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: November 30, 2000
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 January 10, 2001: Common Stock, $. 10 Par Value - 7,277,617
<PAGE>
<TABLE>
IMMUCOR, INC.
Condensed Consolidated Balance Sheets
<CAPTION>
November 30, 2000 May 31, 2000
ASSETS (Unaudited) (Audited)
--------------------- ------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,195,038 $ 3,505,926
Accounts receivable, net 21,212,028 21,726,062
Inventories 18,921,501 16,813,239
Income taxes receivable 1,158,849 752,470
Deferred income taxes 931,170 902,409
Prepaid expenses and other 1,823,650 1,321,363
--------------------- ------------------
Total current assets 47,242,236 45,021,469
Long-term investment, at cost 1,000,000 1,000,000
Property and equipment, at cost 25,848,394 25,196,862
less accumulated depreciation (8,997,775) (7,720,980)
--------------------- ------------------
16,850,619 17,475,882
Deferred income taxes 1,120,238 1,120,238
Other assets, net 2,683,895 2,251,293
Deferred licensing costs, net 1,946,747 2,044,850
Excess of cost over net tangible assets acquired, net 32,569,647 33,861,147
--------------------- ------------------
Total Assets $ 103,413,382 $ 102,774,879
===================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of borrowings under bank line of credit agreements $ 4,114,926 $ 2,952,307
Current portion of long-term debt 4,117,520 4,277,598
Current portion of capital lease obligations 656,196 618,240
Accounts payable 10,248,749 9,442,977
Income taxes payable 74,755 74,715
Accrued salaries and wages 1,655,444 1,346,874
Deferred income taxes 400,732 164,243
Other accrued liabilities 3,961,982 4,276,554
--------------------- ------------------
Total current liabilities 25,230,304 23,153,508
Long-term debt, including borrowings under bank line of credit agreements 35,359,214 33,150,485
Capital lease obligations 1,579,682 1,664,165
Deferred income taxes 2,815,794 3,062,331
Other liabilities 820,956 825,592
Shareholders' equity:
Common stock - authorized 45,000,000 shares and 30,000,000 shares
at 11/30/2000 and 5/31/2000, respectively, $.10 par value; issued
and outstanding 7,277,617 at 11/30/2000 and 7,462,118 at 5/31/2000 727,762 746,212
Additional paid-in capital 15,382,541 16,848,804
Retained earnings 27,483,061 28,310,741
Accumulated other comprehensive loss (5,985,932) (4,986,959)
--------------------- ------------------
Total shareholders' equity 37,607,432 40,918,798
--------------------- ------------------
Total Liabilities and Shareholders' equity $ 103,413,382 $ 102,774,879
===================== ==================
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
IMMUCOR, INC.
Condensed Consolidated Statements of Income
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30, November 30, November 30,
2000 1999 2000 1999
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net sales $16,813,264 $20,249,819 $33,894,506 $39,179,786
Cost of sales 8,839,249 9,268,872 17,407,203 18,223,299
---------------- ---------------- ---------------- ----------------
Gross profit 7,974,015 10,980,947 16,487,303 20,956,487
Research and development 528,329 371,569 1,001,354 730,257
Selling and marketing 3,065,417 2,912,990 6,246,879 5,920,087
Distribution 1,411,523 1,463,690 2,839,124 2,998,960
General and administrative 2,131,915 2,858,310 4,501,825 5,239,288
Amortization expense 443,661 439,348 927,753 900,248
---------------- ---------------- ---------------- ----------------
Total operating expenses 7,580,845 8,045,907 15,516,935 15,788,840
---------------- ---------------- ---------------- ----------------
Income from operations 393,170 2,935,040 970,368 5,167,647
Interest income 17,238 6,098 21,025 10,615
Interest expense (814,026) (790,192) (1,679,741) (1,439,526)
Other income 41,645 60,033 126,946 150,087
---------------- ---------------- ---------------- ----------------
Total other expense (755,143) (724,061) (1,531,770) (1,278,824)
---------------- ---------------- ---------------- ----------------
(Loss) income before income taxes (361,973) 2,210,979 (561,402) 3,888,823
Income taxes 250,276 770,934 266,278 1,229,632
---------------- ---------------- ---------------- ----------------
Net (loss) income ($612,249) $1,440,045 ($827,680) $2,659,191
================ ================ ================ ================
(Loss) earnings per share:
Basic ($0.08) $0.19 ($0.11) $0.35
================ ================ ================ ================
Diluted ($0.08) $0.17 ($0.11) $0.31
================ ================ ================ ================
Weighted average shares outstanding:
Basic 7,277,617 7,725,678 7,294,709 7,665,335
================ ================ ================ ================
Diluted 7,277,617 8,627,333 7,294,709 8,692,140
================ ================ ================ ================
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
IMMUCOR, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
Six Months Ended
November 30, November 30,
2000 1999
----------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) income ($827,680) $2,659,191
Adjustments to reconcile net (loss) income to
net cash (used in) provided by operating activities:
Depreciation 1,551,760 1,373,395
Amortization 927,753 900,248
Changes in assets and liabilities:
Accounts receivable 514,034 (2,288,361)
Accounts receivable from former officer and director - 140,946
Income tax receivable (406,415) 180,033
Inventories (2,108,262) (1,848,289)
Other current assets (988,141) (247,574)
Accounts payable 805,772 (1,070,224)
Income taxes payable 25,943 579,568
Other current liabilities (10,127) 509,612
----------------- -----------------
Cash (used in) provided by operating activities (515,363) 888,545
INVESTING ACTIVITIES:
Purchase of / deposits on property and equipment (1,189,018) (1,088,497)
Cash paid for acquisitions - (212,204)
Acquisition-related severance - (79,019)
Decrease (increase) in other assets 6,905 (263,337)
----------------- -----------------
Cash used in investing activities (1,182,113) (1,643,057)
FINANCING ACTIVITIES:
Borrowings/(payments) under line of credit agreements 2,640,148 (402,191)
Payments of long term debt and capitalized leases (2,398,030) (807,473)
Borrowings of long term debt and capitalized leases 3,191,572 -
Exercise of stock options and warrants (259,131 shares) - 2,062,049
Purchase and retirement of stock (184,500 shares) (1,484,713) -
----------------- -----------------
Cash provided by financing activities 1,948,977 852,385
EFFECT OF EXCHANGE RATE CHANGES ON CASH (562,389) 102,458
----------------- -----------------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (310,888) 200,331
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,505,926 2,793,592
----------------- -----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $3,195,038 $2,993,923
================= =================
</TABLE>
<PAGE>
IMMUCOR, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States 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 accounting principles generally
accepted in the United States for complete financial statements. However,
there has been no material change in the information disclosed in the Company's
annual financial statements dated May 31, 2000, except as disclosed herein. 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 six-month period ended November 30, 2000 are not
necessarily indicative of the results that may be expected for the year
ending May 31, 2001. 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, 2000.
Certain reclassifications were made in the consolidated financial statements
for the six-month period ended November 30, 1999 to conform to the presentation
for the six-month period ended November 30, 2000.
2. INVENTORIES
Inventories are stated at the lower of first-in, first-out cost or market:
<TABLE>
<CAPTION>
As of As of
November 30, 2000 May 31, 2000
---------------------- ----------------------
<S> <C> <C>
Raw materials and supplies $5,713,275 $4,983,303
Work in process 1,298,526 1,603,117
Finished goods 11,909,700 10,226,819
---------------------- ----------------------
$18,921,501 $16,813,239
====================== ======================
</TABLE>
3. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per
share in accordance with Statement of Financial Accounting Standards No. 128,
Earnings per Share.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30, November 30, November 30,
2000 1999 2000 1999
---------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Numerator for basic and diluted earnings per share:
(Loss) income available to common
shareholders $(612,249) $ 1,440,045 $(827,680) $2,659,191
================ =============== ================ ===============
Denominator:
For basic (loss) earnings per share - weighted
average basis 7,277,617 7,725,678 7,294,709 7,665,335
Effect of dilutive stock options and warrants - 901,655 - 1,026,805
---------------- --------------- ---------------- ---------------
Denominator for diluted (loss) earnings per share
adjusted weighted-average shares 7,277,617 8,627,333 7,294,709 8,692,140
================ =============== ================ ===============
Basic (loss) earnings per share $(0.08) $0.19 $(0.11) $0.35
================ =============== ================ ===============
Diluted (loss) earnings per share $(0.08) $0.17 $(0.11) $0.31
================ =============== ================ ===============
</TABLE>
<PAGE>
4. DOMESTIC AND FOREIGN OPERATIONS
Information concerning the Company's domestic and foreign operations is
summarized below (in 000s):
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
Three Months Ended November 30, 2000
-------------------------------------------------------------------------------------------
U.S. Germany Italy Canada Other Eliminations Consolidated
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales:
Unaffiliated customers $10,532 $2,090 $1,330 $1,520 $1,341 $ - $16,813
Affiliates 1,778 76 - 26 53 (1,933) -
----------- ----------- ---------- ----------- ---------- ------------- --------------
Total 12,310 2,166 1,330 1,546 1,394 (1,933) 16,813
(Loss) income from operations 39 282 117 361 (347) (59) 393
-------------------------------------------------------------------------------------------
Three Months Ended November 30, 1999
-------------------------------------------------------------------------------------------
U.S. Germany Italy Canada Other Eliminations Consolidated
Net sales:
Unaffiliated customers $12,751 $2,757 $1,751 $1,415 $1,576 $ - $20,250
Affiliates 1,731 147 - 80 949 (2,907) -
----------- ----------- ---------- ----------- ---------- ------------- --------------
Total 14,482 2,904 1,751 1,495 2,525 (2,907) 20,250
(Loss) income from operations 2,024 372 168 452 (81) - 2,935
-------------------------------------------------------------------------------------------
Six Months Ended November 30, 2000
-------------------------------------------------------------------------------------------
U.S. Germany Italy Canada Other Eliminations Consolidated
Net sales:
Unaffiliated customers $21,192 $4,122 $2,744 $2,761 $3,076 $ - $33,895
Affiliates 3,387 147 - 45 89 (3,668) -
----------- ----------- ---------- ----------- ---------- ------------- --------------
Total 24,579 4,269 2,744 2,806 3,165 (3,668) 33,895
(Loss) income from operations (329) 647 294 674 (257) (59) 970
-------------------------------------------------------------------------------------------
Six Months Ended November 30, 1999
-------------------------------------------------------------------------------------------
U.S. Germany Italy Canada Other Eliminations Consolidated
Net sales:
Unaffiliated customers $24,985 $4,875 $3,419 $2,497 $3,404 $ - $39,180
Affiliates 3,253 248 - 151 1,329 (4,981) -
----------- ----------- ---------- ----------- ---------- ------------- --------------
Total 28,238 5,123 3,419 2,648 4,733 (4,981) 39,180
(Loss) income from operations 3,656 598 330 719 (127) (8) 5,168
</TABLE>
The Company's U.S. operation made net export sales to unaffiliated customers of
approximately $1,230,000 and $1,733,000 for the three months ended November 30,
2000 and 1999, respectively and $2,896,000 and $3,481,000 for the six months
ended November 30, 2000 and 1999, respectively. The Company's German operation
made net export sales to unaffiliated customers of approximately $170,000 and
$245,000 for the three months ended November 30, 2000 and 1999, respectively and
$387,000 and $495,000 for the six months ended November 30, 2000 and 1999,
respectively. The Company's Canadian operation made net export sales to
unaffiliated customers of approximately $720,000 and $560,000 for the three
months ended November 30, 2000 and 1999, respectively and $1,280,000 and
$1,091,000 for the six months ended November 30, 2000 and 1999, respectively.
Product sales to affiliates are valued at market prices.
<PAGE>
5. COMPREHENSIVE (LOSS) INCOME
The components of comprehensive income for the three-month and six-month periods
ended November 30, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 30, November 30, November 30, November 30,
2000 1999 2000 1999
---------------- ---------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Net (loss) income $ (612,249) $ 1,440,045 $ (827,680) $ 2,659,191
Net foreign currency translation (243,931) (735,902) (998,973) (345,488)
---------------- ---------------- ------------------ -----------------
Comprehensive (loss) income $ (856,180) $ 704,143 $ (1,826,653) $ 2,313,703
================ ================ ================== =================
</TABLE>
Accumulated comprehensive loss as of November 30, 2000 and May 31, 2000 was
($5,985,932) and ($4,986,959), respectively. The balance consists of net losses
on foreign currency translation adjustments and has been disclosed in the
shareholders' equity section of the condensed consolidated balance sheets.
6. ACCOUNTS RECEIVABLE FROM OFFICER AND DIRECTOR
On June 6, 2000, Edward L. Gallup, President and CEO of Immucor, Inc. entered
into a loan agreement with Immucor, Inc. to borrow up to $400,000 in order to
meet margin calls related to loans made by brokerage companies. The Company
acknowledges that certain benefits would accrue to Immucor, Inc. and its
shareholders if such margin calls were satisfied by some means other than having
those shares sold by the broker. The interest rate on the loan is LIBOR plus 2%,
which is the Company's current borrowing rate. As of November 30, 2000, the
amount owed to Immucor, Inc. is $369,000 and is secured by 105,000 Immucor
shares.
7. CONTINGENCIES
During the quarter ended August 31, 2000, isolated performance issues arose at
certain ABS2000 installations that resulted in mistypings not directly affecting
any patient transfusions. The Company issued a safety notification, requesting
customers to confirm ABS2000 results until the cause of the difficulty is
identified and corrected. The Company believes it has identified the factors
that caused the performance issues and submitted this information to the FDA. On
December 6, 2000, with the FDA's approval, the safety notification for antibody
screening and crossmatch assays was removed. Customers no longer have to perform
manual backup for either of these procedures. In addition to this, the Company's
corrective action plan for blood grouping was accepted by the FDA. This plan
calls for the submission of a 510(k) to the FDA. The Company expects this
document to be filed with the FDA by February 1, 2001. At that time Company
service engineers will begin the process of completing field corrective action
on the ABS2000 and will begin accumulating clinical data for group and type
assays for selected customers. This data will be collated by the Company and
submitted to the FDA for expedited review. Upon clearance by the FDA, the safety
alert for group and type assays will be lifted. These performance issues may
result in further delays in customers accepting instruments, and continue to
affect sales of reagents used in the instruments, and both of these factors will
adversely impact sales and earnings. The Company deferred recognition of
instrument sales of approximately $1 million in the first and second quarters
and believes this is a conservative approach to accounting for sales made in
connection with its third party leasing arrangement. In addition, the Company
may receive requests for refunds on instruments already placed in service or
requests for financial concessions attributable to inconveniences associated
with these performance issues. At the date of this report only three ABS2000
installations have requested credits. A private label leasing company that
finances customer purchases of ABS2000 instruments has advised the Company
that it is not willing to provide financing for additional purchases of this
instrument until it satisfies itself that the performance issues related to the
ABS2000 are resolved to the satisfaction of the FDA. The Company is working with
the leasing company to help it obtain the required confirmation from the FDA.
<PAGE>
When the Company acquired Gamma Biologicals, Inc. ("Gamma Biologicals") in
October 1998, Gamma Biologicals was a party to an existing legal proceeding. On
May 12, 1998, Gamma Biologicals received notification that a claim of patent
infringement had been filed on that date in U.S. District Court, Southern
District of Florida, Miami Division, by Micro Typing Systems, Inc. and Stiftung
fur Diagnostiche Forschung (the Foundation). Subsequently, in February 1999 the
Company received notification that a second claim was filed in the U.S. District
Court for the Northern District of Georgia, against Immucor, Inc. and Gamma
Biologicals for patent infringement on the first patent described above and a
second patent recently granted to the Foundation. The claim alleges that the
recently introduced Gamma ReACT Test System infringes U.S. patent No. 5,512,432
granted to the Foundation April 30, 1996 and U.S. patent No. 5,863,802 granted
to the Foundation on January 26, 1999. The plaintiffs seek a preliminary and
permanent injunction against the continued alleged infringement by Gamma
Biologicals and Immucor, and an award of treble damages, with interest and costs
and reasonable attorney's fees. On September 5, 2000 a third patent was issued
to the Foundation. The plaintiffs have asserted infringement of this patent and
are seeking to add this patent to the lawsuit. The Company, in light of this new
patent, is evaluating its position. A reserve for the lawsuit was recorded with
the acquisition of Gamma Biologicals and management believes it is sufficient to
cover contingent expenses related to the resolution of the lawsuit.
European results were adversely affected by the interrupted supply of a
distributed product produced by a large multinational supplier. The backorder
situation escalated in the first quarter of fiscal 2001 and reduced sales by an
estimated $230,000 and by a similar amount in the second quarter. The Company
believes that the backorder situation will continue. (see Part II Item 1. Legal
Proceedings). The Company expects European results to continue to be suppressed
unless and until this supply problem can be satisfactorily resolved.
<PAGE>
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, 2000.
Financial Condition and Liquidity:
As of November 30, 2000, the Company's cash position totaled $3,195,000, an
improvement of $360,000 for the quarter. During the quarter the Company had a
net increase in borrowings on long-term debt and capitalized leases of $1.3
million to fund capital improvements necessary to meet FDA quality requirements
and for inventory purchases. For the six-month period, $6.4 million additional
debt was assumed to fund capital improvements, to repay $3.0 million in debt and
to repurchase $1.5 million of the Company's common stock.
During the first and second quarters, the Company did not achieve the
Fixed Charge Coverage, Funded Debt to EBITDA and Liquidity ratios as specified
in its loan agreement with its primary bank. These covenant calculations
deteriorated due to the Company's recent reported losses. The bank has agreed
to waive the present loan covenant defaults for the period ended November 30,
2000, and the Company is finalizing the restructuring of the loan covenants and
debt repayment schedule. Management believes, now that the FDA has lifted the
ABS2000 safety notification for antibody screen and crossmatch, that the Com-
pany's current cash and cash equivalents, internally generated funds, and
amounts available under the lines of credit should be more than sufficient
to support operations for planned product introduction and continued improvement
and development of products during the next 12 months. Management also believes
that should the need arise for additional capital for other corporate purposes
that these needs would be available through the issuance of various forms of
equity or debt.
Results of Operations:
Net sales
Net sales for the three months ended November 30, 2000 totaled $16,813,000,
a decrease of $3,437,000 (17%) from last year's $20,250,000. The decrease in
sales was due, in large part, to lower instrumentation sales in the U.S
following the ABS2000 safety notification issued in the first quarter (see Note
7. Contingencies). The Company generated instrument revenues of $930,000 for the
quarter compared to $3,589,000 for the same period last year. Customer returns
and the loss of revenue for reagents provided free of charge to customers
performing backup testing also reduced second quarter sales by approximately
$591,000. The strength of the US dollar versus the Euro had the effect of
reducing reported European sales by approximately $1,200,000, or 20%, when
compared to the prior year. For the six months ended November 30, 2000, net
sales were $33,895,000 versus $39,180,000 in the prior year.
Gross profit
As a percent of sales, gross profit for the three months ended November 30,
2000 equaled 47.4% compared to 54.2% for the same period in 1999. The decrease
in gross profit margin was primarily caused by ABS2000 instrument installation
costs incurred in this quarter, in advance of revenue recognition. The Company
now expects to record these revenues as the instruments are accepted. Further
costs were incurred for implementation of additional quality assurance and
quality system policies to bring the manufacturing operations into FDA
compliance. Gross profit for the six months ended November 30, 2000 totaled
48.6% versus 53.5% for the same period in 1999. The Company has launched an
aggressive reagent price increase that it expects will improve sales and profits
significantly while only adding minor increases to the overall cost of patient
care. It is expected that this price increase, coupled with new instrument
placements, will return the Company to profitability by the fiscal fourth
quarter.
<PAGE>
Operating expenses
When compared to the prior year, research and development costs for the
three and six-month periods ended November 30, 2000 increased $157,000 and
$271,000 due to instrument development initiatives for the Galileo for the
European market. The project is on track for a launch in late calendar year
2001. The Galileo is designed to fulfill the need in Europe for a high
throughput blood serology-testing device with a test menu that includes antibody
screening.
Selling and marketing expenses for the three and six month periods increased
$152,000 and $327,000 as compared to the same periods last year. The Company
recorded $230,000 in additional expense representing the impact of the
interrupted reagent sales on ABS customers who financed their instrument
purchase through fee per use arrangements.
Distribution expenses as a percentage of sales have increased from 7.2% to
8.3% for the fiscal year to date as compared to the prior period, although costs
remained relatively constant. The decrease in sales in the current period was
due primarily to the impact of the ABS2000 safety alert and the strength of the
US dollar. Neither factor had a significant impact on distribution activities.
Shipments of core reagent products continued at or above historical levels.
General and administrative expenses and amortization expense for the three
and six month periods remained relatively constant, as a percentage of sales,
as compared with the same periods last year.
Interest expense
When compared to the prior year three and six month periods, interest
expense increased $24,000, or 3% and $240,000, or 17%. This is the result of
increased borrowings on long-term debt and capitalized leases as outlined in
Financial Condition and Liquidity.
Other income
Other income decreased for the three and six month periods as compared to
the prior year due to foreign currency transaction losses offsetting foreign
currency transaction gains in the current periods.
Income taxes
Income tax expense decreased during the three and six-month periods ended
November 30, 2000, as compared to the prior period, due primarily to the
domestic operating loss that was offset by taxes on income provided in Germany
and Canada as a result of the Company's ongoing implementation of tax planning
strategies. The domestic operating losses will offset future domestic earnings
as the Company returns to profitability.
<PAGE>
ITEM 3. Quantitative and Qualitative Disclosures On Market Risk
There have been no material changes regarding the Company's market risk position
from the information provided in its Annual Report on Form 10-K for the fiscal
year ended May 31, 2000. The quantitative and qualitative disclosures about
market risk are discussed in Item 7A-Quantitative and Qualitative Disclosures
About Market Risk, contained in the Company's Form 10-K.
<PAGE>
Part II
OTHER INFORMATION
Item 1. Legal Proceedings.
On December 28, 2000 the Company initiated arbitration against Becton, Dickinson
and Company with the American Arbitration Association to take place in Santa
Clara County, California. The Company's claims against Becton, Dickinson and
Company relate to a Distributor Agreement between the Company and Biometric
Imaging, Inc., and Becton, Dickinson and Company became a party to this
agreement when they acquired Biometric Imaging, Inc. in 1999. The Company
alleges that Becton, Dickinson and Company either intentionally, recklessly or
negligently failed to supply medical testing instruments and assay test kits and
either intentionally, recklessly or negligently supplied defective assay test
kits in violation of its obligations under this Distributor Agreement. The
Company seeks specific performance by Becton, Dickinson and Company of the
Distributor Agreement or, in the alternative, compensatory and punitive damages
in an amount in excess of $4 million. The Company acknowledges that this
proceeding is in its initial stages and cautions that it can not accurately
estimate the amount it may recover, if any.
Item 4. Submission of Matters to a Vote of Security Holders.
An annual meeting of shareholders was held on November 30, 2000. At the meeting,
the shareholders were asked to approve an amendment to the Company's Articles of
Incorporation to increase the number of authorized shares from 30 million shares
to 45 million shares. This resolution was approved with 6,527,615 votes being
cast in favor of the proposal and 773,263 votes were withheld or voted against
the proposal and 22,308 shares abstained.
In addition, a proposal to stagger the terms of the board of directors into
three classes was not approved. This resolution received 2,495,654 votes in
favor of the proposal and 1,611,964 votes were case against the proposal or
withheld. 38,650 shares abstained and there were 3,176,918 broker non-votes.
Finally, each member of the board was re-elected to the board of directors until
the next annual meeting of shareholders. Each directors received the following
number of votes:
<TABLE>
<CAPTION>
For Against or Withheld
<S> <C> <C>
Edward L. Gallup 6,439,602 883,584
Didier L. Lanson 6,634,832 688,354
Dennis M. Smith, Jr. M.D. 6,639,132 684,054
Ralph A. Eatz 6,638,132 685,054
G. Bruce Papesh 6,511,968 811,218
Joseph E. Rosen 6,636,532 686,654
Dr. Gioacchino De Chirico 6,625,932 697,254
Daniel T. McKeithan 6,632,132 691,054
</TABLE>
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Item 6. Exhibits and Reports on Form 8-K.
(a) The Company has filed the following exhibits with this report:
3.1 Amended and Restated Articles of Incorporation
3.2 Amended and Restated Bylaws.
4.2 Amendment No. 1 to Shareholders Rights Agreement dated as of
November 29, 2000 between Immucor, Inc. and EQUISERVE Trust
Company, N.A.
27 Financial data schedule.
(b) The Company filed a report on Form 8-K on November 30, 2000 describing in
Item 9 of such report in accordance with Regulation FD certain statements made
by management of the Company at its annual meeting of shareholders.
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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 under-
signed thereunto duly authorized.
IMMUCOR, INC.
(Registrant)
Date: January 16, 2001
/s/ Edward L. Gallup Edward L. Gallup, President
/s/ Steven C. Ramsey Steven C. Ramsey, Senior Vice President - Finance
(Principal Accounting Officer)
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