<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarter Ended September 30, 1996 Commission File No. 0-6994
------
NEW BRUNSWICK SCIENTIFIC CO., INC.
State of Incorporation - New Jersey E. I. #22-1630072
-----------
44 Talmadge Road, Edison, N.J. 08818-4005
Registrant's Telephone Number: 908-287-1200
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 twelve (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 ninety (90) days.
Yes X No
-------- ----------
There are 3,783,040 Common shares outstanding as of November 7, 1996.
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC.
Index
PAGE NO.
PART I. FINANCIAL INFORMATION:
Item 1:
Consolidated Condensed Balance Sheets -
September 30, 1996 and December 31, 1995 3
Consolidated Statements of Operations -
Three and Nine Months Ended September 30, 1996 and 1995 4
Consolidated Condensed Statements of
Cash Flows - Nine Months Ended September 30, 1996 and 1995 5
Notes to Consolidated Condensed Financial
Statements 6
Item II:
Management's Discussion and Analysis of Results
of Operations and Financial Condition 7
PART II. OTHER INFORMATION 9
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except for share data)
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 4,415 $ 6,382
Accounts receivable, net 7,916 9,135
Refundable income taxes 216 216
Deferred income tax benefit 188 188
Inventories:
Raw materials and sub-assemblies 7,176 6,786
Work-in-process 2,196 2,062
Finished goods 4,863 3,844
-------- --------
Total inventories 14,235 12,692
Prepaid expenses and other current assets 1,610 1,364
-------- --------
Total current assets 28,580 29,977
-------- --------
Property, plant and equipment, net 5,760 5,237
Other assets 565 471
-------- --------
$ 34,905 $ 35,685
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current installments of long-term debt $ 128 $ 130
Accounts payable and accrued expenses 5,803 6,339
-------- --------
Total current liabilities 5,931 6,469
-------- --------
Long-term debt, net of current installments 439 564
Other liabilities 471 471
-------- --------
Shareholders' equity:
Common stock, $.0625 par, authorized
25,000,000 shares; shares issued and
outstanding, 1996 - 3,783,040 and 1995
- 3,595,651 net of shares held in
treasury, 1996 - 355,425 and
1995 - 338,500 236 225
Capital in excess of par 20,589 19,283
Retained earnings 8,378 9,488
Currency translation adjustment (668) (344)
Pension liability adjustment (471) (471)
-------- --------
Total shareholders' equity 28,064 28,181
-------- --------
$ 34,905 $ 35,685
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $ 9,658 $ 8,266 $ 29,074 $ 27,224
Operating costs and expenses:
Cost of sales 5,783 4,973 17,611 16,431
Selling, general and administrative expenses 2,962 2,754 8,752 8,797
Research, development and engineering expenses 894 536 2,616 1,510
-------- -------- -------- --------
Total operating costs and expenses 9,639 8,263 28,979 26,738
-------- -------- -------- --------
Income from operations 19 3 95 486
Other income (expense):
Interest income 40 52 149 172
Interest expense (12) (12) (36) (44)
Other income (expense), net 3 (6) 2 (9)
-------- -------- -------- --------
31 34 115 119
-------- -------- -------- --------
Income before income taxes 50 37 210 605
Income taxes 10 7 42 121
-------- -------- -------- --------
Net income $ 40 $ 30 $ 168 $ 484
======== ======== ======== ========
Earnings per Common share $ .01 $ .01 $ .05 $ .13
======== ======== ======== ========
Weighted average number of shares outstanding 3,783 3,769 3,688 3,674
======== ======== ======== ========
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1996 1995
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 168 $ 484
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation 528 404
Change in related balance sheet accounts:
Accounts receivable 1,001 354
Inventories (1,692) (1,619)
Prepaid expenses and other current assets (272) (130)
Accounts payable and accrued expenses (1,041) (1,299)
Advance payments from customers 588 579
------- -------
Net cash used by operating activities (720) (1,227)
------- -------
Cash flows from investing activities:
Additions to property, plant and equipment (1,145) (567)
Sale of equipment 22 16
------- -------
Net cash used by investing activities (1,123) (551)
------- -------
Cash flows from financing activities:
Dividends -- (179)
Repayment of long-term debt (98) (107)
Proceeds from issue of shares under Employee
Stock Purchase Plan 36 33
Proceeds from issue of Common stock under
Stock Option Plan for nonemployee directors 3 --
------- -------
Net cash used by financing activities (59) (253)
------- -------
Net effect of exchange rate changes on cash (65) 77
------- -------
Net decrease in cash and cash equivalents (1,967) (1,954)
Cash and cash equivalents at beginning of period 6,382 7,142
------- -------
Cash and cash equivalents at end of period $ 4,415 $ 5,188
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 31 $ 49
Income taxes 195 172
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Interim Results:
In the opinion of the Company, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting only of normal
recurring accruals) necessary to present fairly, its financial position as of
September 30, 1996 and the results of its operations and cash flows for the nine
months ended September 30, 1996 and 1995. Interim results may not be indicative
of the results that may be expected for the year.
Note 2 - Earnings per share:
Earnings per Common share are based on the weighted average number of shares
outstanding. Stock options are not included in the calculation as they had no
significant dilutive effect on earnings per share. A 5% stock dividend was
declared in March 29, 1996 and distributed on May 15, 1996. The weighted average
number of shares for prior periods have been restated to reflect this dividend.
Note 3 - Consolidated Condensed Statements of Shareholders' Equity:
Nine Months Ended
September 30
----------------------
1996 1995
------- -------
(In thousands)
Balance at beginning of period $28,181 $27,735
Net income 168 484
Currency translation adjustment (324) (47)
Dividends ($.05 per share) - (179)
Issue of shares under Employee Stock
Purchase Plan 36 33
Issue of shares under Stock Option Plan
for nonemployee directors 3 -
------- -------
Balance at end of period $28,064 $28,026
======= =======
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The following is Management's discussion and analysis of significant factors
that have affected the Company's operating results and financial condition
during the quarter and nine months ended September 30, 1996.
Results of Operations
Quarter Ended September 30, 1996 vs. Quarter Ended September 30, 1995.
For the quarter ended September 30, 1996, net sales were $9,658,000 compared
with net sales of $8,266,000 for the quarter ended September 30, 1995. Net
income for the 1996 quarter was $40,000 or $.01 per share compared with net
income of $30,000 or $.01 per share for the third quarter of 1995. The nominal
increase in net income for the 1996 quarter on a $1,392,000 increase in net
sales was primarily attributable to research, development and engineering
expenses which increased to $894,000 in the 1996 quarter from $536,000 in the
1995 quarter primarily to support the operations of DGI BioTechnologies, the
Company's drug lead discovery operation, which was established in late 1995.
Nine Months Ended September 30, 1996 vs. Nine Months Ended September 30, 1995.
For the nine months ended September 30 1996, net sales were $29,074,000 compared
with net sales of $27,224,000 for the nine months ended September 30, 1995. Net
income for the 1996 period was $168,000 or $.05 per share compared with net
income of $484,000 of $.13 per share for the period ending September 30, 1995.
The decrease in net income for the 1996 period on a 6.8% increase in net sales
was attributable to research, development and engineering expenses which
increased to $2,616,000 in the 1996 period from $1,510,000 in the 1995 period
primarily to support the operations of DGI BioTechnologies, the Company's drug
lead discovery operation, which was established in late 1995.
Financial Condition
Liquidity and Capital Resources
During the period ended September 30, 1996, Cash and Cash Equivalents decreased
to $4,415,000 from $6,382,000 at December 31, 1995. The decrease in cash
resulted primarily from an increase in inventories from $12,692,000 at December
31, 1995 to $14,235,000 at September 30, 1996 and additions to property, plant
and equipment of $1,145,000 partially offset by a decrease in accounts
receivable to $7,916,000 at September 30, 1996 from $9,135,000 at December 31,
1995. Finished goods inventories increased primarily as a result of the need to
build stock to compensate for the Company's annual two-week summer shutdown of
its manufacturing facility and to prepare for anticipated higher demand during
the fourth quarter.
Additions to property, plant and equipment during the period reflect the costs
of building and equipping laboratory facilities for DGI BioTechnologies, and the
installation of a state-of-the-art powder coat (paint) facility within the
Company's plant. At September 30, 1996, accounts receivable, net amounted to
$7,916,000 down from $9,135,000 at December 31, 1995. The decrease resulted from
the lower volume of sales during the quarter ended September 30, 1996 as
compared with the quarter ended December 31, 1995 and from increased
collections.
<PAGE>
Cash Flows from Operating Activities
During the periods ended September 30, 1996 and 1995, net cash used by operating
activities amounted to $720,000 and $1,227,000, respectively. The primary
reasons for the $507,000 positive change between the two periods were the
following: (a) accounts receivable decreased $1,001,000 vs. a decrease of
$354,000 in 1995; (b) accounts payable and accrued expenses decreased $1,041,000
vs. a decrease of $1,299,000 in 1995 and were partially offset by a decrease in
net income to $168,000 in 1996 from $484,000 in 1995.
Cash Flows from Investing Activities
Net cash used by investing activities amounted to $1,123,000 in 1996 vs.
$551,000 in 1995, virtually all as a result of additions to property, plant and
equipment. A significant portion of the 1996 expenditures are attributable to
building laboratories and purchasing equipment for DGI BioTechnologies and for
the installation of a powder coat (paint) facility within the Company's plant.
Cash Flows from Financing Activities
Net cash used by financing activities amounted to $59,000 in 1996 vs. $253,000
in 1995. The 1995 amount includes a cash dividend of $179,000 paid on the
Company's Common stock. During the 1996 period the Company issued a 5% stock
dividend.
Management believes that the resources available to the Company, including its
line of credit are sufficient to meet its near and intermediate-term needs,
including funding commitments for DGI BioTechnologies, and its strong
unleveraged balance sheet and debt-free real estate provide the basis for any
long-term financing if the need should arise.
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter ended September 30,
1996.
<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.
NEW BRUNSWICK SCIENTIFIC CO., INC.
(Registrant)
Date: November 8, 1996 /s/ Ezra Weisman
-----------------------------------
Ezra Weisman
President
(Chief Executive Officer)
/s/ Samuel Eichenbaum
-----------------------------------
Samuel Eichenbaum
Vice President - Finance
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000071241
<NAME> NEW BRUNSWICK SCIENTIFIC CO., INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,415,000
<SECURITIES> 0
<RECEIVABLES> 7,916,000
<ALLOWANCES> 0
<INVENTORY> 14,235,000
<CURRENT-ASSETS> 28,580,000
<PP&E> 5,760,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 34,905,000
<CURRENT-LIABILITIES> 5,931,000
<BONDS> 0
0
0
<COMMON> 236,000
<OTHER-SE> 27,828,000
<TOTAL-LIABILITY-AND-EQUITY> 34,905,000
<SALES> 29,074,000
<TOTAL-REVENUES> 29,074,000
<CGS> 17,611,000
<TOTAL-COSTS> 28,828,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 36,000
<INCOME-PRETAX> 210,000
<INCOME-TAX> 42,000
<INCOME-CONTINUING> 168,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 168,000
<EPS-PRIMARY> .05
<EPS-DILUTED> .00
</TABLE>
