively 111,650 110,661
Accumulated deficit (5,078) (10,172)
Translation adjustment (1,288) (1,018)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 105,284 99,471
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $196,312 $186,628
======== ========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
<PAGE>
ADAC LABORATORIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
Three Months Ended
------------------
<TABLE>
<CAPTION>
December 29, December 31,
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating $ 544 $ (1,345)
activities --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (777) (363)
Other assets (717) (1,130)
------- -------
Net cash used in investing activities (1,494) (1,493)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short term borrowings 4,974 2,396
Dividends paid (2,137) (2,054)
Proceeds from issuance of
Common Stock, net 989 1,108
------ -------
Net cash provided by financing activities 3,826 1,450
------ -------
Effect of exchange rates on cash (270) (406)
------ -------
Net change in cash and cash equivalents 2,606 (1,794)
Cash and cash equivalents, at beginning of
the period 3,081 7,551
------ -------
Cash and cash equivalents, at end of the
period $ 5,687 $ 5,757
======== ========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
<PAGE>
ADAC LABORATORIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
1. Basis of Presentation
---------------------
The accompanying unaudited condensed interim consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for annual financial statements.
In the opinion of management, the condensed interim consolidated
financial statements include all normal recurring adjustments necessary
for a fair presentation of the information required to be included.
Operating results for the three month period ended December 29, 1996 are
not necessarily indicative of the results that may be expected for any
future periods. Reference shared also be made to the Annual Consolidated
Financial Statements, Notes thereto, and Management's Discussion and
Analysis of Financial Condition and Results of Operations contained in
the Company's Annual Report on Form 10-K for the fiscal year ended
September 29, 1996.
The previous year-end's balance sheet data was derived from audited
financial statements but does not include all disclosures required by
generally accepted accounting principles.
2. Net Income Per Share
--------------------
Net income per common and common equivalent share has been computed using
the weighted average number of common shares outstanding after considering
the dilutive effect of common stock options and warrants using the treasury
stock method.
3. Depreciation and Amortization
-----------------------------
Depreciation and amortization was approximately $2.5 million for each of
the three-month periods ended December 29, 1996 and December 31, 1995.
4. Inventories
-----------
Inventories consist of:
<TABLE>
<CAPTION>
December 29, September 29,
1996 1996
------------ -------------
<S> <C> <C>
Purchased parts and
sub-assemblies $15,384 $16,000
Work in process 7,722 5,057
Finished goods 12,933 10,918
------- -------
$36,039 $31,975
======= =======
</TABLE>
5. Income Taxes
------------
The Company uses the deferral method to account for income taxes.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amounts expected to be realized.
The provisions for income taxes for each of the three months ended December
29, 1996 and December 31, 1995 are based on the estimated effective income
tax rates for the fiscal years ending September 28, 1997 and September 29,
1996 of 36.3% and 36.0%, respectively.
5
<PAGE>
ADAC LABORATORIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
6. Credit and Borrowing Arrangements
---------------------------------
Interest payments for the first quarter of fiscal years 1997 and 1996 were
approximately $914 and $768, respectively.
The Company has a $60.0 million revolving credit facility with a bank
syndicate. The credit facility offers borrowings in either U.S. dollars or
in foreign currencies and expires July 31, 1999. The Company pays interest
and commitment fees on its borrowings based on the debt level in relation
to profitability. Commitment fees range from 0.25% to 0.425% of borrowings
and interest rates are based on the bank's prime rate or Libor plus rates
ranging from 0.875% to 1.375%. As of December 29, 1996, the Company had
$27.8 million available for borrowing under this facility.
7. Litigation
----------
The Company is a defendant in various legal proceedings incidental to its
business. While it is not possible to determine the ultimate outcome of
these actions at this time, management is of the opinion that any unaccrued
liability resulting from these claims would not have a material adverse
effect on the Company's consolidated financial position or results of
operations.
8. Acquisition
-----------
On November 4, 1996, the Company acquired Geometrics Corporation, of
Madison, Wisconsin, a developer of specialized medical software used in the
planning of radiation therapy treatments for cancer patients. Geometrics
will operate as a product development unit of the Company's Radiation
Therapy Planning division. In connection with the acquisition, the Company
issued 191 shares having an approximate fair market value of $3.9 million.
The acquisition has been accounted for as a pooling of interests. Prior
period financial statements will not be restated because Geometrics is not
material to the financial position or results of operations of the Company.
9. Other
-----
On September 30, 1996, one of the Company's subsidiaries, ADAC Radiology
Services (ARS), acquired a one-year option to purchase Medical Transition
Strategies, Inc. (MTS) for $500 in cash plus an additional $1.0 million
payable over five years. MTS is in the business of forming and managing
radiology networks. The exercise price of the option is equal to $50 per
validated network under management plus a percentage of each such network's
net revenue in calendar year 1998. The option price and the option
exercise price are, at the option of the Company, payable in cash or Common
Stock. If the option is not exercised by September 30, 1997, the unpaid
portion of the $1.0 million becomes immediately due and payable and any
loans made by ARS to MTS will be canceled and forgiven. In addition,
unless MTS fails to perform certain obligations or there is a material
adverse change in MTS's business resulting from MTS's acts or omissions,
ARS must, if certain of MTS' network revenue goals are achieved, pay MTS a
break-up fee of $500.
10. Recent Pronouncements
---------------------
During March 1995, the Financial Accounting Standards Board issued
Statement No. 121 (SFAS 121), "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to be Disposed Of," which requires
the Company to review for impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets whenever
events or changes in circumstances indicate that the carrying amount of
an asset might not be recoverable. In certain situations, an impairment
loss would be recognized. SFAS 121 will become effective for the Company's
fiscal year ending September 28, 1997.
During October 1995, the Financial Accounting Standard Board issued
Statement No. 123 (SFAS 123), "Accounting for Stock-Based Compensation,"
which established a fair value based method of accounting for stock-based
compensation plans and requires additional disclosures for those companies
who elect to adopt the new method of accounting. The Company intends to
continue to account for stock options under APB Opinion No. 25,
"Accounting for Stock Issued to Employees." SFAS No. 123 will be
effective for fiscal years beginning after December 15, 1995, and will
require the Company to provide additional disclosures in the financial
statements for the fiscal year ending September 28, 1997.
During July 1996, The Financial Accounting Standard Board issued
Statement No. 125 (SFAS 125), "Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities." This statement is
effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996 and is
to be applied prospectively.
At present, the Company's adoption of these pronouncements are not
expected to have a material effect on the Company's financial position or
results of operations.
6
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- -------------------------------------------------------------------------------
OF OPERATIONS
- -------------
The following discussion and analysis should be read in conjunction with the
Company's Condensed Consolidated Financial Statements and related Notes
thereto contained elsewhere within this document. Operating results for the
three month period ended December 29, 1996 are not necessarily indicative of
the results that may be expected for any future periods. Reference should also
be made to the Annual Consolidated Financial Statements, Notes thereto, and
Management's Discussion and Analysis of Financial Condition and Results of
Operations contained in the Company's Annual Report on Form 10-K for the
fiscal year ended September 29, 1996.
RESULTS OF OPERATIONS
THE FIRST QUARTER OF FISCAL 1997 COMPARED TO THE FIRST QUARTER OF FISCAL 1996
- -----------------------------------------------------------------------------
REVENUES AND GROSS MARGIN:
The Company's two primary business units are Medical Systems and Healthcare
Information Systems (HCIS).
Medical Systems. The Medical Systems business unit includes Nuclear Medicine,
- ---------------
Radiation Therapy Planning (RTP) and, to a lesser extent, Digital Systems
Angiography (DSA) products, as well as customer service related to those
products.
Summary information related to Medical Systems' product and service revenues and
gross margins is as follows:
<TABLE>
<CAPTION>
FIRST QUARTER OF
FISCAL YEAR INCREASE
1997 1996 (DECREASE)
--------- -------- --------------------
<S> <C> <C> <C> <C>
Product:
Revenues:
Volume $45,012 $36,812 $8,200 22.3%
Product mix:
Nuclear Medicine 94.2% 95.9%
RTP 5.8% 3.3%
DSA 0.0% 0.8%
Geographical mix:
North America 75.3% 75.5%
Europe 16.2% 16.3%
Other 8.5% 8.2%
Gross margin 42.3% 37.5%
Service:
Revenues $12,763 $10,965 $1,798 16.4%
Gross margin 31.4% 33.3%
</TABLE>
Medical Systems' product revenues increased primarily due to continued customer
acceptance of the Company's nuclear medicine product family, including new
product introductions, and enhancement options. RTP's product revenues also
increased due to the FDA's clearance of Pinnacle 3(TM). Medical Systems'
revenues increased in dollar volume in all of the Company's geographical
markets. Product gross margins for Medical Systems primarily increased due to
reductions in product cost and sales of the Company's new product, Molecular
Coincidence Detection (MCD).
7
<PAGE>
Medical Systems' service revenues increased as a result of an increase in the
Company's installed customer base. Service gross margins decreased slightly,
primarily from increased investments in field service engineers and resources
necessary to continue providing increased customer satisfaction for the
Company's installed customer base.
Healthcare Information Systems ("HCIS"). HCIS includes products comprising the
- ---------------------------------------
hardware, software and related implementations of systems designed to manage
information within the laboratory and radiology departments of healthcare
organizations, as well as service related to those products.
Summary information related to HCIS' product and service revenues and gross
margins is as follows:
<TABLE>
<CAPTION>
FIRST QUARTER OF
FISCAL YEAR INCREASE
1997 1996 (DECREASE)
-------- --------- -------------------
<S> <C> <C> <C> <C>
Product:
Revenues:
Volume $ 6,468 $ 2,896 $3,572 123.3%
Product mix:
Laboratory 59.5% 30.3%
Radiology 40.5% 69.7%
Geographical mix:
North America 100.00% 100.00%
Gross margin 37.1% 46.7%
Service:
Revenues $ 3,998 $ 4,315 ($317) (7.4%)
Gross margin 49.0% 53.2%
</TABLE>
The increase in HCIS' product revenues is attributable to the Company's
QuadRIS(TM) radiology and LabStat(TM) laboratory information systems acquired in
or developed subsequent to the Company's acquisition of CHC
in July 1995. HCIS' product revenues grew in both the laboratory and
radiology product families, although the product mix shifted more towards
laboratory in the first quarter of 1997 compared to the first quarter in the
prior fiscal year. In comparing the first quarter of fiscal 1997 to the fourth
quarter of fiscal 1996, however, this trend has been reversed as sales of the
Company's QuadRIS(TM) product have accelerated compared to LabStat(TM). The
decrease in HCIS' product gross margins is attributable to a greater
percentage of hardware components shipped in the laboratory product family in
the first quarter of fiscal 1997 compared with primarily software components
in the first quarter of fiscal 1996, and product costs associated with the
increased laboratory product family shipments and installations and the
infrastructure required to deliver such products.
HCIS service revenues and margins decreased as a result of lower dollar volume
in service renewal from HCIS' legacy client base while the new laboratory
product client base is at early introductory stages. Additionally, the Company
incurred increased costs associated with the infrastructure required to
deliver such products.
8
<PAGE>
OPERATING AND OTHER EXPENSES:
As a percentage of total revenue the Company's operating and other expenses are
as follows:
<TABLE>
<CAPTION>
FIRST QUARTER OF
FISCAL YEAR
1997 1996
----- -----
<S> <C> <C>
Operating costs and expenses:
Marketing and sales 15.7% 14.9%
Research and development,
net of software capitalization 4.8% 5.3%
General and administrative 6.2% 6.5%
Goodwill amortization 0.3% 0.4%
---- ----
27.0% 27.0%
==== ====
Other expense, net 1.6% 1.5%
==== ====
</TABLE>
Marketing and sales expenses as a percentage of revenue increased due to higher
travel and compensation costs associated with increasing revenues and orders.
Research and development expenditures represent continued investment in new
product development and product enhancement. Net research and development
expenditures increased $0.4 million over the same period in the prior year
from continued investments and product enhancements, but decreased as
percentage of revenue as a result of the consolidation of the Company's
existing radiology business with that of CHC. Capitalized software costs for
the first quarters of fiscal 1997 and 1996 were $1,071 and $1,119,
respectively. General and administrative expenditures as a percentage of
revenue decreased slightly as the Company continued to focus on cost controls.
Goodwill amortization related to the acquisition of CHC in late fiscal 1995.
Other expense, net, primarily consists of interest expense, which increased due
to the Company's increased level of bank borrowings during the first quarter of
fiscal 1997 over the first quarter of fiscal 1996. Foreign currency transaction
gains and losses are also included in other expense, net.
INCOME TAXES:
The effective tax rate as a percentage of pretax income was 36.3% in the first
quarter of fiscal 1997 compared with 36.0% in the first quarter of fiscal 1996.
INFLATION:
The Company does not believe that inflation has had a material effect on its
revenues or results of operations.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Summary information regarding the Company's cash flows, liquidity, and capital
resources is as follows:
<TABLE>
<CAPTION>
FIRST QUARTER OF
FISCAL YEAR
1997 1996
--------- ---------
<S> <C> <C>
Net cash and equivalents generated (used in):
Operating activities $ 544 $ (1,345)
Investing activities (1,494) (1,493)
Financing activities 3,826 1,450
-------- --------
Subtotal 2,876 (1,388)
Effect of exchange rates on cash (270) (406)
-------- --------
Net cash and equivalents generated (used) 2,606 (1,794)
Cash and equivalents at beginning of period 3,081 7,551
-------- --------
Cash and equivalents at end of period $ 5,687 $ 5,757
======== ========
Available bank lines of credit at end of period $ 27,800 $ 19,306
</TABLE>
Net cash provided by operations were primarily due to net income from
operations and a continued decrease in deferred income tax assets as the
Company utilized its tax basis net operating losses. These changes were offset
by increases in accounts receivable, prepaid expenses and increased inventory.
Accounts receivable increased primarily as a result of higher sales volumes
in Europe and in the Company's HCIS business. The increase is also
attributable to the timing of product installations and implementations in the
Medical System's business unit and HCIS business unit, respectively.
Increases in prepaid expenses related to a higher level of prepayments to
inventory vendors along with prepaid royalty arrangements related to new
product and product enhancements. Inventory levels increased to meet
anticipated higher future sales levels.
Net cash used in investing activities during both periods primarily related to
capital expenditures and increases in the capitalized software expenditures.
The increase in cash generated by financing activities was primarily due to
increased short term bank borrowings.
As a result of the above noted operating, financing and investing activities,
and the effect of exchange rates on cash, cash and cash equivalents increased by
$2.6 million compared with a decrease of $1.8 million in the same period of
fiscal 1996.
Borrowings outstanding under the Company's lines of credit at the end of the
first quarter of fiscal 1997 were $32.2 million verses $27.2 million in the
first quarter of fiscal 1996.
The Company believes that its cash and cash equivalents, cash flows from
operations, and, if necessary, remaining lines of credit will be sufficient to
fund the Company's operating cash flow requirements for the next fiscal year.
However, the Company may need to increase its sources of capital through
additional borrowings or the sale of securities in response to business
conditions or to pursue new business opportunities. There can be no assurance
that such additional sources of capital will be available on terms
favorable to the Company, if at all.
The foregoing Management's Discussion and Analysis of Financial Condition and
Results of Operations, including the discussion of product mix and liquidity
and capital resources, contains forward looking statements within the meaning of
the federal securities laws.
These statements are subject to a number of risks and uncertainties that could
cause actual results to differ materially from those projected, including
without limitation those set forth below. The Company expressly disclaims any
obligation to update any forward looking statements.
The medical systems and health care information system markets are
characterized by rapidly evolving technology, intense competition and pricing
pressure. There are a number of companies that currently offer, or are in the
process of developing, products that compete with products offered by the
Company, many of which have substantially greater capital, engineering,
manufacturing and other resources than the Company. These competitors could
develop technologies and products that are more effective than those currently
used or produced by the Company or that could render the Company's products
obsolete or noncompetitive. In addition, as the Company enters new markets,
such as the laboratory information systems market, there can be no assurance
that the Company will be able to penetrate such markets successfully.
ADAC's success is dependent upon the successful development, introduction and
commercialization of new products and the development of enhancements to
existing products. Because the nuclear medicine market is relatively mature,
and from time to time in recent years has experienced a decline, the Company
must continue to develop innovative new products and product enhancements such
as MCD in order to pursue its growth strategy. The success of some products
depends on receipt of appropriate regulatory approvals for and the commercial
availability of specific radiopharmaceuticals. For example, MCD requires the
use of positron emitting isotopes. At this time, the infrastructure for the
commercial supply of such isotopes is not well-developed, certain applicable
regulatory approvals for such isotopes have not yet been obtained, and
reimbursement for the use of such isotopes in connection with MCD is
uncertain. There can be no assurance that the Company will be able to
commercialize its existing products or any new products or enhancements
successfully.
The Company's future operating results may vary substantially from period to
period. The timing and amount of revenues are subject to a number of factors
that make estimation of revenues and operating results prior to the end of the
quarter very uncertain. The timing of revenues can be affected by delays in
product introductions and shipments, as well as general economic and industry
conditions. Furthermore, of the orders received by the Company in any fiscal
quarter, a disproportionately large percentage has typically been received
and shipped toward the end of that quarter. Accordingly, results for a given
quarter can be adversely affected if there is a substantial order shortfall
late in that quarter. In addition, although both the Company's bookings and
revenue have increased steadily in recent periods, bookings cannot necessarily
be relied upon as an accurate predictor of future revenues.
The market price of the Company's Common Stock is and is expected to be
subject to significant fluctuations in response to variations in anticipated
or actual operating results, market speculation, announcements of new products
or technologies by the Company or its competitors, changes in earnings
estimates by the Company's analysts, trends in the health care industry in
general and other factors, many of which are beyond the control of the
Company. In addition, broad market fluctuations as well as general economic or
political conditions or initiatives, such as health care reform, may adversely
impact the market price of the Common Stock regardless of the Company's
operating results.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
----- -----------
Not applicable.
Item 2. Changes in Securities
------- -- ----------
(c) On November 4, 1996, the Company issued 190,561 shares of Common
Stock to the shareholders of Geometrics Corporation as consideration
in the merger of Geometrics into the Company. See Note 8 of Notes to
Condensed Consolidated Financial Statements. The shares were issued
to the four individual shareholders of Geometrics in a transaction
not involving a public offering, pursuant to section 4(2) of he
securities Act of 1933, as amended.
Item 3. Defaults Upon Senior Securities
-------- ---- ------ ----------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------- -- ------- -- - ---- -- -------- -------
Not applicable.
Item 5. Other Information
----- -----------
None.
Item 6. Exhibits and Reports on Form 8-K
-------- --- ------- -- ---- ---
(a) Exhibits:
Exhibit 11.1 - Computation of Net Income Per Share
(b) Form 8-K Reports:
None filed during the fiscal quarter described in this Report on Form 10-Q.
11
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 12, 1997
ADAC Laboratories
---- ------------
(Registrant)
BY: /s/ P. Andre Simone
--------------------
P. Andre' Simone
Vice President and Chief Financial Officer
12
<PAGE>
EXHIBIT 11.1
ADAC LABORATORIES
COMPUTATION OF NET INCOME PER SHARE
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
December 29, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Average shares outstanding 17,929 17,051
Net effect of dilutive stock
options and warrants 1,221 659
------- -------
Average common and common
equivalent shares
outstanding 19,150 17,710
======= =======
Net income $ 5,093 $ 3,541
======= =======
Net income per share $ 0.27 $ 0.20
======= =======
</TABLE>
Primary and fully diluted income per share differs by less than one percent
in all periods presented herein.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-28-1997
<PERIOD-START> SEP-30-1996
<PERIOD-END> DEC-29-1996
<CASH> 5,687
<SECURITIES> 0
<RECEIVABLES> 88,857
<ALLOWANCES> 2,135
<INVENTORY> 36,039
<CURRENT-ASSETS> 145,220
<PP&E> 24,272
<DEPRECIATION> (15,903)
<TOTAL-ASSETS> 196,312
<CURRENT-LIABILITIES> 85,214
<BONDS> 0
0
0
<COMMON> 111,650
<OTHER-SE> (6,366)
<TOTAL-LIABILITY-AND-EQUITY> 196,312
<SALES> 51,604
<TOTAL-REVENUES> 68,365
<CGS> 30,040
<TOTAL-COSTS> 40,838
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</TABLE>
