<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended February 29, 1996
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period to
------------ ------------
COMMISSION FILE NO. 0-9833
UNIHOLDING CORPORATION
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 58-1443790
- ---------------------------- ---------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
96 Spring Street, 8th Floor, New York, New York 10012
- ----------------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 219-9496
------------------------
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 April 12, 1996, there were 6,122,169 shares of Common Stock, par value
$0.01 per share, of the Registrant outstanding.
PAGE 1 OF 37
<PAGE> 2
UNIHOLDING CORPORATION AND SUBSIDIARIES
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED FEBRUARY 29, 1996
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements 3
Consolidated Balance Sheets - February 29, 1996
and May 31, 1995 4
Consolidated Statements of Operations -
Three month and nine month periods ended
February 29, 1996 and February 28, 1995 7
Consolidated Statements of Cash Flows Nine month periods ended
February 29, 1996 and February 28, 1995 8
Notes to Unaudited Consolidated Financial Statements 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 15
PART II - OTHER INFORMATION:
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Items 24
Item 6. Exhibits 24
Signatures 25
Appendix A - Press Releases 26
Appendix B - Amendment to Certificate of Incorporation 29
Appendix C - Financial Data Schedule (Exhibit 27) 36
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
3
<PAGE> 4
UNIHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
ASSETS February 29, 1996 May 31, 1995
----------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,532 $ 16,939
Accounts receivable, net of allowance for doubtful accounts 17,942 17,890
Due from related companies 4,296 124
Inventories 1,987 1,867
Prepaid expenses 1,981 2,921
Other current assets 909 1,413
-------- --------
Total current assets 28,647 41,154
-------- --------
NON-CURRENT ASSETS:
Long-term notes receivable 3,516 2,815
Intangible assets, net 56,479 55,654
Property, plant and equipment, net 33,694 33,511
Other assets, net 5,719 424
-------- --------
Total non-current assets 99,408 92,404
-------- --------
$128,055 $133,558
======== ========
</TABLE>
See notes to financial statements
4
<PAGE> 5
UNIHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY February 29, 1996 May 31, 1995
----------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Bank overdrafts $ 6,450 $ 6,501
Lease payable, short-term portion 1,359 1,021
Payable to related parties 13 338
Trade payables 5,735 4,854
Accrued liabilities 5,024 4,997
Long-term debt, current portion 19,893 4,378
Taxes payable, current portion 3,064 2,751
------- -------
Total current liabilities 41,538 24,840
------- -------
NON-CURRENT LIABILITIES:
Lease payable, non-current 2,772 1,386
Long-term debt, non-current 36,989 32,662
Taxes payable, long-term portion 49 195
Deferred taxes 4,169 4,534
------- -------
Total non-current liabilities 43,979 38,777
------- -------
Total liabilities 85,517 63,617
------- -------
MINORITY INTERESTS 5,767 32,064
------- -------
</TABLE>
(continued)
5
<PAGE> 6
UNIHOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(continued)
<TABLE>
<S> <C> <C>
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value; authorized 20,000,000 shares; issued and
outstanding 6,122,169 at February 29, 1996
and 6,060,182 at May 31, 1995 $ 245 $ 242
Additional paid-in capital 32,244 31,008
Cumulative translation adjustment (182) 1,174
Retained earnings 7,551 5,453
--------- ---------
39,858 37,877
Less - cost of 163,000 and 0 shares of Common Stock held in treasury at
February 29, 1996 and May 31, 1995, respectively (3,087) 0
--------- ---------
Total stockholders' equity 36,771 37,877
--------- ---------
$ 128,055 $ 133,558
========= =========
</TABLE>
See notes to financial statements
6
<PAGE> 7
UNIHOLDING CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months ended Nine Months ended
February 29, February 28, February 29, February 28,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE $ 23,587 $ 20,237 $ 71,262 $ 59,241
Operating expenses:
Salaries and related charges 10,505 8,907 30,721 25,273
Supplies 3,922 3,261 11,282 10,323
Other operating expenses 6,524 3,934 17,751 11,613
Depreciation and amortization of tangible assets 1,176 1,388 4,097 3,789
Amortization of intangible assets 633 469 1,827 1,456
----------- ----------- ----------- -----------
OPERATING INCOME 827 2,278 5,584 6,787
Interest, net (873) (341) (1,969) (1,116)
Other, net 338 (10) 668 (67)
----------- ----------- ----------- -----------
Income before taxes and minority interests 292 1,927 4,283 5,604
Tax provision 22 (799) (1,164) (2,087)
----------- ----------- ----------- -----------
Income from continuing operations
before minority interests 314 1,128 3,119 3,517
Minority interests in income of continuing operations (209) (693) (1,021) (2,022)
----------- ----------- ----------- -----------
Income from continuing operations 105 435 2,098 1,495
Loss on disposition of discontinued operation, net of tax
benefit of $195 and minority interests of $220 -- -- -- (234)
----------- ----------- ----------- -----------
NET INCOME $ 105 $ 435 $ 2,098 $ 1,261
=========== =========== =========== ===========
Weighted average common shares outstanding 5,959,682 5,810,183 6,021,132 5,743,488
Earnings per share of common stock
Net income from continuing operations $ 0.02 $ 0.07 $ 0.35 $ 0.26
Loss on disposition of discontinued operation -- -- -- $ (0.04)
Net income $ 0.02 $ 0.07 $ 0.35 $ 0.22
</TABLE>
See notes to financial statements
7
<PAGE> 8
UNIHOLDING CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Nine Months ended
February 29, February 28,
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,098 $ 1,261
Adjustments to reconcile net income to net cash
provided by operations:
Minority interests in income 1,021 1,802
Depreciation and amortization of tangible assets 4,097 3,789
Amortization of intangible assets 1,827 1,456
Other non-cash expenses (40) --
Net changes in assets and liabilities, net of acquisitions:
(Increase) Decrease in accounts receivable (582) 541
(Increase) Decrease in inventories (173) 796
(Increase) Decrease in prepaid expenses 918 158
(Increase) Decrease in other assets 451 (395)
Increase (Decrease) in trade payables 1,045 (2,881)
Increase (Decrease) in accrued liabilities 158 (1,292)
Increase (Decrease) in reserve for taxes 254 (522)
Increase (Decrease) in deferred taxes (741) 570
-------- --------
Net cash provided by operating activities 10,333 5,283
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from issuance of share capital 1,240 --
Repayment of long-term debt (750) --
Cash proceeds from long-term debt 4,248 2,913
Proceeds (reimbursement) from (of) bank overdrafts (424) 2,169
Dividend paid to minority shareholders (335) (310)
Proceeds (repayment) of lease debt 1,839 (342)
-------- --------
Net cash provided by financing activities 5,818 4,430
-------- --------
</TABLE>
(continued)
8
<PAGE> 9
UNIHOLDING CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(continued)
<TABLE>
<CAPTION>
Nine Months ended
February 29, February 28,
CASH FLOWS FROM INVESTING ACTIVITIES: 1996 1995
-------- --------
<S> <C> <C>
Payment for purchases of property and equipment $ (5,638) $ (3,857)
Loans and advances (to) from affiliates,
related companies and shareholders (6,005) (1,495)
Payment for purchase of interest in subsidiaries (16,790) (3,662)
Payment for purchase of intangible assets (271) (1,828)
Payment for purchase of treasury stock (3,087) --
Proceeds from sale of assets 285 849
-------- --------
Net cash used in investing activities (31,506) (9,993)
-------- --------
Effect of exchange rate changes on cash (52) 138
Net increase (decrease) in cash and cash equivalents (15,407) (142)
Cash and cash equivalents, beginning of year 16,939 1,095
-------- --------
Cash and cash equivalents, end of period $ 1,532 $ 953
======== ========
</TABLE>
See notes to financial statements
9
<PAGE> 10
UNIHOLDING CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Monetary amounts in thousands, except per share data)
1. DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION
As more fully discussed in UniHolding Corporation's ("UniHolding")
Annual Report on Form 10-K for the year ended May 31, 1995, UniHolding and its
subsidiaries (collectively the "Company") primarily provide clinical laboratory
testing services to physicians, managed care organizations, hospitals and other
health care providers through its laboratories in Switzerland, the United
Kingdom, Italy and Spain.
On March 31, 1994 UniHolding issued 3,275,865 shares (post reverse
split) then corresponding to 65.75% of its common stock, a promissory note in
the amount of $18,000 and canceled a debt in the amount of $2,900 in exchange
for 60% of the capital stock of Unilabs Group Limited ("UGL"), 100% of the
capital stock of Uni Clinical Laboratories UCL Engineering SA ("UCLE"), and
options to acquire certain laboratory operating companies in Spain and Italy
from Unilabs Holdings SA, a Panama corporation, ("Holdings") pursuant to a stock
exchange agreement between UniHolding and Holdings.
UGL was formed pursuant to a Stock Purchase Agreement dated January 19,
1993 among Unilab Corporation ("Old Unilab"), MetCal, Inc. (now known as "Unilab
Corporation") and Holdings. Pursuant to the agreement, which closed on November
10, 1993, Holdings contributed 70% of Unilabs SA, a Swiss corporation ("ULSA"),
subject to the assumption by Unilab Corporation from UGL of a liability of
$21,000 to Holdings and Unilab Corporation contributed 100% of the capital stock
of JS Pathology plc ("JSP") in exchange for 60% and 40%, respectively, of the
capital stock of UGL. Subsequent to November 10, 1993, Holdings and Unilab
agreed upon an increase in the relative value of Holdings' original contribution
by approximately $4,100. Accordingly, UGL issued a note in this amount to
Holdings. JSP was subsequently transferred to United Laboratories Limited
("ULL"), a newly formed United Kingdom corporation and 100% subsidiary of UGL,
in a reorganization which is deemed to have occurred as of November 10, 1993.
The acquisitions referred to above were accounted for as the reverse
acquisition of UniHolding by an "accounting entity" consisting of ULSA and UCLE
because following the acquisitions the former shareholders of ULSA and UCLE were
in control of the Company. Accordingly, the financial statements of the Company
are the financial statements of the "accounting entity" adjusted for the assumed
acquisition, at fair value, of the net assets of UniHolding in exchange for the
issuance of UniHolding's common stock outstanding before the transaction.
The Company accounted for the net assets of UniHolding at the fair
value of the net assets acquired as of March 31, 1994.
On May 31, 1995, the Company exercised its options, acquired on March
31, 1994, to acquire the Spanish and Italian laboratory operations from Holdings
for an aggregate cost of $7,342 paid in the form of two promissory notes offset
against cash advances. The acquisitions were accounted for at predecessor cost.
As of May 29, 1995, with a view to streamlining the European subsidiary
structure, UGL sold ULL, its wholly-owned subsidiary, to ULSA, currently an
87.2% subsidiary of UGL.
10
<PAGE> 11
As of June 30, 1995, the Company, UGL and Unilab entered into an
agreement whereby UGL acquired from Unilab 40% of UGL's common stock for a total
consideration of $30,000. The consideration was paid $13,000 in cash, $2,000
through the assumption of a debt from Unilab to JSP, and $15,000 in the form of
a one-year, interest-bearing promissory note. The agreement provides that if the
note is still unpaid six months after its due date, Unilab has the right to
convert it into shares of the Company's common stock. The acquisition of the
minority interest in UGL has been accounted for as a purchase and the excess of
the purchase price over the fair value, which approximates the carrying value,
of the assets acquired have been allocated to goodwill.
The accompanying financial statements have been prepared based on
generally accepted accounting principles in the United States and include the
accounts of all the subsidiaries, as restated for this purpose.
2. MANAGEMENT OPINION
In the opinion of management, the accompanying unaudited interim
financial statements reflect all adjustments which are necessary to present
fairly the financial position, results of operations and cash flows for the
interim periods reported. All such adjustments made were of a normal recurring
nature.
The accompanying interim financial statements and related notes should
be read in conjunction with the consolidated financial statements of the Company
and related notes as contained in the Annual Report on Form 10-K for the year
ended May 31, 1995.
The results of operations and financial position for interim periods
are not necessarily indicative of those to be expected for a full year, due, in
part, to the seasonal fluctuations which are normal for the Company's business.
3. NET INCOME PER SHARE
Net income per share is computed by dividing net income by the weighted
average number of common shares outstanding.
4. PAID-IN CAPITAL AND REVERSE SPLIT
Effective as of December 27, 1995, the Company effected a four-to-one
reverse split of its Common Stock. These financial statements reflect this
reverse split for all periods presented including corresponding adjustments to
share amounts and purchase prices of the underlying share amounts. The reverse
split has no effect on the financial position or results of operations of the
Company.
As of the same date, the Company decreased its authorized shares of
Common Stock from 60 million to 20 million.
As of July 3, 1995, the Company issued 25,000 new shares of common
stock to one investor, at a price of $22.00 per share, including warrants for
12,500 shares at a price of $26.00 exercisable for 18 months from July 3, 1995.
Further, as of October 5, 1995, the Company issued 37,500 new shares of common
stock to two investors, at a price of $22.00 per share, including warrants for
18,750 shares at a price of $26.00 exercisable for 18 months from October 5,
1995. See also Note 7.
11
<PAGE> 12
5. CUMULATIVE TRANSLATION ADJUSTMENT
The Company's operations are located in Switzerland, the United
Kingdom, Italy and Spain. Its net assets, revenues and expenses are
substantially all denominated in Swiss franc, Sterling pound, Italian lire, and
Spanish pesetas, while the Company presents its consolidated financial
statements in US dollars. In accordance with generally accepted accounting
principles in the United States, net gains and losses arising upon translation
from local currency financial statements are accumulated in a separate component
of Stockholders' Equity, the Cumulative Translation Adjustment account, which
may be realized upon the eventual disposition by the Company of part or all of
its investments.
6. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Nine months ended
February 29, February 28,
1996 1995
---- ----
<S> <C> <C>
Cash paid during the period for
Interest $1,518 $1,182
Income taxes 1,735 2,076
</TABLE>
During the period ended February 29, 1996, in connection with its
acquisition of 40% of the share capital of UGL, the Company issued a note of
$15,000 and assumed a note of $2,000 payable to JSP.
During the period ended February 29, 1996, capital lease obligations of
$3,278 were incurred when the Company entered into leases for new capital
equipment.
7. ACQUISITION OF TREASURY STOCK
At various times during the period, the Company transferred funds to
Holdings, with a view to enable Holdings to acquire some shares of the Company's
common stock, either from private sources or on the market. As of November 30,
1995, the balance due by Holdings to the Company was approximately $2,900, which
was paid by Holdings through the transfer of 155,000 shares of the Company's
common stock reflecting the purchase price of such stock as paid by Holdings.
Further, during the nine month period, the Company acquired 8,000 of its own
shares on the market for $142.
8. EXPANSION INTO CLINICAL TRIALS
As of March 1, 1995, the Company entered into a Cooperation Agreement, a
License Agreement and a Marketing Agreement (together referred to as the "NDA
Agreements") with NDA Clinical Trials Services Inc., a Delaware corporation
("NDA") to provide laboratory testing services to the pharmaceutical industry in
clinical evaluations conducted in both the United States and Europe. According
to the NDA Agreements, the Company and NDA will seek to offer a unique service
to the pharmaceutical industry through their joint efforts in conducting
laboratory tests of pharmaceutical products, utilizing similar procedures and
data management, thereby providing a global product. European operations
commenced in the Summer of 1995.
In connection therewith, the Company formed a wholly-owned subsidiary
whose only activity is to sell and perform clinical trials services. The
subsidiary's name is Unilabs Clinical Trials Ltd. ("UCT"), and is domiciled in
London (UK).
In connection with its decision to expand into the clinical trials
business, as of October 16, 1995, the Company entered into a Stock Purchase
Agreement and an Option
12
<PAGE> 13
Agreement with NDA. Under these Agreements, the Company acquired 17% of NDA's
capital through the purchase of newly-issued shares, together with an option to
increase its stake in NDA to 30% on or before May 31, 1998. The consideration
for the acquisition of 17% was $1,188 paid in cash at closing. The price for the
acquisition of the additional 13% will be based on a formula linked to NDA's
revenues for its fiscal year ending December 31, 1997.
Simultaneously, UCT granted to NDA and NDA's stockholders (excluding
the Company), an option to subscribe to new shares of UCT based on a formula
linked to UCT's revenues for its fiscal year ending May 31, 1998. The option is
contingent upon the Company exercising its option on NDA's equity, and is
limited to a maximum of 5/7th of the Company's aggregate investment in NDA.
On December 15, 1995, the Company announced its intent to effect a
spin-off of its clinical trials business through a distribution to its
shareholders. The Company is currently reviewing the available alternatives to
effect such spin-off, particularly from a taxation viewpoint. Accordingly, the
precise timing of the spin-off is still uncertain.
Had such spin-off been effected as of June 1, 1995, the Company would
have recorded the following pro forma results for the nine months ended February
29, 1996 (unaudited):
<TABLE>
<S> <C>
Revenue $71,262
Operating income 7,128
Net income 3,148
Per share $0.52
</TABLE>
Had such spin-off been effected as of June 1, 1994, there would have
been no material effect on the results for the period ended February 28, 1995.
A summary of the consolidated balance sheet giving pro forma effect to
the spin-off as if it had occurred on June 1, 1995 is as follows (unaudited):
<TABLE>
<S> <C>
Current assets $ 27,897
Other assets 97,190
--------
$125,087
========
Current liabilities $ 39,567
Other liabilities 43,786
Minority interests 5,767
Stockholders' equity 35,967
--------
$125,087
========
</TABLE>
13
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9. INVESTMENT IN NEW VENTURE
During the nine month period, UGL entered into an agreement with a
non-affiliated company, Health Strategies Limited, a Jersey Channel Islands
corporation ("HSL"), whereby a new company, MISE S.A., a British Virgin Islands
corporation ("MISE") was formed. UGL has made an investment of $3,005 in MISE in
return for 33% of the voting rights in MISE stock, and for 67% of any dividend
which may be paid in the future. The purpose of this investment is for the
Company to have access to a software package, of which the rights thereto have
been contributed to MISE by HSL. The software package, known as "MDM", operates
as a sophisticated payments system for health insurance companies. The package
permits processing of payments by an insurance company through a networking
system which checks claims for tests provided at the doctor's request against
industry averages thereby identifying test service providers who may deviate
from the relevant norms. MISE intends to market the package to health insurance
companies throughout Europe. The Company believes that such a system should be
particularly useful and applicable in the context of the ongoing deregulation of
the European health care system as it may provide a useful tool in achieving
substantial savings in health care costs.
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ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
As discussed in Note 1 to the accompanying financial statements, the
Company's results for the three and nine month periods ended February 29, 1996
give effect to the acquisition by UniHolding and UGL, as of June 30, 1995, of
40% of the capital stock of UGL, while the Company's results for the three and
nine month periods ended February 28, 1995 included a 40% minority interest on
UGL's earnings. The financial statements also give effect to the acquisition of
ULL by ULSA from UGL. The following table presents the required adjustments to
the results of operations for the three and nine month periods ended February
28, 1995, providing a comparative analysis with the comparable period in the
current fiscal year, had the 40% of UGL's common stock been acquired as of June
1, 1994, and had ULL been owned by ULSA as of June 1, 1994 (unaudited). The
results of operations for the three and nine month periods ended February, 1995
were translated into U.S. dollars using the exchange rates which were then
valid.
Had the Spanish and Italian operations been acquired by the Company as
of June 1, 1994, there would have been no material effect on the consolidated
operations of the Company for the nine month period ended February 28, 1995.
<TABLE>
<CAPTION>
Three months ended February 28, 1995 Three months ended
-----------------------------------------------
As reported Adjustments Pro forma February 29, 1996
----------- ----------- ----------- -----------------
<S> <C> <C> <C> <C>
Revenue $ 20,237 $ 20,237 $ 23,587
Operating expenses:
Salaries and related charges 8,907 8,907 10,505
Supplies 3,261 3,261 3,922
Other operating expenses 3,934 3,934 6,524
Depreciation 1,388 1,388 1,176
Amortization 469 25 494 633
----------- ----------- ----------- -----------
Operating income 2,278 (25) 2,253 827
Interest, net (341) (414) (755) (873)
Other, net (10) 338
----------- ----------- ----------- -----------
Income before taxes and minority interests 1,927 (439) 1,498 292
Tax provision (799) 226 (573) 22
----------- ----------- ----------- -----------
Income before minority interests from continuing operations 1,128 (213) 925 314
Minority interests in income of continuing operations (693) 369 (324) (209)
----------- ----------- ----------- -----------
Income from continuing operations 435 155 600 105
Loss on disposition of discontinued operation, net 0
----------- ----------- ----------- -----------
Net income $ 435 $ 155 $ 600 $ 105
=========== =========== =========== ===========
Weighted average common shares outstanding 5,810,183 5,959,682
Earnings per share of common stock
Net income from continuing operations $ 0.10 $ 0.02
Loss on disposition of discontinued operation $ 0.00
Net income $ 0.10 $ 0.02
</TABLE>
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<PAGE> 16
<TABLE>
<CAPTION>
Nine months ended February 28, 1995 Nine months ended
----------------------------------- -----------------
As reported Adjustments Pro forma February 29, 1996
----------- ----------- --------- -----------------
<S> <C> <C> <C> <C>
Revenue $ 59,241 $ 59,241 $ 71,262
Operating expenses:
Salaries and related charges 25,273 25,273 30,721
Supplies 10,323 10,323 11,282
Other operating expenses 11,613 11,613 17,751
Depreciation 3,789 3,789 4,097
Amortization 1,456 75 1,531 1,827
----------- ----------- ----------- -----------
Operating income 6,787 (75) 6,712 5,584
Interest, net (1,116) (1,243) (2,359) (1,969)
Other, net (67) (67) 668
----------- ----------- ----------- -----------
Income before taxes and minority interests 5,604 (1,318) 4,286 4,283
Tax provision (2,087) 373 (1,409) (1,164)
188
117
----------- ----------- ----------- -----------
Income before minority interests from continuing operations 3,517 (640) 2,877 3,119
Minority interests in income of continuing operations (2,022) 816 (1,132) (1,021)
113
(24)
(15)
----------- ----------- ----------- -----------
Income from continuing operations 1,495 249 1,744 2,098
Loss on disposition of discontinued operation, net (234) -- (234) --
----------- ----------- ----------- -----------
Net income $ 1,261 $ 249 $ 1,510 $ 2,098
=========== =========== =========== ===========
Weighted average common shares outstanding 5,743,488 6,021,132
Earnings per share of common stock
Net income from continuing operations $ 0.30 $ 0.35
Loss on disposition of discontinued operation $ (0.04)
Net income $ 0.26 $ 0.35
</TABLE>
THREE AND NINE MONTH PERIODS ENDED FEBRUARY 29, 1996 COMPARED WITH THE THREE AND
NINE MONTH PERIODS ENDED FEBRUARY 28, 1995
Consolidated revenue denominated in US dollars for the three and nine
months ended February 29, 1996 increased $3.4 million or 16.8% and $12.0 million
or 20.3%, respectively, as compared to the same prior year periods. Excluding
the effect of the change in the US dollar exchange rate versus the Swiss franc
and the pound Sterling (approximately $0.7 million and $4.7 million for the
three and nine months, respectively), and excluding revenue generated by the
newly-acquired Italian and Spanish operations (together, $1.9 million and $5.0
million for the three and nine months, respectively), revenue increased by
approximately $0.8 million and $2.3 million for the three and nine months,
respectively, as compared to the same prior year periods. Revenue generated by
the Swiss operations increased by approximately 2% over the comparable nine
month period of the prior year due to improved test mix and greater volumes.
Revenue generated by the UK operations increased by approximately 10.4% over the
comparable nine month period of the prior year due to additional revenue
resulting from the NHS contract and a new contract with a major public transport
service, offset by a decrease in revenues due to
16
<PAGE> 17
the prior loss of a significant client. UCT has not recorded any revenues during
the three and nine month periods; however management of UCT is confident that
revenue will begin to be recorded by UCT within the present fiscal year as a
result of continuing marketing and selling efforts, although such revenue is not
likely to be sufficient to offset the development costs associated with UCT.
Management cannot make any assurances as to the timing or magnitude of any such
revenues.
Operating income for the nine months ended February 29, 1996 decreased
by $1.2 million versus the comparable prior year period. This decrease includes
the positive effect of the change in the US dollar exchange rate versus the
Swiss franc and the pound Sterling (approximately $0.8 million), against the
start-up expenses of the clinical trials activity without matching income ($1.0
million), an increase in operating costs related to the strengthening of certain
administrative functions and controls including the recruitment of senior
personnel in Switzerland ($1.0 million), offset by increased performance and the
streamlining of personnel and other charges in the United Kingdom ($0.5
million). Operating losses generated by the Spanish operations ($0.6 million)
resulted from the Company's strategic decision to increase penetration in the
Spanish market requiring investment in facilities and human resources. Italian
operations, on the other hand, have maintained a positive contribution ($0.1
million) to operating income. Operating income for the three months ended
February 29, 1996 decreased by $1.5 million versus the comparable prior year
period due to the same factors, particularly the costs associated with Spanish
operations and the development costs associated with the clinical trials
division.
Interest expense increased during the three and nine months ended
February 29, 1996 as compared to the similar prior year periods, due to higher
average borrowing levels by the Company resulting from the Company's acquisition
of the 40% minority interest in UGL and other capital expenditures, offset by an
overall decrease in interest rates.
Other income was recorded primarily from exchange gains realized on
certain assets and liabilities as a result of fluctuations in exchange rates.
Provision for income taxes reduced as compared to the comparable prior
year period due to the decrease in taxable income.
Minority interests in income decreased substantially as compared to the
comparable prior year period. This resulted primarily from the decrease in the
minority interests in income of UGL due to the acquisition of the 40% minority
interest in UGL as of June 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities for the nine months ended
February 29, 1996 amounted to $10.3 million, an increase of $5.1 million from
the prior year primarily due to decreases in working capital needs.
Net cash provided by financing activities for the nine months ended
February 29, 1996 was $5.8 million, as compared to $4.4 million in the
comparable prior year period. The change primarily resulted from increased lease
debt, increased proceeds of long-term debt and cash proceeds from issuance of
new capital.
Net cash used in investing activities for the nine months ended
February 29, 1996 was $31.5 million, consisting primarily of capital
expenditures incurred in connection with new laboratory equipment, lending to
affiliates, acquisition of treasury stock, the purchase of the 40% minority
interest in UGL as of June 30, 1995, the purchase of the 17%
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<PAGE> 18
minority interest in NDA as of October 16, 1995 and the investment in MISE. This
compares to $10 million used in investing activities in the comparable prior
year period, which had been used for purchases of property and equipment and
intangibles, and for lending to affiliates.
The Company's bank facilities provide for a total of approximately
$42.1 million, including secured senior revolving facilities consisting of term
loans, working capital loans and/or guarantees. As of April 12, 1996, the
Company had approximately $3 million of availability under the aggregate credit
facilities. Cash on hand, cash flows from operations and additional borrowing
capabilities are expected to be sufficient to meet anticipated operating
requirements and provide funds for capital expenditures, excluding acquisitions,
and working capital for the foreseeable future. Such are also expected to be
sufficient to meet debt repayments, with the exception of the Unilab note
discussed below.
OTHER
On June 30, 1995, the Company, UGL and Unilab entered into an agreement
whereby UGL acquired from Unilab 40% of UGL's common stock for a total
consideration of $30,000. The consideration was paid $13,000 in cash, $2,000
through the assumption of a debt from Unilab to JSP, and $15,000 in the form of
a one-year, interest-bearing promissory note. While the agreement provides that
if the note is still unpaid six months after its due date, Unilab has the right
to convert it into shares of the Company's common stock, the Company intends to
pay the note on or before its due date. In connection with this note, the
Company is actively considering raising additional capital through debt or
equity financing.
In July 1995, the Company issued 25,000 new shares of common stock to
one investor, at a price of $22.00 per share, including warrants for 12,500
shares at a price of $26.00 exercisable for 18 months from July 3, 1995.
In October, 1995, the Company issued 37,500 new shares of common stock
to two investors, at a price of $22.00 per share, including warrants for 18,750
shares at a price of $26.00 exercisable for 18 months from October 5, 1995.
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<PAGE> 19
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ARBITRATION
As described and discussed more thoroughly in the Company's Annual
Report on Form 10-K for the year ended May 31, 1995, the Company is entitled to
80% of the net recovery (less legal fees and costs) of any settlement or
successful resolution of the pending arbitration instituted by Americanino
Capital Corp. ("ACC") pursuant to an agreement by which the Company sold its
remaining interest in ACC.
In February 1993, ACC instituted the arbitration proceedings against
Mr. Eugenio Schiena, Mr. Raffaele Palma, Mr. Tonino Manzali, FIBRA S.p.A.,
GEFAPI S.r.l., "S.G.F." SOCIETE GENERALE COMMERCIALE ET FINANCIERE S.A., PARIBAS
FINANZIARIA S.p.A., BANQUE PARIBAS (Milan, Italy), and BANQUE PARIBAS (Paris,
France) (hereinafter collectively referred to as the "Defendants") for
misrepresentations and fraudulent conduct in the negotiation, consummation and
performance under an agreement by and between the above mentioned parties. The
arbitration is presently pending before an Arbitral Tribunal of three qualified
arbitrators (the "Arbitral Tribunal") under the auspices of the International
Court of Arbitration. As of November 9, 1994, the Terms of Reference were
established by the Arbitral Tribunal and sent to all the parties for signature.
The Terms of Reference were signed by ACC and certain of the Defendants. Some
Defendants did not sign them within the time limit set by the Arbitral Tribunal,
but, in accordance with the prevailing arbitration rules, the proceedings are
going forward irrespective of who has signed the Terms of Reference. The
International Court of Arbitration further summoned all the Defendants to
effectuate payment within 30 days in the amount of $212,500 representing their
share of the advance costs. The Arbitral Tribunal fixed a deadline date of April
30, 1995 for the Claimant, ACC, to file its brief on jurisdiction and on the
merits of its claim; and fixed a deadline date of July 31, 1995 for all the
Defendants to file their briefs in reply. ACC filed its Brief with the
International Court of Arbitration in compliance with the deadline. In July
1995, the Company decided to open a bank guarantee in favor of the International
Court of Arbitration to cover the amount of $212,500 which the Defendants have
failed to pay, in order for the proceedings to continue. In July 1995, ACC was
notified by the Arbitral Tribunal that PARIBAS FINANZIARIA S.p.A., BANQUE
PARIBAS (Italy), and BANQUE PARIBAS (France) on one hand, and Mr. MANZALI on the
other hand, had each appointed new legal counsels, who requested an extension of
the July 31 reply deadline in order to be able to study the files. The Arbitral
Tribunal agreed to such an extension. Accordingly, a new deadline date of
September 30, 1995 was set by the Arbitral Tribunal for all the Defendants to
file their briefs in reply. To the Company's knowledge, all Defendants filed
their briefs in reply, with the exception of Messrs. Schiena and Palma, and
GEFAPI. ACC filed a further brief in response to the replies on April 1, 1996.
In the meantime, ACC had agreed to withdraw its claim against BANQUE PARIBAS
(Italy), and BANQUE PARIBAS (France) in an effort to simplify the arbitration
proceedings and recognizing that its claim against PARIBAS FINANZIARIA is
sufficient under the circumstances.
While, to the best of the Company's knowledge, the Claimant appears to
have a legitimate claim, there can be no assurance that an award will be
rendered in ACC's favor and thus benefit the Company as provided under the terms
of the ACC Sale Agreement. The Company believes that any estimate of recovery is
still subject to many factors beyond the Company's control. Pending developments
in the arbitration proceedings, and in absence of other criteria, the management
of the Company has recorded its rights at a
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present fair market value of $10,000 which is estimated to be the amount an
unrelated party might presently pay to acquire all such rights arising from the
ACC Sale Agreement. Realization of any amount is entirely dependent upon a
favorable award from the Court and the collection thereof, if any, from the
Defendants. The Company's management will continuously monitor and report the
progress of the proceedings.
ATTACHMENT CLAIM
As of April 6, 1995, the Company presented a Complaint, a Memorandum of
Law in Support of a Motion for a Writ or Order of Attachment and an Affidavit in
Support of Motion for Attachment with an Order to Show Cause to the United
States District Court in Newark, New Jersey against Tonino Manzali, Alessandra
Sichirollo, Claudio Barozzi, Frederica Sichirollo, Marco Martinolli, Giuseppe
Mortellaro, Giampaolo Pattarello, Giorgio Pezzolato, Brigida Russo and Anna
Zinetti (known as the "Manzali Group"). The Company presented therewith the
Motion for Attachment against two of the above shareholders, Tonino Manzali and
Alessandra Sichirollo. Mr. Manzali and Ms. Sichirollo have taken the necessary
steps to dissipate the assets their shares during the pendency of the above
arbitration proceeding of which they are a party.
On April 17, 1995, the Court awarded and ordered the Attachment against
Defendants Manzali and Sichirollo as they did not show cause against the
Attachment.
As of February 13, 1996, the Court placed the attachment proceeding on
its suspense docket until such time as the parties re-open the proceedings for
good cause shown for the entry of any stipulation or order, or for any other
purpose required to obtain a final determination of the litigation. The Company
will re-open the proceedings upon a decision being rendered in the above
arbitration.
On March 22, 1996, upon notice of a request for transfer of additional
shares of the Manzali Group held in the name of Antonio Sichirollo, the Company
filed an adverse claim with its transfer agent estopping the further transfer of
such shares for a 30 day period. Since such time, the Company has retained
counsel to proceed with an attachment claim in the state of Colorado based on
the same facts and circumstances as the attachment claim made in the United
States District Court of New Jersey.
ITEM 2. CHANGES IN SECURITIES
As of March 11, 1996, the Company designated 2,000,000 million of its
authorized shares as Non-Voting Common Stock. Such Non-Voting shares have
identical rights and privileges as the Voting shares, except that such
Non-Voting shares are not entitled to a vote on any matters presented before the
shareholders. The Non-Voting shares shall be convertible into an equal number of
Voting shares at the holder's option. See Item 4. Submission of Matters to a
Vote of Security Holders.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
An affirmative vote of the holders of a majority of the outstanding
shares of Common Stock is required for approval of any Amendment to a Company
Certificate of Incorporation pursuant to the applicable provisions of the
General Corporation Law of the State of Delaware (the "DGCL"). Unilabs Holdings
SA ("Holdings"), owning approximately 51% of the outstanding shares of Common
Stock at the time of the execution
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<PAGE> 21
of both written consents, has acted by written consent to vote in favor of the
two Amendments to the Company's Certificate of Incorporation described
hereinafter. Accordingly, the Amendments have been approved.
As of December 27, 1995, the Amendment to the Certificate of
Incorporation became effective (the "Effective Date") in accordance with the
applicable time applications as set forth in the rules of the Securities
Exchange Act of 1934, as amended with regard to the change in the Company's
capital structure.
Such Amendment to the Certificate of Incorporation of the Company
provided for a one-to-four reverse split of the Common Stock of the Company;
provided for a decrease of authorized shares of Common Stock of the Company from
60 million to 20 million; and changed the name of the Company from "UniHolding
Corp." to "UniHolding Corporation". The reverse stock split affected only the
shares which were then issued.
On the Effective Date of such charter Amendment, each four shares of
Common Stock of the Company, par value $0.01 per share, issued as of the close
of business on such date was automatically changed into one validly issued,
fully paid and non-assessable share of Common Stock, par value $0.01 per share
("New Common Stock"). As of the Effective Date, each certificate representing
shares of Common Stock immediately prior to the Effective Date represents a
number equal to one-fourth of the number of shares of Common Stock set forth
thereon, and as soon as practicable thereafter and upon return of each such
certificate, there shall be exchanged to the holders of record of the shares
represented thereby at the close of business on the Effective Date a certificate
or certificates representing shares of New Common Stock on a ratio of one share
of New Common Stock, par value $0.01 per share, for each four share of Common
Stock, par value $0.01 per share, held prior to the Effective Date.
On the Effective Date, any capital of the Company in excess of the
aggregate par value of the shares of New Common Stock has been transferred to
capital surplus. A holder of Common Stock whose aggregate shares of Common Stock
held in one name or account are not evenly divisible by four shall not be issued
a fractional share of the New Common Stock, but rather shall be entitled to
receive from the Company, upon surrender of certificates representing Common
Stock, cash in respect of shares for which a fractional share would otherwise
have been issued, such cash to be in an amount equal to $5.00 multiplied by the
number of existing shares of Common Stock for which a new fractional share would
otherwise have been issued. Following the reverse stock split, the Company will
record the number of shares for each new certificate for every stockholder of
record on the basis of the list of stockholders of record on the Effective Date,
which is the record date for the reverse stock split. In the event that the
Company had reliable information with respect to beneficial ownership which
differed from record ownership, the Company would require that the stockholder
of record prove he, she or it is the beneficial owner of the shares for which he
appears as the stockholder of record. Only entities holding at least one full
share of New Common Stock shall be deemed stockholders of the Company.
After the reverse stock split, the Company now has approximately
6,122,169 shares of New Common Stock issued and outstanding. After the reduction
of authorized shares to 20 million, the Company presently has approximately
13,877,831 shares of New Common Stock available for issuance by action of the
board of directors.
As of March 11, 1996, the Amendment to the Certificate of Incorporation
of the Company became effective (the "Effective Date") in accordance with the
applicable time applications as set forth in the rules of the Securities
Exchange Act of 1934, as amended with regard to the creation of Non-Voting
Common Stock.
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<PAGE> 22
The Amendment provides for the creation and authorization of Non-Voting
Common Stock. The Company's Certificate of Incorporation authorizes the issuance
of 20,000,000 shares of capital stock, all those previously being voting shares
of Common Stock. Under the Amendment, the Company is now authorized to issue up
to 20,000,000 shares of capital stock, of which 2,000,000 shares are Non-Voting
Common Stock, from time to time in the Board's discretion consistent with the
applicable law and the rules and regulations of the National Association of
Securities Dealers, Inc. The terms, rights and privileges of the Non-Voting
Common Stock are identical to those of the Common Stock except that the
Non-Voting Common Stock (i) has no right to vote on any matter to be presented
to the shareholders of the Company in accordance with its By-laws, except as
required by law and (ii) shall be convertible by any holder of the Non-Voting
Common Stock on a share for share basis into shares of the Company's Common
Stock, at the holder's option (except as described below). Accordingly, both the
Common Stock and the Non-Voting Common Stock, as expressly provided in the
Company's Certificate of Incorporation, by law or by the Board of Directors
pursuant to the Certificate of Incorporation, possess all such rights and
privileges as are afforded to capital stock by applicable law in the absence of
any express grant of rights or privileges in the Certificate of Incorporation,
including, but not limited to, the following rights and privileges: (a)
dividends may be declared and paid or set apart for payment upon the Common
Stock and the Non-Voting Common Stock out of any assets or funds of the Company
legally available for the payment of dividends; and (b) upon the voluntary or
involuntary liquidation, dissolution or winding-up of the Company, the net
assets of the Company shall be distributed pro rata, and without preference of
one class of common stock over the other, to the holders of the Common Stock and
the Non-Voting Common Stock in accordance with their respective rights and
interests as provided for in Articles 4 and 5 of the Certificate of
Incorporation of the Company. Neither the Common Stock or the Non-Voting Common
Stock will have preemptive rights. The descriptions contained herein of the
terms, rights and privileges of the Non-Voting Common Stock and of the Amendment
creating the Non-Voting Common Stock are qualified in their entirety by
reference to the form of Amendment attached as Appendix B, which is incorporated
by reference herein in its entirety.
Except as set forth above, the rights and interests of the Non-Voting
Common Stock do not vary form those of the Common stock. The rights and interest
of the Non-Voting Common Stock may be amended, altered or repealed by an
amendment, alteration or repeal of the provisions of Article 4 of the Company's
Certificate of Incorporation addressing such rights and interests. Under
applicable law and the provisions of the Certificate of Incorporation, such
provisions of the Certificate may be amended, altered or repealed by the
affirmative vote of the holders of a majority of the outstanding shares of the
Company's Common Stock.
Upon approval and effectiveness of the Amendment, the Company will
issue 298,384 shares of Non-Voting Common Stock (the "Holdings Shares") to
Holdings in exchange for 298,384 shares of Common Stock in connection with an
Exchange Agreement, dated January 31, 1996, between Holdings and SBC Equity
Partners SA ("SBC"), a wholly-owned subsidiary of Swiss Bank Corporation with
the cooperation and agreement of the Company (the "SBC Exchange Agreement").
Pursuant to the SBC Exchange Agreement, Holdings will exchange with SBC 298,384
shares of the Company's Non-Voting Common Stock and 298,384 shares of the
Company's Voting Common Stock for 1600 shares of common stock, par value Swiss
Franc 500 each of Unilabs S.A., a majority owned Swiss subsidiary of the
Company. Such exchange was determined in arm's length negotiations between
Holdings and SBC. Pursuant to the SBC Exchange Agreement, the transfer by
Holdings to SBC of the 298,384 shares of the Company's Voting Common Stock will
be effected on or before February 5, 1996, and the issuance of the Non-Voting
Common Stock to Holdings, and thereafter to SBC through a
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transfer, will be effected as soon as practicable. The Holdings Shares will not
be convertible into Common Stock so long as such shares are owned by SBC or an
affiliate of SBC. Upon the subsequent sale or transfer of such shares by SBC to
a third party unaffiliated with SBC that is not otherwise a "Restricted Person"
as defined in the Amendment, such shares will become convertible on a share for
share basis into shares of the Company's Common Stock, as described above.
Other than restrictions imposed as a matter of law, including
restrictions under the Securities Act and the Bank Holding Company Act of 1956
(the "BHCA"), as discussed below, there are no restrictions, contractual or
otherwise, on the resale of the Non-Voting Common Stock issued to Holdings for
subsequent transfer to SBC. As of the date of this Information Statement, the
Company is not aware of any plans or commitments on the part of SBC to resell
such Non-Voting Common Stock.
The Company agreed to create and exchange a portion of the Non-Voting
Common Stock at Holding's and SBC's request because of the potential application
of certain restrictions contained in the BHCA, which prohibits in certain
circumstances bank holding companies from acquiring more than 5% of the voting
equity securities of a non banking entity. SBC is an affiliate of Swiss Bank
Corporation which may be deemed to be a bank holding company under the BHCA.
The Company has no current plans to issue additional shares of
Non-Voting Common Stock. The purchase price for any additional issuances of
Non-Voting Common Stock will depend on the facts and circumstances of each such
issuance at the time and may be higher than, equal to or lower than the then
current market price for UniHolding Common Stock.
The Company's Board of Directors approved the Amendment because it
believes the Amendment, and the class of Non-Voting Common Stock created
thereby, are in the best interests of the Company and its shareholders. The
Amendment was directly motivated by the request of Holdings and SBC for the
creation and issuance of Non-Voting Common Stock because of the potential
restrictions contained in the BHCA on SBC's ownership of more than 5% of the
Common Stock of the Company. The Company's Board of Directors believes that it
was in the Company's best interests to agree to Holdings' and SBC's request
(subject to obtaining subsequent corporate and regulatory approvals for the
issuance of the Non-Voting Common Stock) since this will permit SBC, a prominent
institutional investor acting on an international basis, to become a 10%
shareholder in the Company. The Board believes that the investment in the
Company represented by such Non-Voting Common Stock and Common Stock will
enhance the Company's perception and reputation in the market and the industry.
In considering the Amendment, the Board recognized and considered that
the Amendment could increase the Company's financial flexibility by permitting
it to issue, subject to obtaining requisite corporate and regulatory approvals,
additional common equity to finance future growth, internally or through
acquisitions, without substantially reducing the ability of the Company's
long-term holders to participate in, and exert influence over, corporate
decisions. Thus, following the issuance of the Non-voting Common Stock to
Holdings and the subsequent transfer of same to SBC, the Company may be in a
better position to issue various forms of equity for various corporate purposes.
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ITEM 5. OTHER ITEMS
PROPOSED RESTRUCTURING OF SUBSIDIARY RELATIONSHIP AND PLANS TO MAXIMIZE
SHAREHOLDER VALUE
The Company has determined that the best financial strategy for
maximizing the present and future value of the Company and its anticipated
growth, is to effect a spin-off of the Company's clinical trials business to its
shareholders. The clinical trials business consists of UCT, Pharmasoft, and the
17% interest in NDA with the option to purchase the additional 13% of NDA. The
Company is now working on the details of such action, including the preparation
of the documentation to be filed with the Securities & Exchange Commission and
NASDAQ. Further, the Company is addressing certain US and foreign tax issues
related to the completion of the spin off or disposition of the clinical trials
business.
The Company announced as of February 27, 1996 that it is considering
several alternative proposals to maximize shareholder values, including the
selling of a minority or majority stake in some of its operations, and the
floating of one or more of its subsidiaries on a major European exchange. The
Company expects that such action will generate cash permitting the financing of
new developments and/or acquisitions in countries which offer significant
potential opportunities.
REGULATION S OFFERING
The Company is reviewing several alternatives to expand its operations.
In order to raise funds to enable the Company to consider such actions, the
Company continues to offer a maximum of 1,875,000 newly-issued shares of the
Company in the offshore market to certain European investors presently not
affiliated with the Company. The shares are being offered in the offshore market
in accordance with Regulation S, which provides an exemption to registration of
the shares from the Securities Act of 1933, as amended. There are 1,812,500
shares presently available for issuance under the Regulation S Offering.
PROPOSED REGISTRATION OF SHARES
The Company is finalizing the preparation of its Registration Statement
and Prospectus to be filed with the Securities & Exchange Commission and NASDAQ
with a view to register substantially all of the outstanding shares of the
Company's Common Stock under the Securities Act of 1933, as amended.
ITEM 6. EXHIBITS
Exhibits included hereinafter in Appendix A are as follows:
Press Release:
1. UniHolding Corp. Announces Second Quarter Results - January
16, 1996
2. UniHolding Corp. Announces Plans to Maximize Shareholders'
Values - February 27, 1996
Appendix B contains the Amendments to the Company's Certificate of
Incorporation.
Appendix C contains the Financial Data Schedule (Exhibit 27) as
required under Regulation S-X and S-K
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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 hereunto duly authorized.
UniHolding Corporation
By: /s/ Bruno Adam by Melanie K. Stapp (poa)
---------------------------------------
Bruno Adam, CFO
By: Melanie K. Stapp by Power
of Attorney
Date: 4-15-96
-------
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APPENDIX A
PRESS RELEASES
26
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PRESS RELEASE
From: UniHolding Corp.
New York, New York
For further information:
Melanie K. Stapp (New York)
(212) 219-9496
Bruno Adam (Geneva)
+(41) (22) 732-9411
FOR IMMEDIATE RELEASE
January 20, 1995
UNIHOLDING CORP. ANNOUNCES SECOND QUARTER RESULTS
New York, New York, January 20, 1995 -- UniHolding Corp. (NASDAQ: UHLD)
announced today that the net revenues for the quarter ended November 30, 1994
were $21 million and net income was $0.6 million, or $0.03 per share as reported
in the Company's Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on January 17, 1995.
For the six months ended November 30, 1994, net revenues were $39 million and
net income was $0.8 million, or $0.04 per share. Net income for the Quarter and
for the six months ended November 30, 1994, included a non-recurring charge of
$0.2 million, or $0.01 per share, incurred in connection with the disposition of
a non-strategic subsidiary. Accordingly, net income from continuing operations
for the Quarter and for the six months ended November 30, 1994 were $0.8 million
and $1 million, or $0.04 and $0.05 per share, respectively.
This compares to results for the comparable periods in the prior year of $15
million and $26 million in revenues and $1.5 million and $2.1 million in net
income. For the six months ended November 30, 1993, pro forma revenues would
have been $33 million, pro forma net income would have been $1.3 million and pro
forma earnings per share would have been $0.06 taking into account an assumption
that certain transactions would have taken place as of June 1, 1993, including
(a) the deemed acquisition of the net assets of UniHolding, (b) the purchase of
JS Pathology, (c) the reduction from 30% to 14% of the minority interest in
Unilabs SA, and (d) the previously reported issuance by UniHolding on June 22,
1994 of approximately 3.3 million shares in early payment of an $18 million
note.
Mr. Edgard Zwirn, Chairman and CEO, commented that, "We are pleased to see that
the performance of the Swiss operations continues to be strong and exactly on
target with our forecasts. On the other hand, we are confident that the decline
in profitability of JS Pathology will not continue in part due to a major
restructuring of the local management and the appointment of a dedicated sales
force. The contract with the Lister Hospital started as planned on December 1,
1994, and we expect it to bring a positive contribution in the months to come".
UniHolding Corp. owns 60% of Unilabs Group Limited, a European joint venture
with Unilab Corp. (which owns 40% thereof). Unilabs Group Limited provides
laboratory testing services in the United Kingdom and Switzerland through its
principal operating subsidiaries, United Laboratories Limited (UK) and Unilabs
SA (Switzerland).
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PRESS RELEASE
From: UniHolding Corp.
New York, New York
For Further Information:
Melanie Stapp (New York)
(212) 219 9496
Bruno Adam (Geneva, Switzerland)
+ (41) (22) 909 77 77
FOR IMMEDIATE RELEASE
February 27, 1996
UNIHOLDING CORP. ANNOUNCES PLANS TO MAXIMIZE
SHAREHOLDERS' VALUES
New York, New York, February 27, 1996 -- UniHolding Corporation (NASDAQ: UHLD)
announced today that its Board of Directors is considering a number of
alternative proposals for implementation over the next several (few) months.
Such proposals have been presented for consideration as a result of the
observation that the share price recently quoted on NASDAQ does not reflect, in
the Board's opinion, the underlying value of the Company and its subsidiaries.
The Company has already announced the preparation of a registration statement to
register substantially all of its outstanding shares, and the spin off of its
clinical trials division. Yet, the market has not accurately reflected the
Company's real performance and prospects in management's view.
With a view to further maximize shareholders' values, the Board is currently
considering the implementation of one or more of the following courses of
action: floating one or more of its subsidiaries on a major European exchange;
selling a minority or majority stake of its operations to new investors, and the
issuance of an initial public offering. The Company expects any such action will
generate cash permitting the financing of new developments and/or acquisitions
in countries which offer significant potential.
UniHolding Corp. owns Unilabs Group Limited which provides laboratory testing
services in the United Kingdom and Switzerland through its principal operating
subsidiaries, United Laboratories Limited (UK) and Unilabs SA (Switzerland).
UniHolding also owns laboratories in Italy and Spain.
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APPENDIX B
AMENDMENTS TO CERTIFICATE OF INCORPORATION
29
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
****************
Pursuant to Section 242 of the General Corporation Law of the State of
Delaware, UNIHOLDING CORP., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That by unanimous written consent of the Board of Directors of
UniHolding Corp. resolutions were duly adopted as of November 17, 1995 setting
forth the proposed amendments to the Certificate of Incorporation of said
corporation, declaring said amendments to be advisable and recommending same to
the shareholders of the corporation. The resolutions setting forth the proposed
amendments are as follows:
RESOLVED, that the Certificate of Incorporation be amended by deleting
Articles 1 and 4 in their entirety and inserting in lieu thereof the following:
1. The name of the Corporation is UniHolding Corporation.
4. The total number of shares of stock which the Corporation
shall have the authority to issue is twenty million (20,000,000) shares
of Common Stock, having a par value of $0.01 per share.
Each four shares of such Common Stock issued at the close of business
on the date on which this amendment becomes effective shall
automatically be changed into one validly issued, fully paid and
non-assessable share of Common Stock, having a par value of $0.01 per
share. Upon this amendment becoming effective, each certificate
representing shares of Common Stock immediately prior to the
effectiveness of this amendment shall represent a number equal to
one-fourth of the number of shares of Common Stock set forth thereon,
and as soon as practicable thereafter and upon return of each such
certificate, there shall be exchanged to the holders of record of the
shares represented thereby at the close of business on the date on
which this amendment becomes effective a certificate or certificates
representing shares on a ratio of one share of Common Stock, par value
$0.01 per share, for each four shares of Common Stock, par value $0.01
per share held prior to the effectiveness of this amendment.
SECOND: That said resolutions were duly adopted by the written consent
of the shareholders of the Corporation in accordance with the provisions of
Section 228 of the General Corporation Law of the State of Delaware.
30
<PAGE> 31
IN WITNESS WHEREOF, said Corporation has caused this certificate to be
signed by Bruno Adam, its Chief Financial Officer and attested by Melanie K.
Stapp, its Secretary, as of this 22nd day of December, 1995.
UNIHOLDING CORP.
By: /s/ Bruno Adam
-------------------
Bruno Adam,
Chief Financial Officer
ATTEST:
By:/s/ Melanie K. Stapp
--------------------------
Melanie K. Stapp
Secretary
31
<PAGE> 32
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
UNIHOLDING CORPORATION
****************
Pursuant to Section 242 of the General Corporation Law of the State of
Delaware, UNIHOLDING CORP., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST, the Certificate of Incorporation of the Corporation is hereby
amended by deleting Article 4 in its entirety and substituting the following in
lieu thereof :
4. The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is twenty million
(20,000,000) shares, of which 18,000,000 shares, par value $0.01 per
share shall be designated Voting Common Stock ("Voting Common Stock"),
and 2,000,000 shares, par value $0.01 per share shall be designated
Non-Voting Common Stock ("Non-Voting Common Stock"). All
cross-references in each Part of this Article 4 refer to other
paragraphs in such Part unless otherwise indicated. All shares of
Voting Common Stock and Non-Voting Common Stock shall be identical and
shall entitle the holders thereof to the same rights and privileges,
except as otherwise provided in this Certificate of Incorporation and
as required by law. The Board of Directors of the Corporation may
authorize the issuance from time to time of shares of its stock of any
class, whether now or hereafter authorized, or securities convertible
into shares of its stock of any class, whether now or hereafter
authorized, for such consideration as the Board of Directors may deem
advisable, subject to such restrictions or limitations, if any, as may
be set forth in the bylaws of the Corporation.
(a) Voting Common Stock. Except as provided by law the holders of
shares of Voting Common Stock shall be entitled to vote on any matter
or question submitted to the shareholders, as to such matter or
question, have one vote, in person, by written consent or by proxy, for
each share of duly authorized, issued and outstanding share of Voting
Common Stock standing in his name on the books of the Corporation.
Quorum constituting any number of shareholders holding at least a
majority of the outstanding shares of capital stock entitled to vote
with respect to the business to be transacted, who shall be present in
person, represented by proxy or by written consent in accordance with
the General Corporation Laws of Delaware.
(b) Non-Voting Common Stock. Except as otherwise provided by law,
the holders of Non-Voting Common Stock shall have no right in any event
to vote on any matter to be voted on by the shareholders of the
Corporation (including any election or removal of the directors of the
Corporation).
(c) Dividends. When and as dividends are declared, whether payable
in cash, in property or in securities of the Corporation or any of its
subsidiaries, the
32
<PAGE> 33
holders of the Voting Common Stock and the Non-Voting Common Stock
shall be entitled to share equally, on a share for share basis, in such
dividends.
(d) Conversion of Non-Voting Common Stock.
(i) The holder of Non-Voting Common Stock shall have the right
at any time, or from time to time, at such holder's option, to convert
all or any portion of the shares into an equal number of fully paid and
nonassessable share of Voting Common Stock, on and subject to the terms
and conditions hereinafter set forth; provided, however, that 298,384
shares of Non-Voting Common Stock to be held in the name of SBC Equity
Partners ("SBC"), pursuant to an Exchange Agreement, dated January 31,
1996, shall not be convertible into shares of Voting Common Stock so
long as such shares are beneficially owned by SBC or any of its
affiliates or any other "Restricted Person", defined as any person that
would be precluded by applicable United States federal or state law
from owning Common Stock or securities convertible into Voting Common
Stock. However, all or a portion of such shares may be converted into
Voting Common Stock on a share for share basis upon the transfer by SBC
of such shares to any person not an affiliate of SBC or not a
Restricted Person, at such holder's option. SBC may transfer shares of
the Non-Voting Common Stock only (a) in a widely dispersed public
offering, (b) to one or more investors (not being an affiliate of SBC
nor a Restricted Person), in one or more transactions, none of whom,
after such purchase would hold more than 2% of the voting securities of
the Company then outstanding assuming that the shares of Non-Voting
Common Stock being transferred to such investor have been fully
converted by such investor, (c) to any person or entity that already
controls the Company prior to such transfer, (d) in a transaction that
complies with Rule 144 (or any successor thereto) of the Securities Act
of 1933, as amended, or (e) in any other transaction approved in
advance by the Federal Reserve System.
SBC may only convert shares of this Non-Voting Common Stock
into Voting Common Stock in connection with the sale of the Voting
Common Stock (a) in a widely dispersed public offering, (b) to one or
more investors (not being an affiliate of SBC nor a Restricted Person),
in one or more transactions, none of whom, after such purchase would
hold more than 2% of the voting securities of the Company then
outstanding assuming that the shares of Non-Voting Common Stock being
transferred to such investor have been fully converted by such
investor, (c) to any person or entity that already controls the Company
prior to such transfer, (d) in a transaction that complies with Rule
144 (or any successor thereto) of the Securities Act of 1933, as
amended, or (e) in any other transaction approved in advance by the
Federal Reserve System.
(ii) In order to exercise its conversion privilege, the holder
of any shares of Non-Voting Common Stock shall present and surrender
the certificate or certificates representing such shares or portion of
such shares of Non-Voting Common Stock to be converted during usual
business hours at any office of the Corporation (or such other office
or agency designated by the Corporation) together with a written notice
of the election of the holder to convert the shares represented by such
certificate or any portion thereof specified in such notice. Such
notice shall contain the name or names, address and denominations in
which the certificate(s) for shares of Voting Common Stock shall be
issuable on such conversion and shall include instructions for delivery
thereof. Further, certificate(s) representing the Non-Voting Common
Stock which shall be surrendered shall be accompanied by instruments of
transfer, in the form satisfactory to the Corporation, duly executed by
the holder of such shares or its duly authorized representative. Each
conversion of shares of Non-Voting Common Stock shall be deemed to have
been effected on
33
<PAGE> 34
the date (the "conversion date") on which the certificate(s)
representing such shares shall have been surrendered and such notice
and any required instruments of transfer shall have been received as
aforesaid, and the person or persons in whose name(s) any
certificate(s) for shares of Voting Common Stock shall be issuable on
such conversion shall be, for the purpose of receiving dividends and
for all other corporate purposes whatsoever, deemed to have become the
holder(s) of record of the shares of Voting Common Stock represented
thereby on the conversion date. The issuance of certificates for shares
of Voting Common Stock issuable upon the conversion of shares of
Non-Voting Common Stock by the registered holder thereof shall be made
without charge to the converting holder for any tax imposed on the
Corporation in respect of the issue thereof. The Corporation shall not,
however, be required to pay any tax which may be payable with respect
to any transfer involved in the issue and delivery of any certificate
in a name other than that of the registered holder of the shares being
converted, and the Corporation shall not be required to issue or
deliver any such certificate unless and until the person requesting the
issuance thereof shall have paid to the Corporation the amount of such
tax or has established to the satisfaction of the Corporation that such
tax has been paid.
(iii) In case of any consolidation or merger of the
Corporation as a result of which the holders of Common Stock shall be
entitled to receive cash, stock, other securities or other property
with respect to or in exchange for Common Stock or in case of any sale
or conveyance of all or substantially all of the property or business
of the Corporation as an entirety, a holder of a share of Non-Voting
Common Stock shall have the right thereafter, so long as the conversion
right hereunder shall exist, to convert such share into the kind and
amount of cash, shares of stock and other securities and properties
receivable upon such consolidation, merger, sale or conveyance by a
holder of one share of Voting Common Stock and shall have no other
conversion rights with regard to such share. The provisions of this
paragraph (iii) shall similarly apply to successive consolidations,
mergers, sales or conveyances.
(iv) Shares of the Non-Voting Common Stock converted into
shares of the Voting Common Stock as provided in this Article 4 shall
resume the status of authorized but unissued shares of Non-Voting
Common Stock.
(v) Such number of shares of Voting Common Stock as may from
time to time be required for such purpose shall be reserved for
issuance upon conversion of outstanding shares of Non-Voting Common
Stock.
SECOND: The foregoing amendment has been duly adopted by the Board of
Directors and a majority of the shareholders of the Company in accordance with
the provisions of Section 228 and Section 242 of the General Corporation Law of
the State of Delaware.
34
<PAGE> 35
IN WITNESS WHEREOF, said Corporation has caused this certificate to be
executed by Bruno Adam, its Chief Financial Officer and attested by Melanie K.
Stapp, its Secretary, as of this 2nd day of February, 1996.
UNIHOLDING CORPORATION
By: /s/ Bruno Adam
----------------------
Bruno Adam,
Chief Financial Officer
ATTEST:
By: /s/ Melanie K. Stapp
--------------------------------
Melanie K. Stapp
Secretary
35
<PAGE> 36
APPENDIX C
FINANCIAL DATA SCHEDULE (EXHIBIT 27)
36
<PAGE> 37
EXHIBIT INDEX
Exhibit 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
COMPANY'S FINANCIAL STATEMENTS FOR THE QUARTER ENDED FEBRUARY 29, 1996 AS
SUBMITTED IN ITS QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS WITH REFERENCE TO THE ANNUAL
REPORT FILED ON FORM 10-K FOR THE YEAR ENDED MAY 31, 1995.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1996
<PERIOD-END> FEB-29-1996
<CASH> 1,532
<SECURITIES> 0
<RECEIVABLES> 22,238
<ALLOWANCES> 0
<INVENTORY> 1,987
<CURRENT-ASSETS> 28,647
<PP&E> 33,694
<DEPRECIATION> 4,097
<TOTAL-ASSETS> 128,055
<CURRENT-LIABILITIES> 41,538
<BONDS> 0
0
0
<COMMON> 6,122,169
<OTHER-SE> 36,771
<TOTAL-LIABILITY-AND-EQUITY> 128,055
<SALES> 0
<TOTAL-REVENUES> 71,262
<CGS> 63,851
<TOTAL-COSTS> 65,678
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,969)
<INCOME-PRETAX> 4,283
<INCOME-TAX> (1,164)
<INCOME-CONTINUING> 2,098
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,098
<EPS-PRIMARY> .35
<EPS-DILUTED> .35
</TABLE>
