<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 June 30, 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 No. 0-15098
JONES MEDICAL INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-1229854
(State or other jurisdiction (I.R.S. EMPLOYER IDENTIFICATION NO.)
of 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 July 29,
1997: 28,621,700
Page 1 of 17
<PAGE> 2
<TABLE>
JONES MEDICAL INDUSTRIES, INC.
INDEX
-----
<CAPTION>
Part I - Financial Information PAGE
NUMBER
------
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
December 31, 1996 and June 30, 1997 3
Condensed Consolidated Statements of Income -
three months and six months ended June 30, 1996
and 1997 4
Condensed Consolidated Statements of Stockholders'
Equity - six months ended June 30, 1996 and 1997 5
Condensed Consolidated Statements of Cash Flows -
six months ended June 30, 1996 and 1997 6 - 7
Notes to Condensed Consolidated Financial
Statements 8 - 10
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition 11 - 14
Part II - Other Information
Item 4. Submission of Matters to a vote of Security Holders 16
Item 6. Exhibits and Reports on Form 8-K
Signatures 17
</TABLE>
- 2 -
<PAGE> 3
<TABLE>
JONES MEDICAL INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<CAPTION>
December 31, June 30,
1996 1997
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 52,171,684 $ 39,766,143
Accounts receivable, less allowance for doubtful accounts of
$388,109 at December 31, 1996 and $410,610 at June 30, 1997 11,301,251 13,848,685
Inventories 12,752,523 14,063,160
Income taxes receivable 1,763,864 201,769
Deferred income taxes 1,846,318 1,846,318
Prepaid expenses and other 715,165 913,288
------------ ------------
Total current assets 80,550,805 70,639,363
Net property, plant and equipment 24,170,353 26,802,228
Intangible assets, net 69,847,240 91,331,169
Other assets 2,664,990 1,207,724
------------ ------------
$177,233,388 $189,980,484
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 6,471,061 $ 6,395,374
Current portion of long-term debt 3,000,000 3,000,000
Dividends payable 560,298 -
------------ ------------
Total current liabilities 10,031,359 9,395,374
Deferred income taxes 5,282,307 5,282,307
Contingencies and commitments (Note 5) - -
Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000 shares
authorized at December 31, 1996 and 5,000,000 share
authorized at June 30, 1997 - -
Common stock, $.04 par value; 30,000,000 authorized,
28,435,451 issued and outstanding at December 31, 1996
and 75,000,000 authorized, 28,621,200 issued and
outstanding at June 30, 1997 1,137,418 1,144,848
Contributed capital 108,582,105 108,750,120
Retained earnings 52,200,199 65,407,835
------------ ------------
Total stockholders' equity 161,919,722 175,302,803
------------ ------------
$177,233,388 $189,980,484
============ ============
See accompanying notes.
</TABLE>
- 3 -
<PAGE> 4
<TABLE>
JONES MEDICAL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ -----------------------------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $25,737,906 $27,886,510 $47,585,982 $57,662,192
Cost of sales 10,021,812 11,628,079 19,422,751 20,506,980
----------- ----------- ----------- -----------
Gross profit on sales 15,716,094 16,258,431 28,163,231 37,155,212
Selling, general and administrative
expenses:
Selling 3,785,778 4,412,950 7,444,775 9,250,060
General and administrative 2,543,887 1,487,710 4,577,930 3,940,209
Amortization 695,794 868,002 1,225,095 1,739,862
----------- ----------- ----------- -----------
Total selling, general
and administrative
expenses 7,025,459 6,768,662 13,247,800 14,930,131
----------- ----------- ----------- -----------
Operating income 8,690,635 9,489,769 14,915,431 22,225,081
Other income (expense)
Interest income 800,385 747,644 900,662 1,425,671
Interest expense (102,227) (89,353) (364,345) (178,810)
Other income (expense) 4,233 16,945 (18,072) 1,131
----------- ----------- ----------- -----------
Income before income taxes 9,393,026 10,165,005 15,433,676 23,473,073
Income taxes 3,554,822 3,788,677 5,846,775 8,978,824
----------- ----------- ----------- -----------
Net income $ 5,838,204 $ 6,376,328 $ 9,586,901 $14,494,249
=========== =========== =========== ===========
Average shares outstanding 28,733,000 29,603,000 27,095,000 29,479,000
Earnings per share $ .20 $ .22 $ .35 $ .49
=========== =========== =========== ===========
See accompanying notes.
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
Six Months Ended June 30, 1996 and 1997
<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, 1995 1,056 24,227,423 $ 10 $969,097 $19,590,417 $35,379,001 $55,938,525
Exercise of stock options - 310,825 - 12,433 708,950 - 721,383
Sales of common stock - 3,450,000 - 138,000 75,083,921 - 75,221,921
Restricted Stock:
Amortization of
unearned compensation - - - - 12,500 - 12,500
Conversion of preferred stock ( 1,056) 4,080 ( 10) 162 ( 152) - -
Net income - - - - - 9,586,901 9,586,901
Adjustment to increase
pooled companies net
income to conform to
year-end - - - - - 701,925 701,925
Cash dividend declared
- - common stock ($.047 per
share) - - - - - (857,773) (857,773)
Cash dividend declared
- - preferred stock ($.08
per share) - - - - - (12) (12)
-------- ---------- --------- ---------- ------------ ----------- ------------
Balance at June 30, 1996 - 27,992,328 $ - $1,119,692 $95,395,636 $44,810,042 $141,325,370
======== ========== ========= ========== ============ =========== ============
Balance at December 31, 1996 - 28,435,451 $ - $1,137,418 $108,582,105 $52,200,199 $161,919,722
Exercise of stock options - 198,624 - 7,944 595,305 - 603,249
Shares tendered in payment
of option price - (10,182) - (407) (339,606) - (340,013)
Return of escrowed shares - (2,693) - (107) (87,684) - (87,791)
Net income - - - - - 14,494,249 14,494,249
Cash dividend declared -
common stock ($.045 per
share) - - - - - (1,286,613) (1,286,613)
-------- ---------- --------- ---------- ------------ ----------- ------------
Balance at June 30, 1997 - 28,621,200 $ - $1,144,848 $108,750,120 $65,407,835 $175,302,803
======== ========== ========= ========== ============ =========== ============
See accompanying notes.
</TABLE>
- 5 -
<PAGE> 6
<TABLE>
JONES MEDICAL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended June 30, 1996 and 1997
<CAPTION>
Cash flows from operating activities: 1996 1997
---- ----
<S> <C> <C>
Net income $ 9,586,901 $14,494,249
Adjustment to increase pooled companies net income to conform
to year end 701,925 -
Non-cash adjustments:
Depreciation and amortization 1,985,526 2,785,862
Provision for uncollectibles 53,830 22,501
Loss on asset sales 13,887 19,176
Change in assets and liabilities:
Accounts receivable (1,908,207) (2,569,935)
Inventories (1,197,952) (1,310,637)
Prepaid expenses and other assets (1,437,062) 645,502
Accounts payable and accrued expenses. (29,611) (75,687)
Income tax receivable - 1,562,095
Income taxes payable 118,152 -
----------- -----------
Net cash from operating activities 7,887,389 15,573,126
----------- -----------
Cash flows used for investing activities:
Proceeds from sale of assets 181,848 33,358
Acquisition of Tapazole(R) (26,057,057) -
Acquisition of Cytomel(R) and Triostat(R) - (22,800,000)
Additions to property, plant and equipment (2,169,627) (3,628,352)
----------- -----------
Net cash used for investing activities (28,044,836) (26,394,994)
----------- -----------
Cash flows from (used for) financing activities:
Proceeds from debt 26,000,000 -
Repayment of long term debt (27,573,836) -
Payment of dividends (641,412) (1,846,909)
Proceeds from exercise of stock options 721,383 263,236
Proceeds from common stock sale 75,221,921 -
----------- -----------
Net cash from (used for) financing activities 73,728,056 (1,583,673)
----------- -----------
Increase (decrease) in cash and cash equivlents 53,570,609 (12,405,541)
Cash and cash equivalents, beginning of period 8,341,823 52,171,684
----------- -----------
Cash and cash equivalents, end of period $61,912,432 $39,766,143
=========== ===========
See accompanying notes.
</TABLE>
- 6 -
<PAGE> 7
<TABLE>
JONES MEDICAL INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CON'T)
(UNAUDITED)
Six Months Ended June 30, 1996 and 1997
Supplemental Disclosures of Cash Flow Information:
- --------------------------------------------------
<CAPTION>
Cash paid during the six months for: 1996 1997
---- ----
<S> <C> <C>
Interest $ 184,973 $ -
========== ==========
Income taxes $4,888,056 $7,411,886
========== ==========
See accompanying notes.
</TABLE>
- 7 -
<PAGE> 8
JONES MEDICAL INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996 and 1997
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, 1996, included in the 1996 Annual Report.
2. 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 (28,733,000 and 27,095,000
for the three months and six months ended June 30, 1996; 29,603,000
and 29,479,000 for the three months and six months ended June 30,
1997). The computation assumes that outstanding stock options were
exercised and the proceeds used to purchase common shares.
8
<PAGE> 9
3. INVENTORIES
-----------
Inventories are valued at the lower of cost on a first-in, first-out
basis or market.
Inventories are comprised as follows:
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
(Unaudited)
--------------- ----------------
<S> <C> <C>
Raw material $ 4,766,356 $ 5,915,632
Work-in-process 1,539,115 1,711,873
Finished goods 6,447,052 6,435,655
--------------- ---------------
$ 12,752,523 $ 14,063,160
=============== ===============
</TABLE>
4. PROPERTY, PLANT AND EQUIPMENT
-----------------------------
Property, plant and equipment are as follows:
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
(Unaudited)
---------------- ----------------
<S> <C> <C>
Land $ 2,419,676 $ 2,419,676
Building and improvements 11,710,066 13,183,023
Equipment and furniture 15,022,571 16,975,567
Automobiles 438,451 557,419
--------------- ---------------
29,590,764 33,135,685
Less accumulated depreciation and
amortization 5,420,411 6,333,457
--------------- ---------------
$ 24,170,353 $ 26,802,228
=============== ===============
</TABLE>
9
<PAGE> 10
5. INTANGIBLE ASSETS
-----------------
Intangible assets are as follows:
<TABLE>
<CAPTION>
December 31, June 30,
1996 1997
(Unaudited)
--------------- ----------------
<S> <C> <C>
Distribution systems, trademarks
and licenses $ 48,409,609 $ 69,409,609
Customer list 6,084,967 6,084,967
Restrictive covenants and other
intangibles 5,602,768 7,994,420
Goodwill 17,249,968 17,060,114
-------------- --------------
77,347,312 100,549,110
Less accumulated amortization 7,500,072 9,217,941
-------------- --------------
$ 69,847,240 $ 91,331,169
============== ==============
</TABLE>
6. CONTINGENCIES
-------------
The Company currently carries product liability coverage of
$20,000,000 per occurrence and $20,000,000 in the aggregate on a
"claims made" basis. In addition to this policy, the Company carries
a $5,000,000 umbrella policy. 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.
7. ACQUISITION
-----------
On June 30, 1997, the Company acquired two products, Cytomel(R)
(liothyronine sodium tablets) and Triostat(R) (liothyronine sodium
injection) from SmithKline Beecham Corporation (SKB), for a cash
purchase price of $22.8 million. The purchase price has been
allocated to the acquired intangibles with amortizable lives ranging
from 10 to 25 years. In connection with the acquisition, the Company
entered into manufacturing agreements for the future supply of both
Cytomel(R) and Triostat(R). Subsequent to June 30, 1997, the Company
purchased approximately $850,000 of SKB's related finished goods
inventory that was on hand at the date of the acquisition
10
<PAGE> 11
<TABLE>
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
- --------------------------------------------------------------------------
FINANCIAL CONDITION
- -------------------
The following table sets forth, for the two interim periods indicated, the
percentages which certain components of the 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.
<CAPTION>
PERCENTAGE PERCENTAGE
INCREASE INCREASE
(DECREASE) (DECREASE)
AGGREGATE AGGREGATE
THREE MONTHS ENDED DOLLAR SIX MONTHS ENDED DOLLAR
JUNE 30, AMOUNT JUNE 30, AMOUNT
-------- ------ -------- ------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Sales 100.0% 100.0% 8.3% 100.0% 100.0% 21.2%
Cost of sales 38.9 41.7 16.0 40.8 35.6 5.6
Gross profit margin 61.1 58.3 3.5 59.2 64.4 31.9
Selling, general and
administrative expenses
Selling 14.7 15.8 16.6 15.6 16.0 24.2
General and
administrative 9.9 5.3 (41.5) 9.6 6.8 (13.9)
Amortization 2.7 3.1 24.7 2.6 3.0 42.0
Total selling,
general and
administrative
expenses 27.3 24.3 (3.7) 27.8 25.9 12.7
Operating income 33.8 34.0 9.2 31.3 38.5 49.0
Interest income 3.1 2.7 (6.6) 1.9 2.5 58.3
Interest expense (0.4) (0.3) (12.6) (0.8) (0.3) (50.9)
Other income (expense (0.0) 0.1 300.3 (0.0) 0.0 106.3
Income before income taxes 36.5 36.5 8.2 32.4 40.7 52.1
Provision for income taxes 13.8 13.6 6.6 12.3 15.6 53.6
Net income 22.7 22.9 9.2 20.1 25.1 51.2
</TABLE>
11
<PAGE> 12
RESULTS OF OPERATIONS
---------------------
SALES
- -----
The following summarizes approximate sales activity by product category for
the second quarter ended June 30:
<TABLE>
SALES BY PRODUCT CATEGORY
<CAPTION>
1996 % 1997 %
---- --- ---- ---
<S> <C> <C> <C> <C>
Pharmaceutical products $17,341,000 67.4 $19,986,000 71.7
Vitamin and Nutritional
Supplement products 8,397,000 32.6 7,901,000 28.3
----------- ----- ----------- -----
Total Sales $25,738,000 100.0 $27,887,000 100.0
=========== ===== =========== =====
</TABLE>
Sales for the second quarter ended June 30, 1997 increased 8.3% to $27.9
million from $25.7 million in the second quarter of 1996. The Company's
sales increased as a result of a 15.3% increase in pharmaceutical product
sales, offset by a 5.9% decrease in vitamin and nutritional supplement
product sales. The pharmaceutical growth is primarily due to the addition of
the Abana Pharmaceuticals product lines (acquired December 31, 1996) and the
continuing strong sales of Thrombin-JMI(R) and Brevital(R). The decrease in
the vitamin and nutritional supplement product sales results from a decline
in the lower margin contract vitamin sales.
The following summarizes approximate sales activity by product category for
the six months ended June 30:
<TABLE>
SALES BY PRODUCT CATEGORY
<CAPTION>
1996 % 1997 %
---- --- ---- ---
<S> <C> <C> <C> <C>
Pharmaceutical products $30,662,000 64.4 $42,454,000 73.6
Vitamin and Nutritional
Supplement products 16,924,000 35.6 15,208,000 26.4
----------- ----- ----------- -----
Total Sales $47,586,000 100.0 $57,662,000 100.0
=========== ===== =========== =====
</TABLE>
Sales for the first six months of 1997 increased 21.2%, or $10,076,000 over
the first six months of 1996. The increase results from a 38.4% increase in
pharmaceutical product sales offset by a 10.1% decrease in vitamin and
nutritional supplement product sales. The pharmaceutical product sales
increase is due to the inclusion of a full six months of sales of Tapazole(R)
(acquired March 18, 1996), the addition of the Abana product lines (acquired
December 31, 1996) and the increasing sales of Thrombin-JMI(R), Brevital(R)
and Levoxyl(R). The decrease in vitamin and nutritional supplement product
sales results from a decline in the lower margin contract vitamin sales.
12
<PAGE> 13
GROSS PROFIT
- ------------
Gross profit during the second quarter of 1997 increased 3.5% or $542,000 in
aggregate dollars over the second quarter of 1996. As a percentage of sales,
gross profit decreased 2.8%. The gross profit increase, in aggregate
dollars, was due to the increased sales volume discussed above. As a
percentage of sales, the gross profit decline resulted from certain
nonrecurring inventory adjustments and, to a greater extent, from the
significant forward buying in the first quarter of 1997 by the Company's
wholesale customers of higher margin products, in anticipation of the
Company's announced price increases.
Gross profit for the first six months of 1997 increased $8,992,000 or 31.9%
in aggregate dollars over the first six months of 1996 and as a percentage of
sales, increased 5.2%. The increase in both aggregate dollars and as a
percentage of sales resulted from the increase in the pharmaceutical product
sales, discussed above, which are higher margin products. The Company does
not believe that the forward buying or nonrecurring inventory adjustments
affecting the second quarter of 1997 had a significant impact on the June 30,
1997 year-to-date results.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
- --------------------------------------------
Selling expenses increased as a percentage of sales in the second quarter of
1997 as compared to the second quarter of 1996 from 14.7% to 15.8% and, in
aggregate dollars, increased 16.6% or $627,000. These expenses increased as
a result of the additional sales personnel employed January 1, 1997 in
connection with the Abana acquisition. For the same reason, the first six
months selling expenses increased in aggregate dollars by 24.2% or
$1,805,000.
General and administrative expenses as a percentage of sales decreased from
9.9% for the second quarter of 1996 to 5.3% for the second quarter of 1997
and, in the aggregate, decreased 41.5% or $1,056,000. General and
administrative expenses as a percentage of sales decreased from 9.6% for the
six months ended June 30, 1996 to 6.8% for the six months ended June 30,
1997. The decrease in 1997 primarily results from the consolidation of the
administrative functions at Daniels Pharmaceuticals (merged on August 31,
1996) with the Company's corporate facility, net of normal salary increases
in 1997.
Amortization expenses associated with intangible assets included in selling,
general and administrative expenses were up 24.7% and 42.0%, respectively,
for the second quarter and the first six months of 1997 over 1996 as a result
of additional amortization on intangible assets acquired with the Tapazole(R)
and Abana acquisitions.
OPERATING INCOME
- ----------------
Operating income during the second quarter of 1997, compared to the second
quarter of 1996, increased 9.2% in aggregate terms, and as a percentage of
sales from 33.8% to 34.0% due to lower general and administrative expenses.
13
<PAGE> 14
For the first six months of 1997 operating income increased 49.0% due
primarily to lower general and administrative expense and higher gross
margins.
OTHER INCOME (EXPENSE)
- ----------------------
Interest income decreased 6.6% for the second quarter of 1997, but increased
58.3% or $525,000 for the first six months compared to the same period of
1996. Fluctuations in interest income result from the receipt of the $75
million net proceeds from the Company's sale of common stock in April, 1996
and the partial use of those proceeds to repay outstanding debt.
Interest expense was down 12.6% and 50.9%, respectively, for the second
quarter and the first six months as compared to the same periods of 1996 due
to the reduction in the Company's outstanding debt.
Miscellaneous income consists primarily of gains or losses on the sale of
fixed assets.
INCOME TAXES
- ------------
The effective tax rate for the second quarter 1997 is 37.2% as compared to
37.8% for the same period of 1996. The effective tax rate for the six months
ended June 30, 1997 of 38.2% is comparable to the June 30, 1996 effective tax
rate of 37.8%.
NET INCOME
- ----------
Earnings per share increased from $.20 on average shares outstanding of
28,733,000 for the quarter ended June 30, 1996 to $.22 on average shares
outstanding of 29,603,000 for the quarter ended June 30, 1997. For the first
six months of 1997 earnings per share increased to $.49 on average shares
outstanding of 29,479,000 from $.35 on average shares outstanding of
27,095,000 for the first six months of 1996.
FINANCIAL CONDITION
- -------------------
Balance Sheet Information
- -------------------------
At June 30, 1997 the Company's current ratio decreased to 7.5:1 from 8.0:1 at
December 31, 1996 and working capital decreased from $70.5 million at
December 31, 1996 to $61.2 million at June 30, 1997. The decline in these
ratios is primarily due to the acquisition of Triostat(R) and Cytomel(R) on
June 30, 1997 for $22.8 million cash. Debt to equity remained relatively
unchanged at 1.8% at December 31, 1996 compared to 1.7% at June 30, 1997.
RECENT ACCOUNTING PRONOUNCEMENTS
- --------------------------------
Adoption of FASB Statement No. 128, "Earnings Per Share", which is effective
for the Company in 1997, is not anticipated to have a material effect on the
Company's consolidated financial statements.
14
<PAGE> 15
PART II - OTHER INFORMATION
---------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
The Annual Meeting of Shareholders of Jones Medical Industries, Inc. was held
on May 20, 1997. The following proposals were adopted by the margins
indicated:
(1) Each of the nine nominees to the Board of Directors was elected for
a one-year term by the shareholders:
<TABLE>
<CAPTION>
DIRECTOR FOR AGAINST
-------- --- -------
<S> <C> <C>
Dennis M. Jones 20,247,896 18,815
Judith A. Jones 20,243,921 22,790
Michael T. Bramblett 20,266,711 43,822
G. Andrew Franz 20,245,366 21,345
David A. McLaughlin 20,245,691 21,020
Stanley L. Lopata 20,238,316 28,395
L. John Polite, Jr. 20,240,016 26,695
Edward A. Chod 20,247,966 18,745
Thomas F. Patton, Ph.D. 19,667,853 598,858
</TABLE>
(2) The shareholders approved the proposed amendment to the Company's
Restated Certificate of Incorporation, as heretofore amended, to
increase the authorized capital stock to 75,000,000 shares of Common
Stock and 5,000,000 shares of Preferred stock:
For 15,691,689
Against 3,638,736
Abstain 92,170
(3) The shareholders approved the Company's 1997 Incentive Stock Plan
relating to 1,000,000 shares of the Company's Common Stock:
For 20,108,440
Against 1,229,396
Abstain 81,157
15
<PAGE> 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
a. Exhibits:
---------
22 The Company's proxy statement dated April 9, 1997,
containing the full text of the proposals referred to in
Item 4, which was previously filed electronically, is
hereby incorporated by reference.
b. 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. The Form 8-K
was dated June 30, 1997 and reported, pursuant to Item 2 of Form
8-K, the Registrant's acquisition of two (2) pharmaceutical products
used to treat thyroid disorders from SmithKline Beecham Corporation.
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 thereunto duly authorized.
JONES MEDICAL INDUSTRIES, INC.
Date: August 6, 1997 By: /s/ Dennis M. Jones
---------------------------- ----------------------------------
Dennis M. Jones, President
Date: August 6, 1997 By: /s/ Judith A. Jones
----------------------------- ------------------------------------
Judith A. Jones,
Executive Vice President and
Principal Financial and
Accounting Officer
17
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 39,766,143
<SECURITIES> 0
<RECEIVABLES> 14,259,295
<ALLOWANCES> 410,610
<INVENTORY> 14,063,160
<CURRENT-ASSETS> 70,639,363
<PP&E> 33,135,685
<DEPRECIATION> 6,333,457
<TOTAL-ASSETS> 189,980,484
<CURRENT-LIABILITIES> 9,395,374
<BONDS> 0
<COMMON> 1,144,848
0
0
<OTHER-SE> 174,157,955
<TOTAL-LIABILITY-AND-EQUITY> 189,980,484
<SALES> 57,662,192
<TOTAL-REVENUES> 57,662,192
<CGS> 20,506,980
<TOTAL-COSTS> 20,506,980
<OTHER-EXPENSES> 1,131
<LOSS-PROVISION> 22,501
<INTEREST-EXPENSE> 178,810
<INCOME-PRETAX> 23,473,073
<INCOME-TAX> 8,978,824
<INCOME-CONTINUING> 14,494,249
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,494,249
<EPS-PRIMARY> .49
<EPS-DILUTED> .49
</TABLE>
