SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 September 30, 1996
Commission File Number: 0-13588
FAULDING INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2769995
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Elmora Avenue, Elizabeth, New Jersey 07207
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 527-9100
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
------------------- -----------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
--------------------------------------
(Title of class)
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 and Exchange
Act of 1934 during the preceding twelve 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 [ ]
15,064,560
Number of shares outstanding of the Registrant's
common stock as of October 28, 1996
<PAGE>
FAULDING INC.
INDEX
Page No.
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements:
Consolidated Balance Sheets
September 30, 1996 and June 30, 1996 . . . . . . . . . . 3
Consolidated Statements of Operations
Three months ended September 30, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows
Three months ended September 30, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . 10
PART II - OTHER INFORMATION
ITEMS 1 thru 6 . . . . . .. . . . . . . . . . . . . . . . . 14
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 15
PAGE 2
<PAGE>
Faulding Inc.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, June 30,
1996 1996
(Unaudited) (Audited)
- --------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,424 $ 1,897
Accounts receivable 14,934 17,118
Inventory (Note 4) 30,263 26,496
Other current assets 3,834 3,315
Deferred income taxes (Note 6) 2,657 3,225
- --------------------------------------------------------------------------
TOTAL CURRENT ASSETS 54,112 52,051
- --------------------------------------------------------------------------
Property, plant and equipment, net 42,272 41,510
Other assets 4,226 4,279
Deferred income taxes (Note 6) 1,327 838
- --------------------------------------------------------------------------
TOTAL ASSETS $ 101,937 $ 98,678
==========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 8,275 $ 7,553
Due to affiliated companies 1,129 847
Loan payable to bank 4,000 ---
Accrued expenses 5,552 6,666
Accrued preferred dividends 689 689
- --------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 19,645 15,755
- --------------------------------------------------------------------------
STOCKHOLDERS' EQUITY (Notes 1 and 2)
Class A convertible preferred stock;
par value $.01, authorized 1,834,188
shares; issued and outstanding 834,188
(liquidation value $24,995) 8 8
Class B convertible preferred stock;
par value $.01, authorized 150,000
shares; issued and outstanding 150,000
(liquidation value $15,169) 2 2
Common stock; par value $.01, authorized
35,000,000 shares; issued and outstanding
15,064,560 at September 30, 1996 and June
30, 1996 151 151
Capital in excess of par value 56,473 57,138
Retained earnings 25,658 25,624
- --------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 82,292 82,923
- --------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 101,937 $ 98,678
==========================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
PAGE 3
<PAGE>
Faulding Inc.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except per share amounts)
Three Months Ended
September 30,
-----------------------
1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
NET SALES $ 18,585 $ 15,572
Cost of sales 13,013 13,718
- -----------------------------------------------------------------------------
Gross profit 5,572 1,854
- -----------------------------------------------------------------------------
Expenses:
Selling, general and administrative 3,031 2,852
Research and development 2,488 2,231
- -----------------------------------------------------------------------------
Total expenses 5,519 5,083
- -----------------------------------------------------------------------------
Income (loss) from operations 53 (3,229)
Other income (expense), net (19) (279)
- -----------------------------------------------------------------------------
Income (loss) before income taxes 34 (3,508)
Provision (benefit) for income taxes (Note 6) -- (658)
- -----------------------------------------------------------------------------
Income (loss) Before Preferred Stock Dividends 34 (2,850)
Preferred stock dividends 689 520
- -----------------------------------------------------------------------------
NET INCOME (LOSS), AVAILABLE FOR COMMON STOCK $ (655) $ (3,370)
=============================================================================
Primary Earnings Per Common Share (Note 3)
Net income (loss) $ (.04) $ (.22)
- -----------------------------------------------------------------------------
Weighted average number of common
shares outstanding 15,064,560 15,018,935
=============================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
PAGE 4
<PAGE>
Faulding Inc.
<TABLE>
<CAPTION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
Three Months Ended
September 30,
-----------------------------
1996 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss), Available for Common Stock $ (655) $ (3,370)
Adjustments To Reconcile Net Income (Loss) to Net Cash
Provided By (Used For) Operating Activities:
Depreciation and amortization 942 756
Compensation expense-stock grants 82 67
Deferred income tax, asset 79 190
INCREASE (DECREASE) IN CASH FROM:
Accounts receivable 2,184 85
Inventory (3,767) 183
Other current assets (498) (536)
Other assets (23) 10
Accounts payable 722 (172)
Accrued expenses (1,114) 108
Accrued income taxes (79) 848
Due to/from affiliates 282 234
- -----------------------------------------------------------------------------
TOTAL ADJUSTMENTS (1,190) 77
- -----------------------------------------------------------------------------
Net Cash Provided By (Used For)
Operating Activites (1,845) (3,293)
- -----------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITES:
Purchases of property, plant and equipment (1,628) (661)
- -----------------------------------------------------------------------------
Net Cash Provided By (Used For)
Investing Activities (1,628) (661)
- -----------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITES:
Borrowings from bank 4,000 1,000
Proceeds from additions to paid in capital 0 2,597
- -----------------------------------------------------------------------------
Net Cash Provided By (Used For)
Financing Activites 4,000 3,597
- -----------------------------------------------------------------------------
Increase (Decrease) In Cash and Cash Equivalents $ 527 $ (357)
=============================================================================
Cash and cash equivalents,
beginning of period 1,897 1,225
- -----------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 2,424 $ 868
=============================================================================
Supplemental disclosure of cash flow information:
Cash paid (received) during the period for:
Interest $ 28 $ 54
Income Taxes --- $ ---
- -----------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
PAGE 5
<PAGE>
FAULDING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in Thousands)
Notes to the Financial Statements included in Faulding Inc.'s (the "Company")
Form 10-K for the year ended June 30, 1996 contain information pertinent to
the accompanying financial statements and should be read in conjunction
with reading these financial statements. There has been no material change
in the information contained in such footnotes except as set forth below.
The Consolidated Balance Sheet at September 30, 1996, the Consolidated
Statements of Operations for the three months ended September 30, 1996 and
1995 and the Consolidated Statements of Cash Flows for the three months ended
September 30, 1996 and 1995 are unaudited.
In the opinion of management, all adjustments (consisting only of normal
recurring entries) necessary for a fair presentation of such financial
results have been included.
1. Acquisitions and Consolidation
On February 29, 1996 the Company acquired all of the outstanding capital
stock of each of Faulding Medical Device Co. ("FMD"), Faulding Puerto
Rico, Inc. ("FPR"), and Faulding Pharmaceutical Co. ("FPC"), collectively
the "Acquired Companies," from Faulding Holdings Inc. (the Company's
principal stockholder) in exchange for 2,438,712 shares of its common
stock. As part of the acquisition, the Company created a Class B Preferred
Stock with 150,000 authorized shares, par value at $.01, all of which were
issued to Faulding Holdings Inc. for a cash purchase price of $100 per
share, for a total value of $15 million.
The acquisition transaction was accounted for as similar to a pooling of
interests and, therefore, financial statements for the quarter ended
September 30, 1995 have have been restated as if the acquisition took
place at the beginning of the period presented. The financial statements
reflect the accounts of Faulding Inc. (including its wholly owned subsidiary,
Purepac Pharmaceutical Co.) and the Acquired Companies. All intercompany
transactions and balances have been eliminated.
PAGE 6
<PAGE>
2. A reconciliation of the change in total stockholders' equity is as follows:
<TABLE> Par Value
of Common Capital in Total Stock-
and Preferred Excess of Retained holders'
Stock Par Value Earnings Equity
------------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Balance,
June 30, 1996 $ 161 $ 57,138 $ 25,624 $ 82,923
Class A preferred
stock dividend (520) (520)
Class B preferred
stock dividend (169) (169)
Stock grant amortization 81 81
Reduction of deferred income
tax asset from issuance
of stock grants (57) (57)
Net Income 34 34
------------- ----------- -------- ----------
Balance,
September 30, 1996 $ 161 $ 56,473 $ 25,658 $ 82,292
============= =========== ======== ==========
</TABLE>
3. Earnings Per Common Share
Primary earnings per common share is calculated by dividing income after
preferred dividends by the weighted average number of common shares
outstanding during the period. Common stock equivalents are excluded as
the effect is either not material or anti-dilutive. Earnings per share
assuming full dilution is not presented as the effect would be anti-dilutive.
4. Inventory
<TABLE>
<CAPTION>
September 30, June 30,
1996 1996
------------- ----------
<S> <C> <C>
Raw materials $ 11,769 $ 11,160
Work-in-process 7,065 4,509
Finished goods 11,429 10,827
---------- ----------
Total $ 30,263 $ 26,496
========== ==========
</TABLE>
5. Capital Stock
During the quarter ended September 30, 1996 no additional shares were
issued.
PAGE 7
<PAGE>
6. Accounting for Income Taxes
Deferred income tax assets, both current and non-current, reflect the net tax
effects of (a) temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for
income tax purposes, and (b) operating loss and tax credit carryforwards.
The income tax expense provision does not include the benefit of recognizing
available loss carryforwards to the extent they have already been recognized
as a deferred tax asset. Instead, there is a reduction in the deferred tax
asset as such benefits are utilized to reduce taxes payable.
The provision (benefit) for income tax expense was comprised of the following:
<TABLE>
Three Months Ended
September 30,
----------------------
1996 1995
---------- ---------
<S> <C> <C>
Current
Federal $ 11 $ (533)
State 1 (63)
---------- ---------
12 (596)
Deferred
Federal (11) (24)
State (1) (38)
---------- ---------
Total provisions $ 0 $ (658)
========== =========
</TABLE>
The Company has net operating losses and tax credits available as
carryforwards to reduce future payments of federal income taxes. State tax
losses are also available as carryforwards. At September 30, 1996, for
federal tax purposes, the net operating loss and tax credit carryforwards
amounted to $14,870 and $707, respectively; they expire through year 2003.
The future utilization of the net operating loss carryforwards is subject to
limitation under provisions of the Internal Revenue Code.
The benefit of net operating losses generated by the Acquired Companies
prior to acquisition by the Company cannot be realized until the individual
company generates taxable income to utilize such benefit. As of September
30, 1996 this had not occurred, and a valuation allowance has been provided
fully for these net operating losses.
PAGE 8
<PAGE>
7. New Accounting Pronouncements
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 123 "Accounting For Stock
Based Compensation" ("SFAS 123") which requires that an employer's
financial statements include expanded disclosure regarding stock-based
employee compensation arrangements. The Company will adopt the
disclosure only requirements of SFAS123, therefore, such adoption will have
no effect on the Company's consolidated financial condition or results of
operations.
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 121 "Accounting For The Impairment
Of Long-Lived Assets" ("SFAS 121") which requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstance
indicate that the carrying amount of an asset may not be recoverable. To
determine a loss, if any, to be recognized, the book value of the asset would
be compared to the market value or expected future cash flow value. The
Company is adopting SFAS 121 for the fiscal year ended June 30, 1997 and
anticipates, based upon information currently available, that it will not have
a material impact on its results of operations and financial position.
PAGE 9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Dollars presented in thousands)
Results Of Operations - Three Month Period Ended September 30, 1996
Compared with the Three Month Period Ended September 30, 1995
Overview: Acquisitions and Consolidation
On February 29, 1996 the Company acquired all of the outstanding capital stock
of each of Faulding Medical Device Co. ("FMD"), Faulding Puerto Rico, Inc.
("FPR"), and Faulding Pharmaceutical Co. ("FPC"), collectively the "Acquired
Companies," from Faulding Holdings Inc. (the Company's majority stockholder)
in exchange for 2,438,712 shares of its common stock. As a result, the
acquisition transaction was accounted for as similar to a pooling of interests
and, therefore, financial statements for the three month period ended
September 30, 1995 have been restated as if the acquisition took place at the
beginning of the earliest period presented. The financial statements reflect
the accounts of Faulding Inc. (including its wholly owned subsidiary, Purepac
Pharmaceutical Co.) and the Acquired Companies.
Results of Operations
The following segregates the results of operations before income taxes for
Faulding Inc. into the Company's business prior to the acquisition, "Purepac,"
and the Acquired Companies which became wholly owned subsidiaries of Faulding
Inc. effective March 1, 1996.
STATEMENTS OF OPERATIONS (UNAUDITED) - Purepac
Three Months Ended
September 30,
-----------------------
1996 1995
- -----------------------------------------------------------------------------
[S] [C] [C]
NET SALES $ 16,178 $ 14,167
Cost of sales 10,164 11,655
- -----------------------------------------------------------------------------
Gross profit 6,014 2,512
- -----------------------------------------------------------------------------
Expenses:
Selling, general and administrative 2,437 2,255
Research and development 1,945 1,951
- -----------------------------------------------------------------------------
Total expenses 4,382 4,206
- -----------------------------------------------------------------------------
Income (loss) from operations 1,632 (1,694)
Other income (expense), net (19) (40)
- -----------------------------------------------------------------------------
Income (loss) before income taxes 1,613 (1,734)
- -----------------------------------------------------------------------------
PAGE 10
<PAGE>
STATEMENTS OF OPERATIONS (UNAUDITED) - Acquired Companies
Three Months Ended
September 30,
-----------------------
1996 1995
- -----------------------------------------------------------------------------
[S] [C] [C]
NET SALES $ 2,407 $ 1,405
Cost of sales 2,849 2,063
- -----------------------------------------------------------------------------
Gross profit (442) (658)
- -----------------------------------------------------------------------------
Expenses:
Selling, general and administrative 593 597
Research and development 544 280
- -----------------------------------------------------------------------------
Total expenses 1,137 877
- -----------------------------------------------------------------------------
Income (loss) from operations (1,579) (1,535)
Other income (expense), net --- 239
- -----------------------------------------------------------------------------
Income (loss) before income taxes $ (1,579) $ (1,774)
- -----------------------------------------------------------------------------
The discussion below relates to the segregated results presented above.
Purepac Results of Operations
Net sales for the three month period ended September 30, 1996 was $16,178
compared with $14,167 for the corresponding 1995 period. The increase is
primarily due to sales of diclofenac, which was approved in March 1996.
Diclofenac sales in the September 1996 quarter represented 22% of the
quarter's sales. In addition to diclofenac, sales of indapamide and
diflunisal, which were approved by the United States food and Drug
Administration ("FDA") in the quarter ended June 30, 1996 and sales related
to the contract manufacturing of KADIAN (TM) for Faulding Services Inc. were
recorded in the current quarter.
Gross profit for the three month period ended September 30, 1996 was $6,014
compared with $2,512 for the corresponding 1995 period. Gross profit as a
percentage of net sales for the current period was 37% compared with 18% for
the corresponding period in the prior year. The increase was mostly
attributable to the sales of diclofenac and indapamide plus contract
manufacturing of KADIAN (TM) .
Selling, general and administrative expenses for the current three month
period was $2,437 compared with the corresponding prior period's expense of
$2,255. Current period expenses as a percentage of net sales was 15% compared
with 16% for the corresponding prior year's period.
Research and development expenses for the current three month period was
$1,945 compared with $1,951 for the corresponding 1995 period. The current
period's expense as a percent of net sales was 12% compared with 14% for the
PAGE 11
<PAGE>
corresponding prior period. The relative stable expenses for both periods
reflect the continuing expenditures in biostudy costs and product development.
Other income (expense) for the current three month period was ($19) compared
with ($40) in the prior year's corresponding period. The other income
(expense) reflects interest expense and revolving credit agreement fees in
excess of interest income.
Income before income taxes for the current three month period was $1,613
compared with a net loss before income taxes of $1,734 for the corresponding
1995 period.
The results for the three month period ended September 30, 1996 was positively
affected by recent new product approvals for diclofenac, indapamide and
income resulting from contract manufacturing of KADIAN (TM) , partly offset by
negative pricing pressures within the oral generic pharmaceutical industry.
The future financial results will continue to be dependent on the ability of
income from sales of new products to counter ongoing price erosion within
the industry.
Acquired Companies Results of Operations
The Acquired Companies became wholly owned subsidiaries of Faulding Inc.
effective March 1, 1996.
Net sales for the three month period ended September 30, 1996 was $2,407
compared with $1,405 for the corresponding 1995 period. Of the current and
prior period net sales, 64% and 73%, respectively, were related to products
manufactured at the FPR production facility in Aguadilla, Puerto Rico. These
products were sold either under contract manufacturing agreements or by
FPC to its customers in the USA. The majority of the remainder of the net
sales comprises products licensed from F.H. Faulding Co. Limited, the
beneficial majority stockholder of the Company ("F. H. Faulding"). Net sales
in the current three month period included mitomycin, which sales commenced
in the quarter ended March 31, 1996, licensed from F.H. Faulding and approved
by the FDA for marketing in November 1995.
Gross profit for the three month period ended September 30, 1996 was ($442)
compared with ($658) for the corresponding 1995 period. Gross profit was
unfavorably impacted in both periods by under utilization of the production
facility in Puerto Rico.
Selling, general and administrative expenses for the current three month
period was $593 compared with the corresponding prior period's expense of
$597. The expense represent principally selling expenses associated with
FPC.
PAGE 12
<PAGE>
Research and development expenses for the current three month period was
$544 compared with $280 for the corresponding 1995 period. The increase in
expense of $264 was due to all three Acquired Companies increasing
development expenditures.
The loss before income taxes for the current three month period was $1,579
compared with a loss of $1,774 for the corresponding 1995 period.
Consolidated Income Tax Benefit
The calculation of the provision (benefit) for income taxes of the Company,
which includes Purepac and the Acquired Companies, has been prepared in
accordance with accounting for the acquisitions as similar to a pooling of
interests consistently applying Statement of Financial Accounting Standard No.
109 ("SFAS109").
For the current three month period ended September 30, 1996, the consolidated
income before tax was $34. Due to permanent tax differences which reduce the
taxable income to breakeven, no consolidated provision needs to be provided.
For the Acquired Companies, only the net loss before income tax since
acquisition can be consolidated into the Company's income tax returns. The
income tax benefit of the net losses prior to acquisition have been fully
reserved against as the recovery of these losses is dependent on future
taxable income of each of the respective companies, which at present cannot
be assured.
Financial Condition, Liquidity And Capital Resources
The Company had $2,424 in cash and cash equivalents at September 30, 1996,
compared with $1,897 at June 30, 1996. The increase in the current three
month period of $527 resulted primarily from $4,000 borrowed from a bank
offset by $1,845 used for operating activities, and $1,628 used for
investments in property, plant and equipment.
A comparison of the balance sheet accounts at September 30, 1996 to the June
30, 1996 balances shows the following to be noteworthy:
Accounts receivable decreased by $2,184 due to collections of the
previous quarter's high level of sales.
Inventory increased by $3,767 due to anticipation of higher sales volumes,
increased production and to better match customers' demands.
The accrued preferred dividends payable to the Company's majority stockholder,
Faulding Holdings Inc., of $689 for the three month period ended September
30, 1996 were subsequently paid on October 1, 1996.
PAGE 13
<PAGE>
The Company believes that its current cash resources, anticipated operating
cash flows and funds available under a revolving credit and loan arrangement
with a bank will be sufficient to fund its working capital needs for the next
24 months. In addition, it is not anticipated that the Acquired Companies
will generate adequate revenues to finance their combined operating expenses
until at least 1998. Depending upon the timing of the Company's cash flow
requirements, which is highly dependent upon the unpredictable timing of the
receipt of FDA product approvals, the future cash flow needs of the Company
could exceed the Company's current cash resources and its available credit
under its existing credit facilities. As of September 30, 1996, the Company
had $2,424 in cash, plus approximately $11,000 of available borrowings under
its existing credit facilities.
Accordingly, the Company may need to seek additional credit facilities or to
seek additional funding from sales of its securities or from other sources.
The Company anticipates that it would be able to increase its credit
facilities or obtain financing from other sources, should it require
additional cash flow to support the commercialization of new products
following receipt of FDA approval. However, there can be no assurance that
such financing will be available when required, if at all, or will be
available upon terms the Company may deem commercially reasonable.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On August 21, 1996, an action was commenced against the Company, Purepac,
F.H. Faulding and Zeneca Inc. in the United States District Court for the
District of Delaware entitled Purdue Pharma L.P. and the Purdue Frederick
Company v. F. H. Faulding & Company Ltd. [sic], Faulding Inc., Purepac
Pharmaceutical Co. and Zeneca Inc. 96 Civ. 427. The complaint alleges that
the manufacture and marketing in the United States of KADIAN (TM) infringes a
patent assigned to one of the plaintiffs and constitutes unfair competitive
practices under Federal and State law. The Company, through Purepac,
manufactures KADIAN (TM) pursuant to a contract manufacturing agreement with
Faulding Services Inc.
The complaint seeks, among other things, an order enjoining the Company from
infringing the subject patent and awarding treble and punitive damages. The
Company believes the allegations in the complaint to be entirely without
merit and intends, in cooperation with its co-defendants, to vigorously
defend this action. The commencement of the action did not impact the launch
of KADIAN (TM) .
The Company is involved in litigation incidental to the conduct of its
business, in addition to the above matter, and does not believe that the
ultimate adverse resolutions of any, or all, thereof would have a material
adverse effect on its financial position, results of operations or cash
flows.
PAGE 14
<PAGE>
Item 2. through Item 4.
Not Applicable.
Item 5. OTHER EVENTS
Not Applicable.
Item 6 (a). EXHIBITS
Not Applicable.
Item 6 (b). REPORTS ON FORM 8-K
Not Applicable.
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.
FAULDING INC.
BY: /s/ Richard F. Moldin November 13, 1996
Richard F. Moldin
President and Chief Executive Officer
(Principal Executive Officer)
BY: /s/ Lee H. Craker November 13, 1996
Lee H. Craker
Chief Financial Officer
(Principal Accounting Officer)
PAGE 15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 2,424
<SECURITIES> 0
<RECEIVABLES> 14,934
<ALLOWANCES> 0
<INVENTORY> 30,263
<CURRENT-ASSETS> 54,112
<PP&E> 42,272
<DEPRECIATION> 0
<TOTAL-ASSETS> 101,937
<CURRENT-LIABILITIES> 19,645
<BONDS> 0
0
10
<COMMON> 151
<OTHER-SE> 82,131
<TOTAL-LIABILITY-AND-EQUITY> 101,937
<SALES> 18,585
<TOTAL-REVENUES> 18,585
<CGS> 13,013
<TOTAL-COSTS> 5,519
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19
<INCOME-PRETAX> 34
<INCOME-TAX> 0
<INCOME-CONTINUING> 34
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34
<EPS-PRIMARY> (.04)
<EPS-DILUTED> 0
</TABLE>
