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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 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 number 000-21873
BIOSITE DIAGNOSTICS INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 33-0288606
[State or other jurisdiction [I.R.S. Employer Identification No.]
of incorporation or organization]
11030 Roselle Street
San Diego, California 92121
[Address of principal executive offices] [Zip Code]
Registrant's telephone number, including area code: (619) 455-4808
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) Yes X No ___ and (2) has been
subject to such filing requirements for the past 90 days. Yes ___ No X
The number of shares of the Registrant's Common Stock, $0.01 par value,
outstanding at May 1, 1997 was 12,736,995
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BIOSITE DIAGNOSTICS INCORPORATED
FORM 10-Q/A
Amendment No. 1
INDEX
<TABLE>
<CAPTION>
PAGE
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PART I. FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements:
Condensed Balance Sheets as of March 31, 1997 (Unaudited) and
December 31, 1996 .......................................... 1
Condensed Statements of Income (Unaudited) for the three months
ended March 31, 1997 and 1996 ............................... 2
Condensed Statements of Cash Flows (Unaudited) for the three
months ended March 31, 1997 and 1996 ........................ 3
Notes to Condensed Financial Statements (Unaudited) ........... 4
Signatures .............................................................. 6
</TABLE>
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIOSITE DIAGNOSTICS INCORPORATED
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,239,426 $ 1,609,861
Marketable securities, available-for-sale 31,613,890 8,305,663
Accounts receivable 4,266,890 4,608,072
Receivable from stockholder 1,335,524 869,535
Inventories 1,884,549 1,732,180
Other current assets 2,463,511 1,864,298
------------ ------------
Total current assets 49,803,790 18,989,609
Property, equipment and leasehold improvements, net 4,751,756 4,140,163
Patents and license rights, net 4,179,674 4,292,277
Other assets 2,241,306 2,666,569
------------ ------------
$ 60,976,526 $ 30,088,618
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,127,667 $ 967,974
Accrued salaries and other 916,093 1,950,800
Accrued contract payable 751,544 751,544
Current portion of long-term obligations 1,397,912 1,012,073
------------ ------------
Total current liabilities 4,193,216 4,682,391
Long-term obligations 2,671,320 3,252,944
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 shares
and 8,328,847 shares authorized at March 31,
1997 and December 31, 1996, respectively;
8,328,847 shares issued and outstanding at
December 31, 1996 -- 83,288
Common stock, $.01 par value, 25,000,000 shares and
12,000,000 shares authorized at March 31, 1997
and December 31, 1996, respectively; 12,731,660,
and 1,473,573 shares issued and outstanding at
March 31, 1997 and December 31, 1996,
respectively 127,317 14,736
Additional paid-in capital 53,086,734 22,094,711
Unrealized net loss on marketable securities, net
of related tax effect of $(54,765) and $(1,837)
at March 31, 1997 and December 31, 1996,
respectively (84,903) (2,754)
Deferred compensation (400,284) (427,345)
Retained earnings 1,383,126 390,647
------------ ------------
Total stockholders' equity 54,111,990 22,153,283
------------ ------------
$ 60,976,526 $ 30,088,618
============ ============
</TABLE>
Note: 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.
See accompanying notes.
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BIOSITE DIAGNOSTICS INCORPORATED
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Net sales $ 7,533,068 $ 6,206,664
Cost of sales 1,624,246 1,370,699
------------ ------------
Gross profit 5,908,822 4,835,965
Operating Expenses:
Research and development 2,737,946 2,066,386
Selling, general and administrative 2,303,220 1,913,364
Settlement of patent matters -- 2,368,282
------------ ------------
5,041,166 6,348,032
------------ ------------
Operating income (loss) 867,656 (1,512,067)
Other income:
Interest and other income 323,816 187,361
Contract revenue-related party 336,007 312,229
------------ ------------
Income (loss) before benefit (provision) for income taxes
1,527,479 (1,012,477)
Benefit (provision) for income taxes (535,000) 372,809
------------ ------------
Net income (loss) $ 992,479 $ (639,668)
============ ============
Net income (loss) per share $ 0.08 $ (0.06)
============ ============
Shares used in calculating per share amounts 11,886,000 10,423,000
============ ============
</TABLE>
See accompanying notes.
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BIOSITE DIAGNOSTICS INCORPORATED
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net cash provided by (used in) operating activities $ 232,548 $ (1,485,505)
INVESTING ACTIVITIES
Proceeds from sales and maturities of marketable securities 3,593,626 4,227,313
Purchase of marketable securities (27,038,767) (4,008,166)
Purchase of property, equipment and leasehold improvements (1,119,797) (559,576)
Patents, license rights, deposits and other assets 136,424 126,769
------------ ------------
Net cash used in investing activities (24,428,514) (213,660)
FINANCING ACTIVITIES
Proceeds from issuance of financing obligations 1,169,503 618,556
Principal payments under financing obligations (365,288) (282,667)
Proceeds from issuance of stock, net 30,021,316 14,073
------------ ------------
Net cash provided by financing activities 30,825,531 349,962
------------ ------------
Increase (decrease) in cash and cash equivalents 6,629,565 (1,349,203)
Cash and cash equivalents at beginning of period 1,609,861 2,276,403
------------ ------------
Cash and cash equivalents at end of period $ 8,239,426 $ 927,200
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Interest paid $ 83,493 $ 89,245
============ ============
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
Accrued liability for license rights acquired $ -- $ 3,500,000
============ ============
</TABLE>
See accompanying notes.
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BIOSITE DIAGNOSTICS INCORPORATED
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997 (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q 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. The accompanying financial statements reflect all
adjustments (consisting of normal recurring accruals) which are, in the opinion
of management, considered necessary for a fair presentation of the results for
the interim periods presented. Interim results are not necessarily indicative of
results for a full year. The Company has experienced significant quarterly
fluctuations in operating results and it expects that these fluctuations in
sales, expenses and net income or losses will continue.
The financial statements and related disclosures have been prepared
with the presumption that users of the interim financial information have read
or have access to the audited financial statements for the preceding fiscal
year. Accordingly, these financial statements should be read in conjunction with
the audited financial statements and the related notes thereto incorporated by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
MARKETABLE SECURITIES
Effective January 1, 1994 the Company adopted Financial Accounting
Standards Board ("FASB") Statement No. 115, "Accounting for Certain Investments
in Debt and Equity Securities", which requires that investments in equity
securities that have readily determinable fair values and investments in debt
securities be classified in three categories: held-to-maturity, trading and
available-for-sale. The Company's accounting policy for and classification of
investments are consistent with those of 1996. Based on the nature of the assets
held by the Company and management's investment strategy, the Company's
investments have been classified as available-for-sale. Management determines
the appropriate classification of debt securities at the time of purchase and
reevaluates such designation as of each balance sheet date.
Securities classified as available-for-sale are carried at estimated
fair value, as determined by quoted market prices, with unrealized gains and
losses, net of tax, reported in a separate component of stockholders' equity. At
March 31, 1997, the Company had no investments that were classified as trading
or held-to-maturity as defined by the Statement.
The amortized cost of debt securities classified as available-for-sale
is adjusted for amortization of premiums and accretion of discounts to maturity.
Such amortization is included in interest income. Realized gains and losses are
included in interest income. The cost of securities sold is based on the
specific identification method. Interest on securities classified as
available-for-sale is included in interest income.
2. NET INCOME (LOSS) PER SHARE
Net income (loss) per share is computed using the weighted average
number of common shares and common equivalent shares outstanding during each
period. Common equivalent shares are computed using the treasury stock method
and consist of common stock which may be issuable upon exercise of outstanding
common stock options, when dilutive. Pursuant to the requirements of the
Securities and Exchange Commission, common stock issued by the Company during
the twelve months immediately preceding the initial public offering, plus the
number of common equivalent shares which became issuable during the same period
pursuant to the grant of stock options, have been included in the calculation of
the shares used in computing net income (loss) per share as if these shares were
outstanding for all periods presented using the treasury stock method. In
addition, the calculation of the shares used in computing net income (loss) per
share also includes the convertible preferred stock which converted into
8,328,847 shares of common stock and an outstanding $1.0 million convertible
debenture and related accrued interest which converted into 92,575 common shares
(based on the initial public offering price of $12.00 per share) upon the
completion of the initial public offering, as if they were converted into common
stock as of the original dates of issuance.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per Share
("Statement No. 128"). Statement No. 128 applies to entities with publicly held
common stock or potential common stock and is effective for financial statements
issued for periods ending after December 15, 1997. Statement No. 128 replaces
APB Opinion 15, Earnings per Share ("EPS"). Statement No. 128 requires duel
presentation of basic and diluted earnings per share by entities with complex
capital structures. Basic EPS includes no dilution and is computed by dividing
net income (loss) by the weighted average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution of securities that
could share in the earnings of the entity. The Company plans to adopt Statement
No. 128 beginning with its financial statements for the quarter and year ended
December 31, 1997. The impact of Statement No. 128 is expected to result in the
calculation of basic net income (loss) per share of $0.15 and $(0.46) for the
quarters ended March 31, 1997 and 1996, respectively. The Company has not yet
determined what the impact of Statement No. 128 will be on the calculation of
fully diluted net income (loss) per share.
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BIOSITE DIAGNOSTICS INCORPORATED
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997 (UNAUDITED)
3. BALANCE SHEET INFORMATION
Inventories consist of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
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<S> <C> <C>
Raw materials $ 489,130 $ 441,719
Work in process 1,182,045 1,125,608
Finished goods 213,374 164,853
---------- ----------
$1,884,549 $1,732,180
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</TABLE>
4. INITIAL PUBLIC OFFERING
In February 1997, the Company completed its initial public offering of 2,760,000
shares of common stock (including an exercised underwriters' over-allotment
option for 360,000 shares) at a price of $12.00 per share, providing the Company
with net proceeds of approximately $29.8 million, after deducting underwriting
discounts and commissions of approximately $2.3 million and offering costs of
approximately $973,000. Additionally, all outstanding shares of preferred stock
were converted into 8,328,847 shares of common stock and an outstanding $1.0
million convertible debenture and related accrued interest was converted into
92,575 common shares (based on the initial public offering price of $12.00 per
share) upon the completion of the initial public offering. Upon completion of
the initial public offering, the authorized number of shares of common and
preferred stock issuable by the Company was amended to 25,000,000 shares of
common stock and 5,000,000 shares of preferred stock.
5. CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES
The following is a summary of cash, cash equivalents and available-for-sale
securities by balance sheet classification at March 31, 1997:
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR MARKET
COST GAINS LOSSES VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash and cash equivalents:
Cash $ 992,368 $ -- $ -- $ 992,368
Money Market Fund 1,497,058 -- -- 1,497,058
Commercial Paper 5,750,000 -- -- 5,750,000
------------ ------------ ------------ ------------
8,239,426 -- -- 8,239,426
Marketable Securities:
Certificate of Deposit 93,809 -- (616) 93,193
Commercial Paper 397,360 -- (920) 396,440
Corporate Debt Securities 31,264,225 2,614 (142,582) 31,124,257
------------ ------------ ------------ ------------
31,755,394 2,614 (144,118) 31,613,890
------------ ------------ ------------ ------------
Total cash, cash equivalents and marketable
securities $ 39,994,820 $ 2,614 $ (144,118) $ 39,853,316
============ ============ ============ ============
</TABLE>
The amortized cost and estimated fair value of available-for-sale
securities at March 31, 1997, by contractual maturity, are as follows:
<TABLE>
<CAPTION>
AMORTIZED ESTIMATED
COST FAIR VALUE
----------- -----------
<S> <C> <C>
Marketable Securities:
Due in one year or less $15,014,406 $14,963,619
Due after one year through two years 16,740,988 16,650,271
----------- -----------
$31,755,394 $31,613,890
=========== ===========
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Amendment to report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: October 9, 1997 BIOSITE DIAGNOSTICS INCORPORATED
By: /s/ CHRISTOPHER J. TWOMEY
-------------------------------------
Christopher J. Twomey
Vice President, Finance and Chief
Financial Officer(Principal Financial
and Accounting Officer)
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