UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
( x ) For the quarterly period ended June 30, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ To _______________
Commission file number 0-11997
CARRINGTON LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
Texas 75-1435663
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2001 Walnut Hill Lane, Irving, Texas 75038
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(Address of principal executive offices and Zip Code)
972-518-1300
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date. 9,614,087 shares of Common
Stock, $.01 par value, were outstanding at August 10, 2000.
<PAGE>
INDEX
Page
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
at June 30, 2000 (unaudited) and
December 31, 1999 3
Condensed Consolidated Statements of
Operations for the three and six
months ended June 30, 2000 and
1999 (unaudited) 4-5
Condensed Consolidated Statements
of Cash Flows for the six months
ended June 30,2000 and 1999 (unaudited) 6
Notes to Condensed Consolidated Financial
Statements (unaudite 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-13
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 13
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Condensed Consolidated Balance Sheets
(Dollar amounts in 000's)
December 31, June 30,
1999 2000
(unaudited)
------- -------
<S> <C> <C>
Assets
Cash and cash equivalents $ 2,453 $ 2,410
Accounts receivable, net 3,690 2,846
Inventories 5,184 5,103
Prepaid expenses 573 901
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Total current assets 11,900 11,260
Property, plant and equipment, net 10,985 10,715
Other assets 608 421
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Total assets $23,493 $22,396
======= =======
Liabilities and Shareholders' Investment
Notes payable $ 200 $ 200
Accounts payable 1,871 1,034
Accrued liabilities 1,918 2,525
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Total current liabilities 3,989 3,759
Shareholders' investment:
Common stock 94 96
Capital in excess of par 51,910 52,249
Deficit (32,500) (33,708)
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Total shareholders' investment 19,504 18,637
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Total liabilities and
shareholders' investment $23,493 $22,396
======= =======
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
Condensed Consolidated Statements of Operations (unaudited)
(Dollar amounts and shares in 000's, except per share amounts)
Three Months Ended
June 30,
1999 2000
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<S> <C> <C>
Net sales $ 6,750 $ 5,463
Costs and expenses:
Cost of sales 3,370 2,614
Selling, general and administrative 2,592 2,648
Research and development 661 692
Research and development, Aliminase[TM]
clinical trial 551 -
Charge related to Oregon Freeze Dry, Inc. - 223
Other Income - (8)
Interest, net (30) (27)
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Loss before income taxes (394) (679)
Provision for income taxes - -
------- -------
Net loss $ (394) $ (679)
======= =======
Net loss per share - basic and diluted $ (0.04) $ (0.07)
======= =======
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
Condensed Consolidated Statements of Operations (unaudited)
(Dollar amounts and shares in 000's, except per share amounts)
Six Months Ended
June 30,
1999 2000
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<S> <C> <C>
Net sales $13,648 $12,588
Costs and expenses:
Cost of sales 6,981 6,244
Selling, general and administrative 5,143 5,271
Research and development 1,313 1,506
Research and development, Aliminase[TM]
clinical trial 1,670 623
Charge related to Oregon Freeze Dry, Inc. - 223
Other income - (25)
Interest, net (60) (46)
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Loss before income taxes (1,399) (1,208)
Provision for income taxes - -
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Net loss $(1,399) $ (1,208)
======= =======
Net loss per share basic and diluted $ (0.15) $ (0.13)
======= =======
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
Condensed Consolidated Statements of Cash Flows (unaudited)
(Dollar amounts in 000's)
Six Months Ended
June 30,
1999 2000
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<S> <C> <C>
Cash flows from operating activities
Net loss $(1,399) $(1,208)
Adjustments to reconcile net loss to
net cash provided (used) by
operating activities:
Depreciation and amortization 513 534
Provision for inventory obsolescence 173 90
Changes in assets and liabilities:
Receivables, net (244) 843
Inventories 197 139
Prepaid expenses (354) (327)
Other assets 24 187
Accounts payable and accrued liabilities 401 (370)
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Net cash used in operating activities (689) (112)
Cash flows from investing activities:
Purchases of property, plant
and equipment (421) (263)
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Net cash used by investing activities (421) (263)
Cash flows from financing activities:
Issuances of common stock 80 341
Debt payments (1) (9)
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Net cash provided by financing activities 79 332
Net decrease in cash and cash equivalents (1,031) (43)
Cash and cash equivalents, beginning
of period 3,931 2,453
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Cash and cash equivalents, end
of period $ 2,900 $ 2,410
======= =======
Supplemental disclosure of cash flow
information
Cash paid during the period for
interest $ - $ 9
Cash paid during the period for
federal, state and local income taxes 44 -
The accompanying notes are an integral part of these statements.
</TABLE>
<PAGE>
Notes to Condensed Consolidated Financial Statements (unaudited)
(1) Condensed Consolidated Financial Statements:
The condensed consolidated balance sheet as of June 30, 2000, the condensed
consolidated statements of operations and cash flows for the six month
periods ended June 30, 1999 and 2000 and the condensed consolidated
statements of cash flows for the six month periods ended June 30, 1999 and
2000 have been prepared by the Company without audit. In the opinion of
management, all adjustments (which include all normal recurring adjustments)
necessary to present fairly the consolidated financial position, results of
operations and cash flows at June 30, 2000 and for all periods presented
have been made. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. These
condensed consolidated financial statements should be read in conjunction
with the audited financial statements and notes thereto included in the
Company's annual report to shareholders or Form 10-K for the year ended
December 31, 1999.
(2) Net Loss Per Share:
Basic net loss per share was computed by dividing net loss by the weighted
average number of common shares outstanding. The weighted average numbers
of common shares outstanding for the quarters ended June 30, 1999 and 2000
were 9,358,000 and 9,585,000, respectively. The weighted average numbers of
common shares outstanding for the six month periods ended June 30, 1999 and
2000 were 9,354,000 and 9,541,000, respectively.
In calculating the diluted net loss per share for the three and six month
periods ended June 30, 2000, no effect was given to options and warrants
because the effect would be antidilutive. Total dilutive securities were
insignificant in the three and six month periods ended June 30, 1999 and had
no impact on diluted net loss per share.
(3) Reportable Segments:
The Company operates in two reportable segments: human and veterinary
products sold through its Medical Services Division, and bulk raw materials,
consumer beverages and nutritional and skin care products sold through its
consumer products subsidiary, Caraloe, Inc.
The Company evaluates performance and allocates resources based on profit or
loss from operations before income taxes.
Corporate Loss Before Income Taxes set forth in the following table includes
research and development expenses which were related to the development of
pharmaceutical products not associated with the reporting segments. Assets
which are used in more than one segment are reported in the segment where
the predominant use occurs. The Company's production facility in Costa
Rica, which provides bulk ingredients for all segments, and total cash for
the Company are included in the Corporate Assets figure.
<PAGE>
Reportable Segments (in thousands)
<TABLE>
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Quarter Ended Medical Caraloe,
June 30, 1999 Services Inc. Corporate Total
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<S> <C> <C> <C> <C>
Sales to unaffiliated customers $ 3,746 $ 3,004 $ - $ 6,750
Income (loss) before income taxes (22) 676 (1,048) (394)
Identifiable assets 14,134 1,289 7,908 23,331
Capital expenditures 40 - 225 265
Depreciation and amortization 167 - 89 256
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Quarter Ended
June 30, 2000
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Sales to unaffiliated customers $ 2,995 $ 2,468 $ - $ 5,463
Income (loss) before income taxes (777) 686 (588) (679)
Identifiable assets 12,314 1,686 8,512 22,512
Capital expenditures 38 - 73 111
Depreciation and amortization 145 - 117 262
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Six Months Ended
June 30, 1999
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Sales to unaffiliated customers $ 7,635 $ 6,013 $ - $13,648
Income (loss) before income taxes (93) 1,289 (2,595) (1,399)
Capital expenditures 137 - 284 421
Depreciation and amortization 343 - 170 513
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Six Months Ended
June 30, 2000
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Sales to unaffiliated customers $ 6,696 $ 5,892 $ - $12,588
Income (loss) before income taxes (858) 1,460 (1,810) (1,208)
Capital expenditures 38 - 225 263
Depreciation and amortization 303 - 231 534
</TABLE>
(4) Income Taxes:
The tax effects of temporary differences have given rise to deferred tax
assets. At December 31, 1999 and June 30, 2000, the Company provided a
valuation allowance against the entire deferred tax asset due to the
uncertainty as to the realization of the asset. At December 31, 1999, the
Company had net operating loss carryforwards of approximately $41,400,000
for federal income tax purposes, which expire beginning in 2000, and
research and development tax credit carryforwards of approximately $748,000,
which expire beginning in 2000, all of which are available to offset federal
income taxes due in future periods. The entire benefit from the second
quarter 2000 loss was offset by an increase in the valuation allowance.
<PAGE>
(5) Commitments and Contingencies:
In February 1995, the Company entered into a commitment to purchase $2.5
million of freeze-dried products from its principal supplier over a 66-month
period ending in August 2000. The commitment, which also provides for
monthly minimum purchases, is required to be supported to the extent of 60%
of the remaining commitment by a letter of credit from a bank or a pledged
certificate of deposit. Through June 30, 2000, the Company has purchased
$776,000 of products pursuant to this commitment and made prepayments of
$770,000 toward future deliveries under the commitment.
In the fourth quarter of 1999, the Company determined that it was unlikely
to sell the quantities of products it was obligated to pay for under the
minimum purchase requirements of the agreement, and thus the Company
established a reserve of $1,042,000 for estimated losses under this
contract. Of this amount, $698,000 is recorded in accrued liabilities and
$344,000 offsets the aforementioned prepayments. At June 30, 2000, the
Company increased the reserve by $223,000. The Company is currently
negotiating with the supplier regarding purchase arrangements beyond the
term of the current agreement.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Background
The Company is a research-based biopharmaceutical, medical device, raw
materials and nutraceutical company engaged in the development,
manufacturing and marketing of naturally-derived complex carbohydrates and
other natural product therapeutics for the treatment of major illnesses, the
dressing and management of wounds and nutritional supplements. The Company
is comprised of two business segments. See Note (3) to the condensed
consolidated financial statements for financial information about these
business segments. The Company sells, using a network of distributors,
prescription and nonprescription human and veterinary products through its
Medical Services Division and consumer and bulk raw material products
through its consumer products subsidiary, Caraloe, Inc. The Company's
research and product portfolio are based primarily on complex carbohydrates
isolated from the Aloe vera L. plant.
Liquidity and Capital Resources
At December 31, 1999 and June 30, 2000, the Company held cash and cash
equivalents of $2,453,000 and $2,410,000, respectively.
The Company has invested in inventory to support sales of bulk products to
Mannatech, Inc. Receivables from this customer totaled $666,000 as of June
30, 2000. As of July 17, 2000, all of this balance had been collected.
<PAGE>
As of June 30, 2000, the Company had no material capital commitments.
In February 1995, the Company entered into a supply agreement with its
supplier of freeze-dried products. The agreement required that the Company
establish a letter of credit equal to 60% of the minimum purchase commitment
of $2,500,000, but allowed for the amount of the letter of credit to be
reduced by 60% of the payments made under the agreement. In July 2000, the
letter of credit was reduced under this provision of the agreement to
$600,000. The supplier currently produces the CarraSorb[TM] M Freeze Dried
Gel and the Carrington[TM] (Aphthous Ulcer) Patch for the Company. The
supply agreement also requires the Company to make minimum monthly purchases
of $30,000. In February 1998, the supply agreement was amended to allow for
unmet monthly minimum purchase amounts to be met by prepayments, to be
applied to future purchases under the agreement, which allows the Company to
keep inventory at levels appropriate for sales demand. The Company is
continuing its effort to develop the markets for its freeze-dried products.
Due to the unique technology of these products, this effort has taken
longer than was initially expected. See Note (5) to the condensed
consolidated financial statements.
As of June 30, 2000, the Company had paid this supplier a total of
$1,546,000 for products purchased and prepayments made under the agreement.
The Company is in full compliance with the agreement and, as of June 30,
2000, had the available resources to meet all future minimum purchase
requirements. In the fourth quarter of 1999, the Company determined that it
was unlikely to sell the quantities of products it was obligated to pay for
under the minimum purchase requirements of the agreement, and thus the
Company established a reserve of $1,042,000 for estimated losses under this
contract. Of this amount, $698,000 is recorded in accrued liabilities and
$344,000 offsets the aforementioned prepayments. In the quarter ended June
30, 2000, the Company increased the reserve by $223,000 due to unsuccessful
efforts to develop a freeze-dried concentrated gel product. The Company is
currently negotiating with the supplier regarding purchase arrangements
beyond the term of the current agreement.
In November 1997, the Company entered into an agreement with Comerica Bank-
Texas for a $3,000,000 line of credit, secured by accounts receivable and
inventory. This credit facility is used to secure the letter of credit
described above and used for operating needs, as required. As of June 30,
2000, there was $200,000 outstanding under this credit facility.
<PAGE>
As a result of sharp increases in sales of raw materials produced at the
Company's processing facility in Costa Rica, the Company's demand for Aloe
vera L. leaves has exceeded and continues to exceed both the current and the
normal production capacity of its farm. It has therefore been necessary for
the Company to purchase Aloe vera L. leaves from other sources at costs that
are significantly higher than the cost of leaves produced on its own farm.
In March 1998, the Company, with four other investors, formed Aloe and Herbs
International, Inc., a Panamanian corporation ("Aloe & Herbs"), with the
sole intent of acquiring a 5,000-acre tract of land in Costa Rica to be used
for the production of Aloe vera L. leaves to be sold to the Company at
competitive, local market rates. This would allow the Company to save
approximately 50% on the per-kilogram cost of leaves as compared to the cost
of importing leaves from other Central and South American countries. Aloe &
Herbs subsequently formed a wholly-owned subsidiary, Rancho Aloe (C.R.),
S.A., a Costa Rican corporation ("Rancho Aloe"), which acquired the land in
March 1998.
The Company loaned $487,000 to Aloe & Herbs during 1998. The Company
reserved all of its loans to Aloe & Herbs at December 31, 1998, due to
uncertainty regarding Aloe & Herbs' ability to meet significant mortgage
obligations in 1999 and 2000. In April 2000, Aloe & Herbs refinanced its
mortgage, removing the financial uncertainty. Therefore, the Company will
recognize as other income all principal payments collected from Aloe & Herbs
relating to this debt. As of June 30, 2000, the Company has collected
$9,400 from Aloe & Herbs as payment on the debt.
The Company believes that its available cash resources and expected cash
flows from operations will provide the funds necessary to finance its
current operations. However, the Company does not expect that its current
cash resources will be sufficient to finance the major clinical studies and
costs of filing new drug applications necessary to develop its products to
their full commercial potential. Additional funds, therefore, may have to
be raised through equity offerings, borrowings, licensing arrangements or
other means, and there is no assurance that the Company will be able to
obtain such funds on satisfactory terms when they are needed.
Regulation
The Company is subject to regulation by numerous governmental authorities in
the United States and other countries. Certain of the Company's proposed
products will require governmental approval prior to commercial use. The
approval process applicable to prescription pharmaceutical products usually
takes several years and typically requires substantial expenditures. The
Company and any licensees may encounter significant delays or excessive
costs in their respective efforts to secure necessary approvals. Future
United States or foreign legislative or administrative acts could also
prevent or delay regulatory approval of the Company's or any licensees'
products. Failure to obtain requisite governmental approvals or failure to
obtain approvals of the scope requested could delay or preclude the Company
or any licensees from marketing their products, or could limit the
commercial use of the products, and thereby have a material adverse effect
on the Company's liquidity and financial condition.
<PAGE>
Impact of Inflation
The Company does not believe that inflation has had a material impact on its
results of operations.
Second Quarter of 2000 Compared With Second Quarter of 1999
Net sales were $5,463,000 in the second quarter of 2000, a decrease of
$1,287,000, or 19%, compared with $6,750,000 in the second quarter of 1999.
Net sales for Caraloe, Inc., the Company's consumer products subsidiary,
decreased from $3,004,000 to $2,468,000. Caraloe sales to Mannatech, Inc.,
which are primarily Manapol[R] powder, decreased from $2,761,000 in the
second quarter of 1999 to $1,997,000 in the second quarter of 2000. Sales
of the Company's wound and skin care products decreased 20%, due to product
mix and intense downward pricing pressure, to $2,995,000 in the second
quarter of 2000 as compared to $3,746,000 in the second quarter of 1999.
Domestic sales of wound care products were $2,780,000 in 2000 compared to
$3,549,000 in 1999.
Cost of sales decreased from $3,370,000 to $2,614,000 or 22%. As a
percentage of sales, cost of sales decreased from 50% in the second quarter
of 1999 to 48% in the second quarter of 2000. This was due to operating
efficiencies achieved in the Company's Costa Rica operations as well as its
Irving location.
Selling, general and administrative expenses increased from $2,592,000 in
the second quarter of 1999 to $2,648,000 in 2000.
Research and development expenses decreased to $692,000 from $1,212,000, or
43%, due to the cessation of the clinical trial of Aliminase[TM] in
the first quarter of 2000. Excluding Aliminase[TM] costs, research and
development expenses in the second quarter of 1999 were $661,000. All
costs related to the conclusion of the Aliminise[TM] trial were included in
the quarter ended March 31, 2000.
Other income of $8,000 in the second quarter 2000 was primarily from
royalty income.
Net interest income was $27,000 in the second quarter of 2000 as compared to
$30,000 in the second quarter of 1999. The reduced investment income was
primarily due to lower cash balances invested.
Net loss for the second quarter of 2000 was $679,000, compared with net loss
of $394,000 during the second quarter of 1999. Assuming dilution, the net
loss for the second quarter of 2000 was $.07 per share, compared to net loss
of $.04 per share for the same quarter of 1999.
First Six Months of 2000 Compared With First Six Months of 1999
Net sales were $12,588,000 in the first six months of 2000, compared with
$13,648,000 in the first six months of 1999. This decrease of $1,060,000,
or 8%, resulted from a decrease of $121,000 in sales of Caraloe, Inc., the
Company's consumer products subsidiary, and a decrease in wound care sales
of $939,000. Caraloe's sales decreased from $6,013,000 to $5,892,000, or 2%.
Caraloe's sales to Mannatech, Inc., which were primarily Manapol[R] powder,
decreased from $5,487,000 in 1999 to $5,077,000 in 2000.
<PAGE>
Net wound care sales decreased from $7,635,000 in 1999 to $6,696,000 in
2000, or 12%. Decreased wound care sales were primarily due to downward
pricing pressures from an increasingly competitive marketplace.
Cost of sales decreased from $6,981,000 in 1999 to $6,244,000 in 2000, or
11%. As a percentage of sales, cost of sales decreased from 51% in the
first six months of 1999 to 50% in the first six months of 2000. This was
due to increased efficiencies in the Company's manufacturing operations.
Selling, general and administrative expenses increased to $5,271,000 in 2000
from $5,143,000 in 1999. This increase was due primarily to costs associated
with the initiation of two large sales contracts.
Research and development expenses decreased to $2,129,000 in 2000 from
2,983,000 in 1999, or 29%. This decrease was primarily due to the cessation
of the clinical trial of Aliminase[TM] in the first quarter of 2000.
Expenses from the clinical trial totaled $623,000 the first half of 2000
versus $1,670,000 in the first half of 1999.
Net interest income of $60,000 was realized in the first six months of 1999,
versus net interest income of $46,000 in the first six months of 2000. The
reduced investment income was primarily due to lower cash balances invested.
Net loss for the first six months of 2000 was $1,208,000, compared with
a net loss of $1,399,000 for the first six months of 1999. Assuming
dilution, the net loss for the first six months of 2000 was $0.13 per share,
compared to a net loss of $0.15 per share for the same period in 1999.
Forward Looking Statements
All statements other than statements of historical fact contained in this
report, including but not limited to statements in this "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
(and similar statements contained in the Notes to Consolidated Financial
Statements) concerning the Company's financial position, liquidity, capital
resources and results of operations, its prospects for the future and other
matters, are forward-looking statements. Forward-looking statements in this
report generally include or are accompanied by words such as "anticipate",
"believe", "estimate", "expect", "intend" or words of similar import. Such
forward-looking statements include, but are not limited to, statements
regarding the Company's plan or ability to negotiate an extension of the
agreement with its supplier of freeze-dried products, to fulfill its
obligations under that agreement, to reduce its cost of Aloe vera L. leaves
significantly by purchasing such leaves from Rancho Aloe, to obtain
financing when it is needed and to fund its operations from revenue and
other available cash resources.
<PAGE>
Although the Company believes that the expectations reflected in its
forward-looking statements are reasonable, no assurance can be given that
such expectations will prove correct. Factors that could cause the
Company's results to differ materially from the results discussed in such
forward-looking statements include but are not limited to the possibilities
that the Company may be unable to obtain the funds needed to carry out large
scale clinical trials and other research and development projects, that the
results of the Company's clinical trials may not be sufficiently positive to
warrant continued development and marketing of the products tested, that new
products may not receive required approvals by the appropriate government
agencies or may not meet with adequate customer acceptance, that the Company
may not be able to obtain financing when needed, that the Company may not be
able to obtain appropriate licensing agreements for products that it wishes
to market or products that it needs assistance in developing, that the
Company's efforts to improve its sales and reduce its costs may not be
sufficient to enable it to fund its operating costs from revenues and
available cash resources, that one or more of the customers that the Company
expects to purchase significant quantities of products from the Company or
Caraloe may fail to do so, that competitive pressures may require the
Company to lower the prices of or increase the discounts on its products,
that the Company's sales of products it is contractually obligated to
purchase from suppliers may not be sufficient to enable and justify its
fulfillment of those contractual purchase obligations, that the Company may
not succeed in negotiating an extension of its agreement with its supplier
of freeze-dried products, that other parties who owe the Company substantial
amounts of money may be unable to pay what they owe the Company, and that
the Company may be unable to produce or obtain or may have to pay excessive
prices for the raw materials or products it needs.
All forward-looking statements in this report are expressly qualified in
their entirety by the cautionary statements in the two immediately preceding
paragraphs.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company's exposure to market risk from changes in foreign currency
exchange rates and the supply and prices of Aloe vera L. leaves has not
changed materially from its exposure at December 31, 1999, as described in
the Company's Form 10-K Annual Report for the year then ended.
Part II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the 2000 Annual meeting of Shareholders held on May 18, 2000, the persons
named below were re-elected to serve as directors of the Company for terms
expiring at the 2003 annual meeting by the votes shown opposite their
respective names:
Nominee Shares Voted For Shares Abstaining
------- ---------------- -----------------
George DeMott 8,375,722 136,295
Robert A. Fildes, Ph.D. 8,376,061 135,956
Carlton E. Turner, Ph.D., D.Sc. 8,372,693 139,324
<PAGE>
The other directors whose terms of office continued after the meeting are R.
Dale Bowerman, whose term expires at the 2002 annual meeting, and Thomas J.
Marquez and Selvi Vescovi, whose terms expire at the 2001 annual meeting.
One directorship remained vacant following the meeting and may be filled by
action of the Board at a future date if a suitable candidate is found.
The appointment of Ernst & Young LLP as independent public accountants for
the Company for the fiscal year ending December 31, 2000 was approved by the
holders of 8,466,877 shares, with the holders of 31,065 shares voting
against approval and the holders of 14,075 shares abstaining.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits:
27.1 Financial Data Schedule
b. Reports on Form 8-K:
The Registrant did not file any reports on Form 8-K
during the quarter ended June 30, 2000.
<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.
CARRINGTON LABORATORIES, INC.
(Registrant)
Date: August 14, 2000 By: /s/ Carlton E. Turner
---------------------
Carlton E. Turner,
President and C.E.O.
(principal executive
officer)
Date: August 14, 2000 By: /s/ Robert W. Schnitzius
------------------------
Robert W. Schnitzius,
Chief Financial Officer
(principal financial and
accounting officer)
<PAGE>
INDEX TO EXHIBITS
Item
No. Description
---- -----------
27.1 Financial Data Schedule
