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: August 31, 1997
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 October 8, 1997: Common Stock, $. 1 0 Par Value - 8,099,420
IMMUCOR, INC.
Condensed Consolidated Balance Sheets
August 31 May 31,
ASSETS 1997 1997
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents $15,219,673 $15,718,234
Accounts receivable, net 10,946,967 11,066,519
Accounts receivable, other 1,631,588 1,609,000
Inventories 8,718,715 7,662,764
Income taxes receivable 36,021 38,066
Deferred income taxes 367,898 358,470
Other assets 732,488 677,017
Total current assets 37,653,350 37,130,070
Long-term investment 1,000,000 1,000,000
Property and equipment, at cost 9,164,224 8,985,729
less accumulated depreciation (3,889,330) (3,652,419)
5,274,894 5,333,310
Deferred income taxes 23,176 23,176
Other assets, net 1,407,778 1,401,164
Excess of cost over net tangible
assets acquired, net 12,312,285 12,837,926
$57,671,483 $57,725,646
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Borrowings under bank line of cre $548,674 $487,161
Accounts payable 3,442,264 3,136,117
Income taxes payable 479,042 391,616
Accrued salaries and wages 605,528 695,716
Other accrued liabilities 493,044 551,419
Total current liabilities 5,568,552 5,262,029
Long-term debt 10,444,607 10,665,658
Deferred income taxes 648,785 577,091
Shareholders' equity:
Common stock, $.10 par value 808,248 807,873
Additional paid-in capital 22,513,805 22,502,930
Retained earnings 20,426,579 19,868,924
Foreign currency translation adju (2,739,093) (1,958,859)
Total shareholders' equity 41,009,539 41,220,868
$57,671,483 $57,725,646
See accompanying notes.
IMMUCOR, INC.
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended
August 31, August 31,
1997 1996
Net sales $9,273,479 $7,956,885
Cost of sales 3,847,381 3,137,861
Gross profit 5,426,098 4,819,024
Research and development:
Instrument 100,288 18,736
General 161,011 134,132
Selling, gen & admin 4,160,979 3,834,720
Total operating expenses 4,422,278 3,987,588
Income from operations 1,003,820 831,436
Other income 212,796 173,341
Interest expense (166,615) (55,402)
Other expense (23,098) (2,000)
Total other 23,083 115,939
Inc. before income taxes 1,026,903 947,375
Income taxes 469,248 350,207
Net income $557,655 $597,168
Net income per common
and common equivalent $0.07 $0.07
share
Weighted average number of common
and common equivalent shares
outstanding 8,400,726 8,626,358
See accompanying notes.
IMMUCOR, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
August 31, August 31,
1997 1996
OPERATING ACTIVITIES:
Net income $557,655 $597,168
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 365,201 362,850
Amortization 151,725 119,456
Changes in assets and liabilities:
Accounts receivable 119,552 (139,125)
Accounts receivable, other (22,588)
Income tax receivable 2,045 (2,389)
Inventories (1,055,950) (289,689)
Other current assets (61,887) (493,312)
Accounts payable 306,145 (115,824)
Income taxes payable 87,426 260,014
Other current liabilities (76,869) 11,885
Cash provided by operating activities 372,455 311,034
INVESTING ACTIVITIES:
Purchase of / deposits on property and (465,906) (852,541)
Decrease in other assets 4,831 4,420
Cash used in investing activities (461,075) (848,121)
FINANCING ACTIVITIES:
Borrowings under line of credit agrmnts. 67,147 733
Repayment of notes payable (5,035) (335,098)
Exercise of stock options 11,250 4,375
Cash provided by (used in) financing act. 73,362 (329,990)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (483,303) 328,115
DECREASE IN CASH
AND CASH EQUIVALENTS (498,561) (538,962)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 15,718,234 20,533,422
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $15,219,673 $19,994,460
See accompanying notes.
IMMUCOR, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three month period ended August 31, 1997 are not necessarily
indicative of the results that may be expected for the year ending May 31,
1998. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on
Form 10-K for the year ended May 31, 1997.
2. Inventories are stated at the lower of first-in, first-out cost or
market: As of August 31, 1997 As of May 31, 1997
Raw materials and supplies $2,474,158 $2,278,107
Work in process 849,428 669,112
Finished goods 5,395,129 4,715,545
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. There is no significant difference between
primary and fully diluted per share amounts.
IMMUCOR, INC.
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Any statements contained herein that are not historical fact are forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995, and involve risks and uncertainties. All forward-
looking statements included in this document are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward-looking statements. Further risks are
detailed in the Company's filings with the Securities and Exchange
Commission, including those set forth in its Annual Report on Form 10-K
for the fiscal year ended May 31, 1997.
Financial Condition and Liquidity:
As of August 31, 1997, the Company's cash position totaled $15,219,700.
During the three months ended August 31, 1997, the Company generated cash
from operating activities of $372,500, and the Company used cash to
purchase property, plant and equipment of $465,900.
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 August 31, 1997 totaled $9,273,500,
an increase of 17% over last year's $7,956,900. Current year results
include $1,098,800 in net sales from the operations of Dominion Biologicals
Limited acquired in December 1996. Domestic sales increased $490,100, 10%
over last year's total. In addition, sales of the Company's European
subsidiaries, recorded in their functional currencies, increased 13% over
last year's total. However, due to unfavorable rates of foreign exchange
in Europe, when translated into U.S. dollars, European sales declined.
Gross profit
As a percent of sales, gross profit for the three months ended
August 31, 1997 totaled 58.5% versus 60.6% last year. The decline in gross
profit margin was principally caused by unfavorable rates of foreign
exchange in Europe which increased the cost of goods purchased in U.S.
dollars and sold in local currencies.
Operating expenses
As compared to last year, contract research and development costs
increased $81,600. In the prior year period, two ABS2000 automated
analyzers previously expensed as research and development were sold to
the Company's Canadian distributor, and the sale ($70,000) was recorded
as a reduction of research and development costs. No comparable offset
of contract research and development occurred in the current year.
Selling, general and administrative expenses for the three month period
ended August 31, 1997 increased $326,300 over the same period last year.
Most of the increase, $265,300, is due to the inclusion of Dominion
Biologicals Limited's operating results in the current year.
Interest expense
When compared to the prior year three month period, interest expense grew
$111,200. This increase is the result of the acquisition of Dominion
Biologicals Limited which was financed with the proceeds of a bank loan and
the issuance of subordinated promissory notes.
Income taxes
As a percent of pretax income, income tax expense increased during the
three month period ended August 31, 1997, principally due to the earnings of
several of its foreign subsidiaries being subject to higher income tax rates
than the US tax rate.
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 Statement re: computation of per share earnings.
27 Financial data schedule.
(b) The Company did not file any reports on Form 8-K during the
three months ended August 31, 1997.
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: October 10, 1997
\s\Edward L. Gallup Edward L. Gallup, President
\s\Richard J. Still 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
August 31, August 31,
1997 1996
Net income $557,655 $597,168
Weighted average number of common
shares and common share
equivalents are as follows:
Weighted average common shares
outstanding 8,080,324 8,055,035
Shares issued from assumed exercise of
dilutive options and warrant 320,402 571,323
Weighted average number of shares
outstanding (as adjusted) 8,400,726 8,626,358
Net income per common
and common equivalent share $0.07 $0.07
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.
IMMUCOR, INC.
EXHIBITS
Exhibit 11.1 Statement re: computation of per share earnings.
(continued)
Fully diluted income per share calculations:
Three Months Ended
August 31, August 31,
1997 1996
Net income $557,655 $597,168
Weighted average number of common
shares and common share
equivalents are as follows:
Weighted average common shares
outstanding 8,080,324 8,055,035
Shares issued from assumed exercise of
dilutive options and warrant 320,402 603,912
Weighted average number of shares
outstanding (as adjusted) 8,400,726 8,658,947
Net income per common
and common equivalent share $0.07 $0.07
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.
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