<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995
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 NO. 0-15098
JONES MEDICAL INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-1229854
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1945 Craig Road, St. Louis, Missouri 63146
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (314) 576-6100
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 .
----- -----
NUMBER OF SHARES OUTSTANDING OF REGISTRANT'S COMMON STOCK AS OF
OCTOBER 31, 1995: 9,394,159
PAGE 1 OF 17
<PAGE> 2
JONES MEDICAL INDUSTRIES, INC.
<TABLE>
INDEX
-----
<CAPTION>
PAGE
NUMBER
------
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance
Sheets - December 31, 1994 and
September 30, 1995 3
Condensed Consolidated Statements of
Income - three months and nine months
ended September 30, 1994 and 1995 4
Condensed Consolidated Statements of
Stockholders' Equity - nine months
ended September 30, 1994 and 1995 5
Condensed Consolidated Statements of
Cash Flows - nine months ended
September 30, 1994 and 1995 6- 7
Notes to Condensed Consolidated
Financial Statements 8-11
Item 2. Management's Discussion and
Analysis of Results of Operations and
Financial Condition 12-15
Part II - Other Information
Legal Proceedings 16
Signatures 17
</TABLE>
- 2 -
<PAGE> 3
<TABLE>
JONES MEDICAL INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<CAPTION>
December 31, September 30,
1994 1995
------------ -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and temporary investments........................................ $ 7,031,765 $ 5,541,406
Marketable securities................................................. 120,000 120,000
Accounts receivable, less allowance for doubtful accounts of
$64,794 at December 31, 1994 and $91,794 at September 30, 1995........ 4,242,356 5,166,077
Inventories........................................................... 8,320,590 11,557,864
Deferred income taxes................................................. 652,805 652,805
Prepaid expenses and other............................................ 425,843 732,105
------------ ------------
Total current assets.......................................... 20,793,359 23,770,257
Net property, plant and equipment............................................. 12,603,165 13,788,586
Intangible assets, net........................................................ 20,674,206 33,363,836
Other assets.................................................................. 856,554 1,115,627
------------ ------------
$ 54,927,284 $ 72,038,306
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses................................. $ 3,639,966 $ 5,217,901
Current portion of long-term debt..................................... 1,611,246 4,940,331
Income taxes payable.................................................. 292,774 454,691
Dividends payable..................................................... 234,758 280,637
------------ ------------
Total current liabilities..................................... 5,778,744 10,893,560
Long-term debt................................................................ 3,799,978 10,147,956
Deferred income taxes......................................................... 3,858,198 3,966,105
Contingencies and commitments (Note 8)........................................ - -
Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000
shares authorized, 99,919 issued and outstanding at December 31, 1994
and 1,753 at September 30, 1995...................................... 999 17
Common stock, $.04 par value; 30,000,000 authorized, 9,231,012 issued
and outstanding at December 31, 1994 and 9,358,874 at September 30,
1995.................................................................. 369,240 376,155
Contributed capital (including effects of unearned compensation and
related amortization)................................................. 19,639,433 19,409,273
Retained earnings..................................................... 21,480,692 27,245,240
------------- -------------
Total stockholders' equity.................................... 41,490,364 47,030,685
------------ ------------
$ 54,927,284 $ 72,038,306
============ ============
See accompanying notes.
</TABLE>
- 3 -
<PAGE> 4
<TABLE>
JONES MEDICAL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
1994 1995 1994 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $12,155,518 $15,250,201 $35,882,030 $39,990,932
Cost of sales 5,979,494 7,326,209 17,811,029 19,168,957
----------- ----------- ----------- -----------
Gross profit on sales 6,176,024 7,923,992 18,071,001 20,821,975
Selling, general and administrative expenses
Selling 1,915,214 2,231,473 5,779,629 6,191,332
General and administrative 1,221,129 1,375,628 3,895,213 3,145,071
Research and development 33,488 - 76,319 -
Amortization 343,202 370,562 1,035,466 998,856
----------- ----------- ----------- -----------
Total selling, general and administrative expenses 3,513,033 3,977,663 10,786,627 10,335,259
----------- ----------- ----------- -----------
Operating income 2,662,991 3,946,329 7,284,374 10,486,716
Other income (expense)
Interest income 22,806 38,172 54,985 120,258
Interest expense (160,203) (111,056) (400,566) (194,966)
Other income (loss) 21,448 (10,892) 67,970 (125,483)
----------- ---------- ----------- ----------
Income before income taxes 2,547,042 3,862,553 7,006,763 10,286,525
Income taxes 944,769 1,525,000 2,593,250 3,775,000
----------- ----------- ----------- -----------
Net Income $ 1,602,273 $ 2,337,553 $ 4,413,513 $ 6,511,525
Average shares outstanding 9,557,000 9,680,000 9,565,000 9,684,000
Earnings per share $ 0.17 $ 0.24 $ 0.46 $ 0.67
See accompanying notes.
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
Nine Months Ended September 30, 1994 and 1995
<CAPTION>
Number of shares Preferred Common Contributed Retained
Preferred Common Stock Stock Capital Earnings Total
--------------------- --------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1993 222,706 8,952,039 $ 2,227 $358,081 $19,197,969 $16,677,833 $36,236,110
Exercise of stock options - 56,300 - 2,252 390,573 - 392,825
Restricted stock:
Amortization of unearned compensation - - - - 22,476 - 22,476
Conversion of preferred stock (42,294) 74,014 (423) 2,961 (2,538) - -
Net income - - - - - 4,413,513 4,413,513
Cash dividend declared - common
stock ($.075 per share) - - - - - (612,111) (612,111)
Cash dividend declared - preferred
stock ($.12 per share) - - - - - (20,461) (20,461)
------- --------- -------- -------- ----------- ----------- -----------
Balance at September 30, 1994 180,412 9,082,353 $ 1,804 $363,294 $19,608,480 $20,458,774 $40,432,352
======= ========= ======== ======== =========== =========== ===========
Balance at December 31, 1994 99,919 9,231,012 $ 999 $369,240 $19,639,433 $21,480,692 $41,490,364
Exercise of stock options - 33,100 - 1,324 124,351 - 125,675
Restricted stock:
Amortization of unearned compensation - - - - 22,489 - 22,489
Conversion of preferred stock (54,162) 94,762 (542) 5,591 (5,049) - -
Return of escrowed preferred stock (44,004) - (440) - (381,277) - (381,717)
Escrowed preferred dividend - - - - 9,326 - 9,326
Net income - - - - - 6,511,525 6,511,525
Cash dividend declared - common
stock ($.08 per share) - - - - - (742,837) (742,837)
Cash dividend declared - preferred
stock ($.12 per share) - - - - - (4,140) (4,140)
------- --------- -------- -------- ----------- ----------- -----------
Balance at September 30, 1995 1,753 9,358,874 $ 17 $376,155 $19,409,273 $27,245,240 $47,030,685
======= ========= ======== ======== =========== =========== ===========
See accompanying notes.
</TABLE>
- 5 -
<PAGE> 6
<TABLE>
JONES MEDICAL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended September 30, 1994 and 1995
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Cash flows used from operating activities:
Net income........................................ $ 4,413,513 $ 6,511,525
Non-Cash adjustments:
Depreciation and amortization................... 1,596,180 1,667,889
Provision for uncollectibles.................... 29,000 27,000
Loss on asset sales............................. (1,544) 126,060
Change in assets and liabilities:
Accounts receivable............................. (175,710) (950,721)
Inventories..................................... 245,025 (3,237,274)
Prepaid expenses and other assets............... 24,901 (565,335)
Accounts payable and accrued expenses........... 265,747 1,577,935
Income taxes payable............................ 234,708 161,917
----------- -----------
Net cash from operating activities.............. 6,631,820 5,318,996
----------- -----------
Cash flows used for investing activities:
Acquisition of Brevital........................... - (14,070,000)
Purchase of marketable securities................. 913 -
Maturities of certificates of deposit............. 1,247,489 -
Additions to property, plant and equipment........ (2,672,057) (2,601,502)
Proceeds from sales of assets..................... 2,850 766,108
----------- -----------
Net cash used for investing activities.......... (1,420,805) (15,905,394)
----------- -----------
Cash flows from (used for) financing activities:
Repayment of long-term debt....................... (1,795,531) (4,322,937)
Payment of dividends.............................. (632,572) (706,699)
Proceeds from long-term debt...................... - 14,000,000
Proceeds from exercise of stock options........... 370,349 125,675
----------- -----------
Net cash from (used for) financing activities... (2,057,754) 9,096,039
----------- -----------
Increase (decrease) in cash and temporary investments 3,153,261 (1,490,359)
Cash and temporary investments, beginning of period. 948,713 7,031,765
----------- -----------
Cash and temporary investments, end of period....... $ 4,101,974 $ 5,541,406
=========== ===========
See accompanying notes
- 6 -
<PAGE> 7
JONES MEDICAL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CON'T)
(UNAUDITED)
Nine Months Ended September 30, 1994 and 1995
Supplemental Disclosures of Cash Flow Information:
- --------------------------------------------------
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Cash paid during the nine months for:
Interest............................... $ 420,228 $ 165,187
========== ==========
Income taxes........................... $2,280,223 $3,502,945
========== ==========
See accompanying notes.
</TABLE>
- 7 -
<PAGE> 8
JONES MEDICAL INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1994 and 1995
1. GENERAL
-------
The unaudited interim financial information reflects all adjustments
(consisting only of normal recurring accruals) which management considers
necessary for a fair presentation of the results of operations for such
periods and is subject to year end adjustments. Certain footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted from
the unaudited interim financial information as permitted by rules and
regulations of the Securities and Exchange Commission. Management believes
that the disclosures made are adequate to make the information presented not
misleading. The results for the interim periods are not necessarily
indicative of results for the full year. It is suggested that these
financial statements be read in conjunction with the Company's audited
financial statements and notes thereto for the year ended December 31, 1994,
included in the 1994 Annual Report.
RECLASSIFICATION
----------------
Certain reclassifications of prior year quarter presentations have been
made to conform to the 1995 presentation.
2. PRINCIPLES OF CONSOLIDATION
---------------------------
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant inter-company
accounts and transactions have been eliminated.
3. EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
-----------------------------------------------
Earnings per common and common equivalent share are based on the
weighted average number of shares of common stock and common stock
equivalents outstanding during the period (9,557,000 and 9,565,000 for the
three months and nine months ended September 30, 1994; 9,680,000 and
9,684,000 for the three months and nine months ended September 30, 1995.)
The computation assumes that outstanding stock options were exercised and the
proceeds used to purchase common shares. It also assumes that the preferred
stock was converted to shares of common stock.
8
<PAGE> 9
4. INVENTORIES
-----------
Inventories are valued at the lower of cost on a first-in, first-out
basis or market.
<TABLE>
Inventories are comprised as follows:
<CAPTION>
December 31, September 30,
1994 1995
(Unaudited)
------------ ------------
<S> <C> <C>
Raw material.................. $ 3,372,142 $ 4,399,861
Work-in-process............... 1,030,297 1,096,603
Finished goods................ 3,918 151 6,061,400
----------- -----------
$ 8,320,590 $11,557,864
=========== ===========
</TABLE>
5. PROPERTY, PLANT AND EQUIPMENT
-----------------------------
<TABLE>
Property, plant and equipment are as follows:
<CAPTION>
December 31, September 30,
1994 1995
(Unaudited)
------------ -------------
<S> <C> <C>
Land.......................... $ 2,178,398 $ 2,092,136
Building and improvements..... 7,216,650 6,599,388
Equipment and furniture....... 5,258,169 6,525,247
Leasehold improvements........ 63,964 -
Automobiles................... 303,689 381,984
----------- -----------
15,020,870 15,598,755
Less accumulated depreciation
and amortization.............. 2,417,705 2,796,625
----------- -----------
12,603,165 12,802,130
----------- -----------
Construction in progress - 986,456
----------- -----------
$12,603,165 $13,788,586
=========== ===========
</TABLE>
9
<PAGE> 10
6. INTANGIBLE ASSETS
-----------------
<TABLE>
Intangible assets are as follows:
<CAPTION>
December 31, September 30,
1994 1995
(Unaudited)
------------ ------------
<S> <C> <C>
Distribution systems, trademarks and licenses..... $11,836,110 $22,836,110
Customer list..................................... 6,084,967 6,084,967
Restrictive covenants and other intangibles....... 2,208,710 4,640,050
Goodwill.......................................... 4,636,813 4,255,298
----------- -----------
24,766,600 37,816,425
Less accumulated
amortization...................................... 4,092,394 4,452,589
----------- -----------
$20,674,206 $33,363,836
=========== ===========
</TABLE>
7. INCOME TAXES
------------
The provisions for income taxes at September 30, 1994 and 1995 of
$2,593,250 and $3,775,000, respectively, are based on an estimated effective
annual income tax rate of 37%.
8. CONTINGENCIES
-------------
The Company currently carries product liability coverage of $10,000,000
per occurrence and $10,000,000 in the aggregate on a "claims made" basis.
There is no assurance that the Company's present insurance will cover any
potential claims that may be asserted in the future. In addition, the
Company is subject to legal proceedings and claims which arise in the
ordinary course of business.
9. ACQUISITION
-----------
Brevital(R) Sodium
------------------
On August 31, 1995 the Company completed the acquisition of a perpetual
licensing agreement for the exclusive United States marketing rights of
Brevital(R) Sodium from Eli Lilly and Company. Brevital(R) Sodium is a rapid
ultrashort-acting injectable anesthetic used by anesthesiologists as well as
dental and medical surgeons for induction and maintenance during surgery.
Brevital(R) Sodium has annual sales of approximately $5 million.
The purchase price of approximately $14 million was financed with bank
debt of $7 million and Seller financing of $7
10
<PAGE> 11
million and has been allocated to the respective intangible assets acquired
with amortizable live ranging from 10 to 35 years. In connection with the
acquisition, the Company entered into a manufacturing agreement with Seller
whereby Seller will manufacture and supply the Company with Brevital(R) for a
period of at least ten years. In addition, the Company agreed to pay Seller
royalties totalling 5% of net sales of Brevital(R) for a period of ten years.
11
<PAGE> 12
PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
- -------------------------------------------------------------------------
FINANCIAL CONDITION
- -------------------
RESULTS OF OPERATIONS
---------------------
The following table sets forth, for the interim periods indicated, the
percentages which certain components of the Condensed Consolidated Statements
of Income bear to product net sales and the percentage change of such
components (based on aggregate dollars) as compared to the prior year.
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
THREE INCREASE NINE INCREASE
MONTHS ENDED (DECREASE) MONTHS ENDED (DECREASE)
SEPTEMBER 30, AGGREGATE SEPTEMBER 30, AGGREGATE
------------------- DOLLAR -------------------- DOLLAR
1994 1995 AMOUNT 1994 1995 AMOUNT
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Sales 100.0 100.0 25 100.0 100.0 11
Cost of sales 49.2 48.0 23 49.6 47.9 8
----- ----- ----- -----
Gross profit margin 50.8 52.0 28 50.4 52.1 15
Selling, general and administrative expenses
Selling 15.8 14.6 17 16.1 15.5 7
General and administrative 10.0 9.0 13 10.9 7.9 (19)
Research and development 0.3 - (100) 0.2 - (100)
Amortization 2.8 2.4 8 2.9 2.5 (4)
----- ----- ----- -----
Total selling, general and
administrative expenses 28.9 26.1 13 30.1 25.8 (4)
----- ----- ----- -----
Operating income 21.9 25.9 48 20.3 26.2 44
Other income (expense)
Interest income 0.2 0.3 67 0.1 0.3 119
Interest expense (1.3) (0.7) (31) (1.1) (0.5) (51)
Misc. income 0.2 (0.1) (151) 0.2 (0.3) (285)
----- ----- ----- -----
Income before income taxes 21.0 25.3 52 19.5 25.7 47
Provision for taxes 7.8 10.0 61 7.2 9.4 46
----- ----- ----- -----
Net income 13.2 15.3 46 12.3 16.3 48
</TABLE>
12
<PAGE> 13
RESULTS OF OPERATIONS
---------------------
SALES
- -----
<TABLE>
The following summarizes approximate sales activity by product category for
the third quarter ended September 30;
<CAPTION>
Sales By
Product Category 1994 % 1995 %
- ---------------- ----- ------ ----- ------
<S> <C> <C> <C> <C>
Nutritional Products $ 5,935,000 49 $ 8,245,000 54
Pharmaceutical Products 6,221,000 51 7,005,000 46
----------- ---- ----------- ----
Total Sales $12,156,000 100% $15,250,000 100%
</TABLE>
Sales for the third quarter ended September 30, 1995 increased 25% to $15.3
million from $12.2 million in the third quarter of 1994. The Company's sales
increased primarily due to a 39% increase of branded and contract
manufacturing of nutritional products as well as a 13% increase in
pharmaceutical products.
The 39% increase in nutritional products is attributed to a 20% increase in
Bronson product sales and a 286% increase in contract manufacturing
shipments. This increase was offset, somewhat, by the continuing decline of
the MD Pharmaceutical products of 13% in the third quarter.
The 13% increase in pharmaceutical products was, primarily, due to one months
sales of the September 1, 1995 acquisition of Brevital(R) with sales during
the quarter of approximately $477,000; and, a 17% increase of Thrombin
product sales. At September 30, 1995, essentially all Thrombin orders were
filled and inventory is expected to be at a normal level for fourth quarter.
Contract pharmaceutical products were up 24% as a result of increased demand
by the Company's sole contract customer for Thrombin products.
<TABLE>
The following summarizes approximate sales activity by product category for
the nine months ended September 30;
<CAPTION>
Sales By
Product Category 1994 % 1995 %
- ---------------- ----- ------ ----- ------
<S> <C> <C> <C> <C>
Nutritional Products $19,087,000 53 $22,252,000 56
Pharmaceutical Products 16,795,000 47 17,739,000 44
----------- ---- ----------- ----
Total Sales $35,882,000 100% $39,991,000 100%
</TABLE>
Sales for the first nine months of 1995 grew 11.5% to $40 million compared to
$35.9 million for the same nine months of 1994. The Company's sales
increased as a result of increases in both product categories.
13
<PAGE> 14
Sales of pharmaceutical products increased 6% due, primarily, to the
inclusion of one month's sales of Brevital(R) and the shipments of Thrombin
backorders.
Sales of nutritional products grew 16.6% during the first nine months of 1995
over the same period of 1994. Bronson sales grew 13.8% and contract sales
increased 92.8% for the same reasons as third quarter.
GROSS PROFIT
- ------------
Gross profit during the third quarter of 1995 increased 28.3% in total
dollars and 1.2% to 52.0%, as a percent of sales, due to increases in sales
of higher margin products and greater manufacturing efficiencies and a
September 1, 1995 price increase for Bronson products.
Gross profit for the first nine months of 1995 increased 15.2% in total
dollars and 1.7% to 52.1%, as a percent of sales, for the same reasons third
quarter results improved.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
- --------------------------------------------
Selling expenses decreased 1.2%, as a percent of sales, however in aggregate
dollars increased $316,000 during the third quarter of 1995 over the third
quarter of 1994 due, primarily, to higher expenses associated with larger
mailings of the Bronson mail order catalogue and due to larger administration
fees paid to buying groups on higher sales of Thrombin products and
Liqui-Char(R). General and administrative expenses during the third quarter
of 1995 increased 13% in aggregate terms due to increases in overhead and
reserves for year-end bonuses. However, these expenses, as a percent of
sales, decreased from 10.0% during the third quarter of 1994 to 9.0% during
the 1995 third quarter due to efficiencies of the St. Louis operations.
Amortization expenses associated with intangible assets and included in
selling and general and administrative expenses increased 8% or $27,000
during the third quarter of 1995 as compared to the third quarter of 1994 due
to the additional amortization of certain assets associated with the
Brevital(R) acquisition (netted against certain intangibles that were written
off at the end of 1994.)
OPERATING INCOME
- ----------------
Operating income during the third quarter of 1995, compared to the third
quarter of 1994, increased 48.2% in total dollars, primarily, due to a 25%
increase in sales and due to lower costs of sales, as a percent of sales.
For the same reasons, together with benefiting from economies of scale,
operating income improved, as a percent of sales, from 21.9% in the 1994
third quarter to 25.9% in the 1995 third quarter.
For the first nine months of 1995 operating income was up 44.0%, or
$3,202,000 in total dollars and 5.9% as a percent of sales, over the same
period of 1994 for the same reasons third quarter results improved.
14
<PAGE> 15
OTHER INCOME (EXPENSES)
- -----------------------
Interest income for the third quarter increased 67% over the same quarter of
1994 and 119% during the nine months of 1995 over 1994 due to larger cash
balances on hand.
Interest expense was down 31% and 51% respectively for the third quarter and
the first nine months due to the elimination of long-term debt prior to
August 31, 1995.
INCOME TAXES
- ------------
The provision for income taxes for the third quarter and first nine months
of 1995 are based on estimated effective income tax rates of approximately
39.5% for the quarter and 36.7% for the nine month period. This increase was
required due to higher tax rates on pretax profits of over $10 million. The
year-end effective tax rate is anticipated to be at the 37% level.
NET INCOME
- ----------
Earnings per share increased 41.2% to $.24 per share on 9,680,000 average
shares outstanding for third quarter, 1995, from $.17 per share for third
quarter, 1994; and 45.6% to $.67 per share on 9,684,000 average shares
outstanding for the nine months from $.46 per share in 1994 on 9,565,000
shares outstanding.
FINANCIAL CONDITION
- -------------------
Balance Sheet Information
- -------------------------
At September 30, 1995, the Company's current ratio decreased to 2.2:1 from
3.6:1 at December 31, 1994 due to an increase in debt for the purchase of
Brevital(R). Working capital decreased to $12.9 million from $15.0 million
at December 31, 1994 and debt as a percent of equity increased from 13.0% at
December 31, 1994 to 32.1% at September 30, 1995.
Total assets increased $17.1 million at September 30, 1995 over year-end 1994
to $72.7 million and total liabilities increased $11.6 to $25.0 million.
Both increases are attributed to the Brevital(R) acquisition.
Inventories increased at September 30, 1995 from those at December 31, 1994,
primarily, due to the rebuilding of thrombin inventories, raw materials for
increased contract sales and an initial inventory of Brevital(R).
Accounts receivable increased $924,000 or 21.8% at September 30, 1995 over
December 31, 1994 due to higher sales levels and approximately $477,000 in
Brevital(R) sales. In days outstanding, accounts receivable decreased from
33 days at December 31, 1994 to 31 days at September 30, 1995.
15
<PAGE> 16
PART II - OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
EXHIBITS
- --------
None.
REPORTS ON FORM 8-K
- -------------------
The Registrant filed one (1) Current Report on Form 8-K during the quarter
for which this Report on Form 10-Q is filed. Such Form 8-K was dated August
31, 1995 and reported, pursuant to Item 2 of Form 8-K, the Registrant's
acquisition from Eli Lilly & Company of an exclusive license pursuant to a
License Agreement dated as of August 31, 1995. No financial statements were
required to be submitted with such From 8-K.
16
<PAGE> 17
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 therunto duly authorized.
Jones Medical Industries, Inc.
Date: November 9, 1995 By: /s/ Dennis M. Jones
-------------------------- --------------------------------------
Dennis M. Jones, President
Date: November 9, 1995 By: /s/ Judith A. Jones
-------------------------- --------------------------------------
Judith A. Jones,
Vice President of Finance
and Principal Financial
and Accounting Officer
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from SEC Form
10-Q for the quarterly period ended September 30, 1995, and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 5,541,406
<SECURITIES> 120,000
<RECEIVABLES> 5,257,871
<ALLOWANCES> 91,794
<INVENTORY> 11,557,864
<CURRENT-ASSETS> 23,770,257
<PP&E> 16,585,211
<DEPRECIATION> 2,796,625
<TOTAL-ASSETS> 72,038,306
<CURRENT-LIABILITIES> 10,893,560
<BONDS> 0
<COMMON> 376,155
0
17
<OTHER-SE> 46,654,513
<TOTAL-LIABILITY-AND-EQUITY> 72,038,306
<SALES> 39,990,932
<TOTAL-REVENUES> 40,111,190
<CGS> 19,168,957
<TOTAL-COSTS> 10,308,259
<OTHER-EXPENSES> 125,483
<LOSS-PROVISION> 27,000
<INTEREST-EXPENSE> 194,966
<INCOME-PRETAX> 10,286,525
<INCOME-TAX> 3,775,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,511,525
<EPS-PRIMARY> .67
<EPS-DILUTED> 0
</TABLE>
