<PAGE>
- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- -----------------------------------------------------------------------------
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For Quarterly Period Ended January 31, 1996
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 0-13907
---------------------------------------------------
BIO-VASCULAR, INC.
(Exact name of Registrant as specified in its charter)
State of Incorporation: Minnesota
I.R.S. Employer Identification No.: 41-1526554
Principal Executive Offices: 2575 University Avenue
St. Paul, Minnesota 55114
Telephone Number: (612) 603-3700
---------------------------------------------------
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 ______
---------------------------------------------------
On March 6, 1996, there were 9,426,650 shares of the Registrant's common stock,
par value $.01 per share, outstanding.
<PAGE>
<TABLE>
<CAPTION>
BIO-VASCULAR, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JANUARY 31, 1996 AND OCTOBER 31, 1995
- ----------------------------------------------------------------------------
ASSETS
January 31, October 31,
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................ $ 9,731,736 $15,424,969
Marketable securities, short-term........ 2,922,839 5,803,223
Accounts receivable, net of an allowance
for doubtful accounts of $49,300 at
January 31, 1996 and $40,000 at
October 31, 1995...................... 2,005,427 2,404,258
Other receivables........................ 277,261 421,170
Inventories:
Raw materials......................... 447,341 440,377
Work in process....................... 380,494 374,495
Finished goods........................ 1,465,333 1,153,354
Prepaid expenses and other current assets 394,379 260,831
----------- -----------
Total current assets..................... 17,624,810 26,282,677
----------- -----------
Equipment and leasehold improvements, net... 1,852,788 1,729,299
Intangible assets, net...................... 1,106,050 640,963
Marketable securities, long-term............ 16,305,972 9,069,286
----------- -----------
TOTAL ASSETS............................. $36,889,620 $37,722,225
=========== ===========
</TABLE>
(The accompanying notes are an integral part of the
consolidated financial statements.)
2
<PAGE>
BIO-VASCULAR, INC.
CONSOLIDATED BALANCE SHEETS
AS OF JANUARY 31, 1996 AND OCTOBER 31, 1995
- -----------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
January 31, October 31,
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable.......................................... $ 430,318 $ 675,759
Accrued expenses.......................................... 650,415 1,132,750
Accrued income taxes...................................... 95,554 424,870
Deferred revenues......................................... 126,699 133,510
----------- -----------
Total current liabilities................................. 1,302,986 2,366,889
----------- -----------
COMMITMENTS AND CONTINGENCY
(NOTE 4)
SHAREHOLDERS' EQUITY
Common stock: authorized 20,000,000 shares
of $.01 par value issued and outstanding,
9,393,993 at January 31, 1996 and 9,379,768
at October 31, 1995........................................ 93,940 . 93,798
Additional paid-in capital................................ 38,596,778 .38,352,660
Accumulated deficit....................................... (2,455,504) .(2,660,896)
Unearned compensation..................................... (184,221) . --
Unearned restricted stock................................. (464,359) (430,226)
------------ ------------
Total shareholders' equity................................... 35,586,634 35,355,336
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................... $36,889,620 $37,722,225
============ ============
</TABLE>
(The accompanying notes are an integral part of the consolidated financial
statements.)
3
<PAGE>
BIO-VASCULAR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JANUARY 31, 1996 AND 1995
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
January 31
(unaudited)
1996 1995
----------- -----------
<S> <C> <C>
Net Revenue...................................... $2,979,592 $2,126,016
Cost of Revenue.................................. 835,515 681,433
----------- -----------
Gross margin.................................. 2,144,077 1,444,583
Operating Expenses:
Selling, general, and administrative.......... 1,696,512 1,051,945
Research and development...................... 520,625 545,514
------------ ------------
Loss from operations............................. (73,060) (152,876)
Other income, net................................ 415,452 38,847
------------ -----------
Income (loss) before income taxes................ 342,392 (114,029)
Provision for income taxes....................... 137,000 1,772
------------ -----------
Net income (loss)................................ $ 205,392 $ (115,801)
=========== ===========
Net income (loss) per share...................... $ .02 $ (.02)
=========== ===========
Weighted average shares outstanding.............. 9,928,000 7,320,000
=========== ===========
</TABLE>
(The accompanying notes are an integral part of the consolidated financial
statements.)
4
<PAGE>
BIO-VASCULAR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 31, 1996 AND 1995
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
January 31
(unaudited)
1996 1995
----------- ----------
<S> <C> <C>
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES.................................... $(551,507) $(641,023)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and improvements................... (244,270) (170,787)
Disposition of fixed assets............................... 3,330 --
Additions to intangibles.................................. (516,776) (12,953)
Investments in marketable securities...................... (7,356,302) --
Maturities of marketable securities....................... 3,000,000 279,387
----------- -----------
Net cash provided by (used in) investing
activities............................................. (5,114,018) 95,647
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on debt.......................................... (1,748) --
Costs related to sale of stock............................ (87,326) --
Proceeds related to the exercise of stock
options, net of restricted stock repurchased........... 61,366 (54,843)
------------ -----------
Net cash provided by (used in) financing
activities............................................. (27,708) (54,843)
------------ -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS................ (5,693,233) (600,219)
------------ -----------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD......... 15,424,969 2,347,954
------------ -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.............. $ 9,731,736 $1,747,735
============ ===========
</TABLE>
(The accompanying notes are an integral part of the consolidated financial
statements.)
5
<PAGE>
BIO-VASCULAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
(1) BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements for Bio-Vascular
and its wholly-owned subsidiary, Vital Images, Incorporated ("Vital Images"),
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 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 considered necessary, including items of a normal nature, for a
fair presentation have been included. Operating results for the three months
ended January 31, 1996 are not necessarily indicative of the results that may
be expected for the year ending October 31, 1996. For further information,
refer to the financial statements and footnotes thereto included in the
Company's Annual Report to Shareholders and in Form 10-K for the year ended
October 31, 1995.
(2) BUSINESS SEGMENTS:
The Company has two business segments, a Surgical Business and a Medical
Imaging Software Business, which market products on a worldwide basis. The
Surgical Business develops, manufactures and markets proprietary specialty
medical products used in thoracic, cardiac, neuro and vascular surgery. The
Company, through its wholly-owned subsidiary, Vital Images, develops, markets
and supports certain software products for interactive visualization and
analysis of three-dimensional medical image data.
(3) MAJOR CUSTOMERS:
In the three months ended January 31, 1996 three distributors accounted for an
aggregate of 43% of the Company's gross revenue, with each of such
distributors accounting for in excess of 10% of the Company's gross revenue
for the period. In addition, these same three distributors accounted for 42%
of the Company's accounts receivable at January 31, 1996, with each accounting
for in excess of 10% of the Company's accounts receivable for the period. For
the quarter ended January 31, 1995 two distributors accounted for an aggregate
of 27% of the Company's gross revenue with each of such distributors
accounting for in excess of 10% of the Company's gross revenue for the period.
No distributor at January 31, 1995 accounted for in excess of 10% of the
Company's accounts receivable.
(4) CONTINGENCY:
In May 1995, the Company terminated a distribution arrangement with a Japanese
distributor. The distributor has claimed that the termination was without
cause and caused economic damage. The distributor has threatened to commence
legal action, although to date, has not done so. The Company believes the
distributor's claim is without merit and intends to defend itself vigorously
should a legal claim be filed.
6
<PAGE>
BIO-VASCULAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
- -------------------------------------------------------------------------------
(5) UNCERTAINTY:
Recent developments concerning reimbursement of Lung Volume Reduction (LVR)
surgery are likely to have a material adverse effect on the Company's business
and results of operations. Generally, Medicare had been reimbursing hospitals
and surgeons for LVR surgery since the procedure was re-introduced in 1994.
LVR surgery uses Peri-Strips, the product which has been primarily responsible
for the Company's growth in net revenue and net income in recent periods.
Recently, HCFA decided that it did not have enough patient follow-up data to
substantiate the safety and efficacy of LVR surgery. On that basis, HCFA
decided to cease reimbursement of LVR surgery until its technical assessment
committee ("TAC") could complete an evaluation of the safety and efficacy of
the procedure. TAC has received surgeon data on patient follow-up and is
scheduled to meet on March 27, 1996 to review the data. Although the Company
believes patient follow-up data strongly supports approval for reimbursement
of the procedure, it is uncertain as to how soon HCFA will complete its
review. The Company cannot say with any certainty when, or if, reimbursement
of LVR will be reinstated. The Company believes the earliest any decision
would be made regarding reimbursement would be the end of April 1996. HCFA's
decision to deny reimbursement for LVR surgery will continue to have a
material adverse effect on the Company's net revenue and net income at a
minimum in the second quarter of fiscal 1996, and may continue to have such an
adverse effect in future periods. The Company believes that LVR procedures
reimbursed by Medicare constitute over 50% of total LVR procedures. While the
Company understands that private insurance companies and managed care
organizations (which the Company believes have been the third-party payors
responsible for a significant percentage of non-Medicare reimbursed LVR
procedures) are currently reimbursing LVR surgery based on their own
evaluation of the procedure and its outcomes, it is unknown whether these
private payors will change their reimbursement practices in light of HCFA's
decision.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth the net revenue, gross margin and operating
income (loss) of the Company, and each business segment for the periods shown:
<TABLE>
<CAPTION>
Three Months Ended
January 31
(unaudited)
(in thousands)
1996 1995
---- ----
<S> <C> <C>
Net Revenue
Surgical.............. $2,837 $1,601
Imaging............... 143 525
------ ------
Total................ 2,980 2,126
====== ======
Gross Margin
Surgical.............. 2,034 993
Imaging............... 110 452
------ ------
Total................ 2,144 1,445
====== ======
Operating Income (Loss)
Surgical.............. 620 39
Imaging............... (693) (192)
------ ------
Total................ (73) (153)
====== ======
</TABLE>
COMPARISON OF THE THREE MONTHS ENDED JANUARY 31, 1996
WITH THE THREE MONTHS ENDED JANUARY 31, 1995
Net Revenue. Net revenue increased 40% to $2,980,000 for the three months ended
January 31, 1996 from $2,126,000 for the three months ended January 31, 1995.
Net revenue for the Surgical Business increased 77% to $2,837,000 for the three
months ended January 31, 1996, from $1,601,000 for the comparable period of the
previous year. The increases were substantially due to increases in the sales of
Peri-Strips, which increased to $1,507,000 in the three months ended January 31,
1996 from $566,000 in the three months ended January 31, 1995.
8
<PAGE>
While Peri-Strips sales increased when comparing the first quarter of fiscal
1996 to the first quarter of fiscal 1995, revenue from Peri-Strips sales
decreased by 25% when compared to the fourth quarter fiscal 1995 Peri-Strips
revenue of $2,017,000. Management believes that this decrease between
consecutive quarters is primarily the result of a decision by the Health Care
Financing Administration ("HCFA"), which administers Medicare, to cease
reimbursement for lung volume reduction ("LVR") surgery (the procedure which
is enabled by the use of Peri-Strips) until its Technical Assessment Committee
("TAC") can complete an evaluation of the safety and efficacy of the LVR
procedure. See Note 5 to Notes to Consolidated Financial Statements on page 7
of this Report. TAC has received the surgeon data on patient follow-up and is
scheduled to meet on March 27, 1996 to review the data. In a positive action,
the Society of Thoracic Surgeons, as a national body, has ratified the non-
investigational nature of LVR and agreed on patient selection criteria and
guidelines for levels of surgical expertise and other resources for hospitals
performing the procedure. Although the Company believes that patient follow-
up data strongly supports approval for reimbursement of the procedure, it is
uncertain as to how soon HCFA will complete its review. The Company cannot
say with any certainty when, or if, reimbursement of LVR will be reinstated.
The Company believes the earliest any decision would be made regarding
reimbursement would be the end of April 1996. The Company believes that LVR
procedures reimbursed by Medicare constitute over 50% of total LVR procedures.
HCFA's decision to deny reimbursement for LVR surgery will continue to have a
material adverse effect on the Company's net revenue and net income at a
minimum in the second quarter of fiscal 1996, and may continue to have such an
adverse effect in future periods. This forward looking statement will be
influenced primarily by third-party decisions, i.e., HCFA, and is predicated
on the basis of foregone revenue and revenue growth due to lack of
reimbursement for the LVR procedure. In the meantime, the Company is
carefully reviewing and re-evaluating all planned expenditures, and will
proceed prudently with those believed to be in the Company's best long-term
interests. At the same time, the Company expects to continue to fund the
promising research and development projects underway in the Surgical Business
and to fund the market opportunity for the medical imaging software.
Net revenue from sales of the other products in the Tissue-Guard product line,
Dura-Guard, Vascu-Guard, Supple Peri-Guard and Peri-Guard increased 100% to
$574,000 in the first quarter of fiscal 1996 from $287,000 in the first
quarter of fiscal 1995. All of this increase was due to increases in sales of
Dura-Guard, the Company's dural repair patch, which was cleared to market by
the Food and Drug Administration ("FDA") in June of 1995.
Net revenues from sales of Biograft decreased 11% when comparing the first
quarter of fiscal 1996 to the first quarter of fiscal 1995. Revenue from
sales of Biograft has been decreasing since late fiscal 1993. The Company
believes that the decrease was the result of a trend towards non-surgical
intervention for peripheral vascular reconstruction and the higher price of
Biograft when compared to other synthetic grafts. Pricing was not a factor in
the increases in any of the Surgical Business' products.
Net revenue resulting from sales of the surgical productivity tools (Flo-
Rester and the Bio-Vascular Probe) increased by 11% for the first quarter of
fiscal 1996 when compared to the first quarter of
9
<PAGE>
fiscal 1995. The Company believes that sales of these products will not
increase materially from current levels in the foreseeable future. Pricing
was not a factor in the increases in any of the Surgical Business' products.
Net revenue of the Imaging Business decreased 73% to $143,000 in the first
quarter of fiscal 1996 from $525,000 in the first quarter of fiscal 1995.
Seventy-four percent (74%) of the decrease is a result of the absence of any
geoscience revenue in the first quarter of fiscal 1996. In the fourth quarter
of fiscal 1995, the Company licensed the source code for VoxelGeo, the
Company's geoscience product used in gas and oil exploration, to CogniSeis,
its former marketing partner, for $1,500,000 and a future royalty stream,
which payments, if any, are expected to begin in calendar 1997 and are capped
at a cumulative maximum of $2,000,000. The exclusive licensing of the source
code, which passed all marketing and development responsibility for VoxelGeo
to CogniSeis, had the effect of accelerating geoscience revenues anticipated
in fiscal 1996 into the fourth quarter of fiscal 1995.
With its decisions to exit the Microscopy business, supporting existing
customers but not actively pursuing new customers and to license the source
code for VoxelGeo, the Company has focused the Imaging Business entirely on
the medical imaging field.
In December 1995, the Company received FDA clearance to market its medical
imaging software product, VoxelView, as a clinical diagnostic and surgical
planning device when used in conjunction with computed tomography ("CT") and
magnetic resonance imaging ("MRI") data for diagnosis and surgical planning.
The Company is currently finalizing the marketing plan for this product, and
does not anticipate significant revenues from its medical imaging software
products in the near term.
Gross Margin. The Company's gross margin percentage increased to 72% of net
revenues for the first quarter of fiscal 1996 from 68% for the first quarter
of fiscal 1995, primarily due to increases in production volume and production
efficiencies related to the manufacture of Peri-Strips. The Company
established quarterly standard costs and uses a first-in first-out method of
expensing inventory (costing sales). Therefore, the improvements in the gross
margin are not necessarily a reflection of the current activity in production.
In mid-January 1996, the Company reduced the level of its production of Peri-
Strips due to the reimbursement issue described above and expects that when
products manufactured during this period of reduced production flow into cost
of sales, that its gross margin percentages will decrease. This forward
looking statement is influenced primarily by the Company's current estimates
of standard costs in periods where the production volume of Peri-Strips has
been reduced and could be influenced by significant increases in production
volumes of the Company's other products.
Selling, General and Administrative. Selling general and administrative
expense increased 61% from $1,052,000 in the first quarter of fiscal 1995 to
$1,697,000 in the first quarter of fiscal 1996. In late October, the Company
hired a President for the Imaging Business to finalize the marketing plan for
its medical imaging software product. This represented a majority of the
increase in general and administrative expense, while increases in selling
expense are attributable to expanded infra-structure
10
<PAGE>
and programs in the Surgical Business and the addition of a Vice President of
Sales and Marketing in the Imaging Business in the first quarter of fiscal
1996.
Research and Development. Research and development expense decreased 5% to
$521,000 in the first quarter of fiscal 1996 from $546,000 in the first
quarter of fiscal 1995. Research and development expense of the Surgical
Business increased by 54%, while research and development expense of the
Imaging Business decreased 25%. The Surgical Business increase is due
primarily to the increased level and stage of projects underway, while the
decrease in the Imaging Business is attributable to the absence of individuals
that were focused on the VoxelGeo project. In fiscal 1995 the Company focused
resources and attention on VoxelGeo, allowing it to license the source code in
the last quarter of that fiscal year.
Operating Loss. As a result of the factors described above, the Company had
an operating loss of $73,000 in the first quarter of fiscal 1996. This
compares to an operating loss of $153,000 in the first quarter of fiscal 1995
and after excluding the one-time VoxelGeo source code license operating income
contribution of $1,322,000 in the fourth quarter of fiscal 1995, to operating
income of $589,000 in that quarter. The Surgical Business produced an
operating profit of $620,000 while the Imaging Business had an operating loss
of $693,000 in the first quarter of fiscal 1996. This compares to a first
quarter fiscal 1995 Surgical Business operating income of $39,000 and Imaging
Business operating loss of $192,000.
Other Income and Expense. At January 31, 1996, the Company had cash, cash
equivalents and marketable securities totaling $28,961,000. Net other income,
primarily interest on investments, was $415,000 for the first quarter of
fiscal 1996 compared to net other income of $39,000 for the first quarter of
fiscal 1995.
Income Taxes. The Company recorded a provision for income taxes of $137,000,
an effective tax rate of 40%, in the first quarter of fiscal 1996 compared to
a $1,800 income tax provision for the first quarter of fiscal 1995. Losses in
the first quarter of 1995 resulted in a provision for only federal and state
minimum taxes.
The Company recorded a provision for income taxes of $487,000 in the fourth
quarter of fiscal 1995, an effective tax rate of 23%, impacted by the one-time
source code license fee. Excluding the income, expense and income tax
provision related to the one-time VoxelGeo source code license in the fourth
quarter of 1995, the effective tax rate would have been 18%. The utilization
of net operating loss ("NOL") carryforwards in fiscal 1995 resulted in these
reduced effective tax rates.
The Company has $1,500,000 of NOL carryforward arising from the pre-merger
losses of Vital Images that are usable only against taxable income from the
Medical Imaging Software Business and, in addition, are limited in the amount
that can be used in any one year. These carryforwards begin to expire in
2005. The Company also has $500,000 of capital loss carryforward available
for use against capital gain income. This carryforward expires in fiscal year
2000. The deferred tax assets associated with the pre-merger NOL carryforward
of Vital Images and the capital loss carryforward
11
<PAGE>
have been totally offset by a valuation allowance because of uncertainty that
sufficient taxable income of the appropriate character will be generated prior
to their expiration.
Net Income. The Company reported net income of $205,000, or $0.02 per share,
in the first quarter of fiscal 1996, compared to a net loss of $116,000, or
$0.02 per share, in the first quarter of fiscal 1995. In comparing
consecutive quarters, in the fourth quarter of fiscal 1995, the Company
reported net income of $1,589,000, or $0.18 per share. Two factors affect the
consecutive quarter comparison: a one-time source code license fee recorded in
the fourth quarter of fiscal 1995 and different marginal tax rates between the
quarters due to utilization of net operating loss ("NOL") carryforwards in the
fourth quarter of fiscal 1995 which resulted in a 23% marginal tax rate in
that quarter compared to a 40% marginal tax rate in the first quarter of
fiscal 1996. Excluding the effect of the one-time source code license fee,
and applying a 40% marginal tax rate to fourth quarter 1995 earnings results
in an adjusted reported earnings of $452,000, or $0.05 per share. The
corresponding decline between the consecutive quarters of approximately
$247,000, or $0.03 per share, is primarily a result of the decline in
shipments of Peri-Strips and increases in selling, general and administrative
expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash, cash equivalents and marketable securities balances
decreased by $1,337,000 to $28,961,000 at January 31, 1996 from $30,297,000 at
October 31, 1995. Working capital at January 31, 1996 was $16,322,000
compared to $23,916,000 at October 31, 1995. At January 31, 1996, the Company
had an additional $7,237,000 invested in marketable securities classified as
non-current assets.
Operating activities used $552,000, primarily as a result of decreases of
$1,055,000 in accrued expenses and payables and increases of $458,000 in
inventory and prepaid expenses (primarily annual insurance premiums) which
were partially offset by a $543,000 decrease in accounts receivable. The
Company used $244,000 for the purchase of fixed assets, $517,000 for additions
to intangibles primarily to purchase the Peri-Guard patent, and $4,356,000
increasing investments in marketable securities. Additionally, net financing
activities used $28,000. The Company currently has no commitments for
material capital expenditures in fiscal 1996, but continually reviews internal
and external growth opportunities that may result in material commitments.
The Company believes its present level of cash, cash equivalents, and
marketable securities will be sufficient to satisfy the Company's cash
requirements for the foreseeable future.
INFLATION
Management believes inflation has not had a material effect on the Company's
operations or on its financial condition.
12
<PAGE>
FOREIGN CURRENCY TRANSLATION
Substantially all of the Company's foreign transactions are negotiated, invoiced
and paid in U.S. dollars.
13
<PAGE>
- --------------------------------------------------------------------------
PART II. OTHER INFORMATION
- --------------------------------------------------------------------------
ITEM 1. Legal Proceedings.
None.
ITEM 2. Changes in Securities.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None.
ITEM 5. Other Information.
None.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. None.
(b) Form 8-K. No reports on Form 8-K were filed by the Company during the
quarter ended January 31, 1996.
14
<PAGE>
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.
BIO-VASCULAR, INC.
March 12, 1996 /s/ M. Karen Gilles
-----------------------------
M. Karen Gilles
Vice President of Finance/CFO
(Principal Financial Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> JAN-03-1996
<CASH> 9,731,736
<SECURITIES> 19,228,811
<RECEIVABLES> 2,082,448
<ALLOWANCES> 49,300
<INVENTORY> 2,293,168
<CURRENT-ASSETS> 17,624,810
<PP&E> 3,347,651
<DEPRECIATION> 1,494,863
<TOTAL-ASSETS> 36,889,620
<CURRENT-LIABILITIES> 1,302,986
<BONDS> 0
<COMMON> 93,940
0
0
<OTHER-SE> 35,492,694
<TOTAL-LIABILITY-AND-EQUITY> 36,889,620
<SALES> 2,979,592
<TOTAL-REVENUES> 3,395,044
<CGS> 835,515
<TOTAL-COSTS> 2,217,137
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 342,392
<INCOME-TAX> 137,000
<INCOME-CONTINUING> 205,392
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 205,392
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
