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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JULY 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _______________________
Commission file number: 0-13649
COOPER LIFE SCIENCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2563513
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
160 BROADWAY, NEW YORK, NEW YORK 10038
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 791-5362
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 ____
As of September 8, 1997, there were 2,133,277 outstanding shares of the
Registrant's Common Stock, $.10 par value.
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COOPER LIFE SCIENCES, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
INDEX
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of
July 31, 1997 and October 31, 1996 3
Consolidated Statements of Operations
For The Three and Nine Months Ended
July 31, 1997 and 1996 4
Condensed Statements of Consolidated
Cash Flows For The Nine Months Ended
July 31, 1997 and 1996 5
Notes to Consolidated Condensed
Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 6
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 7
Signature 8
Index of Exhibits
2
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COOPER LIFE SCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
July 31, October 31,
1997 1996
-------- -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 19,031 $ 471
Marketable Securities - at market value:
The Cooper Companies, Inc. Common Stock 33,380 30,583
Executone Information Systems, Inc. Common Stock 2,406 2,989
Prepaid expenses and other 15 95
--------- ---------
$ 54,832 $ 34,138
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 873 961
--------- ---------
873 961
Stockholders' Equity
Preferred stock - $.10 par value:
6,000,000 shares authorized: none issued -- --
Common stock - $.10 par value:
Authorized -- 6,000,000 shares
Issued -- 2,566,095 shares 256 256
Outstanding --
July 31, 1997, 2,136,777 shares
October 31, 1996, 2,172,695 shares
Additional paid-in capital 78,546 78,538
Unrealized gain on marketable securities 31,212 20,230
Accumulated deficit (53,025) (63,369)
Less: Common stock in treasury - at cost;
July 31, 1997, 429,318 shares
October 31, 1996, 393,400 shares (2,514) (1,962)
Minimum pension liability adjustment (516) (516)
--------- ---------
Total Stockholders' Equity 53,959 33,177
--------- ---------
$ 54,832 $ 34,138
========= =========
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
3
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COOPER LIFE SCIENCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
JULY 31, JULY 31,
------------------- -------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Gain on sale of marketable securities $ 3,636 $ 285 $10,384 $ 285
Interest and other income 224 4 514 8
------- ------- ------- -------
3,860 289 10,898 293
------- ------- ------- -------
Expenses
General and administrative 111 120 554 478
Interest -- 33 -- 113
------- ------- ------- -------
Total Expenses 111 153 554 591
------- ------- ------- -------
Income (loss) from operations
before provision for income taxes 3,749 136 10,344 (298)
Provision for income taxes -- -- -- --
------- ------- ------- -------
Net income (loss) $ 3,749 $ 136 $10,344 $ (298)
======= ======= ======= =======
Net income (loss) per share $ 1.68 $ .06 $ 4.61 $ (.14)
======= ======= ======= =======
Average number of shares outstanding 2,236 2,249 2,242 2,141
======= ======= ======= =======
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
4
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COOPER LIFE SCIENCES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
July 31,
------------------------
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 10,344 $ (298)
Adjustments to reconcile net income (loss) to net
cash (used in) operating activities:
(Gain) on sale of marketable securities (10,384) (285)
Depreciation and amortization 2 11
Non cash compensation charge 78 32
Changes in assets and liabilities:
Decrease in prepaid expenses and other 78 54
Decrease in accounts payable and
other accrued liabilities (88) (173)
-------- --------
Net cash (used in) operating activities (30) (659)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of The Cooper
Cooper Companies, Inc. common stock 19,152 1,128
Investment in Unistar Gaming Corp. -- (200)
-------- --------
Net cash provided by investing activities 19,152 928
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Acquisition of treasury stock (625) --
Proceeds from exercise of common stock options 3 --
Decrease in bank borrowing -- (500)
Proceeds from exercise of common stock warrants -- 268
-------- --------
Net cash used in financing activities (622) (232)
-------- --------
Net increase in cash and cash equivalents 18,560 37
Cash and cash equivalents - Beginning of period 471 341
-------- --------
Cash and cash equivalents - End of period $ 19,031 $ 378
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash used to pay interest $ -- $ 113
Cash used to pay taxes $ -- $ --
</TABLE>
SEE NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5
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COOPER LIFE SCIENCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JULY 31, 1997 AND 1996
NOTE 1. - GENERAL
Cooper Life Sciences, Inc. (the "Company") is not presently engaged in
any business operations and is currently investigating new business
opportunities.
During interim periods, the Company follows the accounting policies set
forth in its Annual Report on Form 10-K filed with the Securities and Exchange
Commission. Readers are encouraged to refer to the Company's Form 10-K for the
fiscal year ended October 31, 1996 when reviewing this Form 10-Q. Quarterly
results reported herein are not necessarily indicative of results to be expected
for other quarters.
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of normal
recurring adjustments) considered necessary to present fairly the Company's
consolidated financial position as of July 31, 1997 and October 31, 1996 and the
consolidated results of its operations for the three and nine month periods
ended July 31, 1997 and 1996, and its consolidated cash flows for the nine month
periods ended July 31, 1997 and 1996.
NOTE 2. - MARKETABLE SECURITIES
THE COOPER COMPANIES, INC.
At July 31, 1997 and October 31, 1996, the Company owned 1,192,133
shares and 2,127,533 shares, respectively, of the common stock of The Cooper
Companies, Inc. (the "TCC Common Stock"), a Delaware corporation ("TCC"), the
common stock of which is traded on the New York Stock Exchange. The Company has
been selling shares of TCC Common Stock in open market transactions; and subject
to prevailing market conditions, it is the Company's intention to continue to do
so.
EXECUTONE INFORMATION SYSTEMS, INC.
On December 19, 1995, as a result of a merger transaction, the Company
exchanged its equity interest in a development stage company named Unistar
Gaming Corp. for Common and Preferred Stock of Executone Information Systems,
Inc. (the "Executone Common Stock" and the "Executone Preferred Stock"), a
Virginia corporation ("Executone"), the common stock of which trades on the
NASDAQ National Market System.
NOTE 3. - NEW ACCOUNTING PRONOUNCEMENT
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share, which
is effective for financial statements for both interim and annual periods ending
after December 15, 1997. Early adoption of the new standard is not permitted.
The new standard eliminates primary and fully diluted earnings per share and
requires presentation of basic and diluted earnings per share together with
disclosure of how the per share amounts were computed. The pro forma effect on
the Company of adopting the new standard would be basic earnings per share of
$1.68 and $4.61, and diluted earnings per share of $1.68 and $4.61, for the
quarter and nine months ended July 31, 1997, respectively.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
References to Notes herein are references to the "Notes to Consolidated
Financial Statements" of the Company located in Item 1 herein.
GENERAL. The Company is not presently engaged in any business operations and is
currently investigating new business opportunities. References to the "Company"
herein shall be deemed to refer to the Company and its consolidated subsidiaries
unless the context otherwise requires.
6
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RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED JULY 31, 1997 COMPARED
TO THE THREE AND NINE MONTHS ENDED JULY 31, 1996.
For the three months ended July 31, 1997 net income was $3,749,000, or
$1.68 per share, as compared to net income of $136,000, or $.06 per share, for
the three months ended July 31, 1996. For the nine months ended July 31, 1997
net income was $10,344,000, or $4.61 per share, as compared to a net loss of
$298,00, or $.14 per share in the year ago period. There is no tax expense in
the three and nine month periods ended July 31, 1997 because of the utilization
of the Company's net operating loss carryforward. Remaining net operating and
other tax carryforwards have been fully reserved. The gain on marketable
securities of $3,636,000 and $10,384,000 for the three and nine months in 1997,
respectively, represents realized gains on the sales of shares of TCC Common
Stock.
COSTS AND EXPENSES. Total expense for the three months ended July 31,
1997 was $111,000 as compared to $153,000 for the three months ended July 31,
1996. General and administrative expenses in 1997 decreased by $42,000 to
$111,000 from $153,000 in the year ago period. Interest expense decreased by
$33,000 to $-0- due to the repayment of all bank loans.
Total expense for the nine months ended July 31, 1997 was $554,000 as
compared to $591,000 for the nine months ended July 31, 1996. General and
administrative expenses in 1997 increased by $76,000 to $554,000 from $478,000
in the year ago period. The increase was due primarily to the increase in
non-cash compensation expenses related to the exercise of stock options.
Interest expense declined to $-0- from $113,000 due to the repayment of all bank
loans.
CAPITAL RESOURCES AND LIQUIDITY:
The Company anticipates that during the remainder of fiscal 1997, its
principal financing needs will consist primarily of funding its general and
administrative expenses and the acquisition price of one or more new business
activities. It may be anticipated that any such acquisition will require the use
by the Company of shares of the TCC Common Stock and/or shares of the Executone
Common Stock which are owned by it.
Management believes that cash on hand and internally generated funds
will be sufficient to meet its corporate general and administrative, working
capital and other cash requirements during the remainder of fiscal 1997. The
Company has raised cash by sales of shares of TCC Common Stock which are owned
by it, and, depending upon prevailing market conditions, may raise additional
cash through additional sales of TCC Common Stock. The Company may also obtain
cash by sales of its own debt and/or equity securities, and/or by the
utilization of the proceeds of borrowings.
The Company did not have any material capital commitments at July 31,
1997.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit
Number Description
27 Financial Data Schedule.
b. There were no reports filed by the Company on Form 8-K during the
quarter for which this report on Form 10-Q is filed.
7
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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
undersigned thereunto duly authorized.
COOPER LIFE SCIENCES, INC.
--------------------------
(Registrant)
Date: September 8, 1997 By: /s/ Steven Rosenberg
---------------------------
STEVEN ROSENBERG
VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
8
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EXHIBIT INDEX
Exhibit Sequential
Number Description Page Number
- ------- ----------- -----------
27 Financial Data Schedule 10
9
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COOPER
LIFE SCIENCES, INC. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED
JULY 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JUL-31-1997
<CASH> 19,031
<SECURITIES> 35,786
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 2
<TOTAL-ASSETS> 54,832
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 256
0
0
<OTHER-SE> 53,703
<TOTAL-LIABILITY-AND-EQUITY> 54,832
<SALES> 0
<TOTAL-REVENUES> 10,898
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 554
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 10,344
<INCOME-TAX> 0
<INCOME-CONTINUING> 10,344
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,344
<EPS-PRIMARY> 4.61
<EPS-DILUTED> 4.61
<FN>
See the financial statements for an unclassified balance sheet.
</TABLE>
