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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 JANUARY 31, 1998
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
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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
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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 March 13, 1998, there were 2,126,265 outstanding shares of the
issuers Common Stock, $.10 par value.
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COOPER LIFE SCIENCES, INC. AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
INDEX
PAGE NO.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of
January 31, 1998 and October 31, 1997 3
Consolidated Statements of Operations
For The Three Months Ended
January 31, 1998 and 1997 4
Condensed Statements of Consolidated
Cash Flows For The Three Months Ended
January 31, 1998 and 1997 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>
JANUARY 31, OCTOBER 31,
1998 1997
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<S> <C> <C>
ASSETS
Cash and cash equivalents $ 68,612 $ 25,887
Marketable Securities - at market value:
The Cooper Companies, Inc. Common Stock -- 35,515
Executone Information Systems, Inc. Common Stock 591 2,552
Deferred taxes 918 --
Prepaid expenses and other 540 567
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$ 70,661 $ 64,521
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 1,029 $ 992
Income taxes payable 4,166 100
Deferred income taxes -- 1,700
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5,195 2,792
Stockholders' Equity
Preferred stock - $.10 par value:
6,000,000 shares authorized: none issued -- --
Common stock - $.10 par value: 6,000,000
Authorized -- 6,000,000 shares
Issued -- 2,566,095 shares
Outstanding --
January 31, 1998, 2,126,265 shares
October 31, 1997, 2,126,265 shares 256 256
Additional paid-in capital 78,546 78,546
Unrealized gain on marketable securities,
net of deferred taxes 21 32,359
Accumulated deficit (10,584) (46,659)
Less: Common stock in treasury - at cost;
January 31, 1998, 439,830 shares
October 31, 1997, 439,830 shares (2,773) (2,773)
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Total Stockholders' Equity 65,466 61,729
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$ 70,661 $ 64,521
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</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 THREE MONTHS ENDED
JANUARY 31,
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1998 1997
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<S> <C> <C>
Revenues
Gain on marketable securities $ 38,926 $ 1,957
Interest and other income 610 70
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39,536 2,027
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Expenses
General and administrative 142 148
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Total expenses 142 148
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Income from operations before
provision for income taxes 39,394 1,879
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Provision for income taxes 3,319 --
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Net income $ 36,075 $ 1,879
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Net income per share:
Basic $ 16.97 $ .87
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Diluted $ 16.01 $ .83
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Average number of shares outstanding 2,253 2,257
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</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>
THREE MONTHS ENDED
JANUARY 31,
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1998 1997
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 36,075 $ 1,879
Adjustments to reconcile net income to net
cash used in operating activities:
Gain on marketable securities (38,926) (1,957)
(Increase) in deferred taxes (2,619) --
Depreciation and amortization -- 1
Changes in assets and liabilities:
Decrease in prepaid expenses and other 27 39
Increase (decrease) in accounts payable, other
accrued liabilities and income taxes payable 4,104 (53)
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Net cash used in operating activities (1,339) (91)
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Cash flows from investing activities:
Proceeds from sales of The Cooper
Companies Inc. and Executone Information
Systems, Inc. common stock 44,064 4,376
Net cash provided by investing activities 44,064 4,376
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Cash flows from financing activities:
Acquisition of treasury stock -- (159)
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Net cash used in financing activities -- (159)
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Net increase in cash and cash equivalents 42,725 4,126
Cash and cash equivalents - Beginning of period 25,887 471
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Cash and cash equivalents - End of period $68,612 $ 4,597
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SUPPLEMENTAL CASH FLOW INFORMATION:
Cash used to pay interest $ -- $ --
Cash used to pay taxes $ 133 $ --
</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
JANUARY 31, 1998 AND 1997
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, 1997 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 January 31, 1998 and October 31, 1997 and
the consolidated results of its operations for the three month periods ended
January 31, 1998 and 1997, and its consolidated cash flows for the three month
periods ended January 31, 1998 and 1997.
NOTE 2. - MARKETABLE SECURITIES
THE COOPER COMPANIES, INC.
At October 31, 1997, the Company owned 993,433 shares 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 as of January 31, 1998, the Company has sold all of its shares
of TCC Common Stock.
EXECUTONE INFORMATION SYSTEMS, INC.
At January 31, 1998 and October 31 1997, the Company owned 228,000
shares and 1,166,520 shares, respectively, of the common stock of Executone
Information Systems, Inc. (the "Executone Common Stock"), a Virginia corporation
("Executone"), the common stock of which trades on the NASDAQ National Market
System. The Company has been selling shares of Executone Common Stock in open
market transactions; and intends to sell all of its remaining shares of
Executone Common Stock.
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.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JANUARY 31, 1998 COMPARED TO
THE THREE MONTHS ENDED JANUARY 31, 1997.
Net income was $36,075,000, or $16.01 per diluted share, in the three
month ended January 31, 1998 as compared to net income $1,879,000, or $.83 per
diluted share, in the three months ended January 31, 1997. There is no tax
expense in the 1997 quarter because of the utilization of the Company's net
operating loss carryforward; for which deferred tax assets had been fully
reserved. The income tax expense for the three months ended January 31, 1998
reflects the utilization of the remaining net operating loss carryforwards and
available tax credits. A deferred tax asset has been established to reflect the
reserve, for book purpose, of the Executone preferred stock.
6
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The gain on marketable securities of $38,926,000 and $1,957,000 in 1998
and 1997, respectively, primarily represents realized gains on the sales of
shares of TCC Common Stock.
COSTS AND EXPENSES. Total expense for the three months ended January
31, 1998 was $142,000 as compared to $148,000 for the three months ended January
31, 1997.
CAPITAL RESOURCES AND LIQUIDITY:
The Company anticipates that during fiscal 1998, 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.
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 fiscal 1998. The Company may obtain
additional 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 January 31,
1998.
INFLATION AND CHANGING PRICES:
The Company has not been materially affected by inflation.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Exhibit
Number Description
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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.
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(REGISTRANT)
Date: March 16, 1998 By: /s/ Steven Rosenberg
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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>
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<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
JANUARY 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> JAN-31-1998
<CASH> 68,612
<SECURITIES> 591
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 70,661
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 256
0
0
<OTHER-SE> 65,210
<TOTAL-LIABILITY-AND-EQUITY> 70,661
<SALES> 0
<TOTAL-REVENUES> 39,536
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 142
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 39,394
<INCOME-TAX> 3,319
<INCOME-CONTINUING> 36,075
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,075
<EPS-PRIMARY> 16.97
<EPS-DILUTED> 16.01
<FN>
See the financial statements for an unclassified balance sheet.
</TABLE>
