<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 March 31, 1998 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: 732-287-1200
------------
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 4,228,123 Common shares outstanding as of May 4, 1998.
Page 1
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC.
Index
PAGE NO.
PART I. FINANCIAL INFORMATION:
Item 1:
Consolidated Condensed Balance Sheets -
March 31, 1998 and December 31, 1997 3
Consolidated Statements of Operations -
Three Months Ended March 31, 1998 and 1997 4
Consolidated Condensed Statements of
Cash Flows - Three Months Ended March 31, 1998 and 1997 5
Consolidated Statements of Comprehensive Income -
Three Months Ended March 31, 1998 and 1997 6
Notes to Consolidated Condensed Financial
Statements 7
Item II:
Management's Discussion and Analysis of Results
of Operations and Financial Condition 8
PART II. OTHER INFORMATION 10
Page 2
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except for share data)
<TABLE>
<CAPTION>
ASSETS
------
March 31, December 31,
1998 1997
----------- ------------
(Unaudited)
<S> <C> <C>
Current Assets
- --------------
Cash and cash equivalents $ 3,125 $ 3,968
Accounts receivable, net 9,552 10,602
Refundable income taxes 419 314
Deferred income tax benefit 134 134
Inventories:
Raw materials and sub-assemblies 7,156 7,493
Work-in-process 2,541 2,668
Finished goods 5,380 4,701
------- -------
Total inventories 15,077 14,862
Prepaid expenses and other current assets 2,018 1,819
------- -------
Total current assets 30,325 31,699
------ ------
Property, plant and equipment, net 5,485 5,354
Other assets 1,100 1,100
------- -------
$36,910 $38,153
====== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities
- -------------------
Current installments of long-term debt $ 81 $ 110
Accounts payable and accrued expenses 6,642 7,709
------- -------
Total current liabilities 6,723 7,819
------- -------
Long-term debt, net of current installments 234 247
-------- --------
Shareholders' equity:
Common stock, $.0625 par, authorized 25,000,000
shares; shares issued and outstanding,
1998 - 4,215,182 and 1997 - 4,204,845 net of
shares held in treasury, 1998 and 1997 - 390,967 263 263
Capital in excess of par 23,903 23,854
Retained earnings 6,776 7,085
Accumulated other comprehensive income (989) (1,115)
------- -------
Total shareholders' equity 29,953 30,087
------ ------
$36,910 $38,153
====== ======
</TABLE>
See notes to consolidated condensed financial statements.
Page 3
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1998 1997
---- ----
<S> <C> <C>
Net sales $10,950 $10,095
Operating costs and expenses:
Cost of sales 6,839 6,382
Selling, general and administrative expenses 3,388 3,148
Research, development and engineering expenses 1,152 1,001
------- -------
Total operating costs and expenses 11,379 10,531
------- -------
Loss from operations (429) (436)
Other income (expense):
Interest income 29 33
Interest expense (2) (8)
Other income (expense), net (5) 1
------- -------
22 26
------- -------
Loss before income tax benefit (407) (410)
Income tax benefit (98) (82)
------- -------
Net loss $ (309) $ (328)
======= =======
Basic loss per share $ (.07) $ (.08)
======= =======
Basic weighted average number of shares outstanding 4,210 4,190
======= =======
Diluted loss per share $ (.07) $ (.08)
======= =======
Diluted weighted average number of shares outstanding 4,210 4,190
======= =======
</TABLE>
See notes to consolidated condensed financial statements.
Page 4
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------
1998 1997
---------- -------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (309) $ (328)
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation 332 201
Change in related balance sheet accounts:
Accounts receivable 1,099 1,348
Refundable income taxes (105) 227
Inventories (193) (1,362)
Prepaid expenses and other current assets (194) (407)
Accounts payable and accrued expenses (684) 146
Advance payments from customers (360) (696)
------- -------
Net cash used by operating activities (414) (871)
------- -------
Cash flows from investing activities:
Additions to property, plant and equipment (433) (198)
Investment - (250)
------- -------
Net cash used by investing activities (433) (448)
------- -------
Cash flows from financing activities:
Repayment of long-term debt (39) (25)
Discount from fair market value upon issue
of options under stock option plan for
nonemployee directors - 35
Proceeds from issue of Common stock under
stock option plans 49 8
------- -------
Net cash used by financing activities 10 18
------- -------
Net effect of exchange rate changes on cash (6) (24)
------- -------
Net decrease in cash and cash equivalents (843) (1,325)
Cash and cash equivalents at beginning of period 3,968 5,196
------- -------
Cash and cash equivalents at end of period $ 3,125 $ 3,871
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 2 $ 8
Income taxes 117 69
</TABLE>
See notes to consolidated condensed financial statements.
Page 5
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------
1998 1997
---------- --------
<S> <C> <C>
Net loss $(309) $(328)
Other comprehensive income:
Foreign currency translation adjustment 126 (547)
------ ------
Total comprehensive income (183) (875)
Income taxes (benefit) - -
------ ------
Net comprehensive income $(183) $(875)
====== ======
</TABLE>
Page 6
<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
March 31, 1998 and the results of its operations and cash flows for the three
months ended March 31, 1998 and 1997. Interim results may not be indicative of
the results that may be expected for the year.
Note 2 - Earnings per Common share:
Basic earnings per share is calculated by dividing net income by the weighted
average number of shares outstanding. Diluted earnings per share is calculated
by dividing net income by the sum of the weighted average number of shares
outstanding plus the dilutive effect of stock options which have been issued by
the Company.
Note 3 - Consolidated condensed statements of shareholders' equity:
Three Months Ended
March 31,
---------------------
1998 1997
---- ----
(In thousands)
Balance at beginning of period $30,087 $29,251
Net loss (309) (328)
Other comprehensive income (loss) 126 (547)
Discount from fair market value upon issue
of options under stock option plan
for nonemployee directors - 35
Issue of shares under stock option plans 49 8
------- -------
Balance at end of period $29,953 $28,419
======= =======
Page 7
<PAGE>
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Forward-looking statements, within the meaning of Section 21E of the Securities
Exchange Act of 1934, are made throughout this Management's Discussion and
Analysis of Financial Condition and Results of Operations. For this purpose, any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the foregoing, the
words "believes," "anticipates," "plans," "expects," "seeks," "estimates," and
similar expressions are intended to identify forward-looking statements. There
are a number of important factors that could cause the results of the Company to
differ materially from those indicated by such forward-looking statements.
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 ended March 31, 1998.
Results of Operations
---------------------
Quarter Ended March 31, 1998 vs. Quarter Ended March 31, 1997.
- --------------------------------------------------------------
For the quarter ended March 31, 1998, net sales were $10,950,000 compared with
net sales of $10,095,000 for the quarter ended March 31, 1997, an increase of
8.5%. The net loss for the 1998 quarter of $309,000 or $.07 per diluted share
compared with a net loss of $328,000 or $.08 per diluted share for the first
quarter of 1997.
Research, development and engineering expenses increased to $1,152,000 in the
1998 quarter from $1,001,000 in the first quarter of 1997 due primarily to the
strengthening of the Company's bioprocess engineering division and its new
product development efforts and included $481,000 and $458,000, respectively,
for the quarters ended March 31, 1998 and 1997 related to costs to support the
research efforts of DGI BioTechnologies, the Company's drug lead discovery
operation.
Financial Condition
-------------------
Liquidity and Capital Resources
- -------------------------------
During the quarter ended March 31, 1998, Cash and Cash Equivalents decreased to
$3,125,000 from $3,968,000 at December 31, 1997. The decrease in cash resulted
primarily from an increase in inventories of $215,000, an increase in prepaid
expenses and other current assets of $199,000 and a decrease in accounts payable
and accrued expenses of $1,067,000 partially offset by a decrease in accounts
receivable of $1,050,000.
Cash Flows from Operating Activities
- ------------------------------------
During the period ended March 31, 1998 and 1997 net cash used by operating
activities amounted to $414,000 and $871,000, respectively. The primary reasons
for the $457,000 positive change between the two periods were a decrease in
accounts receivable of $1,099,000 in 1998 vs. a decrease of $1,348,000 in 1997,
an increase in inventories of $193,000 in 1998 vs. an increase of $1,362,000 in
1997 and a decrease in advance payments from customers in 1998 of $360,000 vs. a
decrease of $696,000 in 1997 partially offset by a decrease in accounts payable
and accrued expenses in 1998 of $684,000 vs. an increase of $146,000 in 1997.
Page 8
<PAGE>
Cash Flows from Investing Activities
- ------------------------------------
Net cash used by investing activities amounted to $433,000 in 1998 vs. $448,000
in 1997, primarily as a result of additions to property, plant and equipment
during 1998 and 1997 as well as from an investment in another entity in 1997.
Cash Flows from Financing Activities
- ------------------------------------
Net cash provided by financing activities amounted to $10,000 in 1998 vs.
$18,000 in 1997. The 1998 amount includes $49,000 from the exercise of stock
options partially offset by the repayment of long-term debt and the 1997 amount
includes $8,000 from the exercise of stock options and $35,000 related to the
discount from fair market value upon issuance of options under the Company's
stock option plan for nonemployee directors, partially offset by repayment of
long-term debt.
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 9
<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 March 31, 1998.
Page 10
<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: May 8, 1998 /s/ Ezra Weisman
-----------------------------------
Ezra Weisman
President
(Chief Executive Officer)
/s/ Samuel Eichenbaum
-----------------------------------
Samuel Eichenbaum
Vice President - Finance
(Principal Accounting Officer)
Page 11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 3,125,000
<SECURITIES> 0
<RECEIVABLES> 9,552,000
<ALLOWANCES> 0
<INVENTORY> 15,077,000
<CURRENT-ASSETS> 30,325,000
<PP&E> 5,485,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 36,910,000
<CURRENT-LIABILITIES> 6,723,000
<BONDS> 0
0
0
<COMMON> 263,000
<OTHER-SE> 29,690,000
<TOTAL-LIABILITY-AND-EQUITY> 36,910,000
<SALES> 10,950,000
<TOTAL-REVENUES> 10,950,000
<CGS> 6,839,000
<TOTAL-COSTS> 11,379,000
<OTHER-EXPENSES> (24,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,000
<INCOME-PRETAX> (407,000)
<INCOME-TAX> (98,000)
<INCOME-CONTINUING> (309,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (309,000)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
