<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, 1997
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
_______________
____________________________________________________________________
(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 3, 1997 was 5,092,171
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED FEBRUARY 28, 1997
INDEX
_____
Page
Number
_______
Part I Financial Information
Item 1. Financial Information
Consolidated Statements of Operations -
Three Months Ended February 28, 1997 (Unaudited)
and February 29, 1996 (Unaudited) 3
Consolidated Balance Sheets -
February 28, 1997 (Unaudited) and November 30, 1996 4-5
Consolidated Statements of Cash Flows
Three Months Ended February 28, 1997 (Unaudited)
and February 29, 1996 (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 )
Three Months Ended
---------------------------
February 28, February 29,
1997 1996
------------ ------------
NET SALES $38,004,627 $29,887,421
COST OF GOODS SOLD 30,670,850 23,591,909
----------- -----------
GROSS PROFIT 7,333,777 6,295,512
----------- -----------
OPERATING EXPENSES
Selling, shipping and warehouse 4,501,452 3,823,293
General and administrative 2,355,750 2,006,500
Interest and financing costs
(net of interest income of $ 45,251
in 1997, $ 35,728 in 1996) 99,739 314,103
----------- -----------
Total operating expenses 6,956,941 6,143,896
----------- -----------
INCOME BEFORE INCOME TAXES 376,836 151,616
PROVISION FOR INCOME TAXES 158,300 63,700
----------- -----------
NET INCOME $ 218,536 $ 87,916
=========== ===========
EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE $ 0.04 $ 0.02
=========== ===========
NUMBER OF SHARES USED IN
COMPUTING EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE 6,149,343 5,499,024
=========== ===========
DIVIDENDS PER COMMON SHARE None None
=========== ===========
The notes to financial statements are made a part hereof.
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MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
------------------------------
ASSETS
------------
February 28,
1997 November 30,
(UNAUDITED) 1996
------------ ------------
CURRENT ASSETS
Cash $ 354,864 $ 1,513,750
Accounts receivable, less allowance for
doubtful accounts, of $688,475 at February
1997 and $686,179 at November 1996 30,694,116 31,280,932
Inventory 15,355,018 13,488,244
Deferred income taxes 781,500 781,500
Prepaid expenses and other current assets 707,329 875,451
Prepaid income taxes 263,358 329,918
------------ ------------
Total current assets 48,156,185 48,269,795
PROPERTY, PLANT AND EQUIPMENT - at cost
net of accumulated depreciation and
amortization of $3,709,070 at February 1997
and $3,433,070 at November 1996 3,665,123 3,758,348
INTANGIBLE ASSETS - net of accumulated
amortization of $ 1,262,059 at February 1997
and $1,155,260 at November 1996 8,605,198 8,254,087
OTHER ASSETS 161,586 161,586
------------ ------------
$60,588,092 $60,443,816
============ ============
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
---------------------------------------
February 28,
1997 November 30,
(UNAUDITED) 1996
------------ ------------
CURRENT LIABILITIES:
Current maturities of
long term debt $ 432,755 $ 432,755
Accounts payable 19,224,267 17,182,644
Accrued expenses and
sundry liabilities 2,116,424 2,542,174
------------ ------------
Total current liabilities 21,773,446 20,157,573
LONG-TERM DEBT, net of
current maturities 6,966,659 8,714,567
DEFERRED INCOME TAXES 179,911 179,911
------------ ------------
Total Liabilities 28,920,016 29,052,051
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock $ 1.00 par value
Authorized-1,000,000 shares
no shares issued - -
Common stock $.03 par value
Authorized - 20,000,000 shares
Issued - 5,074,015 in February 1997
- 5,062,115 in November 1996 152,220 151,863
Capital in excess of par value 21,011,954 20,954,536
Retained earnings 10,505,066 10,286,530
Less: Cost of 1,167 shares of common
stock in treasury (1,164) (1,164)
------------ ------------
Total stockholders' equity 31,668,076 31,391,765
------------ ------------
$60,588,092 $60,443,816
============ ============
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)
Three Months Ended
--------------------------
February 28, February 29,
1997 1996
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 218,536 $ 87,916
------------ ------------
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Expenses not requiring the use of cash:
Depreciation and amortization 382,799 282,711
Provision for losses on
accounts receivable 2,296 5,701
Changes in assets and liabilities,
Accounts receivable 584,520 (505,445)
Inventory (1,866,774) 310,648
Prepaid expenses and other current
assets 168,122 (29,315)
Other assets (328,226)
Income taxes 66,560 62,154
Accounts payable 2,041,623 1,219,346
Accrued expenses and sundry
liabilities (425,750) (216,319)
------------ ------------
953,396 801,255
------------ ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 1,171,932 889,171
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of warrants 41,022
Exercise of employee stock options 57,775 20,125
Net repayments under
revolving loan agreements (2,500,000) (1,500,000)
Repayment of long-term debt (179,457) (158,446)
Proceeds of long term debt 931,549
------------ ------------
NET CASH USED IN
FINANCING ACTIVITIES $(1,690,133) $(1,597,299)
------------ ------------
The notes to financial statements are made a part hereof
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
---------------------------------------
(CONTINUED)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures $ (182,775) $ (138,563)
Payments for intangible assets (457,910) (128,791)
------------ ------------
NET CASH USED IN
INVESTING ACTIVITIES (640,685) (267,354)
------------ ------------
NET DECREASE IN CASH (1,158,886) (975,482)
CASH-beginning of period 1,513,750 2,817,285
------------ ------------
CASH-end of period $ 354,864 $ 1,841,803
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ 149,851 $ 349,831
============ ============
Income taxes $ 28,811 $ 1,500
============ ============
BUSINESS ACQUIRED FOR ISSUANCE OF STOCK
which is not reflected in the above
statement $ 3,228,004
============
The notes to financial statements are made part hereof.
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
NOTES TO FORM 10-Q
FEBRUARY 28, 1997
(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, 1996, includedin its annual report on Form 10-K. Such statements should be
read inconjunction 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 - SUBSEQUENT EVENT
On March 7, 1997, the Company entered into an agreement and plan of merger
whereby HSI Acquisition Corp., a wholly-owned subsidiary of Henry Schein,
Inc.("Schein"), will merge into the Company. The Company will be the surviving
corporation as a subsidiary of Schein. Schein is a marketer of healthcare
products and services to office-based healthcare practitioners including dental
practices and laboratories, physician practices and veterinary clinics in the
North American and European markets. As a result of the transaction, outstanding
shares of the Company's common stock will be exchanged at a rate of .62 shares
of Schein's common stock for each outstanding share of the Company. Existing
options and warrants will be exchanged for Schein's options and warrants at the
same rate. It is intended that the merger shall qualify as a tax free
reorganization for income tax purposes and accounted for as a pooling of
interests for financial reporting purposes.
The completion of the transaction is subject to approval by the Company's
shareholders and to termination of any waiting period under the
Hart-Scott-Rodino Act, and further, all dissenting shares shall not constitute
more than 9% of the Company's outstanding common stock immediately prior to the
effective date of the merger.
For additional information on this plan of merger reference is made to the
Company's Form 10K for its year ended November 30, 1996.
NOTE D - EARNINGS PER 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.
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
FEBRUARY 28, 1997
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
__________________________________________________
RESULTS OF OPERATIONS
_____________________
For the three months ended February 28, 1997 net sales increased 27.2%
from the prior year. The increase in net sales resulted from the Company's
increased volume to hospitals, the acquisition of Stone Medical Supply Corp. and
our continuing effort to gain market penetration and sales volume from our
existing customer base and the addition of new customers. For the three months
ended February 28, 1997, 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 decreased from 21.1% to 19.3%
for the three month period ended February 28, 1997 due to increased sales to
hospitals and changes in the product mix. Selling, shipping and warehouse and
general and administrative expenses expressed as a percent of net sales
decreased 1.5% for the three months ended February 28, 1997 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
decreased .8% for the three months ended February 28, 1997 when compared to the
prior period as a result of using the proceeds from the conversion of
outstanding warrants to decrease long-term debt and decreases in the interest
rates charged by financial institutions.
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
FEBRUARY 28, 1997
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
__________________________________________________
LIQUIDITY AND CAPITAL RESOURCES
_______________________________
During the three months ended February 28, 1997, the Company continued to meet
its cash needs via cash flow from operations and borrowings. During the three
months ended February 28, 1997 and 1996, the Company had an average of
approximately $20,000,000 and $12,300,000, respectively, of unused credit lines
available each month over its normal operating requirements.
For the three months ended February 28, 1997, the Company provided cash from
operating activities. The increase in accounts payable and a decrease in
accounts receivable over and above an increase in inventory contributed to the
Company's cash. For the three months ended February 29, 1996, the Company
provided cash from operating activities. The increase in accounts payable and a
decrease in inventory over and above an increase in accounts receivable
contributed to the Company's cash. During the three months ended February 28,
1997 and February 29, 1996, the Company's financing activities used cash
principally as a result of repayments of the bank loan under its long-term
credit agreement. During the three months ended February 28, 1997 and February
29, 1996, the Company used cash in investing activities to make capital
expenditures and payments for intangible assets.
Management believes that its working capital of approximately $26,400,000 at
February 28, 1997 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 meet its cash commitments.
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
NOTES TO FORM 10-Q
FEBRUARY 28, 1997
(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 Registrant
during the quarter ended February 28, 1997.
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<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: April 8, 1997 /s/ Bruce J. Haber
__________________ __________________________
Bruce J. Haber President
and Chief Executive
Officer
Date: April 8, 1997 /s/ Stuart F. Fleischer
__________________ __________________________
Stuart F. Fleischer
Vice-President - Finance
and Chief Financial
Officer
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<PAGE>
MICRO BIO-MEDICS, INC. AND SUBSIDIARIES
FORM 10-Q
FEBRUARY 28, 1997
(UNAUDITED)
_______________________________________
Exhibit 11
__________
Computation of Earnings per Common and Common Equivalent Share
______________________________________________________________
Three Months Ended
__________________________
February 28, February 29,
1997 1996
____________ ____________
Earnings
________
Net income $ 218,536 $ 87,916
Modified Treasury Stock Method
______________________________
Incremental income 44,930
___________ ___________
Adjusted income $ 218,536 $ 132,846
=========== ===========
Shares
______
Weighted average number of
common shares outstanding 5,065,065 4,020,182
Additional shares assuming conversion of:
Stock options and warrants utilizing the
modified treasury stock method 1,084,278 1,478,842
__________ ___________
Number of common and common
equivalent shares 6,149,343 5,499,024
========== ===========
Earnings per common and common
equivalent share $.04 $.02
========= ==========
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-START> DEC-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 354,864
<SECURITIES> 0
<RECEIVABLES> 31,382,591
<ALLOWANCES> 688,475
<INVENTORY> 15,355,018
<CURRENT-ASSETS> 48,156,185
<PP&E> 7,374,193
<DEPRECIATION> 3,709,070
<TOTAL-ASSETS> 60,588,092
<CURRENT-LIABILITIES> 21,773,446
<BONDS> 6,966,659
152,220
0
<COMMON> 0
<OTHER-SE> 31,515,856
<TOTAL-LIABILITY-AND-EQUITY> 60,588,092
<SALES> 38,004,627
<TOTAL-REVENUES> 38,004,627
<CGS> 30,670,850
<TOTAL-COSTS> 30,670,850
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 24,000
<INTEREST-EXPENSE> 99,739
<INCOME-PRETAX> 376,836
<INCOME-TAX> 158,300
<INCOME-CONTINUING> 218,536
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 218,536
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
