<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended August 31, 1995
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: 0-12665
- -------------------------------
MICRO BIO-MEDICS, INC.
----------------------------------------------------------
(Exact name of Registrant as specified in its charter)
New York 13-2692560
------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
846 Pelham Parkway
- ----------------------
Pelham Manor, New York 10803
- ---------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (914) 738-8400
--------------
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
---- ----
The number of shares of Registrant's Common Stock, par value $.03 per share
outstanding as of September 30, 1995 was 3,869,163
- 1 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED AUGUST 31, 1995
INDEX
_____
Page
Number
------
Part I Financial Information
Item 1. Financial Information
Consolidated Statements of Operations -
Nine Months and Three Months Ended August 31, 1995
(Unaudited) and 1994 (Unaudited) 3
Consolidated Balance Sheets -
August 31, 1995 (Unaudited) and November 30, 1994 4-5
Consolidated Statements of Cash Flows
Nine Months Ended August 31, 1995 (Unaudited)
and 1994 (Unaudited) 6-7
Notes to Consolidated Financial Statements (Unaudited) 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-10
Part II 11
Signature Page 12
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
--------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
August 31, 1995 August 31, 1995
--------------------------------------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $89,585,410 $92,562,689 $36,627,467 $34,072,420
COST OF GOODS SOLD 70,558,869 72,701,905 28,666,129 26,342,117
------------ ------------ ------------ ------------
GROSS PROFIT 19,026,541 19,860,784 7,961,338 7,730,303
------------ ------------ ------------ ------------
OPERATING EXPENSES
Selling, shipping and warehouse 10,926,236 10,726,607 3,813,577 3,861,322
General and administrative 5,754,148 6,140,536 2,089,990 2,159,862
Interest and financing costs
(net of interest income of $ 124,828
in 1995, $ 156,481 in 1994) 975,685 718,945 305,387 259,430
------------ ------------ ------------ ------------
Total operating expenses 17,656,069 17,586,088 6,208,954 6,280,614
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 1,370,472 2,274,696 1,752,384 1,449,689
PROVISION FOR INCOME TAXES 575,600 955,000 736,000 609,000
------------ ------------ ------------ ------------
INCOME BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $794,872 $1,319,696 $1,016,384 $840,689
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
FOR INCOME TAXES PRIOR TO 1994 (60,000) --
------------ ------------ ------------ ------------
NET INCOME $794,872 $1,259,696 $1,016,384 $840,689
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE
BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $ .19 $ .29 $ .21 $ .18
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
FOR INCOME TAXES PRIOR TO 1994 (.01) --
------------ ------------ ------------ ------------
$ .19 $ .28 $ .21 $ .18
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
NUMBER OF SHARES USED IN
COMPUTING EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE 5,086,857 4,894,203 5,111,638 4,990,703
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
DIVIDENDS PER COMMON SHARE None None None None
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
The notes to financial statements are made a part hereof.
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------------------
ASSETS
--------
<TABLE>
<CAPTION>
August 31,
1995 November 30,
(UNAUDITED) 1994
----------- ------------
<S> <C> <C>
CURRENT ASSETS
Cash $1,548,081 $3,333,345
Accounts receivable, less allowance for
doubtful accounts, of $685,195 in August
1995 and $650,000 in November 1994 29,283,812 26,780,044
Inventory 13,590,160 15,449,465
Deferred income taxes 518,362 518,362
Prepaid expenses and other current assets 798,290 771,026
----------- -----------
Total current assets 45,738,705 46,852,242
PROPERTY, PLANT AND EQUIPMENT - at cost
net of accumulated depreciation and
amortization of $3,482,003 at August 1995
and $2,852,004 at November 1994 3,149,336 3,453,607
INTANGIBLE ASSETS - net of accumulated
amortization of $891,671 at August 1995
and $769,088 at November 1994 4,332,031 3,793,654
OTHER ASSETS 164,351 361,584
------------ ------------
$53,384,423 $54,461,087
------------ ------------
------------ ------------
</TABLE>
The notes to financial statements are made a part hereof.
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
<TABLE>
<CAPTION>
August 31,
1995 November 30,
(UNAUDITED) 1994
---------------- -------------
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of
long term debt $316,742 $437,970
Accounts payable 14,050,919 13,760,015
Accrued expenses and
sundry liabilities 1,608,132 1,581,341
Due to seller 829,638 931,466
-------------- -----------
Total current liabilities 16,805,431 16,710,792
LONG-TERM DEBT, net of
current maturities 16,955,023 19,381,239
DEFERRED INCOME TAXES 302,000 302,000
-------------- -----------
Total Liabilities 34,062,454 36,394,031
-------------- -----------
STOCKHOLDERS' EQUITY
Preferred stock $ 1.00 par value
Authorized-1,000,000 shares
no shares issued - -
Common stock $.03 par value
Authorized - 7,000,000 shares
Issued - 3,682,784 in August 1995
- 3,595,409 in November 1994 110,483 107,862
Capital in excess of par value 10,985,076 10,527,552
Retained earnings 8,227,574 7,432,806
Less: Cost of 1,167 shares of common
stock in treasury (1,164) (1,164)
--------------- -----------
Total stockholders' equity 19,321,969 18,067,056
--------------- -----------
$53,384,423 $54,461,087
--------------- -----------
--------------- -----------
</TABLE>
The notes to financial statements are made a part hereof.
- 5 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
---------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended
August 31,
-------------------------------
1995 1994
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $794,872 $1,259,696
------------- ------------
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Expenses not requiring the use of cash:
Cumulative effect of accounting change
income taxes prior to 1994 60,000
Depreciation and amortization 752,582 590,607
Provision for losses on
accounts receivable 72,000 72,000
Changes in assets and liabilities,
net of effect of asset acquisitions
Due to seller (101,828) (26,866)
Accounts receivable (2,575,768) (4,033,857)
Inventory 1,859,305 1,163,415
Prepaid expenses and other current
assets (27,264) (810,772)
Other assets 197,233 45,605
Accounts payable 290,904 7,218,515
Accrued expenses and sundry
liabilities 26,791 474,461
Income taxes payable 146,866
------------- ------------
493,955 4,899,974
------------- ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,288,827 6,159,670
------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of warrants 280,815 2,538
Exercise of employee stock options 179,330 55,525
Net (repayments) under
revolving loan agreements (2,150,000) (3,874,694)
Proceeds from long term debt 202,658
Repayment of long-term debt (397,444) (252,477)
------------- ------------
NET CASH (USED IN)
FINANCING ACTIVITIES (2,087,299) (3,866,450)
------------- ------------
</TABLE>
The notes to financial statements are made a part hereof
- 6 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
---------------------------------------
(CONTINUED)
<TABLE>
<CAPTION>
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of business (661,977)
Capital expenditures (325,832) (275,569)
Purchase of intangibles (660,960) (868,655)
---------------- -----------
NET CASH (USED IN)
INVESTING ACTIVITIES (986,792) (1,806,201)
---------------- -----------
NET INCREASE (DECREASE) IN CASH (1,785,264) 487,019
CASH-beginning of year 3,333,345 2,484,015
---------------- -----------
CASH-end of year $1,548,081 $2,971,034
---------------- -----------
---------------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $1,100,513 $875,426
---------------- -----------
---------------- -----------
Income taxes $356,294 $743,021
---------------- -----------
---------------- -----------
BUSINESS ACQUIRED FOR ISSUANCE OF
LONG TERM DEBT which is not reflected
in the above statement
$16,924,760
---------------- -----------
---------------- -----------
</TABLE>
The notes to financial statements are made part hereof.
- 7 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
NOTES TO FORM 10-Q
AUGUST 31, 1995
(UNAUDITED)
-----------------------------------------
NOTE A
The attached summarized financial information does not include all
disclosures required to be included in a complete set of financial
statements prepared in conformity with generally accepted accounting
principles. Such disclosures were included with the consolidated financial
statements of the Company at November 30, 1994, included in its annual report on
Form 10-K. Such statements should be read in conjuction with the data herein.
NOTE B
The financial information reflects all normal recurring adjustments
which, in the opinion of management, are deemed necessary for a fair
presentation of the results for the interim periods. The results for the interim
periods are not necessarily indicative of the results to be expected for the
year.
NOTE C - ACQUISITION
On March 27, 1995, the Company acquired certain assets and customer
accounts of Mid County Medical Supply Co., Inc., a distributor of physician and
hospital supplies for approximately $500,000. The purchase price was allocated
based upon the fair market value of the assets at the date of acquisition.
NOTE D - EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Earnings per common and common equivalent share are based on the
weighted average number of common shares and common equivalent shares
outstanding during the period. The modified treasury stock method was utilized
to calculate the dilutive effect of the options and warrants upon the earnings
per share data.
- 8 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
AUGUST 31, 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
For the three months ended August 31, 1995 net sales increased 7.5% as compared
with the prior year. For the nine months ended August 31, 1995 net sales
decreased 3.2%. The increase in net sales for the three months ended August 31,
1995 resulted from our continuing effort to increase market penetration and
sales volume to our existing customer base and the addition of new customers.
The decrease in net sales for the nine months ended August 31, 1995 resulted in
our downsizing of unprofitable divisions acquired from Clark Surgical Corp.
during the prior year. During the three months and nine months ended August 31,
1995 and 1994, the introduction of new products, changing prices and inflation
had no material impact on the Company's operations.
Net operating income for the three months ended August 31, 1995 was 2.8% of net
sales versus 2.5% of net sales in 1994. Net operating income, before the
cumulative effect of accounting change, for the nine months ended August 31,
1995 was .9% of net sales versus 1.4% of net sales in 1994.
GROSS PROFIT/OPERATING EXPENSES
- -------------------------------
Gross Profit expressed as a percent of net sales decreased from 21.5% to 21.2%
for the nine month period ended August 31, 1995 and decreased from 22.7% to
21.7% for the three month period ended August 31, 1995 due to changes in the
product mix and increased sales to hospitals. Selling, shipping and warehouse
and general and administrative expenses expressed as a percent of net sales
increased .4 % for the nine months ended August 31, 1995 and decreased 1.6% for
the three months ended August 31, 1995.
INTEREST AND FINANCING COSTS (NET OF INTEREST INCOME)
- -----------------------------------------------------
Interest expense net of interest income expressed as a percent of net sales
increased .3% for the nine months ended August 31, 1995 and remained constant
for the three months ended August 31, 1995, when compared to the prior year, as
a result of increases in accounts receivable and increases in the interest rates
charged by financial institutions.
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
AUGUST 31, 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the nine months ended August 31, 1995 and 1994 the Company continued to
meet its cash needs via cash flow from operations and borrowings. During the
first nine months of fiscal 1995 and fiscal 1994, the company had an average of
approximately $10,500,000 and $12,000,000, respectively, of unused credit lines
available each month over its normal operating requirements.
For the nine months ended August 31, 1995, the Company generated cash from
operating activities. An increase in accounts payable, a decrease in inventory,
an increase in accounts receivable and prepaid expenses and other current assets
contributed to the Company's generation of cash. For the nine months ended
August 31, 1994, the Company generated cash from operating activities. An
increase in accounts payable, a decrease in inventory, an increase in accounts
receivable and prepaid expenses and other current assets contributed to the
Company's generation of cash. During the nine months ended August 31, 1995 and
1994, the Company's financing activities used cash as a result of repayments of
the bank loan under its long-term credit agreement. For the nine months ended
August 31, 1995 and 1994, the Company used cash in investing activities to make
capital expenditures.
Management believes that its working capital of approximately $28,900,000 at
August 31, 1995 provides sufficient liquidity for its short and long-term
requirements and that the Company's long-term liquidity is not materially
effected by any restrictive covenants contained in the Company's Revolving
Credit Agreement. Further, Management believes that the Company should not
experience a problem in connection with the maintenance of such covenants and
that its $25,000,000 line of credit provides the Company with the resources it
reasonably expects to require to meet its cash commitments through fiscal 1995.
- 10 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
FORM 10-Q
AUGUST 31, 1995
(UNAUDITED)
-----------------------------------------
Item 6 - Exhibits and Reports on Form 8-K
_________________________________
a. Exhibit 11 - Earnings per share
Exhibit 27 - Financial Data Schedule
b. No report on Form 8-K was required to be filed by the Company
during the quarter ended August 31, 1995.
- 11 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
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.
MICRO BIO-MEDICS, INC.
----------------------
Registrant
Date: September 29, 1995
/s/ Bruce J. Haber
------------------ ------------------------
Bruce J. Haber President
and Chief Executive
Officer
Date: September 29, 1995
/s/ Stuart F. Fleischer
------------------ ------------------------
Stuart F. Fleischer
Vice-President - Finance
and Chief Financial
Officer
- 12 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
FORM 10-Q
AUGUST 31, 1995
(UNAUDITED)
---------------------------------------
Exhibit 11
- ----------------------------------
<TABLE>
<CAPTION>
Computation of Earnings per Common and Common Equivalent Share
--------------------------------------------------------------------
Nine Months Ended Three Months Ended
August 31, August 31,
----------------- ------------------
1995 1994 1995 1994
----- ----- ----- -----
<S> <C> <C> <C> <C>
Earnings
- --------
Income before cumulative
effect of accounting change $794,872 $1,319,696 $1,016,384 $840,689
Modified Treasury Stock Method
- ------------------------------
Incremental Income 166,760 99,446 42,063 51,474
--------- --------- --------- ---------
Adjusted income before
cumulative effect of
accounting change $961,632 $1,419,142 $1,058,447 $892,163
--------- --------- --------- ---------
--------- --------- --------- ---------
Shares
- ------
Weighted average number of
common shares outstanding 3,640,242 3,545,176 3,676,592 3,552,225
Additional shares assuming
conversion of stock options
and warrants utilizing the
modified treasury
stock method 1,446,615 1,349,027 1,435,046 1,438,478
--------- --------- --------- ---------
Number of common and common
equivalent shares 5,086,857 4,894,203 5,111,638 4,990,703
--------- --------- --------- ---------
--------- --------- --------- ---------
Earnings per common and common
equivalent share
Before cumulative effect
of accounting change $.19 $.29 $.21 $.18
Cumulative effect of accounting
change for income taxes
prior to 1994 -- (.01) -- --
--------- --------- --------- ---------
Earnings per common and common
equivalent share $.19 $.28 $.21 $.18
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM FORM 10Q FOR THE NINE
MONTHS ENDED AUGUST 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-START> DEC-01-1995
<PERIOD-END> AUG-31-1995
<CASH> 1,548,081
<SECURITIES> 0
<RECEIVABLES> 29,969,007
<ALLOWANCES> 685,195
<INVENTORY> 13,590,160
<CURRENT-ASSETS> 45,738,705
<PP&E> 6,631,339
<DEPRECIATION> 3,482,003
<TOTAL-ASSETS> 53,384,423
<CURRENT-LIABILITIES> 16,805,431
<BONDS> 16,955,023
<COMMON> 110,483
0
0
<OTHER-SE> 19,211,486
<TOTAL-LIABILITY-AND-EQUITY> 53,384,423
<SALES> 89,585,410
<TOTAL-REVENUES> 89,585,410
<CGS> 70,558,869
<TOTAL-COSTS> 70,558,869
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 72,000
<INTEREST-EXPENSE> 975,685
<INCOME-PRETAX> 1,370,472
<INCOME-TAX> 576,600
<INCOME-CONTINUING> 794,872
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 794,872
<EPS-PRIMARY> 0
<EPS-DILUTED> .19
</TABLE>
