SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1996
Commission File Number: 1-8147
MEDIQ INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 51-0219413
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One MEDIQ Plaza, Pennsauken, New Jersey 08110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 665-9300
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____
As of May 10, 1996, there were 18,393,370 shares of Common Stock, par value
$1.00 per share and 6,334,501 shares of Preferred Stock, par value $.50 per
share, outstanding.
<PAGE>
MEDIQ INCORPORATED AND SUBSIDIARIES
Quarter Ended March 31, 1996
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements.
Condensed Consolidated Statements of Operations-
Three and Six Months ended March 31, 1996 and 1995
(Unaudited) 4
Condensed Consolidated Balance Sheets-
March 31, 1996 (Unaudited) and September 30, 1995 5
Condensed Consolidated Statements of Cash Flows-
Six Months ended March 31, 1996 and 1995
(Unaudited) 6
Notes to Condensed Consolidated Financial
Statements (Unaudited) 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. 10-12
PART II. OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K. 13
2
<PAGE>
MEDIQ INCORPORATED AND SUBSIDIARIES
Quarter Ended March 31, 1996
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
3
<PAGE>
MEDIQ INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
------------------------ ------------------------
1996 1995 1996 1995
-------- -------- -------- --------
Revenues $ 36,999 $ 37,036 $ 69,092 $ 68,878
<S> <C> <C> <C> <C>
Costs and expenses:
Operating 14,038 13,604 28,167 27,425
Selling and administrative 5,387 5,989 10,816 12,231
Restructuring -- -- 2,200 --
Depreciation and amortization 7,487 7,199 14,986 14,302
-------- -------- -------- --------
26,912 26,792 56,169 53,958
-------- -------- -------- --------
Operating income 10,087 10,244 12,923 14,920
Other (charges) credits:
Interest expense (6,807) (7,472) (13,442) (14,875)
Equity in earnings of unconsolidated affiliates 2,270 1,062 3,787 2,133
Interest income 403 347 817 683
Other - net (366) (875) (366) (781)
-------- -------- -------- --------
Income from continuing operations before
income taxes and extraordinary item 5,587 3,306 3,719 2,080
Income tax expense 2,772 1,742 2,272 1,132
-------- -------- -------- --------
Income from continuing operations before
discontinued operations and extraordinary item 2,815 1,564 1,447 948
Discontinued operations -- 223 -- 628
Extraordinary item - early retirement of debt (net of taxes) -- -- 1,001 --
-------- -------- -------- --------
Net income $ 2,815 $ 1,787 $ 2,448 $ 1,576
======== ======== ======== ========
Earnings per share:
Income from continuing operations $ .11 $ .06 $ .06 $ .04
Discontinued operations -- .01 -- .02
Extraordinary item -- -- .04 --
-------- -------- -------- --------
Net income $ .11 $ .07 $ .10 $ .06
======== ======== ======== ========
Weighted average shares outstanding 24,845 24,572 24,713 24,509
======== ======== ======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
4
<PAGE>
MEDIQ INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, Sept. 30,
1996 1995
---------- ----------
(Unaudited) (See Note)
Assets
Current assets:
Cash $ 3,144 $ 2,966
Accounts receivable - net 32,814 27,884
Investment in discontinued operations 19,307 19,009
Inventories 4,870 4,181
Deferred income taxes 3,081 4,310
Other current assets 6,166 5,095
--------- ---------
Total current assets 69,382 63,445
Investments in unconsolidated affiliates 46,948 43,092
Investment in discontinued operations 7,919 8,061
Note receivable from MHM 10,350 10,733
Property, plant and equipment - net 130,764 132,823
Goodwill - net 59,985 61,744
Other assets 14,887 14,272
--------- ---------
Total assets $ 340,235 $ 334,170
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to financial institutions $ 22,493 $ --
Accounts payable 7,897 6,694
Accrued expenses 20,667 20,691
Current portion of long-term debt 32,782 37,300
--------- ---------
Total current liabilities 83,839 64,685
Senior debt 131,686 136,949
Subordinated debt 71,209 81,907
Deferred income taxes and other liabilities 17,916 19,112
Stockholders' equity 35,585 31,517
--------- ---------
Total liabilities and stockholders' equity $ 340,235 $ 334,170
========= =========
Note: The balance sheet at September 30, 1995 has been condensed from the
audited financial statements at that date and restated for discontinued
operations.
See Notes to Condensed Consolidated Financial Statements
5
<PAGE>
MEDIQ INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
-----------------------
1996 1995
-------- --------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 2,448 $ 1,576
Adjustments to reconcile net income to
net cash provided by operating activities 4,810 660
-------- --------
Net cash provided by operating activities 7,258 2,236
Cash Flows From Investing Activities:
Purchase of equipment (9,804) (2,717)
Advance to joint venture (3,250) --
Purchase of warrant (1,625) --
Proceeds from disposal of equipment and other assets 2,905 921
Proceeds from the sale of discontinued operations 1,500 --
Other (1,547) 17
-------- --------
Net cash used in investing activities (11,821) (1,779)
Cash Flows From Financing Activities:
Borrowings 22,210 9,202
Debt repayments (19,088) (10,689)
Proceeds from exercise of stock options 1,619 --
-------- --------
Net cash provided by (used in) financing activities 4,741 (1,487)
-------- --------
Increase (decrease) in cash 178 (1,030)
Cash:
Beginning balance 2,966 1,495
-------- --------
Ending balance $ 3,144 $ 465
-------- --------
Supplemental disclosure of cash flow information:
Interest paid $ 12,489 $ 14,347
======== ========
Supplemental disclosure of non-cash investing and financing activities:
Equipment financed with debt and capital leases $ 1,539 $ 1,847
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
6
<PAGE>
MEDIQ INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Condensed Consolidated Financial Statements
The condensed consolidated balance sheet as of March 31, 1996, the condensed
consolidated statements of operations for the three and six months ended March
31, 1996 and 1995, and the condensed consolidated statements of cash flows for
the six months then ended have been prepared by the Company without audit. In
the opinion of management, all adjustments (consisting only of normal, recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows at March 31, 1996 and for all periods presented have
been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's September 30, 1995 Annual Report on Form 10-K.
The results of operations for the period ended March 31, 1996 are not
necessarily indicative of the operating results for the full year.
Note B - Discontinued Operations
In the second quarter of fiscal 1995, the Company adopted a plan to sell four
non-core businesses, Medifac, Inc., Health Examinetics, Inc., MEDIQ Mobile X-Ray
Services, Inc. and MEDIQ Imaging Services, Inc., within twelve months. During
fiscal 1995, the Company sold Medifac and MEDIQ Imaging Services. In the fourth
quarter, the Company revised the plan to include the operations of HealthQuest,
Inc., which is anticipated to be sold in fiscal 1996. As a result, operating
results and net assets of these businesses have been reported as discontinued
operations. Discontinued operations also include the Company's equity investment
in InnoServ Technologies, Inc. ("InnoServ", formerly MMI Medical, Inc.), which
is anticipated to be distributed to the Company's shareholders during fiscal
1996. The Company's prior year consolidated financial statements have been
restated to report the net assets and operating results of these businesses as
discontinued operations.
In February 1996, the Company agreed to sell substantially all of the assets of
Mobile X-Ray to a subsidiary of Long-Term Care Services, Inc. The transaction is
subject to the satisfaction of various conditions, including receipt of
regulatory notifications and approvals. The transaction is expected to be
completed prior to June 30, 1996. The Company anticipates that the disposal
of Health Examinetics and HealthQuest will be completed in fiscal 1996. The
estimated loss on the sale of these operations was recorded in fiscal 1995.
The investment in discontinued operations as of March 31, 1996 consisted of (in
thousands):
Current assets $14,687
Current liabilities (9,608)
-------
Net current assets 5,079
Net fixed assets 5,614
Other noncurrent assets 8,614
-------
19,307
-------
Investment in InnoServ 7,919
-------
$27,226
=======
The investment in InnoServ, which is expected to be distributed to the Company's
shareholders in the form of a dividend, is classified as a long-term asset.
7
<PAGE>
Note C - Inventories
Inventories, which consist primarily of finished goods for sale and repair parts
for rental equipment, are stated at the lower of cost (first-in, first-out
method) or market.
Note D - Investments in Unconsolidated Affiliates
As of March 31, 1996, the Company's ownership interests in NutraMax Products,
Inc. and PCI Services, Inc. were 47.4% and 46.3%, respectively.
Summarized income statement information for NutraMax and PCI is presented below
(in thousands).
NutraMax Products, Inc.
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
----------------------------- -----------------------------
March 30, April 1, March 30, April 1,
1996 1995 1996 1995
-------- -------- --------- --------
<S> <C> <C> <C> <C>
Net sales $ 19,824 $ 15,055 $ 37,972 $ 30,178
Gross profit 5,545 4,279 11,123 8,881
Net income 1,362 1,111 2,692 2,349
</TABLE>
PCI Services, Inc.
<TABLE>
<CAPTION>
Three Months Ended March 31, Six Months Ended March 31,
----------------------------- -----------------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenue $ 42,276 $ 31,912 $ 79,368 $ 60,522
Gross profit 11,366 6,064 20,041 12,088
Net income 3,245 1,121 5,362 2,162
</TABLE>
Note E - Long-Term Debt
Under the terms of the Company's 7.25% subordinated convertible debentures due
2006, the Company is required to offer to repurchase a portion of the debentures
if stockholders' equity is $40 million or less at the end of two consecutive
fiscal quarters. Since June 30, 1994, the Company's stockholders' equity has
been less than $40 million. In October and November 1995, the Company
repurchased an aggregate of $11.25 million of its debentures at a discount in
the open market and through a private transaction, which resulted in a pretax
gain of $1.5 million, or $1.0 million net of taxes. This gain was recorded as an
extraordinary item in the Company's Condensed Consolidated Statement of
Operations. The Company is required to either repurchase or redeem $11.25
million of debentures prior to June 30, 1996 and semi-annually thereafter until
all of the debentures are repurchased or stockholders' equity is more than $40
million. As of March 31, 1996, $22.5 million of the debentures have been
classified as a current liability.
In December 1995, the Company's $13.4 million revolving credit facility was
extended to December 1996 and increased to $15.0 million with interest reduced
to the prime rate plus 1/2%. In addition, as amended, the facility will be
reduced by an amount equal to 50% of the net cash proceeds from the sale of
certain discontinued operations and certain other assets. As of March 31, 1996,
$12.3
8
<PAGE>
million was outstanding under this facility which was included in Notes Payable
to Financial Institutions in the Condensed Consolidated Balance Sheet.
Note F - Stock Options
In the first quarter of fiscal 1995, the Company granted stock options to
acquire 100,000 and 980,000 shares of common stock at $4.00 per share and $4.53
per share, respectively, to 35 officers and managers of the Company and certain
subsidiaries, including 250,000 options to Mr. Thomas E. Carroll, the Company's
President and Chief Executive Officer.
Note G - Restructuring Charge
In the first quarter of fiscal 1996, the Company recorded a restructuring charge
of $2.2 million for employee severance costs incurred in connection with a plan
approved by the Board of Directors to downsize corporate functions and
consolidate certain activities with the operations of MEDIQ/PRN. The plan is
expected to result in the termination of 29 employees in fiscal 1996. The
Company anticipates reductions in corporate expenses of approximately $1.3
million in 1996 and $2.0 million annually thereafter as a result of the
downsizing and consolidation of corporate activities.
Note H - Acquisition
On January 31, 1996, SpectraCair, a 50% owned joint venture of MEDIQ/PRN,
acquired certain rental assets from Bio Clinic Corporation, a subsidiary of
Sunrise Medical, Inc.. The Company advanced $3.3 million to the joint venture to
fund this acquisition. SpectraCair repaid the advance with interest at the prime
rate plus 2% in April 1996. This acquisition expanded the joint venture's
business of renting air therapy mattress systems throughout the United States.
Note I - Purchase of Warrant
In February 1996, the Company purchased a warrant issued by MEDIQ/PRN Life
Support Services, Inc. in 1992 to a lender in connection with a financing for an
acquisition. The warrant provided for the purchase of up to 2.5% of the common
stock of MEDIQ/PRN Life Support Services, Inc. for a period of seven years for
nominal consideration. The purchase price of the warrant was $1.6 million. The
excess of the purchase price over the carrying value of the warrant resulted in
a net charge to income in the second quarter of 1996 of $625,000 or $.03 per
share.
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
The following discussion addresses the financial condition of the Company as of
March 31, 1996 and results of operations for the three and six month periods
ended March 31, 1996 and 1995. This discussion should be read in conjunction
with the financial statements included elsewhere herein and the Management's
Discussion and Analysis and Financial Statement sections of the Company's
September 30, 1995 Annual Report on Form 10-K to which the reader is directed
for additional information.
Some of the information presented herein constitutes forward looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Although the Company believes that its expectations are based on reasonable
assumptions within the bounds of its knowledge of its business and operations,
there can be no assurances that actual results will not differ materially from
its expectations.
Discontinued Operations
In the second quarter of fiscal 1995, the Company adopted a plan to sell its
non-core businesses: MEDIQ Mobile X-Ray Services, Inc., MEDIQ Imaging Services,
Inc., Medifac, Inc., and Health Examinetics, Inc. In the fourth quarter of
fiscal 1995, the Company expanded its plan to include the operations of
HealthQuest, Inc. These operations, in addition to the Company's equity
investment in InnoServ Technologies, Inc. (formerly MMI Medical, Inc.), which is
anticipated to be distributed to the Company's shareholders in fiscal 1996, are
reported as discontinued operations.
In June 1995, the Company sold Medifac and related assets to the management of
Medifac for approximately $11 million, consisting of $6 million in cash and $5
million in notes, and the assumption of $26.9 million of non-recourse debt.
In August 1995, the Company sold the assets of MEDIQ Imaging to NMC Diagnostic
Services, Inc., a division of W.R. Grace & Co., for approximately $17 million in
cash and the assumption of $9.7 million of debt.
In February 1996, the Company agreed to sell substantially all of the assets of
Mobile X-Ray to a subsidiary of Long-Term Care Services, Inc. The transaction is
subject to the satisfaction of various conditions, including receipt of
regulatory notifications and approvals. The transaction is expected to be
completed prior to June 30, 1996. The Company anticipates that the disposal
of Health Examinetics and HealthQuest will be completed in fiscal 1996.
The Company anticipates that the disposal of Health Examinetics and HealthQuest
will be completed in fiscal 1996.
Results of Operations
Second Quarter 1996 Compared with Second Quarter 1995
Revenues were $37.0 million for the second quarter of 1996, and were
consistent with the prior year quarter. Revenue growth attributable to
disposable products, outsource services and sales of equipment was offset by
lower equipment rentals as a result of the lack of a sustained flu season.
Operating income was $10.1 million, or 27% of revenues for the second
quarter of 1996, which was consistent with the prior year quarter. Operating
income was adversely affected by lower margins associated with the increase in
sales of disposable products and equipment and increased depreciation expense
related to an increase in rental equipment. This decrease was partially offset
by reductions in corporate overhead in the amount of $573,000 primarily as a
result of the reduction in corporate personnel in connection with the corporate
restructuring in the first quarter of 1996. The Company expects this trend of
decreased corporate overhead to continue throughout fiscal 1996.
Interest expense decreased 9% to $6.8 million for the second quarter of
1996 from $7.5 million, primarily as a result of a net reduction in
10
<PAGE>
indebtedness. This decrease was partially offset by an increase in the
interest rate of MEDIQ/PRN's $100 million senior secured notes from 11-1/8% to
12-1/8% effective October 1, 1995.
The Company's equity in earnings of its unconsolidated affiliates was
$2.3 million, as compared to $1.1 million in the prior year period. The
increase was primarily attributable to the improved operating results of PCI.
Six Months Ended March 31, 1996 Compared with Six Months Ended March 31, 1995
Revenues were $69.1 million for the six months ended March 31, 1996, as
compared to $68.9 million in the prior year period. Revenue growth attributable
to disposable products, outsource services and sales of equipment was offset by
lower equipment rentals as a result of the lack of a sustained flu season.
Operating income decreased to $12.9 million, or 19% of revenues, for the
current period, as compared to $14.9 million, or 22% of revenues, in the prior
year period. The decrease in operating income was primarily attributable to a
restructuring charge of $2.2 million, recorded in the first quarter of fiscal
1996, for employee severance costs incurred in connection with a plan approved
by the Board of Directors to downsize corporate functions and consolidate
certain activities with the operations of MEDIQ/PRN. Operating income was also
adversely affected by lower margins associated with the increase in sales of
disposable products and equipment and increased depreciation expense related to
an increase in rental equipment. This decrease was offset by reductions in
corporate overhead of $1.0 million primarily as a result of the reduction in
corporate personnel in connection with the corporate restructuring plan
discussed above. The Company expects this trend of decreased corporate overhead
to continue throughout fiscal 1996.
Interest expense decreased 10% to $13.4 million for the current period
from $14.9 million, primarily as a result of a net reduction in indebtedness.
This decrease was partially offset by an increase in the interest rate of
MEDIQ/PRN's $100 million senior secured notes from 11-1/8% to 12-1/8% effective
October 1, 1995.
The Company's equity in earnings of its unconsolidated affiliates was
$3.8 million as compared with $2.1 million in the prior year period. The
increase was primarily attributable to the improved operating results of PCI.
Income Taxes
The Company's effective tax rate was disproportionate compared to the
statutory rate as a result of goodwill amortization, earnings of the Company's
equity investments and the non-recognition of certain operating losses for state
income tax purposes.
Liquidity and Capital Resources
Cash provided by operating activities was $7.3 million for the six
months ended March 31, 1996, as compared to $2.2 million in the prior year
period. The increase in cash flows from operating activities was primarily
attributable to a higher level of collections of accounts receivable in the
current period, partially offset by other working capital fluctuations.
Cash flows from operations in the prior year period were adversely affected by
the increase in accounts receivable attributable to the growth in MEDIQ/PRN's
business with the KCI acquisition. As of March 31, 1996, the Company had cash of
$3.1 million and a working capital deficit of $14.5 million. Current liabilities
as of March 31, 1996 include $22.5 million representing the portion of the 7.25%
subordinated convertible debentures expected to be repurchased by December 31,
1996.
11
<PAGE>
Net cash used in investing activities consisted principally of capital
expenditures for equipment of $9.8 million, an advance to the SpectraCair joint
venture of $3.3 million and the purchase of the MEDIQ/PRN warrant for $1.6
million. Cash provided by investing activities included proceeds from the
disposal of equipment of $2.9 million and collections on a note receivable from
the sale of discontinued operations of $1.5 million.
Net cash provided by financing activities resulted from borrowings of
$22.2 million and proceeds from the exercise of stock options of $1.6 million,
partially offset by debt repayments of $19.1 million.
Under the terms of the Company's 7.25% convertible debentures due 2006,
the Company is required to offer to repurchase a portion of the debentures
if stockholders' equity is $40 million or less at the end of two consecutive
fiscal quarters. Since June 30, 1994, the Company's stockholders' equity has
been less than $40 million. In October and November 1995, the Company
repurchased an aggregate of $11.25 million of its debentures at a discount in
the open market and through a private transaction. The Company is required to
either repurchase or redeem $11.25 million of debentures prior to June 30, 1996
and semi-annually thereafter until all debentures are repurchased or
stockholders' equity is more than $40 million. Through May 13, 1996, the Company
reduced its June 1996 obligation through the purchase of approximately $3.0
million of its debentures at a discount in the open market and through private
transactions. As of March 31, 1996, $22.5 million of the debentures have been
classified as a current liability.
In December 1995, the Company's $13.4 million revolving credit facility
was extended to December 1996 and increased to $15.0 million with interest
reduced to the prime rate plus 1/2%. In addition, as amended, the facility will
be reduced by an amount equal to 50% of the net cash proceeds from the sale of
certain discontinued operations and certain other assets. As of March 31,
1996, $12.3 million was outstanding under this facility. In addition, the
Company has $10.2 million outstanding under an additional revolving credit
facility and a line of credit aggregating $16.0 million. The amount of available
credit on the additional revolving credit facility fluctuates based upon the
amount of eligible accounts receivable.
The Company believes that its primary source of liquidity for operating
activities will continue to be generated through cash flows from MEDIQ/PRN and
the sale of discontinued operations and miscellaneous assets. The Company
believes that sufficient funds will be available from operating cash flows and
the sale of assets to meet the Company's anticipated operating and capital
requirements, including obligations to redeem or repurchase a portion of the
7.25% subordinated convertible debentures. In addition, the Company recently
signed a letter of understanding with a major European bank to provide funds to
refinance a significant portion of its debt (including MEDIQ/PRN's 12-1/8%
senior secured notes due 1999), but there can be no assurances that such
refinancing will occur.
12
<PAGE>
MEDIQ INCORPORATED AND SUBSIDIARIES
Quarter Ended March 31, 1996
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The 1996 Annual Meeting of Stockholders of the Company was held on March 5,
1996. Stockholders of the Company elected the Board of Directors. No broker
non-votes were recorded. The following is a presentation of the voting results
from the March 5, 1996 Annual Stockholders' Meeting:
Nominee For Withheld
------- --- & Abstentions
-------------
Michael J. Rotko 68,137,118 774,396
Jacob A. Shipon 14,632,912 584,372
Thomas E. Carroll 63,747,053 5,164,461
Michael F. Sandler 68,153,146 758,368
Sheldon M. Bonovitz 13,958,206 1,259,078
Lionel Felzer 14,643,703 573,581
Mark S. Levitan 14,646,048 571,236
H. Scott Miller 14,645,736 571,548
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 11 - Computation of Net Income Per Share appears on page 15.
Exhibit 27 - Financial Data Schedule appears on page 16.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended March 31, 1996.
13
<PAGE>
MEDIQ INCORPORATED AND SUBSIDIARIES
Quarter Ended March 31, 1996
SIGNATURE
---------
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.
MEDIQ Incorporated
------------------------
(Registrant)
May 14, 1996
- ------------
(Date)
/s/ Michael F. Sandler
----------------------------
Michael F. Sandler
Senior Vice President - Finance
and Chief Financial Officer
14
<PAGE>
EXHIBIT 11
MEDIQ INCORPORATED AND SUBSIDIARIES
Computation of Net Income Per Share
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
------------------------ ------------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Computation of Primary Earnings Per Share:
Net Income (loss) $ 2,815 $ 1,787 $ 2,448 $ 1,576
======= ======= ======= =======
Weighted average of primary shares:
Common stock 18,275 17,747 18,064 17,743
Preferred stock 6,351 6,420 6,362 6,424
Assumed conversion of options 219 405 287 342
------- ------- ------- -------
Total 24,845 24,572 24,713 24,509
======= ======= ======= =======
Primary Earnings (Loss) Per Share $ .11 $ .07 $ .10 $ .06
======= ======= ======= =======
Computation of Fully Diluted Earnings Per Share (1):
Net Income (loss) $ 2,815 $ 1,787 $ 2,448 $ 1,576
Interest and amortization of deferred costs on
convertible debentures - net of tax 456 580 911 1,159
------- ------- ------- -------
Total $ 3,271 $ 2,367 $ 3,359 $ 2,735
======= ======= ======= =======
Weighted average of fully diluted shares:
Common stock 18,275 17,747 18,064 17,743
Preferred stock 6,351 6,420 6,363 6,424
Assumed conversion of options 351 444 353 369
Assumed conversion of convertible debentures 5,397 6,897 5,397 6,897
------- ------- ------- -------
Total 30,374 31,508 30,177 31,433
======= ======= ======= =======
Fully Diluted Earnings Per Share $ .11 $ .08 $ .11 $ .09
======= ======= ======= =======
</TABLE>
(1) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB
opinion No. 15, because it is anti-dilutive or results in dilution of less
than 3%.
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,144
<SECURITIES> 0
<RECEIVABLES> 34,133
<ALLOWANCES> 1,319
<INVENTORY> 4,870
<CURRENT-ASSETS> 69,382
<PP&E> 230,205
<DEPRECIATION> 99,441
<TOTAL-ASSETS> 340,235
<CURRENT-LIABILITIES> 83,839
<BONDS> 202,895
0
3,367
<COMMON> 19,145
<OTHER-SE> 13,073
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<INCOME-TAX> 2,272
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<EXTRAORDINARY> 1,001
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<EPS-PRIMARY> .10
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</TABLE>
