<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 May 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 June 26, 1995 was 3,674,243.
- 1 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MAY 31, 1995
INDEX
Page
Number
------
Part I Financial Information
Item 1. Financial Information
Consolidated Statements of Operations -
Six Months and Three Months Ended May 31, 1995
(Unaudited) and 1994 (Unaudited) 3
Consolidated Balance Sheets -
May 31, 1995 (Unaudited) and November 30, 1994 4-5
Consolidated Statements of Cash Flows
Six Months Ended May 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 11-14
Signature Page 15
- 2 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
( UNAUDITED )
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
May 31, 1995 May 31, 1995
------------------------ ------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $52,957,943 $58,490,269 $28,089,303 $30,246,723
COST OF GOODS SOLD 41,892,740 46,359,788 22,188,231 23,854,266
----------- ----------- ----------- -----------
GROSS PROFIT 11,065,203 12,130,481 5,901,072 6,392,457
----------- ----------- ----------- -----------
OPERATING EXPENSES
Selling, shipping and warehouse 7,112,659 6,865,285 3,712,780 3,646,497
General and administrative 3,664,158 3,980,674 1,827,799 1,938,665
Interest and financing costs
(net of interest income of $ 81,420
in 1995, $ 83,766 in 1994) 670,298 459,515 358,427 250,839
----------- ----------- ----------- -----------
Total operating expenses 11,447,115 11,305,474 5,899,006 5,836,001
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES ( 381,912) 825,007 2,066 556,456
PROVISION (BENEFIT) FOR INCOME TAXES ( 160,400) 346,000 900 248,300
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE ( 221,512) 479,007 1,166 308,156
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
FOR INCOME TAXES PRIOR TO 1994 ( 60,000)
----------- ----------- ----------- -----------
NET INCOME (LOSS) ( $221,512) $419,007 $1,166 $308,156
=========== =========== =========== ===========
EARNINGS (LOSS) PER COMMON AND
COMMON EQUIVALENT SHARE
BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $ (.06) $ .11 $ .00 $ .07
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
FOR INCOME TAXES PRIOR TO 1994 (.01)
----------- ----------- ----------- -----------
$ (.06) $ .10 $ .00 $ .07
=========== =========== =========== ===========
NUMBER OF SHARES USED IN
COMPUTING EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE 3,622,067 4,845,953 3,641,895 4,870,613
=========== =========== =========== ===========
DIVIDENDS PER COMMON SHARE None None None None
=========== =========== =========== ===========
</TABLE>
The notes to financial statements are made a part hereof.
-3-
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
May 31,
1995 November 30,
(UNAUDITED) 1994
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash $1,559,631 $3,333,345
Accounts receivable, less allowance for
doubtful accounts, of $682,192 in May
1995 and $650,000 in November 1994 23,587,407 26,780,044
Inventory 14,882,235 15,449,465
Deferred income taxes 518,362 518,362
Prepaid expenses and other current assets 1,044,356 771,026
------------ ------------
Total current assets 41,591,991 46,852,242
PROPERTY, PLANT AND EQUIPMENT - at cost
net of accumulated depreciation and
amortization of $3,272,003 at May 1995
and $2,852,004 at November 1994 3,147,446 3,453,607
INTANGIBLE ASSETS - net of accumulated
amortization of $843,071 at May 1995
and $769,088 at November 1994 4,242,680 3,793,654
OTHER ASSETS 161,904 361,584
------------ ------------
$49,144,021 $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
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
May 31,
1995 November 30,
(UNAUDITED) 1994
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of
long term debt $391,742 $437,970
Accounts payable 9,937,307 13,760,015
Accrued expenses and
sundry liabilities 977,522 1,581,341
Due to seller 829,638 931,466
------------ ------------
Total current liabilities 12,136,209 16,710,792
LONG-TERM DEBT, net of
current maturities 18,485,880 19,381,239
DEFERRED INCOME TAXES 302,000 302,000
------------ ------------
Total Liabilities 30,924,089 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 - 3,667,781 in May 1995
- 3,595,409 in November 1994 110,033 107,862
Capital in excess of par value 10,899,769 10,527,552
Retained earnings 7,211,294 7,432,806
Less: Cost of 1,167 shares of common
stock in treasury ( 1,164) ( 1,164)
------------- ------------
Total stockholders' equity 18,219,932 18,067,056
------------- ------------
$49,144,021 $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>
Six Months Ended
May 31,
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ( Loss ) ( $221,512) $419,007
------------ -----------
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 493,982 393,487
Provision for losses on
accounts receivable 32,192 ( 168,011)
Changes in assets and liabilities,
net of effect of asset acquisitions
Due to seller ( 101,828) ( 26,866)
Accounts receivable 3,160,445 580,588
Inventory 567,230 ( 301,140)
Prepaid expenses and other current
assets ( 273,330) ( 315,075)
Other assets 199,680 47,102
Deferred income taxes ( 235,268)
Accounts payable ( 3,822,708) 4,051,163
Accrued expenses and sundry
liabilities ( 603,819) ( 147,682)
------------ ------------
( 348,156) 3,938,298
------------ ------------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES ( 569,668) 4,357,305
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of warrants 216,033 288
Exercise of employee stock options 158,355 28,471
Net borrowings (repayments) under
revolving loan agreements ( 650,000) ( 4,874,694)
Repayment of long-term debt ( 291,587) ( 202,068)
------------ ------------
NET CASH (USED IN)
FINANCING ACTIVITIES ( 567,199) ( 5,048,003)
------------ ------------
</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:
Capital expenditures ( 636,847) ( 763,831)
------------ ------------
NET CASH ( USED IN )
INVESTING ACTIVITIES ( 636,847) ( 763,831)
------------ ------------
NET ( DECREASE ) IN CASH ( 1,773,714) ( 1,454,529)
CASH-beginning of year 3,333,345 2,484,015
------------ ------------
CASH-end of year $1,559,631 $1,029,486
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $751,718 $543,281
============ ============
Income taxes 48,175 $516,154
============ ============
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.
- 7 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
NOTES TO FORM 10-Q
MAY 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
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 six months and earnings per share for the
three months ended May 31, 1995 were 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 six months and three months ended May 31, 1994
were computed based upon the Modified Treasury Stock Method.
- 8 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
MAY 31, 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
For the six months ended May 31, 1995 net sales decreased 9.5% as
compared with the prior year. For the three months ended May 31, 1995 net
sales decreased 7.1% as compared with 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 and
six months ended May 31, 1995 and 1994, the introduction of new products,
changing prices and inflation had no material impact on the Company's
operations.
GROSS PROFIT/OPERATING EXPENSES
Gross Profit expressed as a percent of net sales increased from 20.7% to
20.9% for the six month period ended May 31, 1995 and decreased from
21.1% to 21% for the three month period ended May 31, 1995 when
compared to the prior period due to changes in the product mix. Selling,
shipping and warehouse and general and administrative expenses expressed
as a percent of net sales increased 1.8% for the six months ended May 31,
1995 and increased 1.2% for the three months ended May 31, 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 six months and three months ended May 31,
1995 when compared to the prior period as a result of increases in the
interest rates charged by financial institutions.
- 9 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
MAY 31, 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended May 31, 1995 and 1994 the Company continued
to meet its cash needs via cash flow from operations and borrowings.
During the first six months of fiscal 1995 and fiscal 1994, the company
had an average of approximately $9,700,000 and $12,000,000, respectively,
of unused credit lines available each month over its normal operating
requirements.
For the six months ended May 31, 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 six months ended May
31, 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 generation of cash. During the six months ended May 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.
Management believes that its working capital of approximately $29,500,000
at May 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
MAY 31, 1995
(UNAUDITED)
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On June 23, 1995, the Company held its annual meeting of
stockholders. At the meeting. Bruce J. Haber, Marvin S. Caligor,
Renee Steinberg and K. Deane Reade, Jr. were re-elected as
directors. Mr. Haber received 3,404,671 shares in favor and 18,502
shares against. Mr. Caligor received 3,404,637 in favor and
18,536 shares against. Mr. Reade received 3,405,505 shares in favor
and 17,718 shares against. Mrs. Steinberg received 3,405,455
shares in favor and 17,668 shares against.
At the annual meeting, the stockholders also approved the resolution
which follows with 976,031 shares in favor, 151,054 shares against,
39,222 shares abstained and 2,256,866 shares unvoted.
RESOLVED, that the following amendments to the Company's 1992
Incentive and Non-Qualified Stock Option Plan be ratified, adopted
and approved:
"The proposed amendments would: (a) increase the number of shares
which may be made the subject of options under the 1992 Plan from
850,000 shares to 1,350,000 shares; (b) upon the occurrence of an
acquisition event, as defined in the amended Plan, at the election
of an optionee, permit each optionee to exercise all or any portion
of such optionee's exercisable options by borrowing from the
Company, and the Company shall be obligated to loan such optionee,
an amount equal to the aggregate exercise price of such options
intended to be exercised by such optionee. Such optionee shall use
the proceeds of such loan to exercise such options. Such optionee
shall issue to the Company a promissory note made by such optionee
in a principal amount equal to the amount of such loan. The
optionee shall pledge to the Company to secure the repayment of
such loan all shares of common stock issued to the optionee upon
exercise of options pursuant to this paragraph. At the time of such
loan, such loan shall have a rate of interest and such loan and
pledge shall have such additional terms and conditions all as
determined by the Board or a Committee thereof; (c) upon the
occurrence of a change of control as set forth in clause (iv) of
the definition thereof contained in paragraph 2 of the 1992 Plan,
or upon the occurrence of a change in control as set forth in
clause (i), (ii) or (iii) of the definition thereof contained in
paragraph 2 of the 1992 Plan, which change of control is not
approved by a vote of at least eighty percent (80%) of the
directors that constitute the Board immediately prior to the
occurrence of such change of control, terminate all options as of
the time immediately prior to the occurrence of such change of
control and the respective optionees shall surrender all of their
unexercised options for cancellation by the Company and, upon such
surrender, the optionee shall receive (1) the cash, securities or
other consideration he would have received had he been entitled to
exercise, and had he exercised, such option or options immediately
- 11 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
FORM 10-Q
MAY 31, 1995
(UNAUDITED)
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (CON'T)
prior to such change of control and had he disposed of his shares
issuable upon such exercise in connection with such change of
control (subject to required deductions and withholdings), minus
(2) an amount of cash or fair market value of securities or other
such consideration equal to the exercise price of such option or
options surrendered. Proposal (b) and (c) shall not apply to (i)
all incentive stock options granted prior to stockholder approval
of such proposals, (ii) any non-statutory stock option granted
prior to such approval where a written consent is required to be
obtained from the optionee whose rights have been adversely
affected and such consent is not obtained from the optionee, or
(iii) any option whatsoever where an event of default would be
created under the Company's then existing institutional loan(s) and
such event of default is not waived prior to such occurrence or
cured pursuant to the terms of said loan agreements."
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 Registrant
during the three months ended May 31, 1995.
- 12 -
<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
FORM 10-Q
MAY 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
EXHIBIT 11
COMPUTATION OF EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Six Months Ended Three Months Ended
May 31, May 31,
_________________ __________________
1995 1994 1995 1994
______ ______ ______ ______
<S> <C> <C> <C> <C>
EARNINGS
Income (loss) before cumulative
effect of accounting change $(221,512) $479,007 $ 1,166 $308,156
MODIFIED TREASURY STOCK METHOD
Incremental income 47,973 33,704
________ ________ ________ _______
Adjusted (loss) income before
cumulative effect of
accounting change $(221,512) $526,980 $ 1,166 $341,860
======== ======== ======== ========
SHARES
Weighted average number of
common shares outstanding 3,622,067 3,541,652 3,641,895 3,546,013
Additional shares assuming
conversion of stock options
and warrants utilizing the
modified treasury stock
method 1,304,301 1,324,600
_________ _________ _________ _________
Number of common and common
equivalent shares 3,622,067 4,845,953 3,641,895 4,870,613
========= ========= ========= =========
Earnings (loss) per common
and common equivalent share
Before cumulative effect
of accounting change $(.06) $ .11 $.00 $.07
Cumulative effect of accounting
change for income taxes
prior to 1994
(.01)
--------- --------- --------- -------
Earnings (loss) per common and
common equivalent share $(.06) $ .10 $.00 $.07
========= ========= ========= =========
</TABLE>
- 13 -
<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: July 8, 1995 /s/ Bruce J. Haber
------------------ ------------------------
Bruce J. Haber President
and Chief Executive
Officer
Date: July 8, 1995 /s/ Stuart F. Fleischer
------------------ ------------------------
Stuart F. Fleischer
Vice-President - Finance
and Chief Financial
Officer
- 14 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE SIX MONTHS ENDED MAY 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-START> DEC-01-1994
<PERIOD-END> MAY-31-1995
<CASH> 1,559,631
<SECURITIES> 0
<RECEIVABLES> 24,269,599
<ALLOWANCES> 682,192
<INVENTORY> 14,882,235
<CURRENT-ASSETS> 41,591,991
<PP&E> 6,419,449
<DEPRECIATION> 3,272,003
<TOTAL-ASSETS> 49,144,021
<CURRENT-LIABILITIES> 12,136,209
<BONDS> 18,485,880
<COMMON> 110,033
0
0
<OTHER-SE> 18,109,899
<TOTAL-LIABILITY-AND-EQUITY> 49,144,021
<SALES> 52,957,943
<TOTAL-REVENUES> 52,957,943
<CGS> 41,892,740
<TOTAL-COSTS> 41,892,740
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 48,000
<INTEREST-EXPENSE> 670,298
<INCOME-PRETAX> (381,912)
<INCOME-TAX> (160,400)
<INCOME-CONTINUING> (221,512)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (221,512)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> 0
</TABLE>
