SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A-1
Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended February 29, 1996
-------------------------
COMMISSION FILE NUMBER O-9833
-------------------------
UNIHOLDING CORPORATION
----------------------------
(Exact name of small business issuer as specified in its
charter)
Delaware 58-1443790
--------------------------- ---------------------------
(State or jurisdiction of (IRS Employer identification
incorporation or organization) Number)
96 Spring Street, New York, New York 10012
- --------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
(212) 219-9496
----------------------------------------------------
(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 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's outstanding.
<PAGE>
UNIHOLDING CORPORATION AND SUBSIDIARIES
Form 10-Q for the Quarterly
Period Ended February 29, 1996
INDEX
Part I- FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheets - February 29, 1996
and May 31, 1995
Consolidated Statements of Operations
Three month and nine month period ended February 29, 1996
and February 28, 1995
Consolidated Statements of Cash Flows
Nine month periods ended February 29, 1996 and February 28, 1995
Notes to Unaudited Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Signatures
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<PAGE>
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
Investment in equity affiliates 1,738 --
Other assets, net 780 424
-------- --------
Total non-current assets 96,207 92,404
-------- --------
$124,854 $133,558
======== ========
</TABLE>
See notes to financial statements
<PAGE>
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
-------- --------
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 4,350 5,453
-------- --------
36,657 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 33,570 37,877
-------- --------
$124,854 $133,558
======== ========
</TABLE>
See notes to financial statements
<PAGE>
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)
Equity in loss of affiliates -- -- (3,005) --
Other, net 338 (10) 472 (67)
----------- ----------- ----------- -----------
Income before taxes and minority interests 292 1,927 1,082 5,604
Tax provision 22 (799) (1,164) (2,087)
----------- ----------- ----------- -----------
Income from continuing operations
before minority interests 314 1,128 (82) 3,517
Minority interests in income of continuing
operations (209) (693) (1,021) (2,022)
----------- ----------- ----------- -----------
Income (loss) from continuing operations 105 435 (1,103) 1,495
Loss on disposition of discontinued operation,
net of tax benefit of $195 and minority
interests of $220 -- -- -- (234)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 105 $ 435 $ (1,103) $ 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 (loss) from continuing operations $ 0.02 $ 0.07 $ (0.18) $ 0.26
Loss on disposition of discontinued operation -- -- -- $ (0.04)
Net income (loss) $ 0.02 $ 0.07 $ (0.18) $ 0.22
</TABLE>
See notes to financial statements
<PAGE>
UNIHOLDING CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Nine Months ended
-----------------
February 29, February 28,
1996 1995
----------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income (loss) $ (1,103) $ 1,261
Adjustments to reconcile net income to net cash
provided by operations:
Equity in loss of affiliates 3,005 --
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 10,137 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)
Payment for purchase of treasury stock (3,087) --
-------- --------
Net cash provided by financing activities 2,731 4,430
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
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 (16,594) (3,662)
Payment for purchase of intangible assets (271) (1,828)
Proceeds from sale of assets 285 849
-------- --------
Net cash used in investing activities (28,223) (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
<PAGE>
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
<PAGE>
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.
As of June 30, 1995, UniHolding and UGL 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 interest on the $ 15,000 promissory note
is the greater of (i) 10% and (ii) the 3-month LIBOR rate on the business day
immediately preceding the first day of a calendar quarter plus 3.25%. Such
interest started accruing on January 1, 1996. The agreement provides that if the
note is still unpaid six months after its due date, it shall be converted into
shares of UniHolding's common stock. In accordance with the agreements between
Unilab and the Company, both parties must in such an instance, so long as all
interest accrued on the $ 15,000 note have been fully paid, use their respective
reasonable efforts to agree upon a mutually acceptable resolution. If such a
mutually acceptable resolution is not found, the amount of principal and accrued
unpaid interest shall be converted on January 1, 1997 into UniHolding Common
Stock at 75% of then market price. Until such time as the note is paid either in
cash or in UniHolding Common Stock, the UGL shares so acquired remain in escrow.
The acquisition of the minority interest in UGL was 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, $ 3,301, was 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
<PAGE>
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 (Loss) Per Share
Net income (loss) per share is computed by dividing net income or net loss 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.
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.
<PAGE>
6. Supplemental Disclosure of Cash Flow Information
Nine months ended
-----------------
February 29, February 28,
1996 l995
------------ -----------
Cash paid during the period for
Interest $1,518 $1,182
Income taxes 1,735 2,076
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 Agreement with NDA. Under these Agreements, the Company acquired 17% of
NDA's capital through the
<PAGE>
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):
Revenue $71,262
Operating income 7,128
Net loss ($53)
Per share ($0.01)
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.
<PAGE>
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):
Current assets $27,897
Other assets 93,989
--------
$121,886
========
Current liabilities $39,567
Other liabilities 43,786
Minority interests 5,767
Stockholders' equity 32,766
--------
$121,886
========
9. Investment in new venture
On September 14, 1995, UGL entered into an agreement with Health Strategies
Limited (a Jersey, Channel Islands, corporation, "HSL", a company which may be
deemed to be related to the Company for the reasons mentioned below, and which
the Company believes may be deemed to be controlled by a director of Unilab),
whereby a new company, MISE S.A. (a British Virgin Islands corporation, "MISE")
was formed. UGL invested $ 3,005 in MISE for 33.3% of the voting rights and for
66.6% of the equity in MISE stock, of which $ 2,005 was paid during the period,
and the balance is payable in two installments of $ 500 each in September 1996
and 1997. HSL owns the remaining voting and equity interests in MISE for which
it contributed a nominal amount of cash and its agreement to obtain for MISE
certain know-how and related software and services. MISE then acquired for $
1,500 certain know-how and computer software from HSL, which know-how and
software were simultaneously acquired for $ 250 by HSL from Medical Diagnostic
Management Inc. (a U.S. corporation, "MDM"), which may be deemed to be related
to HSL, and, for the reasons mentioned below, may also be deemed to be related
to the Company. Further, MISE committed to pay HSL a total of $ 1,500 for
certain plans for marketing the know-how and software in several European
countries. Out of such amount, $ 500 was paid during the period, and the balance
is payable in two installments of $ 500 each in October 1996 and 1997. The fee
agreed for the marketing plans also includes support services and customization
to European needs. Based upon MDM's representations, MDM's board of directors
include two directors or officers of Unilab. Unilab may be deemed to be a
related party of the Company by virtue of the $ 15,000 note due to Unilab in
connection with the acquisition of Unilab's 40% investment in UGL on June 30,
1995, which note may under certain circumstances be converted by Unilab into
UniHolding
<PAGE>
Common Stock. None of those two directors or officers of Unilab are directors or
officers of UniHolding, and no director or officer of UniHolding has any direct
or indirect interest in either of HSL or MDM. The acquisition value of the
know-how was determined on MISE's behalf through negotiations between the
Company and a director of MDM who is also a director of Unilab, and was agreed
upon by the UGL and UniHolding boards of directors. The director of Unilab is
HSL's designee to the board of directors of MISE.
The investment provides the Company access to certain know-how developed by MDM.
MDM is a start-up company which is active in the industry of health information
services in the U.S., and is focusing on organizing and managing access to
discounted provider networks for ambulatory diagnostic services (radiology,
other imaging techniques, and laboratory). Its strategy is to be a clinical,
financial, administrative and information management intermediary among
referring physicians, payers and diagnostic providers. The know-how acquired by
MISE from HSL includes, but is not limited to, a certain computerized
information system proprietary to MDM. HSL granted to MISE a perpetual license
for the use of the MDM know-how and related software for use in Western Europe.
In addition, HSL agreed to provide marketing and support services for a
three-year period at no further cost to MISE. Both UGL and HSL agreed to use
their best efforts to implement the MISE business in Western Europe and agreed
not to compete with MISE in the same territory. The Company, through MISE,
intends to market the concept, including the computerized information system, to
health insurance companies throughout Europe. The Company believes that such a
concept should be particularly useful and applicable in the context of the
ongoing deregulation of the health care system and may provide a useful tool to
achieve substantial savings in health care costs in several European countries.
During the period, MISE had no activity, however the Company's management is of
the opinion that there has been no impairment of its investment, and that
operations will start in fiscal year 1997. Accounting principles generally
accepted in the U.S. require that know-how and marketing plans such as those
purchased by MISE, purchased from either related or unrelated parties, be
expensed as incurred. Accordingly, during the period, the Company has recognized
a loss from its equity investee of $ 3,000.
<PAGE>
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.
<PAGE>
<TABLE>
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)
Equity in loss of affiliates -- -- -- --
Other, net (10) -- -- 338
----------- ---- ----------- -----------
Income before taxes and minority
interests 1,927 (439) 1,498 292
Tax provision (799) 226 (573) 22
----------- ---- ----------- -----------
Income from continuing operations
before minority interests 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>
<PAGE>
<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)
Equity in loss of affiliates -- -- -- (3,005)
Other, net (67) (67) 472
----------- ------ ----------- -----------
Income before taxes and minority
interests 5,604 (1,318) 4,286 1,082
Tax provision (2,087) 373 (1,409) (1,164)
188
117
----------- ------ ----------- -----------
Income (loss) from continuing
operations before minority interests 3,517 (640) 2,877 (82)
Minority interests in income of
continuing operations (2,022) 816 (1,132) (1,021)
113
(24)
(15)
----------- ------ ----------- -----------
Income (loss)from continuing operations 1,495 249 1,744 (1,103)
Loss on disposition of discontinued
operation, net (234) -- (234) --
----------- ------ ----------- -----------
Net income (loss) $ 1,261 $ 249 $ 1,510 ($ 1,103)
=========== ====== =========== ===========
Weighted average common
shares outstanding 5,743,488 6,021,132
Earnings per share of common stock
Net income (loss) from continuing
operations $ 0.30 ($ 0.18)
Loss on disposition of discontinued operation $ (0.04) --
Net income (loss) $ 0.26 ($ 0.18)
</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,
<PAGE>
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 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 of $0.5 million was recorded primarily from exchange gains realized
on certain assets and liabilities as a result of fluctuations in exchange rates.
Other income was also negatively impacted by a charge of $ 3.0 million resulting
from the equity pick-up of the Company's investment in MISE. This was due to the
fact that MISE has recorded a one-time amortization of the know-how
<PAGE>
and computer software it purchased during the year. While the Company's
management believes that the fair value of its investment in MISE has not been
impaired, accounting principles generally accepted in the U.S. require that
know-how and marketing plans, such as those purchased by MISE, whether they are
purchased from either related or unrelated parties, be expensed as incurred.
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 $10.1 million, an increase of $4.8 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 $2.7 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, acquisition of treasury stock and cash proceeds from
issuance of new capital.
Net cash used in investing activities for the nine months ended February 29,
1996 was $28.2 million, consisting primarily of capital expenditures incurred in
connection with new laboratory equipment, lending to affiliates, the purchase of
the 40% minority interest in UGL as of June 30, 1995, the purchase of the 17%
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.
<PAGE>
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
$30.0 million. The consideration was paid $13.0 million in cash, $2.0 million
through the assumption of a debt from Unilab to JSP, and $15.0 million 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, it
shall be converted into shares of the Company's common stock at 75% of the
market price, the Company intends to pay the note on or before its due date. In
connection with this note, the Company is 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.
<PAGE>
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
-------------------
Bruno Adam, CFO
Date: October 15, 1996
<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/A-1 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>
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1996
<PERIOD-END> FEB-29-1996
<CASH> 1,532
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<INVENTORY> 1,987
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