<PAGE> 1
FORM 10-Q SB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED APRIL 30, 1999 (RECAST AND REISSUED)
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. 33-245-66-A
BIO-LOK INTERNATIONAL INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
DELAWARE 65-0317138
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(State or other jurisdiction of (IRS Employee
incorporation or organization) Identification No.)
312 S. MILITARY TRAIL
DEERFIELD BEACH, FLORIDA 33442
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code (954) 698-9998
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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 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 Registrant's classes of
Common Stock.
CLASS OF COMMON STOCK OUTSTANDING AT APRIL 30, 1999
--------------------- -----------------------------
$.01 par value 5,143,275 shares
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BIO-LOK INTERNATIONAL INC.
Index
Page #
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Income
Three and Six months ended April 30, 1999 and 1998 3
Condensed Consolidated Balance Sheets for
April 30, 1999 and October 31, 1998 4
Condensed Consolidated Statements of Cash Flows
Six months ended April 30, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 7
Results of Operations 7
Financial Condition 8
Part II. Other Information
(a) Exhibit 27 9
(b) Report on Form 8-K 9
Signature
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIO-LOK INTERNATIONAL INC.
Condensed Operating Results
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
April 30, April 30,
---------------------------- -----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
('000's) ('000's) ('000's) ('000's)
<S> <C> <C> <C> <C>
NET SALES $ 375 $ 407 $ 630 $ 772
----------- ----------- ----------- -----------
Cost of Goods Sold 118 127 208 234
GROSS PROFIT 257 280 422 538
Selling 51 88 100 175
Admin. & General Exp 137 151 282 304
----------- ----------- ----------- -----------
188 239 382 479
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 69 41 40 59
Other (Income) & Expense 57 29 86 49
----------- ----------- ----------- -----------
Income before Taxes 12 12 (46) 10
Income Taxes 0 0 0 0
----------- ----------- ----------- -----------
NET INCOME (loss) $ 12 $ 12 $ (46) $ 10
=========== =========== =========== ===========
Net Income Available to
Common Share Owners $ 12 $ 12 $ -- $ 10
=========== =========== =========== ===========
Net Income per Common Share $ -0- $ -- $ -- $ --
=========== =========== =========== ===========
Dividends per Common Share $ -0- $ -0- $ -0- $ -0-
=========== =========== =========== ===========
Average Common Shares
Outstanding 4,432,275 4,099,802* 4,331,942 3,787,045*
</TABLE>
* Recast to reflect impact of the 10 to 1 reverse split recorded 7/98.
3
<PAGE> 4
BIO-LOK INTERNATIONAL INC.
Condensed Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
April 30, October 31,
1999 1998**
-------- -----------
('000's) ('000's)
<S> <C> <C>
ASSETS
Current Assets
Cash $ 10 $ 0
Accounts Receivable (Net) 423 413
Inventory 740 723
Other Current Assets 42 21
------- -------
Total Current Assets 1,215 1,157
------- -------
Net Machinery & Equipment 212 246
------- -------
Other Assets - Inventory 512 503
- Other 19 11
------- -------
Total Other Assets 531 514
TOTAL ASSETS $ 1,958 $ 1,917
======= =======
LIABILITIES & EQUITY
Current Liabilities
Revolving Loan Payable $ 390 $ 365
Accounts Payable 84 124
Other Payables 85 32
Accrued Expenses 129 112
Current Portion of LTD 212 212
------- -------
Total Current Liabilities 900 845
------- -------
A/P Plan Pymts 357 372
Other Long Term Debt 86 109
------- -------
Long Term Debt 443 481
------- -------
Total Liabilities 1,343 1,326
------- -------
Equity
Common Stock - authorized
7,000,000 par value $.01;
outstanding 4,733,275 and
4,131,275 shares respectively; 51 41
Paid-in Capital 2,142 2,082
Retained Earnings (1,532) (1,532)
Retained Earnings - CY (46) 0
------- -------
Total Equity 615 591
------- -------
TOTAL LIABILITIES & EQUITY $ 1,958 $ 1,917
======= =======
</TABLE>
** Recast to reflect post closing 1998 audit entries and entries per final
audited.
4
<PAGE> 5
BIO-LOK INTERNATIONAL INC.
Condensed Statement of Cash Flow
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
April 30,
-------------------------
1999 1998*
--------- ---------
(000's) (000's)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income (Loss) $ (46) $ 10
Adjustment to reconcile:
Depreciation 32 42
Valuation of shares
Change in Current assets & liabilities:
(Incr.) decr. in accts. rec (10) (119)
(Incr.) decr. in inventory (24) (68)
(Incr.) decr. in prepaid & other (21) (5)
(Incr.) decr. in deposits (8) 0
Incr. (decr.) in A/P & Accr. Exp 30 (32)
--------- ---------
Net Cash (used) by Operating (47) (172)
--------- ---------
FROM INVESTING ACTIVITIES:
Property, Plant & Equipment 0 (37)
Decrease in Long Term Debt (38) 84
Proceeds from Issue of Common Stock 70 0
--------- ---------
Net Cash (used) for Investing Activities 32 47
--------- ---------
FROM FINANCING ACTIVITIES:
Net Proceeds - revolving loan 25 122
Increase in Long Term Debt 0 0
Proceeds - other 0 0
--------- ---------
Net Cash (used) for Financing Activities 25 122
--------- ---------
NET INCREASE (DECREASE) IN CASH $ 10 $ (3)
Cash - Beginning of Period 0 4
--------- ---------
Cash - End of Period $ 10 $ 1
========= =========
Interest Paid $ 51 $ 48
Income Taxes Paid $ -0- $ -0-
</TABLE>
* Note: reflects corrected prior numbers.
5
<PAGE> 6
BIO-LOK INTERNATIONAL INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The financial statement for the second quarter and year-to-date 1999 consists of
all the accounts of Bio-Lok International Inc. ("BLII").
NOTE B - NATURE OF BUSINESS
BLII is a manufacturer and distributor, both domestic and internationally, of
precision dental implants, related prosthetics, associated tools, devices and
irrigated drills. Domestically product is sold directly to clinicians and
internationally is sold to distributors or JV entities who in turn sell the
product to clinicians within their respective markets.
Revenues are attributable to the selling of the product line and the marketing
efforts of the Company. Revenues are recorded when invoices are printed and the
goods shipped.
NOTE C - INVENTORIES
Inventories are stated at average cost. Inventories at April 30, 1999 and
October 31, 1998 consisted of the following:
<TABLE>
<CAPTION>
April 30, 1999 October 31, 1998
-------------- ----------------
<S> <C> <C>
Raw Materials & Supplies $ 17,341 $ 19,036
Consumable Tools 35,000 35,000
Work in Process 389,312 378,108
Consigned Inv. - Int 88,649 58,101
Finished Goods 719,470 735,349
---------- ----------
$1,249,772 $1,225,594
========== ==========
</TABLE>
Inventory reflects a net increase for the period of $24k. The increase is due to
the development of the "Silhouette" Implant line.
Inventory not anticipated to be sold within one year is classified as a
long-term other asset. Inventory consigned is considered to be consumed with in
twelve months.
NOTE D - CHANGE IN BUSINESS ACTIVITY
Effective February 12, 1997, the Plan of Reorganization filed by the Company was
approved by the Court. The plan was fully adopted as of March 14, 1997 with all
initial payments to debtors have been issued and disbursed. The Chapter XI was
finalized and closed effective January 23, 1998.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
VOLUME
Net sales/revenue for the quarter increased by 47% or $120k over the prior
period. The increase in sales from prior quarter is a direct result of a new
distributor coming on-line.
For the quarter net sales decreased by $32K or 8% from the comparable period
prior year and $135K or 17% on a year-to-date basis. The decrease is
attributable to the continued deterioration of the domestic market due to the
Chapter XI filing.
Management expect the domestic market to turn around by mid 1999 with the
international activity to continue to grow with new market being opened and
increased penetration of existing distributor markets.
COST OF GOODS SOLD AND GROSS PROFIT
Cost of goods sold for the quarter reflected no material change from the quarter
prior year as a percent of sales. On a year-to-date basis results improved by 4%
as relates to net sales and is attributable to the continued improvements in
manufacturing operations.
Gross profit results for the current quarter totaled $92K over the prior
quarter. The increased result is due to higher sales volume achieved.
Year-to-date results continue to be below prior years and is solely attributable
to the change to a new distributor for Argentina, then the new distributor did
not come on-line until early 1999 and the old distributor was terminated during
the third quarter 1998.
SELLING, ADMINISTRATIVE & GENERAL EXPENSES
Selling expenses for the period reflected a decrease of $37k or 42% percent for
the comparable quarter prior year and no material change from the prior quarter.
The decrease is the direct result from the continued realignment and personnel
changes being implemented for the domestic market.
7
<PAGE> 8
Administrative and general expenses for the period similarly resulted in no
material change over the prior quarter. But, results for the period to the same
period prior year reflects a decrease of $14k or 9% and for six months
year-to-date results a reduction of $23k or 8%. The lower expenses incurred for
1999 are attributable non-recurring costs and lower professional services
incurred.
RESULTS FROM OPERATIONS
Due to increased sales and lower costs incurred results from operation for the
quarter increased to $69k, an increase of $91k from the prior quarter and was
68% greater than for the same period prior year.
OTHER (INCOME) & EXPENSES
Other income and expenses increase by $29k from the prior quarter, was $28k
greater then the comparable period prior year and 76% or $37k over year-to-date
same period prior year. The higher expenses incurred are primarily due to common
stock issued to officers, directors, clinicians and etc. for services and
support of the company. The balance of the increased costs incurred was
attributable to interest expense incurred for the increase in the revolving loan
balance outstanding and the interest recorded on the Plan payments resulting
from the reorganization recorded in early 1997.
NET INCOME
Net income for the quarter totaled $12k an increase of $70k from the prior
quarter and totaled the same as the prior years quarter. Year-to-date results
for the quarter totaled $(46)k compared to a profit of $10k for the comparable
period prior year. The lower result for this period is solely due to the lower
sales realized in the first quarter of the year and common stock issued during
the current quarter.
Results for the balance of the year are expected to show continued improvement
as the domestic market is re- organized and structured to meet market
objectives, existing foreign distributors increase market penetration and new
international distributors are signed up for targeted markets.
FINANCIAL CONDITION
NET CASH FLOW PROVIDED BY OPERATIONS
Cash flow provided from operations for the quarter increased by $10k since
year-end. This increase reflect a $13k improvement over the same period prior
year and is expected to continue to improve as continued sales growth is
achieved.
FINANCING
No new financing arrangements have been entered into during the past quarter.
The company did borrow an added $25k under its Revolving Loan Agreement which
covered the interest expenses and fees incurred for the period.
8
<PAGE> 9
Part II. Other Information
Item 6. (a) Exhibit 27. Financial Data Schedule (SEC only)
(b) Reports on Form 8-K
None
SIGNATURE
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.
BIO-LOK INTERNATIONAL INC.
(Registrant)
Date: October 11, 1999 By: /s/ Ingo K. Kozak
------------------------------
Ingo K. Kozak
Chief Financial Officer and
on behalf of the Registrant
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BIO-LOK INTERNATIONAL INC. FOR THE 3 MONTH PERIOD ENDED
APRIL 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-2000
<PERIOD-START> FEB-01-1999
<PERIOD-END> APR-30-1999
<CASH> 9,626
<SECURITIES> 0
<RECEIVABLES> 558,344
<ALLOWANCES> 135,015
<INVENTORY> 1,252,772
<CURRENT-ASSETS> 1,685,726
<PP&E> 989,854
<DEPRECIATION> 777,927
<TOTAL-ASSETS> 1,958,340
<CURRENT-LIABILITIES> 899,917
<BONDS> 443,335
0
0
<COMMON> 51,433
<OTHER-SE> 564,656
<TOTAL-LIABILITY-AND-EQUITY> 1,958,340
<SALES> 375,117
<TOTAL-REVENUES> 375,117
<CGS> 118,107
<TOTAL-COSTS> 186,167
<OTHER-EXPENSES> 13,731
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,308
<INCOME-PRETAX> 11,804
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,804
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
