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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission File Number 0-15313
BIO-TECHNOLOGY GENERAL CORP.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-3033811
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
70 WOOD AVENUE SOUTH, ISELIN, NEW JERSEY 08830
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(Address of principal executive offices)
(908) 632-8800
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(Registrant's telephone number, including area code)
Former address: Not Applicable
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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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common Stock, par value $.01 per share,
outstanding as of May 12, 1997 46,783,106
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<PAGE>
INDEX
Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets at
March 31, 1997 and December 31, 1996...................... 3
Consolidated Statements of Operations
for the three months ended
March 31, 1997 and 1996................................... 4
Consolidated Statement of Changes in
Stockholders' Equity for the three
months ended March 31, 1997............................... 5
Consolidated Statements of Cash Flows
for the three months ended
March 31, 1997 and 1996................................... 6
Notes to Consolidated Financial
Statements................................................ 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations............................................. 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................. 13
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<PAGE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
1997 1996
(Unaudited)
----------- ---------
ASSETS
Current Assets:
Cash and cash equivalents .......................... $ 12,033 $ 7,005
Short-term investments ............................. 12,779 12,760
Accounts receivable ................................ 20,581 18,273
Inventories ........................................ 4,722 5,328
Deferred income taxes .............................. 4,808 6,000
Prepaid expenses and other current assets .......... 672 350
-------- --------
Total current assets ............................. 55,595 49,716
Deferred income taxes ................................ 9,379 9,379
Severance pay funded ................................. 2,355 2,318
Property and equipment, net .......................... 6,226 6,039
Intangibles, net ..................................... 3,236 3,451
Patents, net ......................................... 491 538
Other assets ......................................... 2,374 2,134
-------- --------
TOTAL ASSETS ..................................... $ 79,656 $ 73,575
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term bank loans .............................. $ 379 $ 266
Current portion of long-term debt .................. 291 291
Accounts payable ................................... 1,195 3,358
Other current liabilities .......................... 5,666 5,175
-------- --------
Total current liabilities ........................ 7,531 9,090
-------- --------
Long-term liabilities ................................ 3,796 3,927
-------- --------
Stockholders' equity:
Preferred stock -- $.01 par value; 4,000,000
shares authorized; no shares issued .............. -- --
Common stock -- $.01 par value; 150,000,000 shares
authorized; issued: 46,701,000 (45,682,000 at
December 31, 1996) ............................... 467 457
Capital in excess of par value ..................... 133,464 129,130
Deficit ............................................ (65,218) (68,613)
Less -- treasury stock at cost, 83,000 shares ...... (340) (340)
-- deferred compensation ...................... (44) (76)
-------- --------
Total stockholders' equity ....................... 68,329 60,558
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....... $ 79,656 $ 73,575
======== ========
The accompanying notes are an integral part
of these consolidated balance sheets.
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<PAGE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands except per share data)
Three Months Ended
March 31,
--------------------
1997 1996
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Revenues:
Product sales ...................................... $14,379 $ 7,695
Contract fees ...................................... 116 2,725
Other revenues ..................................... -- 100
Interest income .................................... 270 191
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14,765 10,711
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Expenses:
Research and development ........................... 3,940 3,104
Cost of product sales .............................. 2,269 1,166
General and administrative ......................... 1,936 1,920
Marketing and sales ................................ 1,886 1,209
Commissions and royalties .......................... 53 968
Interest and finance ............................... 94 35
Write-off in connection with litigation ............ -- 1,383
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10,178 9,785
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Income before income taxes ........................... 4,587 926
Income taxes ......................................... 1,192 --
------- -------
Net income ........................................... $ 3,395 $ 926
======= =======
Earnings per share ................................... $ 0.07 $ 0.02
======= =======
Weighted average number of shares outstanding ........ 52,138 47,147
======= =======
The accompanying notes are an integral part of these consolidated statements.
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<PAGE>
<TABLE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands)
<CAPTION>
Common Stock
----------------- Capital in Total
Par Excess of Treasury Deferred Stockholders'
Shares Value Par Value Deficit Stock Compensation Equity
------ ------ -------- -------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 ........... 45,682 $457 $129,130 $(68,613) $(340) $(76) $60,558
Issuance of common stock ............. 1 15 15
Exercise of stock options ............ 949 9 3,936 3,945
Exercise of warrants ................. 50 1 245 246
Issuance of common stock
on conversion
of convertible debt ................ 19 138 138
Amortization of deferred
compensation ....................... 32 32
Net income for three months
ended March 31, 1997 ............... 3,395 3,395
------ ---- -------- -------- ----- ---- -------
Balance, March 31, 1997 .............. 46,701 $467 $133,464 $(65,218) $(340) $(44) $68,329
====== ==== ======== ======== ===== ==== =======
The accompanying notes are an integral part of this consolidated statement.
</TABLE>
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<PAGE>
<TABLE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<CAPTION>
Three Months
Ended March 31,
----------------------
1997 1996
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<S> <C> <C>
Cash flows from operating activities:
Net income ............................................................ $ 3,395 $ 926
Adjustments to reconcile net income to net
cash provided by operating activities:
Write-off in connection with litigation ............................ -- 1,383
Depreciation and amortization ...................................... 776 771
Provision for severance pay ........................................ 7 143
Gain on sales of short-term investments ............................ (2) (12)
Deferred income taxes .............................................. 1,192 --
Common stock as payment for services ............................... 15 20
Changes in: receivables ............................................ (2,308) 3,012
inventories ............................................ 606 (495)
prepaid expenses and other current assets .............. (322) (276)
accounts payable ....................................... (2,163) 299
other assets ........................................... (240) (8)
other current liabilities .............................. 604 994
------- -------
Net cash provided by operating activities ............................. 1,560 6,757
------- -------
Cash flows from investing activities:
Short-term investments ................................................ (514) (964)
Capital expenditures .................................................. (669) (438)
Severance pay funded .................................................. (37) (117)
Intangibles ........................................................... -- (55)
Proceeds from sales of short-term investments ......................... 497 1,501
------- -------
Net cash used in investing activities ................................. (723) (73)
------- -------
Cash flows from financing activities:
Proceeds from issuance of common stock ................................ 4,191 744
------- -------
Net increase in cash and cash equivalents ............................... 5,028 7,428
Cash and cash equivalents at beginning of year ......................... 7,005 6,886
------- -------
Cash and cash equivalents at end of period .............................. $12,033 $14,314
======= =======
Supplementary Information
Non-cash investing and financing activities:
Conversions of convertible debt ....................................... $ 138 $ 6
Other information:
Interest paid ......................................................... $ 6 $ 5
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
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<PAGE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: STATEMENT ON ADJUSTMENTS
In the opinion of management, the condensed consolidated financial statements
include all adjustments, consisting of only normal recurring accruals,
considered necessary for a fair presentation. Due to fluctuations in quarterly
revenues earned, operating results for interim periods are not necessarily
indicative of the results that may be expected for the full year. The accounting
policies continue unchanged from December 31, 1996. For further information,
refer to the Consolidated Financial Statements and footnotes thereto included in
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996.
NOTE 2: WRITE-OFF IN CONNECTION WITH LITIGATION
On December 1, 1994, Genentech Inc. filed a lawsuit against BTG in the United
States District Court for the District of Delaware alleging that BTG's
importation of human growth hormone ("hGH") infringed two Genentech process
patents. In January 1995, BTG commenced an action against Genentech in the
United States District Court for the Southern District of New York seeking,
among other things, declaratory judgments as to the non-infringement, invalidity
and unenforceability of such Genentech patents as well as damages resulting from
Genentech's actions in the ITC proceedings. The Delaware action was consolidated
with the New York action, and in August 1995 the United States District Court
for the Southern District of New York granted a preliminary injunction
prohibiting the commercial introduction in the U.S. of BTG's hGH. In April 1996
the CAFC rejected BTG's appeal of the grant of the preliminary injunction. In
May 1996 the CAFC rejected BTG's request for a rehearing and a rehearing en
banc. BTG filed a petition for a writ of certiorari with the U.S. Supreme Court,
which was denied in October 1996. BTG is now precluded from marketing and
distributing its human growth hormone in the United States pending the outcome
of the patent infringement action. During 1995, the Company incurred total legal
fees relating to this litigation of approximately $824,000, which amount was
initially capitalized but subsequently written off in the first quarter of 1996
following the CAFC decision. In addition, the Company wrote-off previously
capitalized expenses incurred in connection with the preparation for launch of
hGH in the United States.
NOTE 3: SUBSEQUENT EVENT-NOTE CONVERSION
Subsequent to March 31, 1997, $148,000 aggregate principal amount of the
Company's 7 1/2% Convertible Senior Subordinated Notes due April 15, 1997 (the
"7 1/2% Notes") were converted into an aggregate of approximately 14,100 shares
of Common Stock; the remaining $4,000 principal amount of the 7 1/2% Notes was
repaid on April 15, 1997, the maturity date for such notes.
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<PAGE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997
COMPARED WITH THREE MONTHS ENDED MARCH 31, 1996
Statements in this Quarterly Report on Form 10-Q concerning the Company's
business outlook or future economic performance; anticipated profitability,
revenues, expenses or other financial items; introductions and advancements in
development of products, and plans and objectives related thereto; and
statements concerning assumptions made or expectations as to any future events,
conditions, performance or other matters, are "forward-looking statements" as
that term is defined under the Federal Securities Laws. Forward-looking
statements are subject to risks, uncertainties and other factors which could
cause actual results to differ materially from those stated in such statements.
Such risks, uncertainties and factors include, but are not limited to, changes
and delays in product development plans and schedules, changes and delays in
product approval and introduction, customer acceptance of new products, changes
in pricing or other actions by competitors, patents owned by the Company and its
competitors, changes in healthcare reimbursement, risk of operations in Israel,
risk of product liability, governmental regulation, dependence on third parties
to manufacture products and commercialize products, general economic conditions,
as well as other risks detailed in the Company's filings with the Securities and
Exchange Commission, including the Company's Annual Report on Form 10-K for the
year ended December 31, 1996.
RESULTS OF OPERATIONS:
Bio-Technology General Corp. (the "Company" or "BTG") reported net income of
approximately $3.4 million in the three month period ended March 31, 1997, or
$0.07 per share, compared to net income of $0.9 million, or $0.02 per share, in
the three months ended March 31, 1996. Net income for the three months ended
March 31, 1996 includes a write-off of previously capitalized expenses of $1.4
million, or $0.03 per share. The Company had approximately 5.0 million
additional average shares outstanding for the three month period ended March 31,
1997, as compared to the same period in 1996, primarily as a result of the
increase in the Company's stock price (which resulted in more outstanding
options being considered common equivalent shares because their exercise price
was below the average fair market value of the common stock), and the issuance
of approximately 2.3 million shares upon the exercise of outstanding options
subsequent to March 31, 1996, primarily in the last quarter of 1996 and the
first quarter of 1997.
Revenues from product sales, derived primarily from the Company's human growth
hormone ("hGH"), oxandrolone ("Oxandrin(R)") and pharmaceutical grade hyaluronic
acid ("BioLon(R)") products, amounted to $14,379,000 for the three month period
ended March 31, 1997, or 99% of revenues (exclusive of interest income). For the
comparable period in 1996, product sales of $7,695,000, or 73% of revenues
(exclusive of interest income), were earned. Sales of hGH were $6,779,000 in the
three months ended March 31, 1997, representing 47% of product sales, as
compared with $5,207,000, or 68% of product sales, in the comparable period in
1996. The increase in sales of hGH in the three month period ended March 31,
1997 was primarily the result of increased sales to JCR Pharmaceuticals Co.,
Ltd. and the Ferring Group, the Company's exclusive distributors in Japan and
Europe, respectively. Revenues from Oxandrin product sales were $5,459,000, or
38% of total product sales, in the three months ended March 31, 1997 as compared
to 502,000, or 7% of product sales, in the three month period ended March 31,
1996. Substantially all the Oxandrin sales were to Quantum Health Resources,
BTG's exclusive distributor in the United States. The Company launched Oxandrin
in the United States in December 1995. Sales of BioLon were $1,926,000, or 13%
of product sales, in the three month
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<PAGE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
period ended March 31, 1997 as compared with $873,000, or 11% of product sales,
in the three month period ended March 31, 1996. The increase in sales of BioLon
was mainly due to increased sales to its distributors. In aggregate, $215,000
was earned from sales of other products for the three month period ended March
31, 1997 as compared with $1,113,000 in the comparable period in 1996. Other
product sales in 1996 included a sale of product to one of the Company's
licensees for use in clinical trials.
For the three month periods ended March 31, 1997 and 1996 contract fees of
$116,000 and $2,725,000, or 1% and 26%, respectively, of revenues (exclusive of
interest income), were earned. Of the contract fees earned in the three months
ended March 31, 1997, $66,000, or 57% of total contract fees, was earned in
respect of BioLon. Of the contract fees earned in the three months ended March
31, 1996, $2,500,000, or 92% of total contract fees, was earned in respect of
vitamin D, of which $2,000,000 was earned in respect of a fee paid to its
European licensee in connection with termination of a sublicense and $500,000
was earned in connection with the license of distribution rights in the United
States, and $75,000 was earned in respect of BioLon.
Other revenues, in the three months ended March 31, 1996, consist of partial
funding of several of the Company's research and development projects by the
Chief Scientist of the Israeli government.
Interest income was $270,000 and $191,000 for the three month periods ended
March 31, 1997 and 1996, respectively. The increase in interest income in 1997
is mainly due to an increase in cash balances resulting from funding received
from exercise of stock options during the last quarter of 1996 and the first
quarter of 1997 and increased product sales.
The Company conducts research on potential products for which it has retained
future rights for its own account and on behalf of its partners for which it
receives certain current revenues and, if successful, future revenues in the
form of royalties or manufacturing rights. Expenditures for research and
development in the three month period ended March 31, 1997 were $3,940,000 as
compared with $3,104,000 in the three months ended March 31, 1996. The increase
in these expenditures resulted primarily from an increase in expenses and
headcount associated with the clinical studies conducted by the Company.
Cost of product sales, primarily related to commercial sales of hGH, Oxandrin
and BioLon, were $2,269,000 in the three month period ended March 31, 1997 as
compared with $1,166,000 for the same period last year. Cost of product sales as
a percentage of product sales varies from year to year and quarter to quarter
depending on the quantity and mix of products sold.
Marketing and sales expenses for the three months ended March 31, 1997 were
$1,886,000 as compared with $1,209,000 for the three months ended March 31,
1996. These expenses primarily relate to the sales and marketing force in the
United States, which the Company established to promote distribution of Oxandrin
and the Company's other products in the United States. The increase in these
expenses derived mainly from additional marketing and sales expenses, primarily
personnel, resulting from the growth of the Company's product sales.
Commissions and royalties expenses for the three months ended March 31, 1997
were approximately $53,000. In the same period in 1996 commissions and royalties
expenses were $968,000. These expenses consist primarily of royalties to
entities from which the Company licensed certain of its products and to the
Chief Scientist. Commissions and royalties in 1996 include a royalty payment in
respect of BTG's Vitamin D product resulting from the termination of its
European licensee's sublicense and royalties to the Chief Scientist in respect
of a product for which the Company's royalty obligations to the Chief Scientist
were completed in 1996.
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<PAGE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
In the three months ended March 31, 1996 the Company wrote-off $1,383,000 of
capitalized expenses relating to human growth hormone as a result of the
affirmation by the United States Court of Appeals for the Federal Circuit of a
preliminary injunction obtained by Genentech, Inc. prohibiting the Company from
marketing its human growth hormone in the United States. The write-off consists
of legal costs related to the litigation with Genentech and U.S. hGH launch
preparation costs.
Income taxes for the three months ended March 31, 1997 were $1,192,000,
representing 26% of income before income taxes. The Company's consolidated tax
rate differs from the statutory rate because of research and development tax
credits, Israeli tax benefits and similar items which reduce the tax rate. In
the three months ended March 31, 1996 the Company did not provide any income
taxes as any interim tax provision would be offset by available net operating
loss carryforward.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital at March 31, 1997 was $48,064,000 as compared to
$40,626,000 at December 31, 1996.
The major portion of the Company's revenues is derived from product sales. In
addition, the Company derives revenue from collaborative arrangements, under
which the Company may earn up-front contract fees, may receive funding for
additional research, is reimbursed for producing certain experimental materials,
may be entitled to certain milestone payments, may sell product at specified
prices and may receive royalties on sales of product. Revenues have in the past
displayed and will in the immediate future continue to display variations due to
changes in demand for its products, introductions of new products by
competitors, the obtaining of new research and development contracts and
licensing arrangements, the completion or termination of such contracts and
arrangements, the timing and amounts of milestone payments and the timing of
regulatory approvals of products.
The Company manages its Israeli operations with the object of protecting against
any material net financial loss in U.S. dollars from the impact of Israeli
inflation and currency devaluation on its non-U.S. dollar assets and
liabilities. The Bank of Israel's monetary policy is to manage the exchange rate
while allowing the Consumer Price Index to rise by approximately 8% in 1995, 11%
in 1996 and 2% in the three month period ended March 31, 1997. For those
expenses linked to the Israeli Shekel, such as salaries and rent, this resulted
in corresponding increases in these costs in U.S. dollars. In each of 1995 and
1996 the Shekel was devalued by approximately 4% against the U.S. dollar, and
was devalued by approximately 5% in the three months ended March 31, 1997. To
the extent that expenses in Shekels exceed the Company's income in Shekels
(which to date have consisted primarily of research and development funding from
the Chief Scientist and product sales in Israel), the devaluations of Israeli
currency have been and will continue to be a benefit to the Company's financial
condition. However, should the Company's income in Shekels exceed its expenses
in Shekels in any material respect, the devaluation of the Shekel will adversely
affect the Company's financial condition. Further, to the extent the devaluation
of the Shekel with respect to the U.S. dollar does not substantially offset the
increase in the cost of local goods and services in Israel, the Company's
financial results will be adversely affected as local expenses expressed in U.S.
dollar terms will increase. There can be no assurance that the government of
Israel will continue to devalue the Shekel from time to time to offset the
effects of inflation in Israel.
The Company maintains its funds in money market funds, commercial paper and
other liquid short-term debt instruments. The Company's investment policy is to
preserve principal and to avoid risk.
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<PAGE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
The cash flows of the Company have fluctuated significantly due to the impact of
net income and losses, capital spending, working capital requirements and
issuance of common stock and other financings. The Company expects that cash
flow in the near future will be primarily determined by the levels of net income
(loss), and financings, if any, undertaken by the Company. In the three months
ended March 31, 1997, net cash increased by $5,028,000, primarily as a result of
net income of $3,395,000 (after income taxes of $1,192,000 and depreciation and
amortization in the amount of $776,000), proceeds of $4,191,000 from the
issuance of common stock upon the exercise of outstanding warrants and options,
partially offset by increases in current assets of $2,024,000 net, decrease in
current liabilities of $1,559,000 net and net investing activities of $723,000.
In the three months ended March 31, 1996, net cash increased by $7,428,000
(after depreciation and amortization aggregating $771,000 and write-off in
connection with litigation of $1,383,000), primarily as a result of a decrease
in current assets of $2,241,000, net, increase in current liabilities
aggregating $1,293,000, and proceeds of $744,000 from the issuance of common
stock upon exercise of outstanding options.
The Company does not currently have any material commitments for capital
expenditures.
At March 31, 1997, intangibles, net consist of (i) $2,057,000 (net of
amortization) relating to the repurchase of all rights to hGH previously
licensed to The DuPont Merck Pharmaceutical Company, together with all rights to
all data generated in pharmacological, toxicological and clinical studies and
encompassed in the Investigational New Drug Application and New Drug Application
files then pending with the U.S. Food and Drug Administration for the treatment
of human growth hormone-deficient children and (ii) $1,179,000 (net of
amortization) relating to the reacquisition of all rights to human growth
hormone licensed to Smithkline Beecham.
The Company is party to several proceedings relating to patents owned by it or
others. The Company cannot predict the costs of such proceedings, and there can
be no assurance that such costs will not be significant. Should the Company be
unsuccessful in any of these proceedings, it may be unable to commercialize the
products which are the subject of such proceedings in certain countries, and may
be unable to produce the products in Israel, which could have a material adverse
effect on the Company's revenues and results of operations.
The Company believes that its remaining cash resources as of March 31, 1997,
together with anticipated product sales, scheduled payments to be made to BTG
under its current agreements with pharmaceutical partners, the proceeds from
sales of equity and continued funding from the Chief Scientist at current
levels, will be sufficient to fund the Company's current operations for the
foreseeable future. There can, however, be no assurance that product sales will
occur as anticipated, that scheduled payments will be made by third parties,
that current agreements will not be canceled, that the Chief Scientist will
continue to provide funding at current levels, or that unanticipated events
requiring the expenditure of funds will not occur. The satisfaction of the
Company's future cash requirements will depend in large part on the status of
commercialization of the Company's products, the Company's ability to enter into
additional research and development and licensing arrangements, and the
Company's ability to obtain additional equity investments, if necessary. There
can be no assurance that the Company will be able to obtain additional funds or,
if such funds are available, that such funding will be on favorable terms. In
addition, the indentures under which the Company's debt securities were issued
limit the ability of the Company to satisfy its cash requirements through
borrowings or the issuance of debt securities. The Company continues to seek
additional collaborative research and development and licensing arrangements, in
order to provide revenue from sales of certain products and funding for a
portion of the research and development expenses relating to the products
covered, although there can be no assurance that the Company will be able to
obtain such agreements.
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<PAGE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
RECENTLY ISSUED ACCOUNTING STANDARDS
Subsequent to December 31, 1996, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings Per
Share. This statement establishes standards for computing and presenting
earnings per share ("EPS"), replacing the presentation of currently required
primary EPS with a presentation of Basic EPS. For entities with complex capital
structures, the statement requires the dual presentation of both Basic EPS and
Diluted EPS on the face of the statement of operations. Under this new standard,
Basic EPS is computed based on the weighted average number of shares actually
outstanding during the year. Diluted EPS includes the effect of potential
dilution from the exercise of outstanding dilutive stock options and warrants
into common stock using the treasury stock method. SFAS 128 is effective for
financial statements issued for periods ending after December 15, 1997, and
earlier application is not permitted. When adopted, the Company will be required
to restate its EPS data for all prior periods presented. Had the Company applied
the principals of SFAS 128, earnings per share data for the three months ended
March 31, 1997 and 1996 would be as follows:
Pro Forma
---------------------
Three Months Ended
March 31,
---------------------
1997 1996
------- -------
BASIC EPS
Net Income ................................ $ 0.07 $ 0.02
======= =======
DILUTED EPS
Net income ................................ $ 0.07 $ 0.02
======= =======
Shares used in calculation ('000s)
Basic EPS ............................... 46,284 43,558
====== ======
Diluted EPS ............................. 52,138 47,147
====== ======
-12-
<PAGE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS:
None
(b) REPORTS ON FORM 8-K:
None
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<PAGE>
BIO-TECHNOLOGY GENERAL CORP. AND SUBSIDIARIES
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.
BIO-TECHNOLOGY GENERAL CORP.
(Registrant)
By: /s/ SIM FASS
------------------------------------------
Sim Fass
President and
Chief Executive Officer,
Principal Executive Officer
/s/ YEHUDA STERNLICHT
------------------------------------------
Yehuda Sternlicht
Vice President-Finance and
Chief Financial Officer,
Principal Financial and Accounting Officer
Dated: May 12, 1997
14
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATMENT OF OPERATIONS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 12,033
<SECURITIES> 12,779
<RECEIVABLES> 20,581
<ALLOWANCES> 0
<INVENTORY> 4,722
<CURRENT-ASSETS> 55,595
<PP&E> 6,226
<DEPRECIATION> 0
<TOTAL-ASSETS> 79,656
<CURRENT-LIABILITIES> 7,531
<BONDS> 4,087
0
0
<COMMON> 467
<OTHER-SE> 67,862
<TOTAL-LIABILITY-AND-EQUITY> 79,656
<SALES> 14,379
<TOTAL-REVENUES> 14,765
<CGS> 2,269
<TOTAL-COSTS> 10,084
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 94
<INCOME-PRETAX> 4,587
<INCOME-TAX> 1,192
<INCOME-CONTINUING> 4,587
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,395
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
