<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1997
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Commission file number 0-17714
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BIOPOOL INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
Delaware 58-1729436
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6025 Nicolle Street, Ventura, (805) 654-0643
California 93003 (Registrant's telephone
(Address of principal executive offices) number including
area code)
-------------------------------------
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 proceeding 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 / /
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
Outstanding at June 30, 1997, Common Stock, $.01 par value per share,
8,621,248 shares.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
<TABLE>
BIOPOOL INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
(Unaudited)
- -----------------------------------------------------------------------
(in thousands except share data)
<S> <C> <C>
ASSETS
Current assets
Cash $ 1,174 $ 2,019
Accounts receivable, net 2,500 1,560
Inventories 4,214 2,027
Prepaid expenses and other current
assets 291 289
- -----------------------------------------------------------------------
Total current assets 8,179 5,895
Property and equipment 6,584 3,661
Less accumulated depreciation (2,140) (2,018)
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Property and equipment, net 4,444 1,643
Deposit on acquisition -- 4,500
Other assets 1,158 1,085
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TOTAL ASSETS $ 13,781 $ 13,123
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</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
BIOPOOL INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
(Unaudited)
- -----------------------------------------------------------------------
(in thousands except share data)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and other payables $ 1,625 $ 988
Debt 923 972
- -----------------------------------------------------------------------
Total current liabilities 2,548 1,960
Long-term debt, net 2,343 2,811
Stockholders' equity:
Common stock, $.01 par value, 50,000,000
shares authorized; 8,621,248 and 8,570,380
shares issued and outstanding in 1997 and
1996, respectively 86 86
Other stockholders' equity 8,804 8,266
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Total stockholders' equity 8,890 8,352
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 13,781 $ 13,123
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</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
BIOPOOL INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Ending Six Months Ending
June 30, June 30,
1997 1996 1997 1996
- ----------------------------------------------------------------------
(in thousands except share data)
<S> <C> <C> <C> <C>
Sales $ 4,243 $ 2,089 $ 8,346 $ 3,867
Costs and expenses
Cost of sales 2,535 1,008 5,020 1,911
Selling, general, adminis-
trative and other 1,176 662 2,309 1,229
Interest expense 75 17 163 36
- ----------------------------------------------------------------------
Income before taxes 457 402 854 691
Income tax (expense) benefit 107 16 194 5
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Net income $ 350 $ 386 $ 660 $ 686
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Earnings per share:
Primary $ 0.04 $ 0.05 $ 0.07 $ 0.09
Fully diluted $ 0.04 $ 0.04 $ 0.07 $ 0.08
</TABLE>
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ending June 30,
1997 1996
- -----------------------------------------------------------------------
<S> <C> <C>
Operating activities $ 260 $ 560
Investing activities
Acquisition of BCA (4,729) --
Other 4,263 (118)
Financing activities (435) (48)
Effect of exchange rates (204) 24
- -----------------------------------------------------------------------
Net increase (decrease) in cash $ (845) $ 418
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</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BIOPOOL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-QSB and Article 10 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 (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the six-month period ended June 30, 1997, are not
necessarily indicative of the results that may be expected for the
year ended December 31, 1997. For further information, refer to
the consolidated financial statements and footnotes thereto
included in the Company's annual report on Form 10-KSB for the
year ended December 31, 1996.
The balance sheet at December 31, 1996, has been derived from the
audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
<TABLE>
2. Inventories
<CAPTION>
June 30, December 31,
1997 1996
-----------------------
(in thousands)
<S> <C> <C>
Raw materials $ 1,150 $ 448
Work in process 1,686 700
Finished products 1,378 879
-----------------------
$ 4,214 $ 2,027
</TABLE>
3. Acquisition
On January 1, 1997, the Company acquired certain assets of the
Blood Group Serology Division of Organon Teknika Corporation
located in West Chester, Pennsylvania, for $4,500,000 in cash.
Another $229,000 of costs associated with the acquisition were
capitalized in the first half of 1997. The Company funded the
acquisition, in part, from the privately placed sales of 500,000
shares of its Common Stock to a group of accredited investors and,
in part, from the proceeds of a $3.5 million credit facility. The
acquisition was accounted for as a purchase.
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<TABLE>
The following unaudited data was prepared for analytical purposes
only. Proforma consolidated operating results give effect as if
the acquisition occurred January 1, 1996.
<CAPTION>
Three Months Ended June 30,
1997 1996
---------------------------
(in thousands except share data)
<S> <C> <C>
Net sales $ 8,346 $ 7,847
Net income 660 811
Earnings per share 0.07 0.10
</TABLE>
4. Earnings per Share
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be
adopted on December 31, 1997. At that time, the Company will be
required to change the method currently used to compute earnings
per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the
dilutive effect of stock options will be excluded. The impact is
expected to result in an increase in primary earnings per share
for the first six months ended June 30, 1997, of $0.01 per share,
with no change to the 1996 period. The impact of Statement 128
on the calculation of fully diluted earnings per share for these
quarters is not expected to be material.
<PAGE>
BIOPOOL INTERNATIONAL, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION &
RESULTS OF OPERATIONS
Acquisition of Blood Group Serology
On January 1, 1997, the Company purchased certain assets of the Blood
Group Serology Division (referred to as "BCA") of Organon Teknika
Corporation for $4,500,000 in cash. This acquisition will have a
significant impact on the Company's future operating results and
financial condition. This acquisition has approximately doubled the
number of employees of the Company and substantially increased the
Company's sales.
Results of Operations
Sales increased by $2.2 million, or 103%, to $4.2 million for the
three-month period and increased by $4.5 million, or 116%, to $8.3
million for the six-month period ended June 30, 1997, compared with the
corresponding periods of 1996. While the majority of the increases
were due to the acquisition of BCA, sales from the core hemostasis
business grew approximately 8% for the six-month period as a result of
the addition of a direct sales force and new distribution agreements.
Costs of sales increased $1.5 million and $3.1 million for the 1997
periods compared with the respective 1996 periods. As a percentage of
sales, year-to-date cost of sales increased to 60% in 1997 compared
with 49% in 1996. These increases were due entirely to the acquisition
of BCA, which has excess capacity at this time. Management intends to
capitalize on this opportunity by attempting to grow market share of
existing products and adding new, profitable product lines.
Selling, general, administrative and other expenses increased by 78
percent and 88 percent for the second quarter and first six months of
1997, respectively, compared with the same periods in 1996. The
majority of these increases were due to the BCA acquisition. The
Company also added management positions during 1996 in anticipation of
ongoing internal growth and acquisition activities. Furthermore,
significant transitional costs associated with the BCA acquisition and
costs related to the installation of new computer hardware and software
were incurred in the current periods. These transitional costs are
expected to end during the third quarter of this year.
Interest expense for the first half of 1997 increased $127,000 over the
prior year period as a result of bank financing for the BCA
acquisition.
Income tax expense for the first six months of 1997 includes a benefit
related to utilization of domestic NOL carryforwards. It is
anticipated that NOL benefits will end later in 1997, which will have
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the effect of decreasing future income. Income tax expense for the
1996 periods was significantly lower than in 1997 due to the
recognition of deferred tax benefits.
Net income for the three- and six-month periods was down slightly from
the corresponding 1996 periods as a result of higher income tax
expense.
Earnings dropped by $0.01 per share for each of the first two quarters
of 1997 as a result of: (1) the issuance of 500,000 shares of Common
Stock related to the purchase of BCA, and (2) relatively higher market
prices for the Company's Common Stock, which had the effect of
increasing the number of equivalent shares outstanding.
Financial Condition
The Company's liquidity and capital resources remained strong into the
second quarter of 1997. Working capital as of June 30, 1997, was $5.6
million, with a current ratio of 3.2 to 1. Approximately $600,000 of
the Company's cash was used to establish working capital for the BCA
operations which were purchased without accounts receivables and
payables. The Company's management believes that the current
availability of cash, lines of credit, working capital, and cash
flow from operations are adequate to meet the Company's needs in
the foreseeable future. The Company continues to seek potential
acquisitions and potential sources of capital to finance such
acquisitions, although it has no commitments for either at this time.
<PAGE>
BIOPOOL INTERNATIONAL, INC.
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Registrant's Annual Meeting of Stockholders was held
on May 29, 1997.
(b) The following directors were elected for the ensuing
year at the Annual Meeting:
Michael D. Bick, Ph.D. Douglas L. Ayer
Andrew L. Cerskus, Ph.D. N. Price Paschall
No other director's term of office continued after the
Annual Meeting.
(c) The matters voted upon at the Annual Meeting, the number
of votes cast for, against, or withheld, as well as the
number of abstentions and non-votes as to each
such matter were as follows:
1. The election of Michael D. Bick, Ph.D., as a
director:
6,551,313 votes for; 22,950 votes against; 0 votes
withheld; 0 abstentions; 2,005,006 non-votes.
2. The election of Andrew L. Cerskus, Ph.D., as a
director:
6,553,013 votes for; 21,250 votes against; 0 votes
withheld; 0 abstentions; 2,005,006 non-votes.
3. The election of Douglas L. Ayer as a director:
6,552,613 votes for; 21,650 votes against; 0 votes
withheld; 0 abstentions; 2,005,006 non-votes.
4. The election of N. Price Paschall as a director:
6,552,813 votes for; 21,450 votes against; 0 votes
withheld; 0 abstentions; 2,005,006 non-votes.
5. Amendment of Certificate of Incorporation
authorizing preferred stock:
2,829,344 votes for; 259,759 votes against; 0 votes
withheld; 28,265 abstentions; 5,461,901 non-votes.
There being an insufficient number of shares
represented, the annual meeting of shareholders
<PAGE>
adjourned for a period of thirty days with respect
to the above proposal. The meeting reconvened on
June 27, 1997, at which time the votes cast for,
against, withheld, as well as the number of
abstentions and unvoted shares in regards to this
proposal were as follows:
3,265,599 votes for; 275,009 votes against; 0 votes
withheld; 33,108 abstentions; 5,005,553 non-votes.
There being an insufficient number of shares
represented June 27, 1997, this proposition failed
to pass.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(11) Statements regarding computation of earnings per
share.
(b) Reports on Form 8-K - None.
<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.
Date: August 13, 1997 BIOPOOL INTERNATIONAL, INC.
----------------- -----------------------------
(Registrant)
/s/ Michael D. Bick, Ph.D.
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Michael D. Bick, Ph.D.
Chief Executive Officer and
Chairman of the Board
/s/ Robert K. Foote
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Robert K. Foote
Chief Financial Officer and
Corporate Secretary
<PAGE>
EXHIBIT 11
<TABLE>
BIOPOOL INTERNATIONAL, INC.
Statement Regarding Computation of Per Share Earnings
Six Months Ended June 30,
<CAPTION>
1997 1996
-------------------------
<S> <C> <C>
Primary
Average shares outstanding 8,595,000 7,959,000
Net effect of dilutive stock options
and warrants based on the treasury
stock method using average market
price 543,000 218,000
Total shares 9,138,000 8,177,000
Net income $ 660,000 $ 686,000
Per share amount $ 0.07 $ 0.09
Fully diluted
Average shares outstanding 8,595,000 7,959,000
Net effect of dilutive stock options
and warrants based on the treasury
stock method using the higher of
average or year-end market price 538,000 270,000
Total shares 9,133,000 8,229,000
Net income $ 660,000 $ 686,000
Per share amount $ 0.07 $ 0.08
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,174,000
<SECURITIES> 0
<RECEIVABLES> 2,500,000
<ALLOWANCES> 0
<INVENTORY> 4,214,000
<CURRENT-ASSETS> 8,179,000
<PP&E> 6,584,000
<DEPRECIATION> 2,140,000
<TOTAL-ASSETS> 13,781,000
<CURRENT-LIABILITIES> 2,548,000
<BONDS> 0
0
0
<COMMON> 86,000
<OTHER-SE> 8,804,000
<TOTAL-LIABILITY-AND-EQUITY> 13,781,000
<SALES> 8,346,000
<TOTAL-REVENUES> 8,346,000
<CGS> 5,020,000
<TOTAL-COSTS> 7,329,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 163,000
<INCOME-PRETAX> 854,000
<INCOME-TAX> 194,000
<INCOME-CONTINUING> 660,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 660,000
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
