FORM 10-Q
Securities and Exchange Commission
Washington, D. C. 20549
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended : February 29, 1996
OR
_ Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number : 0-14820
IMMUCOR, INC.
(Exact name of registrant as specified in its charter)
Georgia 22-2408354
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3130 Gateway Drive P.O. Box 5625 Norcross, Georgia 30091-5625
(Address of principal executive offices) (Zip Code)
Registrant's telephone number : (770) 441-2051
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.
As of April 10, 1996: Common Stock, $.10 Par Value - 7,951,611
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
IMMUCOR, INC.
Balance Sheets
February 29, May 31,
ASSETS 1996 1995
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $19,432,175 $18,741,681
Accounts receivable, net 8,794,138 8,009,967
Inventories 5,775,802 5,469,966
Income tax receivable 31,240 76,455
Deferred income taxes 247,488 250,387
Other 898,375 720,592
Total current assets 35,179,218 33,269,048
Long-term investment 1,000,000 1,000,000
Property, plant and equipment, at cos 6,212,310 5,222,975
less accumulated depreciation (3,031,460) (2,364,503)
3,180,850 2,858,472
Other assets 568,820 353,043
Excess of cost over net tangible
assets acquired 6,085,539 6,498,679
$46,014,427 $43,979,242
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank loans $263,595 $241,639
Accounts payable 2,502,878 2,425,510
Income taxes payable 710,784 519,708
Accrued salaries and wages 453,015 683,032
Other accrued liabilities 105,752 298,101
Total current liabilities 4,036,024 4,167,990
Long-term debt 4,431,717 5,744,238
Shareholders' equity:
Common stock, $.10 par value 1,002,082 981,780
Additional paid-in capital 28,190,212 27,031,185
Retained earnings 17,590,491 15,256,375
Cost of shares held in treasury (8,466,284) (8,455,035)
Cumulative translation adjustment (769,815) (747,291)
Total equity 37,546,686 34,067,014
$46,014,427 $43,979,242
See accompanying notes.
IMMUCOR, INC.
Statements of Income
(Unaudited)
Three Mos. Ended Nine Mos. Ended
Feb. 29, Feb. 28, Feb. 29, Feb. 28,
1996 1995 1996 1995
Net sales $8,073,228 $7,234,450 $22,831,459 $21,476,209
Cost of sales 3,155,882 2,585,080 8,630,135 8,384,007
Gross profit 4,917,346 4,649,370 14,201,324 13,092,202
Research & development:
Instrument 133,143 243,927 373,798 586,184
General 124,056 120,259 367,788 362,485
Selling, general and admin. 3,684,671 3,149,640 10,388,531 9,150,764
Total operating expenses 3,941,870 3,513,826 11,130,117 10,099,433
Income from operations 975,476 1,135,544 3,071,207 2,992,769
Other income 292,814 141,553 676,865 451,739
Interest expense (68,650) (102,625) (237,978) (362,457)
Other expense (4,640) (250) (5,392)
Total other 224,164 34,288 438,637 83,890
Income before income taxes 1,199,640 1,169,832 3,509,844 3,076,659
Provision for income taxes 411,484 449,852 1,175,728 1,220,090
Net income $788,156 $719,980 $2,334,116 $1,856,569
Net income per common
and common equivalent share $0.09 $0.09 $0.27 $0.24
Weighted average number of
common and common equivalent
shares outstanding 8,884,564 7,746,718 8,801,288 7,756,591
See accompanying notes.
IMMUCOR, INC.
Statements of Cash Flows
(Unaudited)
Nine Months Ended
February 29, February 28,
1996 1995
CASH PROVIDED BY OPERATING ACTIVITIES
Net income $2,334,116 $1,856,569
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation 758,308 560,244
Amortization 170,423 269,027
Changes in assets and liabilities:
Increase in accounts receivable (700,801) (975,203)
Increase in inventories (305,836) (11,369)
Increase in other current assets (143,213) (200,915)
Increase/(Decrease) in accounts payable (5,093) 340,714
Increase/(Decrease) in accrued liabs (231,290) (143,324)
Cash provided by operating activities 1,876,614 1,695,743
CASH USED IN INVESTING ACTIVITIES:
Purchases of/deposits on prop. & equip (1,224,209) (786,487)
Other 12,406 40,000
Cash used in investing activities (1,211,803) (746,487)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit 21,956
Repayment of bank loans (1,065,191) (1,178,154)
Exercise of stock options 1,168,080 10,884
Cash provided/(used) in financing activities 124,845 (1,167,270)
Effect of exchange rate changes on cash (99,162) (1,590)
INCREASE IN CASH AND CASH EQUIVALENTS 690,494 (246,884)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 18,741,681 18,303,252
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $19,432,175 $18,056,368
See accompanying notes.
IMMUCOR, INC.
Notes to Financial Statements
(Unaudited)
1. In the opinion of management, the information furnished reflects all
adjustments (consisting only of normal recurring adjustments) necessary for
a fair presentation of the results for the interim periods. Revenues from
product sales are recognized at the time of shipment.
2. Inventories are stated at the lower of first-in, first-out cost or market:
As of Feb. 29, 1996 As of May 31, 1995
Raw materials and supplies $1,763,810 $1,551,354
Work in process 786,250 819,296
Finished goods 3,225,742 3,099,316
3. Net income per common share:
Net income per common share is computed using the weighted average number
of common shares and dilutive common share equivalents outstanding during the
respective periods. Common share and common share equivalents were 8,884,564
and 8,801,288 in the 1996 three and nine month comparable periods, and
7,746,718 and 7,756,591 in the 1995 three and nine month periods. There is no
significant difference between primary and fully diluted per share amounts.
4. Domestic and foreign operations:
Information concerning the Company's domestic and foreign operations is
summarized below:
Three Months Ended February 29, 1996:
Net Revenues United States Europe Eliminations Consolidated
Unaffiliated customers $4,278,307 $3,794,921 $8,073,228
Affiliates 750,883 27,815 ($778,698) 0
Total 5,029,190 3,822,736 (778,698) 8,073,228
Income from operations 819,863 150,743 4,870 975,476
Identifiable assets 30,055,173 18,538,509 (2,579,255) 46,014,427
Nine Months Ended February 29, 1996:
Net Revenues United States Europe Eliminations Consolidated
Unaffiliated customers $11,970,382 $10,861,077 $22,831,459
Affiliates 2,485,719 77,673 ($2,563,392) 0
Total 14,456,101 10,938,750 (2,563,392) 22,831,459
Income from operations 2,467,822 595,551 7,834 3,071,207
Identifiable assets 30,055,173 18,538,509 (2,579,255) 46,014,427
Sales to affiliates are valued at market prices.
5. Accounting for income taxes:
The provision for income tax expense for the three months and nine
months ended February 29, 1996 was $411,484, and $1,175,728, respectively.
The information required to determine the current and deferred portion of
these provisions was not available.
IMMUCOR, INC.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Financial Condition and Liquidity:
As of February 29, 1996, the Company's cash position totaled $19,432,200.
For the nine months ended February 29, 1996, the Company generated cash from
operating activities of $1,876,600 and repaid $1,065,200 (1,500,000 DM) of
bank debt in Germany.
The Company does not have any material capital commitments. Management
believes that the Company's current cash balance, internally generated funds,
and amounts available under the lines of credit are sufficient to support
operations for the foreseeable future. Management also believes additional
credit lines would be available should the need arise.
Results of Operations:
Net sales
Net sales for the three months ended February 29, 1996, were $8,073,200
compared to $7,234,500 in the prior year three month period, and for the nine
month period, net sales totaled $22,831,500 versus $21,476,200 last year. Net
sales increased 12% in the third quarter compared to a year ago, with higher
sales in the Company's German and Italian affiliates of $357,700, and $481,000
in the U.S. and balance of the world. This increase was principally due to
continued growth in sales of the Company's Capturer product line.
Gross profit
Gross profit, as a percentage of sales revenue, in the current year third
quarter totaled 60.9% compared to last year's 64.3%. However, year-to-date,
the gross profit percentage increased 1.2%. The decline in gross profit
percentage in the current year third quarter can be attributed to lower levels
of production as compared to a year ago.
Operating expenses
Selling, general and administrative expense for the three and nine month
period ended February 29, 1996, increased $535,000 and $1,237,800 respectively,
compared to the 1995 periods. This increase in spending can principally be
attributed to higher levels of depreciation expense, the addition of sales
and marketing personnel, both in the U.S. and Europe, trade show expense,
journal advertising and costs related to the launch of the ABS2000. This
increase was partially offset by a decline in instrument research and
development expenses for the three and nine months ended February 29, 1996 of
$110,800 and $212,400 respectively, in the comparable periods last year. The
decline in instrument research and development expenses reflects the
completion of the development phase of the Company's blood bank instrument
project, known as the ABS2000.
Other income
Other income increased $151,300 during the three months ended February 29,
1996 as compared to the same period last year, primarily due to higher interest
rates in the current year period over last year, which increased earnings on
invested cash reserves and favorable rates of foreign exchange in Europe as
compared to last year.
Interest expense
Interest expense declined $34,000 during the three months ended
February 29, 1996, and $124,500 in the nine months ended February 29, 1996,
as compared to the same three and nine month periods last year. The decline
in interest expense was due the Company refinancing its Deutsche Mark
denominated debt and reducing its outstanding principal loan balance in
Germany as compared to last year (see Financial Condition and Liquidity.)
Provision for income taxes
As a percent of pretax income, the provision for income taxes declined
during the three and nine months ended February 29, 1996, over the prior
year. The Company's operations in Europe generated a positive contribution
to pretax income in the current year versus a loss in the prior year.
However, no provision for income taxes was recorded in Europe in the current
year as European operations had sufficient net operating loss carryforwards
to offset the tax liability created by current year income.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) The Company has filed the following exhibits with this report:
11.1 Statement re computation of per share earnings.
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.
IMMUCOR, INC.
(Registrant)
Date: April 15, 1996
\s\Edward L. Gallup President
\s\Richard J. Still Senior Vice President -Finance
(Principal Accounting Officer)
IMMUCOR, INC.
EXHIBITS
Exhibit 11.1 Statement re computation of per share earnings.
Primary income per share calculations:
Three Months Ended Nine Months Ended
Feb. 29, Feb. 28, Feb. 29, Feb. 28,
1996 1995 1996 1995
Net income $788,156 $719,980 $2,334,116 $1,856,569
Weighted average number of common
shares and common share
equivalents are as follows:
Weighted average common shares
outstanding 7,907,620 7,695,081 7,830,203 7,692,914
Shares issued from assumed exercise of
options and warrants 745,471 51,637 780,028 63,677
Weighted average number of shares
outstanding (as adjusted) 8,653,091 7,746,718 8,610,231 7,756,591
Net income per common
and common equivalent share $0.09 $0.09 $0.27 $0.24
Fully diluted income per share calculations:
Three Months Ended Nine Months Ended
Feb. 29, Feb. 28, Feb. 29, Feb. 28,
1996 1995 1996 1995
Net income $788,156 $719,980 $2,334,116 $1,856,569
Weighted average number of common
shares and common share
equivalents are as follows:
Weighted average common shares
outstanding 7,907,620 7,695,081 7,830,203 7,692,914
Shares issued from assumed exercise of
options and warrants 976,944 51,637 971,085 63,677
Weighted average number of shares
outstanding (as adjusted) 8,884,564 7,746,718 8,801,288 7,756,591
Net income per common
and common equivalent share $0.09 $0.09 $0.27 $0.24
Note: shares issued from assumed exercise of options and warrants include
the number of incremental shares which result from applying the "treasury
stock method" for options and warrants in 1996 and 1995, APB 15, paragraph 36.
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<RECEIVABLES> 8,794,138
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<INVENTORY> 5,775,802
<CURRENT-ASSETS> 35,179,218
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<COMMON> 1,002,082
<OTHER-SE> 36,544,604
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<CGS> 8,630,135
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<INTEREST-EXPENSE> 237,978
<INCOME-PRETAX> 3,509,844
<INCOME-TAX> 1,175,728
<INCOME-CONTINUING> 2,334,116
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