SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
For the Period ended March 31, 1999.
OR
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
Commission File Number: 0-13143
INNOVEX, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1223933
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
530 Eleventh Avenue South, Hopkins, Minnesota 55343-9904
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 938-4155
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 27, 1999, 14,795,004 shares of the registrant's common stock, $.04
par value per share, were outstanding.
Exhibit Index, page 13
<PAGE>
PART I: ITEM 1 FINANCIAL INFORMATION
INNOVEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, September 30,
1999 1998
ASSETS (Unaudited) (Audited)
- ------ ----------- ---------
<S> <C> <C>
Current assets:
Cash and equivalents $ 25,914,158 $ 17,021,264
Short-term investments 35,454,000 40,434,000
Accounts receivable, less allowance for
doubtful accounts of $208,000 and $213,000 10,946,269 10,521,518
Inventories 6,280,118 5,717,330
Income taxes receivable -- 938,447
Other current assets 3,606,850 4,686,504
------------ ------------
Total current assets 82,201,395 79,319,063
Property, plant and equipment, net of accumulated depreciation
of $18,656,000 and $15,817,000 32,781,261 28,501,443
Intangible and other assets, net of accumulated amortization of
$2,453,000 and $2,236,000 1,721,168 1,831,343
------------ ------------
$116,703,824 $109,651,849
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Current maturities of long-term debt $ 83,000 $ 83,000
Accounts payable 4,959,069 3,688,148
Accrued compensation 973,248 1,604,845
Income taxes payable 1,735,624 --
Other accrued liabilities 1,025,169 875,140
------------ ------------
Total current liabilities 8,776,110 6,251,133
Long-term debt, less current maturities 713,009 755,024
Deferred income taxes 227,632 227,632
Stockholders' equity:
Common stock, $.04 par value; 30,000,000 shares authorized,
14,795,004 and 14,779,604 shares issued and outstanding 591,800 591,184
Capital in excess of par value 15,875,894 15,732,350
Retained earnings 90,519,379 86,094,526
------------ ------------
Total stockholders' equity 106,987,073 102,418,060
------------ ------------
$116,703,824 $109,651,849
============ ============
</TABLE>
See accompanying notes.
Page 2 of 14
<PAGE>
INNOVEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
1999 1998
---- ----
Net sales $ 20,703,779 $ 25,105,195
Costs and expenses:
Cost of sales 13,918,648 16,253,643
Selling, general and administrative 2,112,432 2,069,023
Engineering 1,022,188 1,133,141
Net interest (income) expense (487,319) (373,912)
Net other (income) expense 540,729 (45,341)
------------ ------------
Income before taxes 3,597,101 6,068,641
Provision for income taxes 1,058,000 1,807,000
------------ ------------
Net income $ 2,539,101 $ 4,261,641
============ ============
Net income per share:
Basic $ 0.17 $ 0.29
============ ============
Diluted $ 0.17 $ 0.28
============ ============
Weighted average shares outstanding:
Basic 14,791,885 14,660,885
============ ============
Diluted 15,134,617 15,155,784
============ ============
Six Months Ended March 31,
1999 1998
------------ ------------
Net sales $ 42,731,640 $ 58,113,830
Costs and expenses:
Cost of sales 28,869,976 36,155,636
Selling, general and administrative 4,535,622 3,990,807
Engineering 1,943,693 2,399,582
Net interest (income) expense (881,738) (803,267)
Net other (income) expense 469,219 (76,733)
------------ ------------
Income before taxes 7,794,868 16,447,805
Provision for income taxes 2,261,000 4,912,000
------------ ------------
Net income $ 5,533,868 $ 11,535,805
============ ============
Net income per share:
Basic $ 0.37 $ 0.79
============ ============
Diluted $ 0.37 $ 0.76
============ ============
Weighted average shares outstanding:
Basic 14,786,180 14,616,603
============ ============
Diluted 15,098,359 15,171,997
============ ============
See accompanying notes.
Page 3 of 14
<PAGE>
INNOVEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended March 31,
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,533,868 $ 11,535,805
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,368,086 3,268,841
Other non-cash charges (credits) 46,697 49,405
Changes in operating assets and liabilities:
Accounts receivable (424,751) 7,302,402
Inventories (562,788) (238,666)
Other current assets 1,079,654 130,667
Accounts payable 1,270,921 (784,597)
Other liabilities (481,568) (1,332,089)
Income taxes payable 2,674,071 102,224
------------ ------------
Net cash provided by (used in) operating activities 12,504,190 20,033,992
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (7,618,075) (9,558,978)
Proceeds from sale of assets 33,649 27,071
Purchase of held-to-maturity securities (17,240,000) (12,650,000)
Maturities of held-to-maturity securities 22,220,000 10,981,747
------------ ------------
Net cash provided by (used in) investing activities (2,604,426) (11,200,160)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (42,015) (183,350)
Proceeds from exercise of stock options 144,159 442,714
Dividends paid (1,109,014) (951,768)
------------ ------------
Net cash provided by (used in) financing activities (1,006,870) (692,404)
Increase (decrease) in cash and equivalents 8,892,894 8,141,428
Cash and equivalents at beginning of year 17,021,264 9,442,620
------------ ------------
Cash and equivalents at end of period $ 25,914,158 $ 17,584,048
============ ============
</TABLE>
SUPPLEMENTAL DISCLOSURES:
The Company considers all highly liquid investments with a maturity date of
three months or less when purchased to be "cash equivalents."
Cash paid for interest was $42,000 and $35,000 in 1999 and 1998, respectively.
Income tax payments were $975,000 and $4,810,000 in 1999 and 1998, respectively.
See accompanying notes.
Page 4 of 14
<PAGE>
INNOVEX INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions on Form 10-Q and do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. The unaudited condensed
consolidated financial statements include the accounts of Innovex, Inc. and its
subsidiaries (the "Company") after elimination of all significant intercompany
transactions and accounts. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation
of operating results have been made. Operating results for interim periods are
not necessarily indicative of results that may be expected for the year as a
whole. The Company utilizes a fiscal year that ends on the Saturday nearest to
September 30. For clarity of presentation, the Company has described all periods
as if they end at the end of the calendar quarter. For further information,
refer to the consolidated financial statements and footnotes included in the
registrant's annual report on Form 10-K for the year ended September 30, 1998.
NOTE 2 - EARNINGS PER SHARE
The Company's basic net income per share is computed by dividing net income by
the weighted average number of outstanding common shares. The Company's diluted
net income per share is computed by dividing net income by the weighted average
number of outstanding common shares and common share equivalents relating to
stock options when dilutive. Options to purchase 154,850 and 172,950 shares of
common stock with weighted average exercise prices of $28.31 and $27.22,
respectively, were outstanding during the three and six month periods ending
March 31, 1999, but were excluded from the computation of common share
equivalents because they were not dilutive. Options to purchase 219,750 and
221,000 shares of common stock with weighted average exercise prices of $30.34
and $29.67, respectively, were outstanding during the three and six month
periods ending March 31, 1998, but were excluded from the computation of common
share equivalents because they were not dilutive.
Page 5 of 14
<PAGE>
PART I: ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE COMPANY
Prior to July 28, 1998, Innovex Inc. and its subsidiaries (the "Company")
operated through three divisions, Precision Products (Precision), Litchfield
Precision Components (LPC) and Iconovex. Each division had its own
administrative, engineering, manufacturing and marketing organizations. During
the quarter ending September 30, 1998, the Company combined the operations of
its two core operating divisions, Precision and LPC into one operating division,
Innovex Precision Components. The combination merged the rapidly growing LPC
flexible circuit fabrication and chemical etching operations with Precision's
high volume fine wire manufacturing expertise. The combination also allows
Innovex to leverage Precision's disk drive industry market and trade knowledge
to disk drive industry flexible circuit applications as the industry transitions
from wire interconnects.
Prior to the divisional combination, the largest division, Precision Products,
developed, engineered and manufactured specialty precision electromagnetic
products for original equipment manufacturers ("OEM's"). Lead wire assemblies
for the thin film disk drive market were the Division's primary product. Lead
wire assemblies are fine twisted magnet wires that connect the back end
electronics of a disk drive with the inductive or magneto resistive thin film
heads that read and write information on the disk.
The Litchfield Precision Components Division, prior to the divisional
combination, designed and manufactured highly complex flexible circuitry and
chemically machined components, primarily for the computer and medical
industries. The Company purchased Litchfield Precision Components, Inc. on May
16, 1996. This acquisition reduced the Company's reliance on the disk drive
industry while providing an entry into the large and rapidly growing flexible
circuit market. A large portion of this growth is expected to be providing the
highly intricate flexible circuits required in chip packaging applications. LPC
is one of a limited number of operations in the world able to produce flexible
circuits with line and spacing tolerances of less than 2 mils for these
applications.
The Iconovex Division was established in fiscal 1994 to market and further
develop a technologically advanced software product purchased in November 1993.
The core software utilizes syntactical analysis to recognize meanings and
relationships among words and phrases in order to prepare indexes and abstracts
of electronically stored information. Syntactical analysis is more accurate than
conventional Boolean search systems that only recognize specific words. In
October 1997, Iconovex became the 51% owner of a joint venture with Solutions
Corporation of America. The joint venture, Smart Solution, is targeting the
corporate intranet market by providing a product to organize, analyze, screen
and index email and to eventually perform the same function for corporate
databases. The Company plans to divest Iconovex as it does not fit in the
Company's long-term strategic plan and it is exploring alternatives for the sale
of the division.
On June 1, 1998 the Company sold the assets of its InnoMedica Division. This
division, which produced an immaterial portion of the Company's revenue,
provided contract development and manufacturing services primarily to the
medical device industry as well as pacing/defibrillation leads and adapters for
the implantable bradycardia and tachacardia industry.
RESULTS OF OPERATIONS
NET SALES
The Company's net sales from operations totaled $20,704,000 for the quarter,
down 18% from $25,105,000 reported in fiscal 1998. Sales of $42,732,000 for the
six months ended March 31, 1999 decreased 26% from the prior year period. The
decreases were due to continued disk drive industry softness that began in the
September 30, 1997 quarter. This softness appears to be due to an over supply
Page 6 of 14
<PAGE>
of disk drives and due to a reduction in the number of disk drives kept in
inventory by computer manufacturers as they adopt a build to order business
model. Also contributing to the sales decrease was a reduction in the average
number of heads per disk drive. This reduction is the result of an increasing
number of low cost disk drives being sold and as a result of the conversion to
magneto resistive (MR) and Giant Magneto Resistive (GMR) disk drive heads which
increase the storage capacity per disk drive platter and reduce the number of
heads required to provide the same disk drive capacity. The current quarter was
also impacted by the transition of the disk drive industry from traditional lead
wire interconnects to integrated interconnects including the Company's Head
Interconnect Flex (HIF).
During the fiscal 1999 second quarter, the Company experienced increases in
revenue from flexible circuits of 39% over the prior quarter and 147% over the
same quarter last year. Offsetting this increase was a material decline in the
shipments of wire interconnects during the quarter. This product transition
resulted in over 63% of the fiscal 1999 second quarter revenue being generated
from the sale of flexible circuits as compared to 43% for the prior quarter and
25% for the 1998 fiscal year. This transition will continue with revenue growth
in the remainder of the fiscal year driven by increases in shipments of flexible
circuits.
Over 80% of the Company's total revenue continues to be from disk drive industry
interconnects. An increasing portion of the Company's sales will be generated by
the sale of high-end flexible circuits. The market for high end flexible
circuits is increasing due to new semiconductor packaging substrate applications
and due to the disk drive industry transitioning from wire interconnects to
integrated interconnect products. These products include the Company's Head
Interconnect Flex (HIF), Flex Suspension Assembly(FSA) and Bridge Flex. The
magnitude of the increase in sales will depend on the timing and acceptance of
the Company's new FSA and semiconductor packaging flexible circuit substrate
products.
GROSS MARGINS
The Company's gross profit as a percent of sales for the quarter decreased to
33%, from the 35% reported for the fiscal 1998 second quarter. The gross profit
as a percent of sales for the first six months decreased to 32%, from the 38%
reported for the same period last year. The gross margin percent decreased
primarily due to lower shipments of lead wire assemblies that reduced the
leverage of the fixed overhead costs related to their production. Gross margins
have improved as compared to the 32% reported in the prior quarter as a result
of improved flexible circuit manufacturing yields and increased fixed cost
leverage due to higher flexible circuit unit volume. Gross margins for the
remainder of fiscal 1999 should benefit from expected increases in the demand
for high end flexible circuits although these benefits may be partially offset
by costs related to the phase down of the wire portion of the business.
OPERATING EXPENSES
Operating expenses were 15.1% of sales for the current quarter, as compared to
12.8% in the prior year's second quarter. Operating expenses for the first six
months of fiscal 1999 were 15.2%, up from 11.0% for the prior year's first six
months. The increase in operating expenses as a percent of sales for the current
year is primarily due to the decrease in revenue and an increase in marketing,
professional and legal expenses. Total operating expenses also increased due to
an increase in marketing, professional and legal expenses. The level of
operating expenses should remain relatively stable for the remainder of the
fiscal year and improve as a percent of sales as revenue is expected to
increase.
OPERATING PROFIT
Consolidated operating profit of $3,651,000 in the current quarter was down from
the $5,649,000 profit for the prior year second quarter. Consolidated operating
profit for the first six months was $7,382,000 versus $15,568,000 for the same
period last year. This is primarily the result of the decreased sales volume.
Operating profits for the next quarter are expected to show some sequential
growth and compare favorably with the fiscal 1998 third quarter and improve
during the remainder of the fiscal
Page 7 of 14
<PAGE>
year, as increases in demand for high-end flexible circuits should more than
offset reductions in lead wire assembly shipments.
NET INCOME
Consolidated net income for the fiscal 1999 second quarter was $2,539,000 as
compared to $4,262,000 for the prior year. Basic and diluted net income per
share were $0.17 as compared to $0.29 and $0.28 for the prior year second
quarter. Consolidated net income for the first six months of fiscal 1999 was
$5,534,000 as compared to $11,536,000 for the prior year. Basic and diluted net
income per share were $0.37 as compared to $0.79 and $0.76 for the same period
last year. Other expense included approximately $630,000 of charges related to
the settlement of threatened litigation by a former director of the Company.
These charges reduced earnings per share by $0.03 per share.
LIQUIDITY AND CAPITAL RESOURCES
Cash and short-term investments increased to $61.4 million at March 31, 1999
from $57.5 million at September 30, 1998. This increase was primarily due to
income generated from operating activities and an increase in operating
liabilities due to payment timing.
Accounts receivable and inventory at March 31, 1999 increased by $0.4 million
and $0.6 million, respectively, from September 30, 1998 due to the increased
level of operating activity.
Working capital totaled $73.4 million and $73.1 million at Match 31, 1999 and
September 30, 1998.
Since September 30, 1998, the Company has invested $7.6 million in capital
expenditures. These additions include FSA attachment equipment, computer system
enhancements and equipment to expand the high volume flexible circuit
manufacturing facility capacity. Capital expenditures of approximately $7
million are expected during the remainder of fiscal 1999 to increase the
Company's high volume flexible circuit manufacturing and FSA production
capacities and to begin construction of a facility to produce material for use
in flexible circuit manufacturing.
Management believes that internally generated funds will provide adequate
sources of capital for supporting projected growth in fiscal 1999.
YEAR 2000 UPDATE
The Company is taking steps to ensure that it is not adversely affected by the
year 2000 equipment and software failures that may arise in software
applications and equipment with embedded logic where two-year digits are used to
define the applicable year. Our plan of action and current status follows:
YEAR 2000 STATE OF READINESS:
The Company's products do not contain embedded logic and, as such, they do not
pose any direct year 2000 problem. Innovex's internal operations utilize
computer hardware, software and some equipment with embedded logic and the
Company purchases raw materials from external sources. In order to prepare for
the year 2000, Innovex has formed an active year 2000 committee that is charged
with the responsibility of securing year 2000 compliance to the fullest possible
extent. The process has been split into six major areas, information system
hardware, information system software, all other equipment with potential
embedded logic, critical vendors, critical customers and critical utilities and
service providers.
Information System Hardware:
The manufacturers of the Company's computer server and network hardware have
indicated that the equipment is year 2000 compliant. A plan to perform
comprehensive tests ensuring compliance has been developed and testing should be
complete by August 1999. Over 90% of the Company's personal computers have been
tested to determine year 2000 compliance. The remaining personal computers will
be tested before the end of June 1999. Approximately 20 % of the personal
computers tested are currently not in compliance and will be replaced or brought
into compliance by August 1999.
Page 8 of 14
<PAGE>
Information System Software:
The vendor for the Company's newly implemented primary manufacturing and
financial software has indicated that the software is year 2000 compliant. A
plan to perform comprehensive tests ensuring compliance of this software is
being developed and testing should be complete by August 1999. As the testing of
personal computer hardware is being performed, the personal computer operating
systems and primary application software are being updated to year 2000
compliant versions as specified by the software vendor. A listing of all other
personal computer resident application software has been prepared. Vendors of
software identified as not being year 2000 compliant are being contacted to
determine if any upgrades are required to bring the software into year 2000
compliance. This process is scheduled for completion prior to August 1999.
Equipment With Potential Embedded Logic:
A list of all Company equipment with potential embedded logic was prepared. The
equipment was prioritized as Tier I - mission critical and Tier II - other
equipment. Information has been received from Tier I equipment manufacturers
indicating that over 90% of the Tier I equipment is year 2000 compliant. Year
2000 date remedies have been received from the manufacturers on much of the
remaining equipment. 80% of the Tier II equipment manufacturers have been
contacted and/or determined to be year 2000 compliant. The Company expects to
obtain year 2000 compliance information from the remainder of the manufacturers
by the end of June 1999.
Critical Vendors:
A list of significant vendors was compiled. Letters were sent to these vendors
to determine the level of their year 2000 compliance. Approximately 75% have
replied and indicated that they are currently year 2000 compliant or will become
compliant during 1999. The Company is continuing its efforts to contact all
those vendors that have not yet responded to determine their level of compliance
by June 1999. Progress toward compliance of all vendors that are not yet
compliant will be monitored with alternative vendors identified if necessary.
Critical Customers:
A list of customers considered significant to the Company was compiled. Letters
were sent to these customers to determine the level of their year 2000
compliance. Approximately 50% have responded indicating full year 2000
compliance or have targeted their compliance by calendar third quarter 1999. The
Company expects to contact all those customers that have not yet responded to
determine their level of compliance by June 1999. Many of the Company's
customers have indicated they are diligently in the process of their own Y2K
plans by requesting information from the Company as a supplier to them.
Progress toward compliance of all customers that have not yet indicated
compliance will be monitored.
Utilities and Service Providers:
A list of utilities and service providers considered critical to the Company's
ongoing success has been compiled. These companies are being contacted to
determine their level of Y2K compliance. Most of these companies are in
regulated industries with stringent Y2K compliance requirements. The Company
does not anticipate that any significant problems will be identified in these
areas.
COSTS TO ADDRESS YEAR 2000 ISSUES:
The Company does not anticipate that the costs related to becoming year 2000
compliant will be material. Costs incurred to date are less than $50,000 and
future costs of consultants and equipment and software replacements and upgrades
are expected to be approximately $100,000. Costs of implementing the new
manufacturing and financial software are not considered related to the year 2000
issue.
RISKS OF THE COMPANY'S YEAR 2000 ISSUES AND CONTINGENCY PLANS:
Page 9 of 14
<PAGE>
Based on the progress of the Company's Year 2000 initiative, management believes
the potential of a significant year 2000 issue to be unlikely. The Company's
products do not contain embedded logic. The Company has recently implemented
year 2000 compliant primary manufacturing and financial software throughout its
operation. Dual sources for material are utilized or have been identified and
most manufacturing equipment was recently purchased and/or does not utilize date
sensitive embedded logic.
There can be no assurance that all non-complying equipment and software will be
identified and upgraded on a timely basis. In addition, there can be no
assurance that the Company's customers and suppliers will not be adversely
affected by their own Year 2000 issues, which may adversely affect the Company.
FORWARD LOOKING STATEMENTS
Statements included in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, in letters to shareholders, elsewhere in
the Company's Form 10-Q and in future filings by the Company with the SEC,
except for historical information contained herein and therein, are "forward
looking statements" that involve risks and uncertainties, including the timely
availability and acceptance of new products, the impact of competitive products
and pricing, interruptions in the Company's operations or those of its suppliers
or major customers as such may be caused by problems arising from the year 2000
and a general downturn in the Company's principal market. The Company disclaims
any obligation subsequently to revise any forward-looking statements to reflect
subsequent events or circumstances or the occurrence of unanticipated events.
Page 10 of 14
<PAGE>
PART II - OTHER INFORMATION
Responses to Items 2, 3 and 5 are omitted since these items are either
inapplicable or the response thereto would be negative.
ITEM 1. LEGAL PROCEEDINGS
On January 19, 1999, the Company reached a settlement with Mary Curtin under
which the parties released one another from any and all claims and causes of
action which they held or may have held against one another arising out of or
relating to Ms. Curtin's relationships with the Company as an employee and
director. The Company disclosed Ms. Curtin's threatened claims in Item 3 of the
Company's September 30, 1998 Form 10-K. Ms. Curtin is a former executive vice
president and director of the Company and the spouse of Thomas Haley, the
Company's Chairman and Chief Executive Officer. In connection with the
settlement, the Company agreed to pay Ms. Curtin total cash consideration of
$750,000 upon the expiration of statutory rescission periods. On February 4,
1999, the Company paid $500,000 in cash to Ms. Curtin and Mr. Haley transferred
15,000 shares of Innovex common stock to Ms. Curtin. This cash payment and stock
transfer, together, completely satisfied the Company's financial obligations
under the settlement agreement. The Company has incurred legal and other
expenses of approximately $150,000 related to this settlement.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a) The Annual Meeting of the shareholders of Innovex, Inc. was held on
January 20, 1999. There were 14,781,504 shares of common stock entitled to
vote at the meeting and a total of 13,415,544 shares were represented at
the meeting.
b) Five directors were elected at the meeting to serve for one year or until
their successors are elected and qualified. Two of the board of directors'
original nominees, Mary Curtin and Robert Miller, withdrew as nominees for
the election of directors. Shares were voted as follows:
For Withheld
---------- ---------
Gerald M. Bestler 12,578,346 837,198
Frank L. Farrar 12,207,181 1,208,363
Thomas W. Haley 12,014,393 1,401,151
Michael C. Slagle 10,670,364 2,745,180
Bernt M. Tessem 12,236,667 1,178,877
c) Other matters voted on at the meeting:
Proposal #2. A proposal was made to increase the authorized shares
under the 1994 Stock Option Plan from 1,200,000 to 1,800,000. Shares
were voted as follows:
For Against Abstain
--- ------- -------
12,421,621 845,546 148,376
Proposal #3. A proposal was made to approve the selection of the
Company's independent public accountants for the current fiscal
year. Shares were voted as follows:
For Against Abstain
--- ------- -------
13,276,953 60,273 78,318
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
27 Financial Data Schedule
b) Reports on Form 8-K
None.
Page 11 of 14
<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 thereunto duly authorized.
INNOVEX, INC.
Registrant
Date: May 12, 1999
By \s\ Thomas W. Haley
Thomas W. Haley
Chief Executive Officer
By \s\ Douglas W. Keller
Douglas W. Keller
Vice President, Finance
Page 12 of 14
<PAGE>
INDEX TO EXHIBITS
Exhibits Page
27 Financial Data Schedule 14
Page 13 of 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS INCLUDED IN THE 10-Q FOR THE QUARTER ENDED MARCH
31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 25,914
<SECURITIES> 35,454
<RECEIVABLES> 11,154
<ALLOWANCES> 208
<INVENTORY> 6,280
<CURRENT-ASSETS> 78,595
<PP&E> 51,437
<DEPRECIATION> 18,656
<TOTAL-ASSETS> 116,704
<CURRENT-LIABILITIES> 8,776
<BONDS> 713
592
0
<COMMON> 0
<OTHER-SE> 106,395
<TOTAL-LIABILITY-AND-EQUITY> 116,704
<SALES> 42,732
<TOTAL-REVENUES> 42,732
<CGS> 28,870
<TOTAL-COSTS> 28,870
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29
<INCOME-PRETAX> 7,795
<INCOME-TAX> 2,261
<INCOME-CONTINUING> 5,534
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,534
<EPS-PRIMARY> 0.37
<EPS-DILUTED> 0.37
</TABLE>
