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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 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 number 000-21873
BIOSITE DIAGNOSTICS INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 33-0288606
(State or other jurisdiction or (I.R.S. Employer
incorporation or organization) Identification No.)
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), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
The number of shares of the Registrant's Common Stock, $0.01 par value,
outstanding at
July 31, 1997 was 12,795,788
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BIOSITE DIAGNOSTICS INCORPORATED
FORM 10-Q/A
Amendment No. 1
INDEX
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Balance Sheets as of June 30, 1997 (Unaudited)
and December 31, 1996..................................................................... 1
Condensed Statements of Income (Unaudited) for the three months and six months
ended June 30, 1997 and 1996................................................................ 2
Condensed Statements of Cash Flows (Unaudited) for the six
months ended June 30, 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>
JUNE 30, DECEMBER 31,
1997 1996
------------ ------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,605,888 $ 1,609,861
Marketable securities, available-for-sale 33,809,653 8,305,663
Accounts receivable 5,599,326 4,608,072
Receivable from stockholder 1,077,404 869,535
Inventories 1,954,772 1,732,180
Other current assets 2,298,769 1,864,298
------------ ------------
Total current assets 51,345,812 18,989,609
Property, equipment and leasehold improvements, net 6,363,750 4,140,163
Patents and license rights, net 4,031,417 4,292,277
Other assets 1,110,277 2,666,569
------------ ------------
$ 62,851,256 $ 30,088,618
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,123,203 $ 967,974
Accrued salaries and other 1,051,797 1,950,800
Accrued contract payable 630,283 751,544
Current portion of long-term obligations 1,366,155 1,012,073
------------ ------------
Total current liabilities 4,171,438 4,682,391
Long-term obligations 3,233,590 3,252,944
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 shares and 8,328,847 shares
authorized at June 30, 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 June 30, 1997 and December 31, 1996, respectively; 12,793,277
and 1,473,573 shares issued and outstanding at June 30, 1997 and December
31, 1996, respectively
127,933 14,736
Additional paid-in capital 53,339,879 22,094,711
Unrealized net loss on marketable securities, net of related tax effect (17,248) (2,754)
Deferred compensation (372,921) (427,345)
Retained earnings 2,368,585 390,647
------------ ------------
Total stockholders' equity 55,446,228 22,153,283
------------ ------------
$ 62,851,256 $ 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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------- -----------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 7,796,869 $ 6,770,933 $ 15,329,937 $ 12,977,597
Cost of sales 1,613,005 1,397,796 3,237,251 2,768,495
------------ ------------ ------------ ------------
Gross profit 6,183,864 5,373,137 12,092,686 10,209,102
Operating Expenses:
Research and development 2,681,485 1,904,353 5,419,431 3,970,739
Selling, general and administrative 2,768,275 2,016,312 5,071,494 3,929,676
Settlement of patent matters -- -- -- 2,368,282
------------ ------------ ------------ ------------
5,449,760 3,920,665 10,490,925 10,268,697
------------ ------------ ------------ ------------
Operating income (loss) 734,104 1,452,472 1,601,761 (59,595)
Other income:
Interest and other income 554,335 199,648 878,150 387,009
Contract revenue-related party 244,020 242,301 580,027 554,530
------------ ------------ ------------ ------------
Income before provision for income taxes 1,532,459 1,894,421 3,059,938 881,944
Provision for income taxes 547,000 697,553 1,082,000 324,744
------------ ------------ ------------ ------------
Net income $ 985,459 $ 1,196,868 $ 1,977,938 $ 557,200
============ ============ ============ ============
Net income per share $ 0.07 $ 0.11 $ 0.16 $ 0.05
============ ============ ============ ============
Shares used in calculating per share amounts 13,439,000 10,974,000 12,633,000 10,699,000
============ ============ ============ ============
</TABLE>
See accompanying notes.
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BIOSITE DIAGNOSTICS INCORPORATED
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
------------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net cash provided by operating activities $ 1,131,505 $ 535,542
INVESTING ACTIVITIES
Proceeds from sales and maturities of marketable securities
15,944,012 7,128,514
Purchase of marketable securities (41,472,157) (5,221,882)
Purchase of property, equipment and leasehold improvements
(3,215,591) (965,445)
Patents, license rights, deposits and other assets 998,453 309,607
------------ ------------
Net cash provided by (used in) investing activities (27,745,283) 1,250,794
FINANCING ACTIVITIES
Proceeds from issuance of financing obligations 2,098,435 965,776
Principal payments under financing obligations (763,707) (645,820)
Proceeds from issuance of stock, net 30,275,077 58,061
------------ ------------
Net cash provided by financing activities 31,609,805 378,017
------------ ------------
Increase in cash and cash equivalents 4,996,027 2,164,353
Cash and cash equivalents at beginning of period 1,609,861 2,276,403
------------ ------------
Cash and cash equivalents at end of period $ 6,605,888 $ 4,440,756
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ 114,636 $ 139,560
============ ============
Income taxes paid $ 496,850 $ 77,600
============ ============
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 (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 contained in 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 June
30, 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 PER SHARE
Net income 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 Company's 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 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
per share also includes 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 dual 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 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 per share of $0.08 and $0.84 for the quarters
ended June 30, 1997 and 1996, respectively, and a calculation of basic net
income per share of $0.20 and $0.40 for the six months ended June 30, 1997 and
1996, respectively. The Company has not yet determined what the impact of
Statement No. 128 will be on the calculation of diluted net income per share.
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BIOSITE DIAGNOSTICS INCORPORATED
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. BALANCE SHEET INFORMATION
Inventories consist of the following:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
Raw materials $ 532,909 $ 441,719
Work in process 1,161,463 1,125,608
Finished goods 260,400 164,853
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$ 1,954,772 $ 1,732,180
============ ============
</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 certificate of
incorporation of the Company was amended to provide that the authorized number
of shares of common and preferred stock issuable by the Company was 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 June 30, 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 $ 1,184,345 $ -- $ -- $ 1,184,345
Money Market Fund 372,865 -- -- 372,865
Commercial Paper 5,048,678 -- -- 5,048,678
------------ ------------ ------------ ------------
6,605,888 -- -- 6,605,888
Marketable securities:
Certificates of Deposit 1,093,587 -- (391) 1,093,196
U.S. Treasury Securities 3,006,542 -- -- 3,006,542
Corporate Debt Securities 29,738,271 -- (28,356) 29,709,915
------------ ------------ ------------ ------------
33,838,400 -- (28,747) 33,809,653
------------ ------------ ------------ ------------
Total cash, cash equivalents and marketable securities $ 40,444,288 $ -- $ (28,747) $ 40,415,541
============ ============ ============ ============
</TABLE>
The amortized cost and estimated fair value of available-for-sale
securities at June 30, 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 $16,289,860 $16,267,744
Due after one year through two years 17,548,540 17,541,909
----------- -----------
$33,838,400 $33,809,653
=========== ===========
</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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