<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly period ended JUNE 30, 1995 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 0-11278
-------
MINNTECH CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1229121
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14605 - 28TH AVENUE NORTH
MINNEAPOLIS, MINNESOTA 55447
(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 553-3300
---------------
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.
Class Outstanding at July 31, 1995
------------------------- -----------------------------------
Common Stock, $0.05 par value 6,437,015 shares
Page 1 of 8
<PAGE>
Minntech Corporation
Quarterly Report on Form 10-Q
June 30, 1995
Index
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
----
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Statements of Earnings 3
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
SIGNATURES 8
Exhibit 9
</TABLE>
Page 2 of 8
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MINNTECH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
June 30
---------------------------
1995 1994
------- -------
<S> <C> <C>
REVENUES
Net sales - products $15,444 $13,668
Contract revenues - 75
------- -------
Total revenues 15,444 13,743
OPERATING COSTS AND EXPENSES
Cost of product sales 9,153 7,811
Research and development 754 736
Selling, general and administrative 3,579 2,779
Amortization of intangible assets 140 75
------- -------
Total operating costs and expenses 13,626 11,401
------- -------
EARNINGS FROM OPERATIONS 1,818 2,342
Other income, net 45 67
------- -------
EARNINGS BEFORE INCOME TAXES 1,863 2,409
Provision for income taxes 670 864
------- -------
NET EARNINGS $ 1,193 $ 1,545
------- -------
------- -------
NET EARNINGS PER SHARE $ .18 $ .24
------- -------
------- -------
Weighted average common and common
equivalent shares 6,683 6,492
-------- -------
-------- -------
</TABLE>
Page 3 of 8
<PAGE>
MINNTECH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
ASSETS June 30, March 31,
1995 1995
--------- ---------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 3,855 $ 3,325
Marketable securities 1,163 1,163
Accounts receivable, net 10,312 10,329
Inventories
Finished goods 3,361 2,658
Materials and work-in-process 5,261 4,806
Prepaid expenses 821 911
--------- ---------
TOTAL CURRENT ASSETS 24,773 23,192
PROPERTY AND EQUIPMENT, AT COST 9,629 9,146
Land, buildings and improvements 18,016 17,024
-------- ---------
Machinery and equipment 27,645 26,170
Less accumulated depreciation (11,118) (10,538)
-------- ---------
16,527 15,632
OTHER ASSETS Patent costs, net 643 617
Goodwill, net 1,699 1,151
Other 1,220 682
--------- --------
$ 44,862 $ 41,274
--------- --------
--------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable $ 701 $ -
Accounts payable 4,228 2,811
Accrued expenses 1,274 2,204
Income taxes payable 541 72
--------- --------
TOTAL CURRENT LIABILITIES 6,744 5,087
DEFERRED COMPENSATION 84 -
DEFERRED INCOME TAXES 1,165 1,135
STOCKHOLDERS' EQUITY
Preferred stock, no par value - -
Common stock, $.05 par value 321 319
Additional paid-in capital 9,563 9,124
Retained earnings 26,985 25,609
-------- --------
36,869 35,052
-------- --------
$ 44,862 $ 41,274
-------- --------
-------- --------
</TABLE>
Page 4 of 8
<PAGE>
MINNTECH CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
June 30
-----------------------
1995 1994
------- ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 1,193 $1,545
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities
Depreciation and amortization 775 626
Tax benefit from stock option exercises 40 -
Deferred contract revenue - (75)
Foreign currency exchange (gain) loss 31 (59)
Deferred income taxes 30 135
Other (65) 31
Changes in assets and liabilities:
Accounts receivable 177 (367)
Inventories (962) (106)
Prepaid expenses 90 138
Accounts payable and accrued expenses 484 (556)
Income taxes payable 469 462
------- ------
Total adjustments 1,069 229
------- ------
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,262 1,774
------- ------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (1,295) (679)
Proceeds from sale of equipment - 12
Patent application costs (90) (46)
Purchase of product line (733) -
Other - (1)
------- ------
NET CASH USED IN INVESTING ACTIVITIES (2,118) (714)
------- ------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of long-term debt - (17)
Proceeds from exercise of stock options 401 141
------- ------
NET CASH PROVIDED BY FINANCING ACTIVITIES 401 124
------- ------
Effects of exchange rate changes on foreign currency
cash balances (15) (10)
------- ------
NET INCREASE IN CASH AND CASH EQUIVALENTS 530 1,174
Cash and cash equivalents at beginning of period 3,325 6,207
------- ------
Cash and cash equivalents at end of period $ 3,855 $7,381
------- ------
------- ------
</TABLE>
Page 5 of 8
<PAGE>
MINNTECH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - FINANCIAL INFORMATION
The unaudited interim condensed consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission; accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted.
These interim condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes in the
Company's Annual Report on Form 10-K for the year ended March 31, 1995 as filed
with the Securities and Exchange Commission.
In the opinion of management, the condensed consolidated financial statements
reflect all adjustments necessary for a fair presentation of the interim
periods.
NOTE B - NET EARNINGS PER SHARE
The calculations of net earnings per common and common equivalent shares are
presented in the following table. All amounts are in thousands except per share
amounts.
<TABLE>
<CAPTION>
Three Months Ended
June 30
----------------------
1995 1994
------ ------
<S> <C> <C>
Net earnings $1,193 $1,124
------ ------
------ ------
Weighted average common shares
outstanding 6,411 6,188
Weighted average common equivalent
shares for stock options 272 304
------ ------
Weighted average common and common
equivalents shares 6,683 6,492
------ ------
------ ------
Net earnings per share $ .18 $ .24
------ ------
------ ------
</TABLE>
Page 6 of 8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenues for the first quarter ended June 30, 1995 increased by $1,701,000, or
12%, from revenues in the first quarter of the prior year. The increase in
revenues was primarily due to increased unit sales of hemoconcentrators and
hemofilters. During the quarter the Company completed the acquisition of the
hemoconcentrator, hemofilter and dialysate filter product line from Amicon
Ireland Ltd. Sales of the Amicon products totaled almost $500,000 in the first
quarter. Sales of dialysis supplies increased due to a doubling of dialyzer
sales from one year ago. Reprocessing product sales increased due primarily to
increased sales of reuse supplies which more than offset a decline in Renatron -
Registered Trademark- sales.
Net sales by product group are summarized on the following table:
<TABLE>
<CAPTION>
Three Months Ended June 30
-------------------------------
1995 1994
----------- -----------
<S> <C> <C>
Dialysis supplies and devices $ 4,960,000 $ 4,817,000
Reprocessing products 4,559,000 4,144,000
Cardiosurgery products 5,563,000 4,511,000
Water purification products 362,000 196,000
----------- -----------
$15,444,000 $13,668,000
----------- -----------
----------- -----------
</TABLE>
Gross profit from product sales for the quarter ended June 30, 1995 was
$6,291,000, or 40.7% of net sales, compared to $5,857,000, or 42.9% of net
sales, for the first quarter last year. The decline in margin from one year ago
was due primarily to increased manufacturing expenses related to expansion of
the fiber products manufacturing group.
Research and development expenses for the quarter ended June 30, 1995 totaled
$754,000, or 4.9% of total revenues, compared to $736,000, or 5.4% of total
revenues, in the first quarter one year ago. The Company expects that total
research and development expenses for the fiscal year ending March 31,1996 will
approximate 6% of revenues.
Selling, general and administrative expenses for the quarter ended June 30, 1995
were $3,579,000, or 23.2% of revenues, compared to $2,779,000, or 20.2% of
revenues, in the first quarter one year ago. Selling, general and
administrative expenses have increased due to expansion of sales and
administrative staffs and expanded marketing efforts in the United States and
Europe.
The Company's effective income tax rate was 36.0% in the quarter ended June 30,
1995 compared to a rate of 35.9% in the first quarter of the prior year.
The Company reported net earnings of $1,193,000, or 7.7% of total revenues, for
the quarter ended June 30, 1995 compared to earnings of $1,545,000, or 11.2% of
total revenues, in the first quarter one year ago. The decline in net earnings
and profitability was due to higher manufacturing expenses and increased
selling, general and administrative expenses during the quarter.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1995, the Company had $5,018,000 of cash, cash equivalents and
marketable securities, an increase of $530,000 from the balance at March 31,
1995. Working capital at June 30, 1995 was $18,029,000 compared to $18,105,000
at March 31, 1995. The increase in cash and working capital was due to funds
generated from profitable operations. The Company's current ratio at June 30,
1995 was 3.7 to 1 compared to 4.6 to 1 at March 31,1995.
Page 7 of 8
<PAGE>
During the quarter the Company acquired the Amicon Ireland Ltd. hollow fiber
product lines for $1,402,000 in cash, payable in two cash installments in April
and July 1995. The Company acquired $1,295,000 of capital equipment during the
quarter ended June 30, 1995 and expects to invest approximately $4,000,000 in
capital equipment for the full fiscal year.
The Company believes that its strong financial condition at June 30, 1995, along
with funds expected to be generated from operations, will be sufficient to meet
its working capital and capital equipment needs in fiscal year 1996.
PART II - OTHER INFORMATION
(a) Exhibits
10. Emeritus Director Consulting Plan effective April 8,
1995
27. Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter
ended June 30 1995.
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.
MINNTECH CORPORATION
DATE: August 11, 1995
-----------------
/s/ David F. Meyer
-----------------------------
David F. Meyer
Vice President, Finance
(Duly authorized officer)
(Principal financial officer)
Page 8 of 8
<PAGE>
Exhibit 10
MINNTECH CORPORATION
EMERITUS DIRECTOR CONSULTING PLAN
THIS INSTRUMENT establishes the Minntech Corporation
Emeritus Director Consulting Plan (the "Plan") effective as of April 8, 1995.
1. PURPOSE OF PLAN. The purpose of this Plan is to permit Minntech to
obtain the continued advice and counsel of certain outside directors after their
retirement from the Board of Directors.
2. DEFINITIONS.
"Board of Directors" shall mean the Board of Directors of Minntech
Corporation.
"Former Director" shall mean a non-employee member of the Board of
Directors who has served on the Board of Directors for at least five (5), full
consecutive years immediately prior to his/her retirement from the Board of
Directors.
"Minntech" shall mean Minntech Corporation, a Minnesota corporation.
"Participant" shall mean any Former Director who has been designated
by the Board of Directors as eligible for participation in the Plan for the next
following Plan Year in accordance with Section 3.
"Plan Year" shall mean the twelve (12) month period commencing on
April 1 of each year and ending on March 31 of the following year.
3. ELIGIBILITY FOR A PLAN YEAR. (a) At its last regularly scheduled
meeting for each Plan Year, the Board of Directors shall determine in its sole
discretion which Former Directors will be designated as Participants in the Plan
for the next Plan Year. Designation as a Participant for a particular Plan Year
does not guarantee designation as a Participant for any other Plan Year. If a
Former Director retires from the Board of Directors other than at the end of a
Plan Year, the initial decision regarding eligibility for participation in the
Plan shall be made at the next regularly scheduled meeting of the Board of
Directors following any such retirement and shall apply to that portion of the
Plan Year following the date such retirement occurred.
<PAGE>
(b) Each Former Director designated by the Board of Directors as a
Participant shall execute a written agreement in the form attached hereto as
Exhibit A to provide consulting services to Minntech's Board of Directors (a
"Consulting Agreement") for the Plan Year during which he/she will be
Participant and shall receive the payments provided under Section 4 for such
Plan Year.
(c) The Consulting Agreement shall provide that a Participant shall
make himself or herself available to advise and consult with the Board of
Directors upon request of the Board of Directors or the Chairman of the Board of
Directors. The number of consulting hours required under the Consulting
Agreement shall not exceed six (6) hours per calendar quarter with an additional
eight hours annually as requested by the Chairman of the Board.
(d) During the Plan Year covered by the Consulting Agreement, the
status of the Participant shall be that of an independent contractor rather than
an employee, and the Participant shall not be eligible for any benefits provided
to employees of Minntech.
(e) A Former Director shall only be eligible for designation as a
Participant for a number of years equal to the number of full, consecutive
Fiscal Years that the individual served as a member of the Board of Directors.
4. PAYMENTS FOR CONSULTING. The Consulting Agreement shall provide that
a Participant shall receive as payment for services thereunder, an amount equal
to the annual retainer in effect for members of the Board of Directors at the
time the Participant retired from the Board of Directors (the "Consulting
Compensation"). Such payment shall not include any amounts equal to per meeting
fees or any other compensation the Participant received for services while on
the Board of Directors. The Consulting Compensation shall be paid to the
Participant in equal quarterly installments on the first day of each quarter of
the Plan Year for which the Former Director has been designated a Participant.
5. Cessation of Payments. Notwithstanding the provisions of Section 4,
payments to any Participant shall cease upon the earliest of the following
events:
(a) The Participant dies.
(b) The Participant is unable or refuses to perform his or her duties
under the Consulting Agreement.
(c) The Participant commits any act which constitutes a felony or gross
misdemeanor or which the Board of Directors determines in its sole discretion is
harmful to the business, operations or reputation of Minntech.
<PAGE>
6. FUNDING. Nothing in is this Plan shall be construed as permitting a
Participant to claim any security for the fulfilling of the obligations of
Minntech hereunder, and such Participant shall look only to the general assets
of Minntech for the satisfaction of Minntech's obligations. The Plan shall not
be construed as requiring Minntech, and Minntech shall not required, to invest
in any property to secure its obligations hereunder. If Minntech invests in
property to fund its obligations under this Plan, Minntech shall be the sole
owner of such property, and the Participant shall have no rights in such
property.
7 MISCELLANEOUS.
7.1 LIABILITY. No director of Minntech shall be personally liable by
virtue of any contract, agreement or other instrument made or executed by the
director or on his or her behalf as a Participant under this Plan, nor for any
mistake of judgement made by such director or any other director, nor for any
negligence, omission or wrongdoing of any other director or of anyone employed
by Minntech, nor for any loss, unless resulting from his or her own gross
negligence or willful misconduct. In addition, Minntech does not assure or
guarantee the tax consequences of payments provided hereunder or other matters
beyond its control.
7.2 AMENDMENTS. Minntech reserves the right to amend or modify, in whole
or in part, any or all of the provisions of this Plan at any time by action of
the Board of Directors.
7.3 TERMINATION. Continuation of the Plan is not a contractual obligation
of Minntech, and the right is reserved by Minntech to reduce, suspend or
discontinue the Plan at any time by action of the Board of Directors.
7.4 ASSIGNMENT AND LEVY. The Plan is for the benefit of the Participants
and the rights, privileges and benefits herein conferred shall not, to the
extent permitted by law, be subject to alienation, assignment, pledge, levy,
attachment, garnishment or other legal process or in any manner anticipated,
encumbered, committed, withdrawn or surrendered, and neither shall the same be
subject or liable in any way for debts, contracts, or agreements or other claims
of creditors of such Participants whether such claims are now contracted or may
hereafter be contracted or incurred.
7.5 RIGHTS OF PARTICIPANTS. The Plan shall not be construed as creating
nor does it create any legal or equitable right against Minntech unless such
right is specifically provided for in the Plan.
<PAGE>
7.6 INCOMPETENCY. Every person receiving or claiming payments under the
Plan shall be conclusively presumed to be mentally competent until the date on
which Minntech receives a written notice in a form and manner acceptable to
Minntech that such person is incompetent and that a guardian, conservator or
other person legally vested with the care of his or her estate has been
appointed. In such event, Minntech may direct payments to such guardian
conservator or other person legally vested with the care of the person's estate
and any such payments so made shall be a complete discharge of Minntech to the
extent made.
7.7 NOTICES. Notices required by this Plan to be given to Minntech or a
Participant shall be in writing and shall be considered to have been duly given
or served if personally delivered, or sent by first class, certified or
registered mail.
7.8 SEVERABILITY. The invalidity or partial invalidity of any portion of
this Plan shall not invalidate the remainder thereof, and such remainder shall
remain in full force and effect.
7.9 WITHHOLDING OF TAXES. It is anticipated that federal, state, local
and other taxes will not be withheld from the Consulting Compensation paid in
accordance with the Plan. However, the Consulting Compensation shall be subject
to the deduction of federal, state or local income taxes or other taxes which
are required to be withheld by applicable laws and regulations, either as
currently in effect or as may be adopted or amended in the future.
7.10 GOVERNING LAW. Construction and administration of this Plan shall be
governed by the laws of the State of Minnesota, except to the extent such laws
are preempted by federal law.
MINNTECH CORPORATION
By ______________________________
Its ______________________________
<PAGE>
EXHIBIT A
CONSULTING AGREEMENT
CONSULTING AGREEMENT, Made and entered into as of the ______________ day of
______, 199 ___, by and between Minntech Corporation, a Minnesota corporation
(the "Company"), and ___________, an individual and resident of ("Consultant").
WHEREAS, in consideration for being designated a Participant in the Outside
Director Emeritus Plan dated April 8, 1995, Consultant desires to provide such
consulting and advisory services to the Company's Board of Directors and the
Company desires to retain Consultant to render consulting and advisory services
for the Company's Board of Directors on the terms and conditions set forth in
this Agreement and in the Plan.
NOW THEREFORE, in consideration of the premises, the respective covenants
and commitments of the Company and Consultant set forth in this Agreement, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Company and Consultant agree as follows:
1. RETENTION OF CONSULTANT; SERVICES TO BE PERFORMED. The Company hereby
retains Consultant to render such advisory services that fell within the scope
of his directorship with the Company, as the Company may request. Consultant
hereby accepts such engagement and agrees to perform such services for the
Company's Board of Directors upon the terms and conditions set forth in this
Agreement. During the term of this Agreement, Consultant shall devote such
portion of his time, attention, skill and energy to the business of the Company
up to a maximum time commitment of six (6) hours per calendar quarter with an
additional eight (8) hours annually as requested by the Chairman of the Board,
and shall assume and perform to the best of his ability such reasonable
responsibilities and duties as shall be assigned to Consultant from time to time
by the Company.
Consultant shall perform services hereunder primarily at his residence but
if necessary and at the Company's request he may be asked to perform such
services at the Company's offices in Plymouth, Minnesota. The Company shall
give reasonable notice to Consultant in asking him to perform services
hereunder.
2. TERM. Unless sooner terminated pursuant to Section 6, the term of
this Agreement shall commence as of the date first above written and shall
continue for a period of one (1) year.
3. CONSIDERATION. (a) In consideration for Consultant's services and
covenants hereunder, the Company shall pay to Consultant an amount equal to the
annual retainer in effect for
<PAGE>
members of the Board of Directors at the time the Consultant retired from the
Board of Directors (the "Consulting Compensation"). Such payment shall not
include any amounts equal to per meeting fees or any other compensation the
Consultant received for services while on the Board of Directors. The
Consulting Compensation shall be paid to Consultant in equal quarterly
installments on the first day of each calendar quarter for the term hereof.
(b) It is anticipated that federal, state, local and other taxes will not
be withheld from the Consulting Compensation. However, the Consulting
Compensation shall be subject to the deduction of federal, state or local income
taxes or other taxes which are required to be withheld by applicable laws and
regulations, either as currently in effect or as may be adopted or amended in
the future.
4. PROTECTION OF TRADE SECRETS, KNOW-HOW AND/OR OTHER CONFIDENTIAL
INFORMATION OF THE COMPANY.
a. CONFIDENTIAL INFORMATION. Except as permitted or directed by the
Company's Board of Directors, during the term of this Agreement or at any time
thereafter Consultant shall not divulge, furnish or make accessible to anyone or
use in any way (other than in the ordinary course of the business of the
Company) any confidential or secret knowledge or information of the Company
which Consultant has acquired or become acquainted with or will acquire or
become acquainted with prior to the termination of the period of his employment
by the Company (including employment by the Company or any affiliated companies
prior to the date of this Agreement), whether developed by himself or by others,
concerning any trade secrets, confidential or secret designs, processes,
formulae, plans, devices or material (whether or not patented or patentable)
directly or indirectly useful in any aspect of the business of the Company, any
customer or supplier lists of the Company, any confidential or secret
development or research work of the Company, or any other confidential
information or secret aspects of the business of the Company. Consultant
acknowledges that the above-described knowledge or information constitutes a
unique and valuable asset of the Company acquired at great time and expense by
the Company and its predecessors, and that any disclosure or other use of such
knowledge or information other than for the sole benefit of the Company would be
wrongful and would cause irreparable harm to the Company. Both during and after
the term of this Agreement, Consultant will refrain from any acts or omissions
that would reduce the value of such knowledge or information to the Company.
The foregoing obligations of confi-dentiality, however, shall not apply to any
knowledge or information which is now published or which subsequently becomes
generally publicly known in the form in which it was obtained from the Company,
other than as a direct or indirect result of the breach of this Agreement by
Consultant.
<PAGE>
b. KNOW-HOW AND TRADE SECRETS. All know-how and trade secret information
conceived or originated by Consultant which arises out of the performance of his
obligations or responsibilities under this Agreement or any related material or
information shall be the property of the Company, and all rights therein are by
this Agreement assigned to the Company.
5. TERMINATION. Notwithstanding any contrary provision contained
elsewhere in this Agreement, this Agreement and the rights and obligations of
the Company and Consultant hereunder shall be terminated upon the occurrence
of any of the following events:
a. Immediately in the event of Consultant's death;
b. The Consultant is unable or refuses to perform his or her duties under
this Agreement; or
c. The Consultant commits any act which constitutes a felony or gross
misdemeanor or which the Board of Directors determines in its sole discretion is
harmful to the business, operations or reputation of the Company. In the event
this Agreement is terminated pursuant to this Section 5, all rights to receive
the Consulting Compensation hereunder shall terminate on the date of any such
termination.
6. MISCELLANEOUS.
a. ASSIGNMENT. This Agreement and the rights and obligations of the
parties hereunder shall not be assignable, in whole or in part, by either party.
b. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the state of Minnesota.
c. ENTIRE AGREEMENT. This Agreement evidences the entire understanding
and agreement of the parties hereto relative to the consulting arrangement
between Consultant and the Company and the other matters discussed herein. This
Agreement supersedes any and all other agreements and understandings, whether
written or oral, relative to the matters discussed herein. This Agreement may
only be amended by a written document signed by both Consultant and the Company.
d. INJUNCTIVE RELIEF. Consultant acknowledges that it would be difficult
to fully compensate the Company for damages resulting from any breach by
Consultant of the provisions of Section 4 of
<PAGE>
this Agreement. Accordingly, in the event of any actual or threatened breach of
such provisions, the Company shall (in addition to any other remedies that it
may have) be entitled to temporary and/or permanent injunctive relief to enforce
such provisions, and such relief may be granted without the necessity of proving
actual damages.
e. SEVERABILITY. To the extent any provision of this Agreement shall be
determined to be invalid or unenforceable, such provision shall be deleted from
this Agreement, and the validity and enforceability of the remainder of such
provision and of this Agreement shall be unaffected.
f. STATUS OF CONSULTANT. In rendering services pursuant to this
Agreement, Consultant shall be acting as an independent contractor and not as an
employee or agent of the Company. As an independent contractor, Consultant
shall have no authority, express or implied, to commit or obligate the Company
in any manner whatsoever, except as specifically authorized from time to time in
writing by an authorized representative of the Company, which authorization may
be general or specific. Nothing contained in this Agreement shall be construed
or applied to create a partnership.
IN WITNESS WHEREOF, The Company and Consultant have executed this Agreement
as of the date first set forth above.
MINNTECH CORPORATION
By
---------------------------------
Louis C. Cosentino, Ph.D.
President, Chief Executive
Officer and Chairman of the
Board
---------------------------------
[Consultant]
By
---------------------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet and Statement of Earnings which should be read in
conjunction with this information.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,855
<SECURITIES> 1,163
<RECEIVABLES> 10,312
<ALLOWANCES> 125
<INVENTORY> 8,622
<CURRENT-ASSETS> 24,773
<PP&E> 27,645
<DEPRECIATION> 11,118
<TOTAL-ASSETS> 44,862
<CURRENT-LIABILITIES> 6,744
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<COMMON> 9,884
0
0
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<SALES> 15,444
<TOTAL-REVENUES> 15,444
<CGS> 9,153
<TOTAL-COSTS> 13,626
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 15
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<INCOME-PRETAX> 1,863
<INCOME-TAX> 670
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,193
<EPS-PRIMARY> .18
<EPS-DILUTED> 0
</TABLE>
