<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 JUNE 30, 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 0-15515
APPLIED BIOSCIENCE INTERNATIONAL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C>
DELAWARE 22-2734293
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
4350 N. FAIRFAX DRIVE, ARLINGTON, VA 22203-1627
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (703) 516-2490
------------------------
Indicate by checkmark 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 / /
The number of shares outstanding of the registrant's classes of common
stock, par value $0.01 per share, was 29,559,699 as of August 7, 1996.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Item 1. Financial Statements.
Consolidated Condensed Statements of Operations for the Three-Month Periods
Ended June 30, 1996, and 1995 and the Six-Month Periods Ended June 30,
1996, and 1995........................................................... 3
Consolidated Condensed Balance Sheets as of June 30, 1996, and
December 31, 1995........................................................ 4
Consolidated Condensed Statements of Cash Flows for the Six-Month Periods
Ended June 30, 1996, and 1995............................................ 5
Notes to Consolidated Condensed Financial Statements....................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 7
</TABLE>
PART II. OTHER INFORMATION
<TABLE>
<S> <C> <C>
Item 1. Legal Proceedings.......................................................... 11
Item 2. Changes in Securities...................................................... 11
Item 3. Defaults upon Senior Securities............................................ 11
Item 4. Submission of Matters to a Vote of Security Holders........................ 11
Item 5. Other Information.......................................................... 11
Item 6. Exhibits and Reports on Form 8-K........................................... 11
SIGNATURES.............................................................................. 12
</TABLE>
2
<PAGE> 3
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Life sciences revenues, net of subcontractor costs
of $4,057, $8,120, $8,813, and $14,980,
respectively..................................... $28,045 $35,164 $53,600 $68,518
Environmental sciences revenues, net of
subcontractor costs of $1,053, $1,885, $1,935,
and $3,243, respectively......................... 11,577 12,728 23,411 25,147
------- ------- ------- -------
39,622 47,892 77,011 93,665
------- ------- ------- -------
Direct costs -- Life sciences...................... 18,327 24,749 34,622 48,798
Direct costs -- Environmental sciences............. 8,114 8,743 16,907 17,432
Selling, general and administrative expenses....... 11,133 12,494 21,498 24,062
------- ------- ------- -------
37,574 45,986 73,027 90,292
------- ------- ------- -------
Operating income................................... 2,048 1,906 3,984 3,373
Interest -- (expense).............................. (66) (818) (81) (1,647)
-- income................................. 114 39 257 110
Other (expense) income, net........................ (74) 243 (159) 287
------- ------- ------- -------
Income before provision for income taxes........... 2,022 1,370 4,001 2,123
Provision for income taxes......................... 805 595 1,557 912
------- ------- ------- -------
Net income......................................... $ 1,217 $ 775 $ 2,444 $ 1,211
======= ======= ======= =======
Weighted average number of common shares
outstanding...................................... 30,141 28,425 29,935 28,429
======= ======= ======= =======
Earnings per share................................. $ 0.04 $ 0.03 $ 0.08 $ 0.04
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed financial statements.
3
<PAGE> 4
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents.......................................... $ 3,840 $ 11,304
Accounts receivable, net........................................... 59,369 54,426
Prepaid expenses and other current assets.......................... 7,101 6,601
Deferred tax asset................................................. 3,614 4,756
-------- --------
Total current assets....................................... 73,924 77,087
PROPERTY AND EQUIPMENT, at cost less accumulated depreciation and
amortization....................................................... 20,382 21,515
GOODWILL, less accumulated amortization.............................. 9,887 10,041
OTHER ASSETS......................................................... 7,410 6,514
-------- --------
TOTAL ASSETS......................................................... $ 111,603 $115,157
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt............................... $ 331 $ 322
Accounts payable................................................... 4,052 7,089
Accrued liabilities................................................ 19,133 26,749
Advance billings................................................... 11,119 9,536
-------- --------
Total current liabilities.................................. 34,635 43,696
-------- --------
LONG-TERM DEBT....................................................... 435 572
-------- --------
DEFERRED RENT........................................................ 2,817 3,010
-------- --------
Total liabilities.......................................... 37,887 47,278
-------- --------
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value, 40,000,000 shares authorized,
30,266,000 and 29,724,000 shares issued and outstanding,
respectively.................................................... 303 297
Paid-in capital.................................................... 72,497 69,598
Retained earnings.................................................. 5,588 3,144
Treasury stock, at cost, 713,000 shares............................ (4,335) (4,335)
Unrealized gain on investments..................................... 233 --
Cumulative translation adjustment.................................. (353) (425)
Deferred compensation.............................................. (217) (400)
-------- --------
Total stockholders' equity................................. 73,716 67,879
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........................... $ 111,603 $115,157
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed financial statements.
4
<PAGE> 5
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE
30,
---------------------
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income.......................................................... $ 2,444 $ 1,211
Adjustments to reconcile net income to net cash used in operating
activities:
Depreciation and amortization.................................... 3,988 6,088
Other............................................................ 1,327 361
Change in operating assets and liabilities....................... (15,036) 857
-------- --------
Net cash (used in) provided by operating activities......... (7,277) 8,517
-------- --------
Cash flows from investing activities:
Purchases of property and equipment................................. (2,729) (5,054)
Proceeds from sale of property and equipment........................ -- 2,061
Other............................................................... (135) --
-------- --------
Net cash used in investing activities....................... (2,864) (2,993)
-------- --------
Cash flows from financing activities:
Repayment of long-term debt, net.................................... (128) (49,666)
Other long-term borrowings.......................................... -- 42,250
Proceeds from issuance of stock..................................... 2,710 --
-------- --------
Net cash provided by (used in) financing activities......... 2,582 (7,416)
-------- --------
Effect of exchange rate changes on cash............................... 95 (1,125)
-------- --------
Net decrease in cash and cash equivalents............................. (7,464) (3,017)
Cash and cash equivalents, beginning of the period.................... 11,304 7,944
-------- --------
Cash and cash equivalents, end of the period.......................... $ 3,840 $ 4,927
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed financial statements.
5
<PAGE> 6
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
Certain information and footnote disclosures normally included in financial
statements prepared following generally accepted accounting principles have been
condensed or omitted. The accompanying unaudited consolidated condensed
financial statements reflect all the normal recurring adjustments that, in the
opinion of management, are necessary for a fair presentation of the results for
the interim periods presented. The results for the interim periods may not
necessarily be indicative of the results for the entire fiscal year.
These financial statements should be read in conjunction with the Company's
annual audited financial statements, as filed with the Securities and Exchange
Commission on Form 10-K, for the year ended December 31, 1995.
2. NEW ACCOUNTING PRONOUNCEMENT
Effective January 1, 1996, the Company adopted Financial Accounting
Standards Board Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-based Compensation." SFAS No. 123 provides companies the
option to account for employee stock compensation awards based on their
estimated fair value at the date of grant, resulting in a charge to income in
the period the awards are granted, or to present pro forma footnote disclosure
describing the effect to the company's net income and net income per share data.
The Company has elected to adopt the disclosure provisions of SFAS No. 123. The
adoption of this standard had no effect on the Company's results of operations.
3. EARNINGS PER COMMON SHARE
Earnings per common share were computed using the weighted average number
of common stock and common stock equivalents outstanding during the year. Common
equivalent shares are calculated using the treasury stock method and consist
primarily of shares issuable upon exercise of stock options.
4. RECLASSIFICATIONS
Certain reclassifications have been made to the consolidated condensed
financial statements of prior periods to conform to the current period
presentation.
5. SIGNIFICANT EVENTS
On June 21, 1996, the Company announced that it had entered into a merger
agreement with Pharmaceutical Product Development, Inc. The proposed merger will
be accounted for as a pooling-of-interests transaction. Subject to the receipt
of shareholder approval and the satisfaction of all other closing conditions,
closing is scheduled for September, 1996. After the merger, financial statements
for the current and preceding periods will reflect the combined results of the
merged businesses, which will file as Pharmaceutical Product Development, Inc.
and subsidiaries.
6
<PAGE> 7
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
GENERAL
In the second quarter of 1996, the Company reported net income of $1.2
million, or $0.04 per share, compared to net income of $0.8 million, or $0.03
per share in the second quarter of 1995. The Company's improvement in net income
is attributable to the strategic decisions made by senior management over the
past two years. The divestiture of the Company's capital-intensive toxicology
business completed in November 1995 coupled with the acquisition of the
Leicester, England, Phase I laboratory are key factors in the Company's
financial improvement. In addition, the sale-leaseback of the Company's real
estate in Austin, Texas, also completed in November 1995, with net proceeds of
approximately $11 million has contributed significantly to the positive change
in net interest of $0.8 million in the quarter as compared to last year.
On June 21, 1996, the Company and Pharmaceutical Product Development, Inc.
("PPD") announced that the two companies had entered into a merger agreement.
The proposed merger would be accounted for as a pooling-of-interests
transaction. The combined operations will form one of the largest publicly
traded contract research organizations, with total net revenues in excess of
$200 million. Under the terms of the merger agreement, holders of APBI stock
will receive between .3125 and .4054 shares of PPD stock for each share of APBI
stock, based on the average closing prices of PPD shares of common stock for the
ten business day period ending five business days prior to the closing of the
transaction ("the Average PPD Stock Price"). This represents merger
consideration of $15.00 per share to APBI shareholders if the Average PPD Stock
Price is between $37.00 and $48.00 per share. If the Average PPD Stock Price is
at or below $37.00, the exchange ratio will be .4054 of a share of PPD common
stock for each share of APBI. Under the terms of the agreement, if the Average
PPD Stock Price is less than $30.00, either party may terminate the merger
agreement. The merger is subject to the approval of both APBI and PPD
shareholders. Subject to the receipt of such approvals and the satisfaction of
all other closing conditions, the merger is expected to close towards the end of
September. On August 8, 1996, the reported closing sales price per share of PPD
common stock on the Nasdaq Stock Market was $30.00.
THREE MONTHS ENDED JUNE 30, 1996 VERSUS THREE MONTHS ENDED JUNE 30, 1995
Total net revenues decreased 17.3% to $39.6 million in the second quarter
of 1996 from $47.9 million in the same quarter last year, with the decrease in
revenues being primarily attributable to the sale of the Company's toxicology
operations in November 1995. The Company's Life Sciences Group, which consists
of Pharmaco and Clinix (doing business as the Chicago Center for Clinical
Research, "CCCR"), generated net revenues of $28.0 million, down $7.1 million or
20.2% from a year ago. Net revenues from ENVIRON, the sole ongoing operation in
the Company's Environmental Sciences Group, were $11.6 million, compared with
$12.7 million in 1995, a decrease of $1.1 million or 9.0%.
After elimination of the net revenues from the Company's former toxicology
operations ($11.7 million in the second quarter of last year), total net
revenues increased 9.6% as compared to 1995. Results of operations which exclude
the results of the divested businesses are considered the results of the
Company's ongoing operations.
Net revenues for the second quarter of 1996 from the ongoing Life Sciences
Group were $28.0 million, an increase of 20.2% from the same quarter of 1995.
The growth in the Company's ongoing Life Sciences Group was due in part to an
increase in the size and scope of contracts in the North American clinical
development and biostatistics business. Net revenues from the Company's North
American clinical development and biostatistics business increased 24.9% to
$13.8 million. Demand for the Company's analytical chemistry services continues
to be strong at the Richmond, Virginia, laboratory. Net revenues in Richmond
increased 12.0% to $3.9 million as compared to $3.5 million in net revenues for
the same period last year. The acquisitions of CCCR and the Phase I facility in
Leicester, England, both completed in the second half of 1995, contributed net
revenues of $2.3 million in the second quarter of 1996.
7
<PAGE> 8
The decrease in second quarter net revenues of ENVIRON is due in part to an
overall slowdown in the environmental consulting industry. The Company believes
this is due in part to the political uncertainties in this election year.
Direct costs decreased 21.1% to $26.4 million from $33.5 million last year
and declined as a percentage of net revenues to 66.7% from 69.9%. In the Life
Sciences Group, direct costs decreased as a percentage of net revenues to 65.3%
from 70.4%. This decrease is principally due to the divestiture of the Company's
toxicology business. In the second quarter of 1995, the worldwide toxicology
business reported direct costs of $8.6 million or 73.6% of net revenues. On an
ongoing basis, Life Sciences' second quarter direct costs of 65.3% compare
favorably to 68.8% last year due to higher labor utilization, the mix of
business within the group, and a focused effort by all business segments to
control costs. At ENVIRON, direct costs as a percentage of net revenues
increased to 70.1% from 68.7% last year. This increase is attributable to lower
consultant utilization. In the second quarter of 1996, ENVIRON's consultant
utilization of 72% was seven percentage points below the 79% utilization rate of
the same quarter of last year.
Selling, general, and administrative ("SG&A") expenses decreased 10.9% to
$11.1 million from $12.5 million in 1995. As a percentage of net revenues, SG&A
expenses increased to 28.1% from 26.1% last year. After elimination of the SG&A
expenses associated with the divested toxicology business last year ($3.0
million), SG&A expenses increased approximately 16.8% or $1.6 million in the
second quarter this year as compared to the second quarter of 1995. SG&A
expenses from CCCR and the Leicester Phase I laboratory (both acquired in the
second half of 1995) account for $0.7 million of the increase. In addition the
Company has incurred incremental rent expense of $0.3 million associated with
the sale-leaseback of its real estate in Austin, Texas, (this increase is
partially offset by lower interest expense). The remaining increase is primarily
attributable to the recent investment in Pharmaco's business development and
marketing organization ($0.3 million), certain litigation costs ($0.3 million)
associated with ENVIRON's air quality practice, and acceleration of deferred
compensation expense ($0.2 million) associated with previously issued restricted
stock. The acceleration was attributable to an increase in the Company's stock
price to above $10.00.
Operating income increased $0.1 million (7.5%) to $2.0 million in the
second quarter of 1996 as compared to $1.9 million for the second quarter of
1995. As a percentage of net revenues, the second quarter operating income
increased to 5.2% in 1996 compared to 4.0% in 1995.
The Company reported a break-even net interest income/expense in the second
quarter compared to net interest expense of $0.8 million last year. In the
second quarter this year, the Company had approximately $7.0 million of cash
invested with no long-term bank debt. At the end of the second quarter last
year, the Company had $37.9 million of debt outstanding at an annual interest
rate of approximately 9.25%.
SIX MONTHS ENDED JUNE 30, 1996 VERSUS SIX MONTHS ENDED JUNE 30, 1995
Total net revenues decreased 17.8% to $77.0 million for the first six
months of 1996 from $93.7 million last year, with the decrease in revenues being
primarily attributable to the sale of the Company's toxicology operations. The
Company's Life Sciences Group generated total net revenues of $53.6 million,
down $14.9 million or 21.8% from the same six-month period a year ago. The first
six-months' net revenues from ENVIRON were $23.4 million, compared with $25.1
million in 1995, a decrease of $1.7 million or 6.9%.
After eliminating the net revenues from the Company's former toxicology
operations ($22.4 million in the first six months of last year), total net
revenues increased 8.1% as compared to 1995.
Net revenues from the ongoing Life Sciences Group were $53.6 million, an
increase of 16.9% from 1995. The growth in this business segment was due in part
to an increase in the size and scope of contracts in the worldwide clinical
development and biostatistics business. Net revenues from the Company's
worldwide clinical development and biostatistics business increased 10.8% to
$31.9 million. The demand for the Company's analytical chemistry services
continues to be strong at the Richmond, Virginia, laboratory. Net revenues in
Richmond increased 23.7% to $8.2 million as compared to the $6.6 million in
revenues for the same period last year. The acquisitions of CCCR and the Phase I
facility in Leicester, England, both completed in the second half of 1995,
contributed net revenues of $4.9 million in the first six months of 1996.
8
<PAGE> 9
The 6.9% decrease in net revenues of ENVIRON is due in part to an overall
slowdown in the environmental consulting industry, which the Company believes is
due in part to the political uncertainties in this election year.
Direct costs decreased 22.2% to $51.5 million from $66.2 million last year
and declined as a percentage of net revenues to 66.9% from 70.7%. In the Life
Sciences Group, direct costs decreased as a percentage of net revenues to 64.6%
from 71.2%. This decrease is principally due to the sale of the Company's
toxicology business in the fourth quarter last year. In the first six months of
1995, the worldwide toxicology business reported direct costs of $16.8 million
or 74.9% of net revenues. On an ongoing basis, Life Sciences' direct costs of
64.6% compare favorably to 69.4% last year due to higher labor utilization, the
mix of business within the group, and a focused effort to reduce costs
throughout the entire Company. ENVIRON's direct costs as a percentage of net
revenues increased to 72.2% from 69.3% last year. This increase is attributable
to lower consultant utilization. In the first six months, ENVIRON's consultant
utilization of 72% was seven percentage points below the 79% utilization rate
last year.
SG&A expenses decreased 10.7% to $21.5 million from $24.1 million in 1995.
As a percentage of net revenues, SG&A expenses increased to 27.9% from 25.7%
last year. After factoring out last year's SG&A expenses associated with the
divested toxicology business ($6.0 million), SG&A expenses increased
approximately 18.9% or $3.4 million in the first half of this year as compared
to the same period last year. SG&A expenses from CCCR and the Leicester Phase I
laboratory account for $1.5 million of the increase. In addition, the Company
has incurred incremental rent expense of $0.6 million associated with the sale-
leaseback of its real estate in Austin, Texas. The remaining increase is
primarily attributable to the recent investment in Pharmaco's business
development and marketing organization, certain litigation costs associated with
ENVIRON's air quality practice and acceleration of deferred compensation expense
associated with previously issued restricted stock.
Operating income increased $0.6 million (18.1%) to $4.0 million in the
first half of 1996 as compared to $3.4 million last year. As a percentage of net
revenues, the six-months' operating income increased to 5.2% in 1996 compared to
3.6% in 1995.
The Company reported net interest income of $0.2 million in the first six
months compared to net interest expense of $1.5 million last year. In the first
six months this year, the Company had approximately $7.0 million of cash
invested with no long-term bank debt. During the first six months last year, the
Company had, on average, $37 million of debt outstanding.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 1996, the Company experienced a net
decrease in cash from operating activities of $7.3 million, primarily due to
increases in accounts receivable and decreases in accounts payable and accrued
expenses, offset by increases in advance billings. A portion of the decrease was
attributable to payments made in 1996 of 1995 bonuses and of severance and
transaction costs accrued in 1995 related to the sale of the Company's
toxicology business. Capital expenditures in the first six months of 1996
totaled $2.7 million. The Company experienced an increase in cash from financing
activities of $2.6 million, primarily attributable to proceeds received from the
exercise of stock options. Most of such proceeds were received from employees of
the Company's former toxicology operations, who generally had until February
1996 to exercise stock options which were exercisable at the date those
operations were sold in November 1995.
The Company has a $20.0 million secured revolving line-of-credit facility
which accrues interest on amounts borrowed at a floating rate currently equal to
prime plus 1.0% per year. The rate is adjusted on a quarterly basis and is
subject to reduction if certain covenants related to financial performance are
met. The unused portion of the loan is available to provide working capital and
for general corporate purposes. As of June 30, 1996, the Company has $3.8
million of cash and cash equivalents on hand and has no amounts outstanding
under its line of credit. The line-of-credit loan agreement provides an
additional $5.0 million for letters of credit to back guarantees or insurance
policies. At June 30, 1996, open letters of credit were issued for $0.7 million.
9
<PAGE> 10
As of June 30, 1996, the Company has $1.1 million available under a master
lease agreement to provide a means to lease rather than acquire certain
equipment for use in the United States without drawing on its principal credit
facility.
The Company believes that cash flow generated by its own operating
activities together with its current borrowing capacity is adequate to finance
its world-wide operations and normal growth of its business. Assuming the merger
is consummated, the Company further believes that its cash flow combined with
the cash available at and generated by PPD is sufficient to finance the
world-wide combined operations of the two entities being merged through 1996.
Further growth of the merged companies' businesses may also be funded through
additional borrowings, the sale of non-strategic assets or through issuance of
shares of common stock by the merged Company.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS -- NONE
ITEM 2. CHANGES IN SECURITIES -- NOT APPLICABLE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES -- NOT APPLICABLE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The 1996 Annual Meeting of Shareholders of the Company was
held on June 20, 1996.
(b) At the Annual Meeting, three directors of the Company were
reelected. Dr. Kenneth H. Harper, Lawrence C. McQuade, and Dr.
Thomas J. Russell were each elected to serve a term ending at
the Annual Meeting of Stockholders to be held in 1997 and
until his successor is elected and qualified. The other
members of the Board of Directors, each of whose terms of
office as director continued after the meeting are as follows:
Kirby L. Cramer, Steven A. Fleckman, Frederick Frank, Frank E.
Loy.
<TABLE>
<CAPTION>
FOR AGAINST
---------- -------
<S> <C> <C>
Dr. Kenneth H. Harper.................................. 24,776,451 236,750
Lawrence C. McQuade.................................... 24,936,251 76,950
Dr. Thomas J. Russell.................................. 24,926,451 86,750
</TABLE>
(c) At the Annual Meeting, the following proposal also was voted
upon:
The stockholders voted on a proposal to amend the Company's
Certificate of Incorporation to provide for the annual
election of Directors. The proposal was approved by the
following vote:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
---------- ------ -------
<S> <C> <C>
19,772,480 77,163 101,850
</TABLE>
(d) Not applicable.
ITEM 5. OTHER INFORMATION -- NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11 Computation of Earnings Per Share
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K -- None
11
<PAGE> 12
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.
APPLIED BIOSCIENCE INTERNATIONAL INC.
(Registrant)
By: /s/ KENNETH H. HARPER
------------------------------------
President, Chief Executive Officer
and Chairman of the Board
By: /s/ CAROL P. HANNA
------------------------------------
Controller
(Chief Accounting Officer)
Date: August 9, 1996
12
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER NUMBER
- ------ ----------
<C> <S> <C>
11 Computation of Earnings Per Share......................................... 14
27 Financial Data Schedule................................................... 15
</TABLE>
13
<PAGE> 1
EXHIBIT NO. 11
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED, SIX MONTHS ENDED,
JUNE 30, JUNE 30,
------------------- -------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER COMMON SHARE:
Net income....................................... $ 1,217 $ 775 $ 2,444 $ 1,211
======= ======= ======= =======
Weighted average number of shares of common stock
outstanding during the period................. 29,540 28,159 29,405 28,166
Common stock equivalents assuming exercise of
stock options(a).............................. 601 266 530 263
------- ------- ------- -------
Weighted average common and common equivalent
shares outstanding............................ 30,141 28,425 29,935 28,429
======= ======= ======= =======
Primary earnings per share....................... $ 0.04 $ 0.03 $ 0.08 $ 0.04
======= ======= ======= =======
FULLY DILUTED EARNINGS PER COMMON SHARE:
Net income....................................... $ 1,217 $ 775 $ 2,444 $ 1,211
======= ======= ======= =======
Weighted average number of shares of common stock
outstanding during the period................. 29,540 28,159 29,405 28,166
Common stock equivalents assuming exercise of
stock options(a).............................. 736 266 781 263
------- ------- ------- -------
Weighted average common and common equivalent
shares outstanding............................ 30,276 28,425 30,186 28,429
======= ======= ======= =======
Fully diluted earnings per share................. $ 0.04 $ 0.03 $ 0.08 $ 0.04
======= ======= ======= =======
</TABLE>
- ---------------
(a) In the calculation of common stock equivalents, stock options are assumed to
be exercised at the beginning of the period. The proceeds from the options
exercised are assumed to be used to purchase common stock at (i) the average
market price during the period for primary earnings per share and (ii) the
higher of the average or last market price during the period for fully
diluted earnings per share.
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Applied
Bioscience International Inc. Consolidated Condensed Balance Sheet and Statement
of Operations included within this Form 10-Q and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 3,840
<SECURITIES> 0
<RECEIVABLES> 59,369
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 73,924
<PP&E> 20,382
<DEPRECIATION> 0
<TOTAL-ASSETS> 111,603
<CURRENT-LIABILITIES> 34,635
<BONDS> 435
0
0
<COMMON> 303
<OTHER-SE> 73,413
<TOTAL-LIABILITY-AND-EQUITY> 111,603
<SALES> 0
<TOTAL-REVENUES> 39,622
<CGS> 0
<TOTAL-COSTS> 37,574
<OTHER-EXPENSES> 74
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 66
<INCOME-PRETAX> 2,022
<INCOME-TAX> 805
<INCOME-CONTINUING> 1,217
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,217
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.04
</TABLE>
