UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-11580
PHARMAKINETICS LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
Maryland 52-1067519
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
302 West Fayette Street
Baltimore, Maryland 21201
(Address of principal executive offices)
(410) 385-4500
(Registrant's telephone number, including area code)
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 ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes _X_ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date. 2,496,129
common shares were outstanding as of May 5, 1999.
PHARMAKINETICS LABORATORIES, INC.
FORM 10-Q
INDEX
Page No.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated balance sheets at March 31, 3
1999 (unaudited) and June 30, 1998
Consolidated statements of operations for 4
the three and nine months ended March 31,
1999 and 1998 (unaudited)
Consolidated statements of comprehensive 5
income (loss) for the three and nine months
ended March 31, 1999 and 1998 (unaudited)
Consolidated statements of cash flows for 6
the nine months ended March 31, 1999
and 1998 (unaudited)
Notes to consolidated financial statements (unaudited) 7
Item 2. Management's Discussion and Analysis of 9
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures 14
About Market Risk
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
-2-
PHARMAKINETICS LABORATORIES, INC.
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
1999 1998
------------- ------------
(Unaudited)
ASSETS
Current Assets:
Cash and equivalents $ 2,059,724 $ 3,358,506
Accounts receivable, net 1,485,000 1,731,853
Contracts in process 459,850 740,084
Prepaid expenses 272,191 251,023
------------ ------------
Total Current Assets 4,276,765 6,081,466
Property, plant and equipment, net 4,314,524 3,822,373
Other assets 152,823 203,639
------------ ------------
Total Assets $ 8,744,112 $ 10,107,478
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 732,571 $ 916,816
Deposits on contracts in process 655,591 1,082,005
------------ ------------
Total Current Liabilities 1,388,162 1,998,821
Other liabilities 163,490 235,074
------------ ------------
Total Liabilities 1,551,652 2,233,895
------------ ------------
Commitments and Contingencies
Stockholders' Equity:
Class A Convertible Preferred stock, no
par value; authorized 1,500,000 shares;
issued and outstanding 833,300 shares 4,937,500 4,937,500
Common stock, $.005 par value; authorized,
10,000,000 shares; issued and
outstanding, 2,496,129 and 2,456,129
shares, respectively 12,481 12,281
Additional paid-in capital 11,929,886 11,867,086
Accumulated deficit (9,656,716) (8,964,909)
Accumulated comprehensive income (loss) (30,691) 21,625
------------ ------------
Total Stockholders' Equity 7,192,460 7,873,583
------------ ------------
Total Liabilities and Stockholders' Equity $ 8,744,112 $ 10,107,478
============ ============
- -----------------------------------------------------------------------------
See notes to consolidated financial statements.
-3-
PHARMAKINETICS LABORATORIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
1999 1998 1999 1998
---------- ---------- ---------- ----------
Revenues $2,479,604 $2,722,535 $7,670,723 $9,509,555
Cost of contracts 1,654,986 2,317,954 6,283,986 7,029,898
---------- ---------- ---------- ----------
Gross profit 824,618 404,581 1,386,737 2,479,657
Selling, general and
administrative expenses 564,272 493,450 1,784,762 1,724,230
Research and
development expenses 114,974 140,226 377,704 382,516
---------- ---------- ---------- ----------
Earnings (loss) from operations 145,372 (229,095) (775,729) 372,911
Interest expense 6,940 29,252 22,718 120,039
Interest income 28,103 60,611 106,640 93,765
---------- ---------- ---------- ----------
Earnings (loss)
before income taxes 166,535 (197,736) (691,807) 346,637
Income taxes - - - -
---------- ---------- ---------- ----------
Net earnings (loss) 166,535 (197,736) (691,807) 346,637
Accretion of
preferred stock dividend - - - (1,020,793)
---------- ---------- ---------- ----------
Net earnings (loss) applicable
to common stockholders $ 166,535 $ (197,736) $ (691,807)$ (674,156)
========== ========== ========== ==========
Basic earnings (loss) per share $0.07 ($0.08) ($0.28) ($0.28)
========== ========== ========== ==========
Basic weighted average
shares outstanding 2,496,129 2,440,414 2,492,479 2,439,551
========== ========== ========== ==========
Diluted earnings (loss) per share $0.04 ($0.08) ($0.28) ($0.28)
========== ========== ========== ==========
Diluted weighted average
shares outstanding 4,162,729 2,440,414 2,492,479 2,439,551
========== ========== ========== ==========
- -----------------------------------------------------------------------------
See notes to consolidated financial statements.
-4-
PHARMAKINETICS LABORATORIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
1999 1998 1999 1998
---------- ---------- ---------- ----------
Net earnings (loss) $ 166,535 $ (197,736) $ (691,807)$ 346,637
Other comprehensive income:
Unrealized loss on investment (6,975) - (52,316) -
---------- ---------- ---------- ----------
Comprehensive income (loss) $ 159,560 $ (197,736) $ (744,123)$ 346,637
========== ========== ========== ==========
- ------------------------------------------------------------------------------
See notes to consolidated financial statements.
-5-
PHARMAKINETICS LABORATORIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
March 31,
-------------------------
1999 1998
------------ ------------
Cash flows from operating activities:
Net earnings (loss) $ (691,807) $ 346,637
Adjustments to reconcile net earnings (loss) to
net cash provided (used) by operating activities:
Depreciation and amortization 439,654 395,616
Changes in operating assets and liabilities:
Accounts receivable, net 246,853 (237,183)
Contracts in process 280,234 (59,507)
Prepaid expenses and other assets (22,668) (108,734)
Accounts payable and accrued expenses (180,207) 132,441
Deposits on contracts in process (426,414) 218,288
------------ -----------
Net cash provided (used) by operating activities (354,355) 687,558
------------ -----------
Cash flows from investing activities:
Payment for purchases of property and equipment (931,805) (282,850)
------------ -----------
Net cash used by investing activities (931,805) (282,850)
------------ -----------
Cash flows from financing activities:
Payments for capital lease obligations (75,622) (103,698)
Proceeds from exercise of stock options 63,000 7,988
Proceeds from issuance of preferred stock, net - 4,683,387
Proceeds from issuance of warrants - 62,500
Payments on long-term debt - (1,706,819)
------------ -----------
Net cash provided (used) by financing activities (12,622) 2,943,358
------------ -----------
Increase (decrease) in cash and equivalents (1,298,782) 3,348,066
Cash and equivalents, beginning of period 3,358,506 556,040
------------ -----------
Cash and equivalents, end of period $ 2,059,724 $ 3,904,106
============ ===========
Supplemental Cash Flow Information:
Non-Cash Transactions:
Fixed assets acquired through capital leases $ - $ 340,165
Accretion of preferred stock dividend $ - $ 1,020,793
Cash Paid for Interest: $ 22,367 $ 123,654
Cash Paid for Income Taxes: $ 3,914 $ -
- ------------------------------------------------------------------------------
See notes to consolidated financial statements.
-6-
PHARMAKINETICS LABORATORIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
The consolidated balance sheet as of March 31, 1999, the
consolidated statements of operations for the three and nine months ended
March 31, 1999 and 1998, the consolidated statements of comprehensive
income (loss) for the three and nine months ended March 31, 1999 and 1998,
and the consolidated statements of cash flows for the nine months
ended March 31, 1999 and 1998, have been prepared by the Company without
audit. In the opinion of management, all adjustments necessary to present
fairly the financial position, results of operations and cash flows at
March 31, 1999, and for all periods presented, have been made. The
consolidated balance sheet at June 30, 1998 has been derived from the
audited financial statements as of that date. Prior period financial
information gives retroactive effect to a change in the number of shares of
authorized Common Stock to 10,000,000, an increase in par value to $0.005
per share, and a five-to-one reverse stock split all of which were
effective by the close of business on April 17, 1998.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's annual report
on Form 10-K for the year ended June 30, 1998.
The Company operates principally in one industry, the testing of
pharmaceutical products and related services, and one geographic segment.
Revenues include contract revenue and revenue from license fees under special
agreements whereby the Company receives license fees based upon the
clients' actual product sales.
ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual amounts could differ from these
estimates.
-7-
EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share ("EPS") is calculated by dividing net
earnings (loss) by the weighted average common shares outstanding
during the period.
Diluted EPS reflects the potential dilution to EPS that could occur upon
conversion or exercise of securities, options or other such items, to common
shares using the treasury stock method based upon the weighted average fair
value of the Company's common stock during the period. The Company's Class A
Convertible Preferred Stock, warrants to acquire common stock, outstanding stock
options granted under the Company's stock option plans and other options granted
outside of the Company's plans are considered common stock equivalents for the
purpose of the diluted earnings (loss) per share data; however, they are
excluded from the calculations for the nine month period ended March 31, 1999,
and the three and nine month periods ended March 31, 1998, because the effect of
their inclusion would be anti-dilutive.
For the three month period ended March 31, 1999, the weighted average
shares used in computing basic earnings per share were 2,496,129 and the
dilutive common stock equivalents totaled 1,666,600, which related to the Class
A Convertible Preferred Stock. No stock options were included in the
calculation because all of the option exercise prices were above the average of
the market price of the Company's stock during the period. For the nine month
period ended March 31, 1999, dilutive common stock equivalents totaled
1,697,739, of which 31,139 related to options outstanding. For the three and
nine month periods ended March 31, 1998, dilutive common stock equivalents
totaled 1,905,655 and 771,494, respectively, of which 239,055 and 169,328,
respectively, related to outstanding options.
RECENT ACCOUNTING PRONOUNCEMENTS
In the quarter ended September 30, 1998, the Company adopted
the Financial Accounting Standards Board's SFAS No. 130, "Reporting
Comprehensive Income", which requires additional disclosures with respect
to certain changes in assets and liabilities that previously were not
required to be reported as part of results of operations. Additionally,
the Financial Accounting Standards Board has issued SFAS No. 131, "Disclosures
about Segments of the Enterprise and Related Information", which
establishes standards for the way that public business enterprises report
information in annual statements and interim financial reports regarding
operating segments, products and services, geographic areas and major
customers. SFAS 131 will be effective for the Company beginning with its
annual report on Form 10-K for the fiscal year ending June 30, 1999, and
will apply to both annual and interim financial reporting. SFAS 131 is not
expected to have a material impact on the Company's financial statement
disclosures.
-8-
PART I.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
CERTAIN FORWARD-LOOKING INFORMATION
Certain statements in this Management's Discussion and Analysis and
elsewhere in this Form 10-Q are forward-looking statements based on current
expectations, and entail various risks and uncertainties that could cause
actual results to differ materially from those expressed in
such forward-looking statements. Such risks and uncertainties include the
fluctuation in quarterly operating results which arise from the timing of
orders and the Company's ability to complete projects in a timely manner
once awarded to the Company, dependence of the Company on the product
development cycles of its clients, dependence of the Company on certain
customers, dependence of the Company on its key personnel and their
ability to continuously develop new methodologies for clinical and analytical
applications, and the Company's ability to bring its information technology
and non-information technology systems into compliance with standards for
successful operations as of January 1, 2000. Other more general factors
that could cause or contribute to such differences include, but are not
limited to, general economic conditions, conditions affecting the
pharmaceutical industry, and consolidation resulting in increased
competition within the Company's market.
The Company expects revenues for the quarter ending June 30, 1999 to be
lower than in the previous three quarters of the current fiscal year. These
lower revenues are expected to result in a net loss for the quarter ending June
30, 1999. The lower revenue projections and consequent loss are the result,
among other things, of the initiation of several unusually long studies which
will not be completed during the fourth quarter of the current fiscal year.
Revenue from the studies will not be recognized until the studies are completed,
which, it is anticipated, will occur during the quarters ending September 30,
and December 31, 1999.
RESULTS OF OPERATIONS
The Company's total revenue, which includes contract revenue and
license fees based upon clients' actual product sales, decreased 8.9% and
19.3%, to $2,479,604 and $7,670,723, for the three and nine month periods ended
March 31, 1999, from $2,722,535 and $9,509,555, respectively, for the same
periods in the prior year. The decrease was the result of lower contract
revenue from a reduced number of contracts and significantly lower license fee
income.
Contract revenues decreased 7.2% and 15.9% to $2,458,489 and $7,502,371,
for the three and nine month periods ended March 31, 1999, respectively,
compared to $2,647,896 and $8,920,857, in the same periods in 1998, primarily as
-9-
the result of a reduction in revenues of approximately $2,400,000 for Phase I
and bioequivalence studies for the nine month period ended March 31, 1999, as
compared with the same period of the prior year. The Company believes that the
decline in revenue for its Phase I and bioequivalence services is the result an
increasingly competitive market for its services. The decrease was offset by an
increase of approximately $900,000 in contract revenue from Clinical Trials
Management studies.
License fee income decreased 71.7% and 71.4% to $21,115 and $168,352, for
the three and nine month periods ended March 31, 1999, compared to $74,639
and $588,698, respectively, for the same periods in the prior year. This
decrease was the result of the scheduled termination of one license agreement in
October 1997 and reduced pricing for one of the generic products which is a
major contributor to license fee revenues. At March 31, 1999, the Company
had two license fee agreements from which it was receiving income. This license
fee income, based on clients' sales of approved drugs, will continue through the
expiration of these agreements. The most significant agreement is set to
expire in fiscal 2004, with the other expected to expire in fiscal 2000.
The Company believes it is unlikely that clients will wish to make use of
license fee arrangements in the future. As a result, the Company's operations
will be dependent upon its ability to generate sufficient contract revenue.
The Company's gross profit increased 103.8% to $824,618 for the three month
period ended March 31, 1999, compared to $404,581 for the same period of the
prior year and decreased 44.1% to $1,386,737 for the nine month period ended
March 31, 1999, compared to $2,479,657 for the same period of the prior year.
Gross profit as a percentage of revenues increased to 33.3% for the three month
period ended March 31, 1999, from 14.9% for the comparable period of the prior
year, and decreased to 18.1% for the nine month period ended March 31, 1999,
from 26.1% for the comparable period of the prior year. The increase in gross
margin for the three month period ended March 31, 1999, reflects the reversal of
an accrued expense totaling $116,000 as a result of a liability which is not
expected to materialize and the recognition of $246,000 in revenue from the
conclusion of a long term project for which expenses had previously been
recognized. The Company's gross profit, excluding these adjustments, would have
increased 14.3% for the three month period ended March 31, 1999, due to a mix of
slightly more profitable studies, and would have decreased 58.7% for the nine
month period ended March 31, 1999, compared to the same periods of the prior
year. The decrease in the gross margin for the nine months ended March 31,
1999, is reflective of the fact that in the short term the Company's costs are
relatively fixed and, in keeping with its strategic plan, investment in
personnel and instrumentation has been ongoing to improve the Company's long
term competitive position. As a result, staffing remained at levels comparable
to the prior year despite decreases in revenue.
-10-
Selling, general and administrative expenses of $564,272 and $1,784,762 for
the three and nine month periods ended March 31, 1999, increased 14.4% and
3.5%, respectively, compared to $493,450 and $1,724,230 for the same periods in
the prior year. During the nine month period of the prior year, the
Company had established an allowance for doubtful accounts which had the effect
of increasing selling, general and administrative expenses by $300,000.
Selling, general and administrative expenses, excluding the effect of the
allowance for doubtful accounts in the prior period, would have increased by
25.3% in the nine month period ended March 31, 1999, compared to the comparable
period of the prior year. As a percentage of revenues, selling, general and
administrative expenses increased from 18.1% in the three and nine month periods
ended March 31, 1998, to 22.8% and 23.3%, respectively, in the three and nine
month periods ended March 31, 1999. This increase is due to reduced revenues and
the implementation of the Company's plan to enhance its sales and marketing
efforts through the development and introduction of new marketing materials, the
addition of new business development personnel and the resulting increase in
travel expenditures necessary to have these people visit existing and potential
clients in the U.S. and Europe.
Research and development expenses decreased 18.0% and 1.3% to $114,974 and
$377,704 for the three and nine month periods ended March 31, 1999,
respectively, from $140,226 and $382,516 for the comparable periods of the prior
year. The decrease resulted from the loss of personnel in the Company's
analytical research and development group and the consequent reduction of salary
expense for research and development efforts. The Company is actively searching
for potential candidates in this area while maintaining efforts to develop
methods for utilization in current and future studies related primarily to its
LC/MS/MS instrumentation. In October 1998, the Company acquired the fourth of
these instruments. The Company believes that these investments, assuming its
ability to replace lost personnel, will result in the generation of new business
and improvement in its competitive position.
No provision for income taxes has been recorded. The Company has
available unused operating loss and business tax credit carryforwards,
the benefit of which is reduced by a full valuation allowance.
YEAR 2000
As reported in the Company's annual report on Form 10-K for the year
ended June 30, 1998, the Company has initiated its Year 2000 compliance
program, the purpose of which is to identify those systems that are not yet
Year 2000 compliant, and to initiate replacement or other remedial action
to assure that systems will continue to operate in the Year 2000. The
Company completed its assessment by December 31, 1998, which included third
party confirmations from the Company's key suppliers, vendors and business
partners, with respect to their computers, software and systems, and their
ability to maintain normal operations in the Year 2000, and a listing of all
-11-
equipment subject to Year 2000 concerns. The Company has evaluated
the confirmations it has received and to the extent that the Company is not
satisfied with the status of a vendor's Year 2000 compliance or remediation
plans, the Company expects to develop and implement appropriate contingency
plans. Such contingency plans will include the development of alternative
sources for the product or service provided by any non-compliant vendor. The
Company expects to have such contingency plans defined by June 30, 1999.
The Company has already initiated the removal and exchange of some
non-compliant systems, at a total cost to date of approximately $110,000,
and expects to continue such replacement or other remedial action to ensure
that its computers, software and systems, and other systems will continue
to operate in the Year 2000. These activities are intended to encompass
all major categories of systems used by the Company, including laboratory
instrumentation, clinical systems, building systems, and sales and
financial systems, among others. In some instances, the installation of
new software and hardware in the normal course of business is being
accelerated to also afford a solution to Year 2000 issues. The Company has
planned for the investment of approximately $350,000 in a new Laboratory
Information Management System ("LIMS") in fiscal 1999. Of this amount,
approximately $60,000 has been spent to date, with the remaining $290,000
expected to be paid in the quarter ending June 30, 1999. The Company expects
this new LIMS will streamline data collection, improve reporting ability and
allow for customized report formats, as well as provide the laboratory with a
system that is Year 2000 compliant. As of March 31, 1999, the Company had
initiated the purchase of the LIMS, deployed the new hardware to system users,
installed the software, and was in the process of validating the system. User
training was initiated in February 1999 and is ongoing. It is expected that
user training will be completed before the LIMS is fully operational in June
1999. Expenses not related to the LIMS are expected to total less than
$150,000, of which the Company had spent approximately $52,000 as of March 31,
1999. The total cost estimate is based on the Company's assessment as of March
31, 1999, and is subject to change as the compliance program progresses. Of the
Company's corporate information systems personnel resources (three full-time
individuals), approximately 50% are focused full-time on Year 2000 issues.
The capital improvements and expenses required for the Year 2000
effort have been included as part of the Company's annual budgets. The
Company does not expect that the capital spending or period expense
associated with the Year 2000 issues will have a material effect on its
financial position or results of operations. The Company's policy is to
expense all costs related to its Year 2000 compliance program unless the
useful life of the technological asset is extended or increased. It is
expected that assessment, remediation and contingency planning will be on-
going throughout fiscal 1999 with the goals of appropriately resolving all
material internal systems and third party issues. There can be no
assurances, however, that the Company's computer systems and the
applications of other companies on which the Company's operations rely will
-12-
be timely converted or that any such failure to convert by another company
will not have a material adverse effect on the Company's operations. If
the Company's Year 2000 issues are not successfully resolved, the Company
could continue its operations by collecting and reporting data manually,
consequently delaying project completion on the affected contracted
studies.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of funds is cash flow from operations,
which decreased by $1,041,913 in the nine months ended March 31, 1999,
compared to the same period of the prior year, principally as a result of
the Company's net loss from operations in the nine month period ended March
31, 1999, as compared to the same period in the prior year.
Decreases in the Company's account balances at March 31, 1999, for
accounts receivable and contracts in process, as compared to June 30, 1998, are
primarily attributable to overall decreases in the levels of business for the
nine month period ended March 31, 1999. Prepaid expenses have increased at
March 31, 1999, compared to June 30, 1998, due to the timing of payments on
certain expense items related to future periods.
At March 31, 1999, the Company reported a decrease in its
contracts in process account which represents costs incurred for studies
for which revenues have not been recognized and which are currently
underway. Deposits on contracts in process have also decreased indicating
a decrease in the number of contracted studies. Changes in these account
balances affect the Company's operating cash flow.
In addition, other assets have decreased based on a decline of $52,316
in the market value of the Company's holdings of 44,642 shares of common
stock and warrants to acquire 11,161 shares of common stock, at an exercise
price of $2.40 per share, of Hybridon, Inc. (OTCBB:HYBN). The carrying
value of the stock was determined by the average of the bid and ask prices
of the stock as reported by the National Quotation Bureau on
March 31, 1999, which was $1.3125 per share. The Company received the
stock and warrants in fiscal year 1998 in exchange for an account receivable in
the amount of $89,284. The warrants expire on May 5, 2003 and are not subject
to a call provision.
At March 31, 1999, the market value of the Hybridon stock was
less than the adjusted cost basis of $89,284. The difference of $30,691
was recorded as an unrealized loss on investment (a non-cash transaction)
and was reflected as an accumulated comprehensive loss in Stockholders' Equity.
At March 31, 1999, the Company had available $2,059,724 in
cash to meet the needs of its business. In September 1998 the Company
negotiated a new $500,000 credit facility with The First National Bank of
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Maryland to replace its $500,000 credit facility with NationsBank
N.A. which expired November 30, 1998. The current credit facility has certain
restrictive financial covenant ratios and net worth requirements with which the
Company is currently in compliance; however, no assurances can be given that the
Company will remain in compliance as of June 30, 1999.
As of March 31, 1999, the Company's stockholders' equity totaled
$7,192,460 compared to $7,873,583 at June 30, 1998. The Company had
working capital of $2,888,603 at March 31, 1999, compared to $4,082,645
at June 30, 1998.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 27: Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
March 31, 1999.
-14-
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PHARMAKINETICS LABORATORIES, INC.
Registrant
May 14, 1999 /s/James K. Leslie
- ------------ ------------------
Date James K. Leslie
Chief Executive Officer
and President
May 14, 1999 /s/Taryn L. Kunkel
- ------------ ------------------
Date Taryn L. Kunkel
Vice-President and
Chief Financial Officer
-15-
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This schedule contains summary financial information extracted from
SEC Form 10-Q and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,059,724
<SECURITIES> 58,593
<RECEIVABLES> 1,635,000
<ALLOWANCES> 150,000
<INVENTORY> 459,850
<CURRENT-ASSETS> 4,276,765
<PP&E> 6,995,597
<DEPRECIATION> 2,681,073
<TOTAL-ASSETS> 8,744,112
<CURRENT-LIABILITIES> 1,388,162
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<COMMON> 12,481
0
4,937,500
<OTHER-SE> 2,242,479
<TOTAL-LIABILITY-AND-EQUITY> 8,744,112
<SALES> 7,670,723
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</TABLE>
