<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 February 28, 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
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MICRO BIO-MEDICS, INC.
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(Exact name of Registrant as specified in its charter)
New York 13-2692560
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
846 Pelham Parkway
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Pelham Manor, New York 10803
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (914) 738-8400
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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
---- ----
The number of shares of Registrant's Common Stock, par value $.03 per
share outstanding as of April 7, 1995 was 3,640,874.
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED FEBRUARY 28, 1995
INDEX
Page
Number
------
Part I Financial Information
Item 1. Financial Information
Consolidated Statements of Operations -
Three Months Ended February 28, 1995 (Unaudited)
and 1994 (Unaudited) 3
Consolidated Balance Sheets -
February 28, 1995 (Unaudited) and November 30, 1994 4-5
Consolidated Statements of Cash Flows
Three Months Ended February 28, 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 11-12
Signature Page 13
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
( UNAUDITED )
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
February 28, February 28,
1995 1994
----------- -----------
<S> <C> <C>
NET SALES $24,868,640 $28,243,546
COST OF GOODS SOLD 19,704,509 22,505,522
-------------------------
GROSS PROFIT 5,164,131 5,738,024
-------------------------
OPERATING EXPENSES
Selling, shipping and warehouse 3,399,879 3,218,788
General and administrative 1,836,359 2,042,009
Interest and financing costs
(net of interest income of $ 55,067
in 1995, $ 52,851 in 1994) 311,871 208,676
-------------------------
Total operating expenses 5,548,109 5,469,473
-------------------------
INCOME (LOSS) BEFORE INCOME TAXES ( 383,978) 268,551
PROVISION (BENEFIT) FOR INCOME TAXES ( 161,300) 97,700
-------------------------
INCOME BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE ( 222,678) 170,851
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
FOR INCOME TAXES PRIOR TO 1994 ( 60,000)
-------------------------
NET INCOME (LOSS) ( $222,678) $110,851
=========================
EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE
BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $ (.06) $ .04
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
FOR INCOME TAXES PRIOR TO 1994 (.01)
-------------------------
$ (.06) $ .03
=========================
NUMBER OF SHARES USED IN
COMPUTING EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE 3,602,240 4,821,292
=========================
DIVIDENDS PER COMMON SHARE None None
============ ============
</TABLE>
The notes to financial statements are made a part hereof.
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
February 28,
1995 November 30,
(UNAUDITED) 1994
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<S> <C> <C>
CURRENT ASSETS
Cash $2,062,817 $3,333,345
Accounts receivable, less allowance for
doubtful accounts, of $667,350 in February
1995 and $650,000 in November 1994 23,415,498 26,780,044
Inventory 15,303,303 15,449,465
Deferred income taxes 518,362 518,362
Prepaid expenses and other current assets 1,212,258 771,026
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Total current assets 42,512,238 46,852,242
PROPERTY, PLANT AND EQUIPMENT - at cost
net of accumulated depreciation and
amortization of $3,062,003 at February 1995
and $2,852,004 at November 1994 3,287,697 3,453,607
INTANGIBLE ASSETS - net of accumulated
amortization of $794,471 at February 1995
and $769,088 at November 1994 3,870,002 3,793,654
OTHER ASSETS 151,958 361,584
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$49,821,895 $54,461,087
============ ============
</TABLE>
The notes to financial statements are made a part hereof.
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
February 28,
1995 November 30,
(UNAUDITED) 1994
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<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of
long term debt $492,970 $437,970
Accounts payable 10,227,041 13,760,015
Accrued expenses and
sundry liabilities 1,205,060 1,581,341
Due to seller 808,876 931,466
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Total current liabilities 12,733,947 16,710,792
LONG-TERM DEBT, net of
current maturities 18,801,979 19,381,239
DEFERRED INCOME TAXES 302,000 302,000
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Total Liabilities 31,837,926 36,394,031
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STOCKHOLDERS' EQUITY ( Note D)
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 - 3,627,252 in February 1995
- 3,595,409 in November 1994 108,817 107,862
Capital in excess of par value 10,666,188 10,527,552
Retained earnings 7,210,128 7,432,806
Less: Cost of 1,167 shares of common
stock in treasury ( 1,164) ( 1,164)
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Total stockholders' equity 17,983,969 18,067,056
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$49,821,895 $54,461,087
============= ============
</TABLE>
The notes to financial statements are made a part hereof.
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
February, 28
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1995 1994
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ( loss ) ( $222,678) $110,851
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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 235,382 196,327
Provision for losses on
accounts receivable 17,350 ( 171,282)
Exercise of employee stock options 46,124
Changes in assets and liabilities,
net of effect of asset acquisitions
Accounts receivable 3,347,196 1,776,154
Inventory 146,162 ( 1,458,851)
Prepaid expenses and other current
assets ( 441,232) ( 672,474)
Other assets 209,626 39,989
Deferred income taxes ( 5,000)
Accounts payable ( 3,532,974) 4,739,671
Accrued expenses and sundry
liabilities ( 376,281) 658,458
Due to seller ( 122,590) 43,133
Income taxes payable 11,500
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( 517,361) 5,263,749
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NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES ( 740,039) 5,374,600
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of warrants 32,460
Exercise of employee stock options 107,131
Additional costs of stock offering ( 45,504)
Net borrowings (repayments) under
revolving loan agreements ( 400,000) ( 5,124,694)
Repayment of long-term debt ( 124,260) ( 101,950)
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NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES ( 384,669) ( 5,272,148)
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</TABLE>
The notes to financial statements are made a part hereof
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(CONTINUED)
<TABLE>
<CAPTION>
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ( 145,820) ( 518,295)
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NET CASH USED IN
INVESTING ACTIVITIES ( 145,820) ( 518,295)
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NET INCREASE ( DECREASE ) IN CASH ( 1,270,528) ( 415,843)
CASH-beginning of year 3,333,345 2,484,015
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CASH-end of year $2,062,817 $2,068,172
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $366,938 $261,527
============ ============
Income taxes $48,060 $68,052
============ ============
BUSINESS ACQUIRED FOR ISSUANCE OF
LONG TERM DEBT which is not reflected
in the above statement $16,483,442
=============
</TABLE>
The notes to financial statements are made part hereof.
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
NOTES TO FORM 10-Q
FEBRUARY 28, 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
conjunction 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
Effective 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 (LOSS) PER SHARE
Loss per share for the three month period ended February 28, 1995
was computed based upon the weighted average number of common
shares outstanding as using outstanding options and warrants would
be anti-dilutive. Earnings per share for the three month period
ended February 28, 1994 was computed based upon the Modified
Treasury Stock Method.
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
FEBRUARY 28, 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
For the three months ended February 28, 1995 net sales decreased 12% from
the prior year. The decrease in net sales resulted from our downsizing of
unprofitable divisions acquired from Clark Surgical Corp. during the
prior year. For the three months ended February 28, 1995, the
introduction of new products, changing prices and inflation had no
material impact on the Company's operations.
OPERATING EXPENSES
Gross Profit expressed as a percent of net sales increased from 20.3% to
20.8% for the three month period ended February 28, 1995 due to changes
in the product mix. Selling, shipping and warehouse and general and
administrative expenses expressed as a percent of net sales increased
2.5% for the three months ended February 28, 1995 when compared to the
prior period.
INTEREST AND FINANCING COSTS (NET OF INTEREST INCOME)
Interest expense net of interest income expressed as a percent of net
sales increased .5% for the three months ended February 28, 1995 when
compared to the prior period as a result of increases in the interest
rates charged by financial institutions.
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
FEBRUARY 28, 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended February 28, 1995 the Company continued to
meet its cash needs via cash flow from operations and borrowings. During
the three months ended February 28, 1995 and 1994 the Company had an
average of approximately $10,300,000 and $12,100,000, respectively, of
unused credit lines available each month over its normal operating
requirements.
For the three months ended February 28, 1995, the Company used cash from
operating activities. The decrease in accounts payable and accrued
expenses over and above the decrease in accounts receivable and inventory
contributed to the Company's use of cash. For the three months ended
February 28, 1994, the Company generated cash from operating
activities. The decrease in accounts receivable and the increase in
accounts payable over and above the increase in inventory and
prepaid expenses contributed to the Company's use of cash. During the
three months ended February 28, 1995 and February 28, 1994, the Company's
financing activities used cash as a result of repayments of the bank loan
under its long-term credit agreement.
Management believes that its working capital of approximately $29,800,000
at February 28, 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 $25,000,000 line of credit
provides the Company with the resources it reasonably expects to require
to meet its cash commitments through fiscal 1995.
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
NOTES TO FORM 10-Q
FEBRUARY 28, 1995
(UNAUDITED)
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits - Earnings per share
b. No report on Form 8-K was required to be filed by Registrant
during the quarter ended February 28, 1995.
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
FORM 10-Q
FEBRUARY 28, 1995
(UNAUDITED)
EXHIBIT 11
COMPUTATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
<TABLE>
<CAPTION>
Three Months Ended
February 28,
------------------
1995 1994
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<S> <C> <C>
EARNINGS
(Loss) income before cumulative effect
of accounting change ($ 222,678) $ 170,851
MODIFIED TREASURY STOCK METHOD
Incremental income 14,269
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Adjusted income before cumulative effect
of accounting change ($ 222,678) $ 185,120
=========== ==========
SHARES
Weighted average number of
common shares outstanding 3,602,240 3,537,290
Additional shares assuming conversion of:
Stock options and warrants utilizing the
modified treasury stock method 1,284,002
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Number of common and common
equivalent shares 3,602,240 4,821,292
========= ==========
(Loss) Earnings per common and common
equivalent share
Before cumulative effect of
accounting change ($.06) $.04
Cumulative effect of accounting change
for income taxes prior to 1994 __ (.01)
--------- --------
(Loss) Earnings per common and common
equivalent share ($.06) $.03
========= ========
</TABLE>
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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: April 11, 1995 /s/ Bruce J. Haber
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Bruce J. Haber President
and Chief Executive
Officer
Date: April 11, 1995 /s/ Gary L. Butler
------------------ ---------------------
Gary L. Butler
Treasurer and Chief
Financial and Accounting
Officer
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