UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended August 29, 1998
---------------
Commission file number 1-11479
-------
E-Z-EM, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-1999504
----------------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
717 Main Street, Westbury, New York 11590
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(516) 333-8230
--------------------------------------------------
Registrant's telephone number, including area code
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 ___
On October 9, 1998, there were 4,035,346 shares of the registrant's Class A
Common Stock outstanding and 6,033,852 shares of the registrant's Class B Common
Stock outstanding.
Page 1 of 17
Exhibit Index on Page 16
<PAGE>
E-Z-EM, Inc. and Subsidiaries
INDEX
-----
Part 1: Financial Information Page
- ------- --------------------- ----
Item 1. Financial Statements
Consolidated Balance Sheets - August 29, 1998 and
May 30, 1998 3 - 4
Consolidated Statements of Earnings - thirteen weeks
ended August 29, 1998 and August 30, 1997 5
Consolidated Statement of Stockholders' Equity - thirteen
weeks ended August 29, 1998 6
Consolidated Statements of Cash Flows - thirteen weeks
ended August 29, 1998 and August 30, 1997 7 - 8
Notes to Consolidated Financial Statements 9 - 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12 - 15
Part II: Other Information
- -------- -----------------
Item 6. Exhibits and Reports on Form 8-K 16
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<PAGE>
E-Z-EM, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands)
August 29, May 30,
ASSETS 1998 1998
------- ---------
(unaudited) (audited)
CURRENT ASSETS
Cash and cash equivalents $ 6,096 $ 4,654
Debt and equity securities 3,525 3,475
Accounts receivable, principally
trade, net 19,572 21,348
Inventories 26,246 26,764
Other current assets 2,684 2,499
------- -------
Total current assets 58,123 58,740
INVESTMENT IN AFFILIATE 1,042 1,121
PROPERTY, PLANT AND EQUIPMENT - AT COST,
less accumulated depreciation and
amortization 21,371 21,917
COST IN EXCESS OF FAIR VALUE OF NET ASSETS
ACQUIRED, less accumulated amortization 413 446
INTANGIBLE ASSETS, less accumulated
amortization 2,489 2,546
DEBT AND EQUITY SECURITIES 1,601 2,057
OTHER ASSETS 4,132 3,879
------- -------
$89,171 $90,706
======= =======
The accompanying notes are an integral part of these financial statements.
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<PAGE>
E-Z-EM, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
August 29, May 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1998 1998
------ ------
(unaudited) (audited)
<S> <C> <C>
CURRENT LIABILITIES
Notes payable $ 1,058 $ 3,041
Current maturities of long-term debt 271 287
Accounts payable 5,835 6,265
Accrued liabilities 6,824 6,958
Accrued income taxes 921 592
-------- --------
Total current liabilities 14,909 17,143
LONG-TERM DEBT, less current maturities 543 606
OTHER NONCURRENT LIABILITIES 1,767 1,734
COMMITMENTS AND CONTINGENCIES
-------- --------
Total liabilities 17,219 19,483
-------- --------
STOCKHOLDERS' EQUITY
Preferred stock, par value $.10 per
share - authorized, 1,000,000 shares;
issued, none - -
Common stock
Class A (voting), par value $.10 per
share - authorized, 6,000,000 shares;
issued and outstanding 4,035,346 shares
at August 29, 1998 and May 30, 1998 403 403
Class B (nonvoting), par value $.10 per
share - authorized, 10,000,000 shares;
issued and outstanding 6,026,002 shares
at August 29, 1998 and 5,999,073 shares
at May 30, 1998 603 600
Additional paid-in capital 21,771 21,643
Retained earnings 50,560 49,090
Accumulated other comprehensive loss (1,385) (513)
-------- --------
Total stockholders' equity 71,952 71,223
-------- --------
$ 89,171 $ 90,706
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
E-Z-EM, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
Thirteen weeks ended
-----------------------------------
August 29, August 30,
1998 1997
------------ ------------
<S> <C> <C>
Net sales $ 25,665 $ 25,713
Cost of goods sold 14,996 15,978
------------ ------------
Gross profit 10,669 9,735
------------ ------------
Operating expenses
Selling and administrative 7,617 7,915
Research and development 1,002 1,509
------------ ------------
Total operating expenses 8,619 9,424
------------ ------------
Operating profit 2,050 311
Other income (expense)
Interest income 119 151
Interest expense (62) (189)
Equity in losses of affiliate (79)
Other, net 37 (63)
------------ ------------
Earnings before income taxes 2,065 210
Income tax provision 595 82
------------ ------------
NET EARNINGS $ 1,470 $ 128
============ ============
Earnings per common share
Basic $ .15 $ .01
============ ============
Diluted $ .14 $ .01
============ ============
Weighted average common shares
Basic 10,044,112 9,926,028
============ ============
Diluted 10,327,066 10,412,892
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
E-Z-EM, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Thirteen weeks ended August 29, 1998
(unaudited)
(in thousands, except share data)
<TABLE>
<CAPTION>
Class A Class B Accumulated
common stock common stock Additional other Compre-
---------------- ----------------- paid-in Retained comprehensive hensive
Shares Amount Shares Amount capital earnings loss Total income
------ ------ ------ ------ ---------- -------- ------------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at May 30, 1998 4,035,346 $403 5,999,073 $600 $21,643 $49,090 $(513) $71,223
Exercise of stock options 26,604 3 110 113
Income tax benefits on
stock options exercised 15 15
Compensation related to
stock option plans 1 1
Issuance of stock 325 2 2
Net earnings 1,470 1,470 $1,470
Unrealized holding loss
on debt and equity
securities (261) (261) (261)
Foreign currency
translation adjustments (611) (611) (611)
--------- ---- --------- ---- ------- -------- -------- ------- ------
Comprehensive income $598
======
Balance at August 29, 1998 4,035,346 $403 6,026,002 $603 $21,771 $50,560 $(1,385) $71,952
========= ==== ========= ==== ======= ======== ======== =======
</TABLE>
The accompanying notes are an integral part of this financial statement.
-6-
<PAGE>
E-Z-EM, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Thirteen weeks ended
-----------------------------
August 29, August 30,
1998 1997
---------- ---------
Cash flows from operating activities:
Net earnings $ 1,470 $ 128
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities
Depreciation and amortization 722 836
Provision for doubtful accounts 60 60
Equity in losses of affiliate 79
Deferred income tax provision 6 9
Other non-cash items 1 2
Changes in operating assets and
liabilities
Accounts receivable 1,716 (1,342)
Inventories 518 174
Other current assets (185) 86
Other assets (90) (66)
Accounts payable (430) (335)
Accrued liabilities (134) 258
Accrued income taxes 323 84
Other noncurrent liabilities 38 (34)
------- -------
Net cash provided by (used in)
operating activities 4,094 (140)
------- -------
Cash flows from investing activities:
Additions to property, plant and
equipment, net (116) (294)
Investment in affiliate (537)
Available-for-sale securities
Purchases (70) (1,399)
Proceeds from sale 20 1,270
------- -------
Net cash used in investing activities (166) (960)
------- -------
Cash flows from financing activities:
Repayments of debt (1,961) (334)
Proceeds from issuance of debt 1,289
Proceeds from exercise of stock options,
including related income tax benefits 128 6
Proceeds from issuance of stock in connection
with the stock purchase plan 2
------- -------
Net cash (used in) provided by financing
activities (1,831) 961
------- -------
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<PAGE>
E-Z-EM, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(unaudited)
(in thousands)
Thirteen weeks ended
-------------------------
August 29, August 30,
1998 1997
---------- ---------
Effect of exchange rate changes on
cash and cash equivalents $ (655) $ (205)
------- -------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 1,442 (344)
Cash and cash equivalents
Beginning of period 4,654 4,484
------- -------
End of period $ 6,096 $ 4,140
======= =======
Supplemental disclosures of cash
flow information:
Cash paid during the period for:
Interest $ 47 $ 186
======= =======
Income taxes $ 304 $ 29
======= =======
The accompanying notes are an integral part of these financial statements.
-8-
<PAGE>
E-Z-EM, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 29, 1998 and August 30, 1997
(unaudited)
NOTE A - CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of August 29, 1998, the consolidated
statement of stockholders' equity for the period ended August 29, 1998, and
the consolidated statements of earnings and cash flows for the periods ended
August 29, 1998 and August 30, 1997, have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include only
normally recurring adjustments) necessary to present fairly the financial
position, changes in stockholders' equity, results of operations and cash
flows at August 29, 1998 (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. It is suggested that these
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the fiscal 1998 Annual Report on Form
10-K filed by the Company on August 28, 1998. The results of operations for
the periods ended August 29, 1998 and August 30, 1997 are not necessarily
indicative of the operating results for the respective full years.
The consolidated financial statements include the accounts of E-Z-EM, Inc. and
all 100%-owned subsidiaries (the "Company"). All significant intercompany
balances and transactions have been eliminated. The Company's approximate 23%
interest in an affiliate is accounted for by the equity method. Pursuant to
this method, such investment is recorded at cost and adjusted by the Company's
share of undistributed earnings (or losses).
NOTE B - INVENTORIES
Inventories consist of the following:
August 29, May 30,
1998 1998
------- -------
(in thousands)
Finished goods $13,056 $13,846
Work in process 1,303 1,474
Raw materials 11,887 11,444
------- -------
$26,246 $26,764
======= =======
NOTE C - EARNINGS PER COMMON SHARE
In 1998, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings Per Share," which requires public companies to
present basic earnings per share and, if applicable, diluted earnings per
share. In accordance with SFAS No. 128, all comparative periods have been
restated, if applicable. Basic earnings per share are based on the weighted
average number of common shares outstanding without consideration of potential
common stock. Diluted earnings per share are based on the
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<PAGE>
E-Z-EM, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
August 29, 1998 and August 30, 1997
(unaudited)
NOTE C - EARNINGS PER COMMON SHARE (continued)
weighted average number of common and potential common shares outstanding. The
calculation takes into account the shares that may be issued upon exercise of
stock options, reduced by the shares that may be repurchased with the funds
received from the exercise, based on the average price during the period.
The following table sets forth the reconciliation of the weighted average
number of common shares:
Thirteen weeks ended
----------------------------
August 29, August 30,
1998 1997
---------- ----------
Basic 10,044,112 9,926,028
Effect of dilutive
securities (stock options) 282,954 486,864
---------- ----------
Diluted 10,327,066 10,412,892
========== ==========
NOTE D - COMMON STOCK
Under the 1983 and 1984 Stock Option Plans, options for 15,000 shares were
granted at $5.63 per share, options for 26,604 shares were exercised at $4.22
per share, options for 1,229 shares were forfeited at $5.39 per share, and no
options expired during the thirteen weeks ended August 29, 1998. Under the
1997 AngioDynamics Stock Option Plan, options for .63 shares were forfeited at
$40,000 per share, and no options were granted, exercised or expired during
the thirteen weeks ended August 29, 1998.
Under the Employee Stock Purchase Plan, 325 shares were purchased at $5.10 per
share during the thirteen weeks ended August 29, 1998.
NOTE E - COMPREHENSIVE INCOME
During the first quarter of fiscal 1999, the Company adopted SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 establishes new rules for the
reporting and display of comprehensive income and its components; however, the
adoption of SFAS No. 130 had no impact on the Company's net earnings or
stockholders' equity. SFAS No. 130 requires unrealized holding gains or losses
on debt and equity securities available for sale and cumulative translation
adjustments, which prior to adoption were reported separately in stockholders'
equity, to be included in accumulated other comprehensive income (loss). Prior
year financial statements have been reclassified to conform to the
requirements of SFAS No. 130.
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<PAGE>
E-Z-EM, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
August 29, 1998 and August 30, 1997
(unaudited)
NOTE E - COMPREHENSIVE INCOME (continued)
The components of comprehensive income, net of related tax, are as follows:
Thirteen weeks ended
--------------------------
August 29, August 30,
1998 1997
---------- ----------
(in thousands)
Net earnings $ 1,470 $ 128
Unrealized holding loss on debt
and equity securities (261) (134)
Foreign currency translation
adjustments (611) (149)
------- -------
Comprehensive income (loss) $ 598 $ (155)
======= =======
The components of accumulated other comprehensive loss, net of related tax,
are as follows:
August 29, May 30,
1998 1998
------- -------
(in thousands)
Unrealized holding gain on debt
and equity securities $ 1,083 $ 1,344
Cumulative translation adjustments (2,468) (1,857)
------- -------
Accumulated other comprehensive loss $(1,385) $ (513)
======= =======
NOTE F - NEW PRONOUNCEMENT NOT YET ADOPTED
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information," which
is effective the fourth quarter of the Company's current fiscal year. The
statement redefines how operating segments are determined and requires
disclosure of certain financial and descriptive information about a company's
operating segments. The Company has not completed its evaluation of the
effects that SFAS No. 131 will have on its financial reporting and
disclosures.
NOTE G - RECLASSIFICATIONS
Certain reclassifications have been made to the prior period amounts to
conform to the current period presentation.
-11-
<PAGE>
E-Z-EM, Inc. and Subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarters ended August 29, 1998 and August 30, 1997
- --------------------------------------------------
The Company's quarters ended August 29, 1998 and August 30, 1997 both
represent thirteen weeks.
Results of Operations
- ---------------------
Segment Overview
----------------
The Company operates in two industry segments: Diagnostic products and
AngioDynamics products. The Diagnostic products industry segment includes both
contrast systems and non-contrast systems. The AngioDynamics products industry
segment includes angiography, therapeutic and stent/angioplasty medical devices
used in the interventional medical marketplace.
Diagnostic AngioDynamics Eliminations Total
---------- ------------- ------------ -----
(in thousands)
Quarter ended August 29, 1998
- -----------------------------
Unaffiliated customer sales $19,990 $ 5,675 - $25,665
Intersegment sales 11 142 ($153) -
Gross profit (loss) 7,842 2,841 (14) 10,669
Operating profit (loss) 1,597 459 (6) 2,050
Quarter ended August 30, 1997
- -----------------------------
Unaffiliated customer sales $20,847 $ 4,866 - $25,713
Intersegment sales 55 145 ($200) -
Gross profit 7,776 1,957 2 9,735
Operating profit (loss) 989 (680) 2 311
Diagnostic Products
-------------------
Diagnostic segment operating results for the current quarter improved by
$608,000 due primarily to reduced operating expenses. Despite a 4% decline in
net sales, gross profit expressed as a percentage of net sales improved to 39%
during the current quarter, versus 37% during the comparable quarter of the
prior year. Sales price increases virtually offset the effect of increased
discounts to group purchasing organizations. The improvement in gross profit,
expressed as a percentage of net sales, can be attributed to reduced unabsorbed
overhead costs.
AngioDynamics Products
----------------------
AngioDynamics segment operating results for the current quarter improved by
$1,139,000 due to increased sales, improved gross profit, and decreased
operating expenses. Net sales increased 17%, or $809,000, due to the continued
domestic market penetration of angiography products. International sales
remained virtually flat. Gross profit expressed as a percentage of net sales
improved to 49% during the current quarter versus 39% during the comparable
quarter of the prior year due primarily to increased manufacturing efficiencies
at the Queensbury facility, increased production throughput at both the
Queensbury and Irish facilities, and the consolidation of operations, resulting
from the closing of its Leocor facility in the third quarter of last fiscal
year. Decreased operating expenses of $256,000 can be attributed to the closing
of its
-12-
<PAGE>
Leocor facility, coupled with reduced amortization expense, resulting from the
impairment charge, of certain long-lived assets, recorded in the third quarter
of last fiscal year.
Consolidated Results of Operations
----------------------------------
For the quarter ended August 29, 1998, the Company reported net earnings of
$1,470,000, or $.15 and $.14 per common share on a basic and diluted basis,
respectively, as compared to net earnings of $128,000, or $.01 per common share
on both a basic and diluted basis, for the comparable period of last year.
Results for the current quarter were favorably affected by improved gross
profit in the AngioDynamics segment and decreased operating expenses in both
industry segments. The improved AngioDynamics gross profit is due primarily to
increased manufacturing efficiencies at the Queensbury facility, increased
production throughput at both the Queensbury and Irish facilities, and the
consolidation of operations, resulting from the closing of its Leocor facility
in the third quarter of last fiscal year. The decreased operating expenses can
be attributed, in large part, to reduced research and development due to the
completion of certain projects during last fiscal year.
Net sales for the quarter ended August 29, 1998 decreased less than 1%, or
$48,000, as compared to the quarter ended August 30, 1997. Decreased sales of
contrast systems of $950,000 were virtually offset by increased sales of
AngioDynamics products of $809,000 and non-contrast systems of $93,000. Price
increases had little effect on net sales in the current quarter, although the
Diagnostic segment continued to experience price pressures due to increased
sales to group purchasing organizations. Net sales in international markets,
including direct exports from the U.S., decreased 7%, or $649,000, in the
current quarter versus the comparable period of last year due, in large part, to
foreign currency exchange rate fluctuations which adversely affected the
translation of Canadian and Japanese sales to U.S. dollars for financial
reporting purposes.
Gross profit expressed as a percentage of net sales increased to 42% during
the current quarter versus 38% during the comparable quarter of the prior year
due to increased gross profit in both industry segments. The improved
AngioDynamics gross profit is due primarily to increased manufacturing
efficiencies at the Queensbury facility, increased production throughput at both
the Queensbury and Irish facilities, and the consolidation of operations,
resulting from the closing of its Leocor facility in the third quarter of last
fiscal year. The improved Diagnostic gross profit is due primarily to reduced
unabsorbed overhead costs.
Selling and administrative ("S&A") expenses were $7,617,000 during the
quarter ended August 29, 1998 versus $7,915,000 during the quarter ended August
30, 1997. This decline of $298,000, or 4%, in the current quarter was
principally due to decreased AngioDynamics S&A expenses of $178,000 and
decreased Diagnostic S&A expenses of $120,000. Decreased AngioDynamics S&A
expenses can be attributed to the consolidation of operations, resulting from
the closing of its Leocor facility in the third quarter of last fiscal year,
coupled with reduced amortization expense, resulting from the impairment charge,
of certain long-lived assets, recorded in the third quarter of last fiscal year.
Research and development ("R&D") expenditures decreased 34% in the current
quarter to $1,002,000, or 4% of net sales, from $1,509,000, or 6% of net sales,
in the comparable quarter of the prior year. This decline was due primarily to
decreases in corporate projects of $228,000, expenses associated with product
validations and clinical trials of $125,000, and AngioDynamics projects of
$84,000. Of the R&D expenditures in the current quarter, approximately 43%
relate to contrast systems, 33% to AngioDynamics projects, 4% to immunological
projects, 7% to other projects and 13% to general regulatory costs. R&D
expenditures are expected to continue at approximately current levels.
-13-
<PAGE>
Other income, net of other expenses, totaled $15,000 of income in the
current quarter versus $101,000 of expense in the comparable period of last
year. This improvement was due primarily to decreased interest expense of
$127,000, resulting from the repayment of AngioDynamics debt, and decreased
foreign currency exchange losses of $95,000, partially offset by the recording
of the Company's approximate 23% share in the losses of ITI Medical
Technologies, Inc. of $79,000.
For the quarter ended August 29, 1998, the Company's effective tax rate of
29% differed from the Federal statutory tax rate of 34% due primarily to the
utilization of previously unrecorded tax credit carryforwards and earnings of
the Puerto Rican subsidiary, which are subject to favorable U.S. tax treatment.
The Company's effective tax rate of 39% during the quarter ended August 30, 1997
differed from the Federal statutory tax rate of 34% due primarily to
non-deductible expenses and losses incurred in a foreign jurisdiction subject to
lower tax rates, partially offset by earnings of the Company's Puerto Rican
subsidiary, which are subject to favorable U.S. tax treatment, and tax-exempt
interest income.
Liquidity and Capital Resources
- -------------------------------
During the quarter ended August 29, 1998, debt repayments were funded
primarily by cash provided by operations. The Company's policy has been to fund
capital requirements without incurring significant debt. At August 29, 1998,
debt (notes payable, current maturities of long-term debt and long-term debt)
was $1,872,000 as compared to $3,934,000 at May 30, 1998. The Company has
available $8,629,000 under four bank lines of credit of which no amounts were
outstanding at August 29, 1998.
The Company's current policy is to issue stock dividends. During the third
quarter of fiscal years 1996 and 1998 and the fourth quarter of fiscal year
1997, the Company issued 3% stock dividends.
Presently, the Company is continuing to look for both new and complementary
lines of business for expansion in order to ensure its continued growth.
At August 29, 1998, approximately 62% of the Company's assets consist of
inventories, accounts receivable, cash and cash equivalents, and debt and equity
securities. The current ratio is 3.90 to 1, with net working capital of
$43,214,000 at August 29, 1998, as compared to the current ratio of 3.43 to 1,
with net working capital of $41,597,000 at May 30, 1998.
The Company is evaluating the impact of the Year 2000 issue on its business
and does not expect to incur significant costs associated with Year 2000
compliance or that Year 2000 issues will have a material impact on the Company's
business, results of operations or financial condition. The Year 2000 issue is
the result of computer programs being written using two digits rather than four
to define the applicable year. The Company's domestic software systems and
applications are currently Year 2000 compliant. The Company's international
subsidiaries are currently working toward Year 2000 compliance. The Company has
also initiated discussions with its significant suppliers and customers to
ensure that they have appropriate plans to address Year 2000 issues that may
affect the Company's operations.
This Form 10-Q contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which are intended to be covered by the safe
harbors created thereby. Investors are cautioned that all forward-looking
statements involve risks and uncertainty, including without limitation, the
ability of the Company to develop its products, as well as general market
conditions, competition and pricing. Although the Company believes that the
assumptions underlying the
-14-
<PAGE>
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this Form 10-Q will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.
-15-
<PAGE>
E-Z-EM, Inc. and Subsidiaries
Part II: Other Information
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
--------
No. Description Page
--- ----------- ----
27 Financial data schedule 17
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended August 29, 1998.
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.
E-Z-EM, Inc.
---------------------------------
(Registrant)
Date October 12, 1998 /s/ Howard S. Stern
---------------- ---------------------------------
Howard S. Stern, Chairman of the
Board, President, Chief Executive
Officer and Director
Date October 12, 1998 /s/ Dennis J. Curtin
---------------- ---------------------------------
Dennis J. Curtin, Vice President-
Chief Financial Officer
-16-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Form 10-Q for the quarter ended August 29, 1998 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> MAY-29-1999
<PERIOD-END> AUG-29-1998
<CASH> 6,096
<SECURITIES> 3,525
<RECEIVABLES> 20,499
<ALLOWANCES> 927
<INVENTORY> 26,246
<CURRENT-ASSETS> 58,123
<PP&E> 45,184
<DEPRECIATION> 23,813
<TOTAL-ASSETS> 89,171
<CURRENT-LIABILITIES> 14,909
<BONDS> 543
0
0
<COMMON> 1,006
<OTHER-SE> 70,946
<TOTAL-LIABILITY-AND-EQUITY> 89,171
<SALES> 25,665
<TOTAL-REVENUES> 25,665
<CGS> 14,996
<TOTAL-COSTS> 14,996
<OTHER-EXPENSES> 8,619
<LOSS-PROVISION> 60
<INTEREST-EXPENSE> 62
<INCOME-PRETAX> 2,065
<INCOME-TAX> 595
<INCOME-CONTINUING> 1,470
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,470
<EPS-PRIMARY> .15
<EPS-DILUTED> .14
</TABLE>
