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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 JANUARY 31, 2000
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.
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(Exact name of Registrant as specified in its Charter)
DELAWARE 65-0317138
(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
----------------------
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 as of the latest practicable date.
Class of Common Stock Outstanding At January 31, 2000
--------------------- -------------------------------
$.01 par value 5,642,275 shares
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BIO-LOK INTERNATIONAL INC.
Index
<TABLE>
<CAPTION>
Page #
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Statements of Income for Three
months ended January 31, 2000 and 1999 2
Condensed Balance Sheets for January 31,
2000 and October 31, 1999 3
Condensed Statements of Cash Flows for Three
months ended January 31, 2000 and 1999 4
Notes to Condensed Consolidated Financial Statement 4
Item 2. Management's Discussion and Analysis of Financial
Results of Operations 5
Financial Condition 6
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 6
</TABLE>
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BIO-LOK INTERNATIONAL INC.
Condensed Statement of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
----------------------------
2000 1999
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('000's) ('000's)
<S> <C> <C>
Net Sales $ 453 $ 255
Cost of Goods Sold 151 90
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GROSS PROFIT 302 165
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Selling 41 49
Admin. & General Exp 156 145
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197 194
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Operating Income 105 (29)
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Interest Expense 23 26
Other (Income)/Expense 17 3
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40 29
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Income before Taxes 65 (58)
Income Taxes 0 0
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NET INCOME $ 65 $ (58)
=========== ===========
Net Income Available to
Common Share Owners $ 65 $ 0
=========== ===========
Net Income per Common Share $ .01 $ 0
=========== ===========
Dividends per Common Share $ 0 $ 0
=========== ===========
Average Common Shares
Outstanding 5,642,275 4,131,275
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
2
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BIO-LOK INTERNATIONAL INC.
Condensed Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
January 31, October 31,
2000 1999
----------- -----------
('000's) ('000's)
<S> <C> <C>
ASSETS
Current Assets
Cash $ 20 $ 17
Accounts Receivable (Net) 403 390
Inventory 954 952
Other Current Assets 26 22
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Total Current Assets 1,403 1,381
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Net Machinery & Equipment 183 186
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Other Assets -- Inventory 263 278
-- Other 25 25
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288 303
------- -------
TOTAL ASSETS $ 1,874 $ 1,870
======= =======
LIABILITIES & EQUITY
Current Liabilities
Revolving Loan $ 432 $ 417
Accounts Payable 12 31
Accounts Payable - Other 10 12
Accrued Expenses 33 40
Due to related parties 19 24
Current Portion of LTD 250 260
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Total Current Liabilities 756 785
Notes & Loans payable
- noncurrent portion 299 330
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Total Liabilities 1,055 1,115
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Equity
Common Stock - authorized
7,000,000, par value $.01;
outstanding 5,642,275 and
4,131,275 shares respectively; 56 56
Paid-in Capital 2,172 2,172
Retained Earnings (1,474) (1,474)
Retained Earnings - CY 65
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Total Equity 819 755
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TOTAL LIABILITIES & EQUITY $ 1,874 $ 1,870
======= =======
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
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BIO-LOK INTERNATIONAL INC.
Condensed Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
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2000 1999
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(000's) (000's)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income (Loss) $ 65 $(58)
Adjustments to reconcile:
Depreciation 14 16
Valuation of shares Change in
Current assets & liabilities:
(Incr.) decr. in accts. rec (14) 23
(Incr.) decr. in inventories 14 (23)
(Incr.) decr. in prepaid & other (4) (22)
(Incr.) decr. in deposits -0- (8)
Incr. (decr.) in A/P & Accr. exp (34) 88
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Net Cash (used) by Operating 41 16
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FROM INVESTING ACTIVITIES:
Property, Plant & Equipment (11) 0
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Net Cash (used) by Investing Activities (11) 0
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FROM FINANCING ACTIVITIES:
Net proceeds - revolving loan 15 13
Increase in Long Term Debt (42) (28)
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Net Cash Used for Financing Activities (27) (15)
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NET INCREASE (DECREASE) IN CASH $ 3 $ 1
Cash - Beginning of Period 17 0
---- ----
Cash - End of Period $ 20 $ 1
==== ====
Interest Paid $ 23 $ 26
Income Taxes Paid $-0- $-0-
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
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BIO-LOK INTERNATIONAL INC.
Notes to Condensed Financial Statement
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The financial statements represent only the activity and accounts of Bio-Lok
International Inc. ("Bio-Lok"). Revenue is recognized as product is shipped;
inventory is stated at lower of average cost or market and inventory which is
not expected to be sold in one year is classified as long-term; property and
equipment are stated at cost, less accumulated depreciation.
NOTE B - NATURE OF BUSINESS
Bio-Lok is a manufacturer and distributor, both domestically and
internationally, of the MICRO-LOK(TM) PRECISION DENTAL IMPLANT SYSTEM. Micro-Lok
consists of a number of select implants (both screw and cylinder), related
prosthetics parts, devices, associated tools, and irrigated drills and reamers.
The Company markets its product line direct to the end user, via distributors
and independent representatives.
Revenues are attributable to the distribution and sale of its manufactured or
purchased for resale products. Products are distributed directly to clinicians
domestically and to distributors or related companies internationally who in-
turn market and sell the products to clinicians.
NOTE C - INVENTORIES
Inventories at January 31, 2000 and October 31, 1999 consisted of the following:
JANUARY 31, 2000 OCTOBER 31, 1999
---------------- ----------------
Raw Materials & Supplies $ 25,361 $ 27,977
Consumable Tools 35,000 35,000
Work in Process 440,716 343,601
Finished Goods 716,256 824,478
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$1,217,333 $1,231,056
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5
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The decrease of inventory for the quarter was $13,723 and the change was due to
increased sales for the quarter. The manufacture of product to sales realized
and expected has been adjusted to accommodate the increase in sales and expected
future growth. To this extent, new machinery is being acquired to maintain
production requirements.
As of January 31, 2000, inventory classified as non-current and included in
finished goods totaled $263,252, a decrease of $15,371. The decrease is
attributable to increased sales realized.
NOTE D - SUMMARIZED INCOME STATEMENT DATA OF BIO-LOK INTERNATIONAL INC.
At January 31, 2000, the income statement represents only Bio-Lok International
Inc. Income from operations totaled $105k and $65k at net income. The increase
in results obtained was primarily due to increased sales realized, continued
cost controls being maintained and production efficiency continuing to improve.
NOTE E - CHANGE IN BUSINESS ACTIVITY
Effective February 12, 1997, the Plan of Reorganization filed by the Companies
was approved by the Court and the plan was implemented as March 1997. The
Company has operated successfully under the Plan of Reorganization. On January
23, 1998, the XI filing was closed.
6
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
VOLUME
Net sales (revenues) for the quarter increased by 78% over the comparable
quarter prior year. The increase was due to a distributor terminated last year
having been replaced by a new distributor in early 1999.
COST OF GOODS SOLD AND GROSS PROFIT
Cost of goods sold and gross profit margins as related to net sales decreased by
6% for the quarter over the comparable quarter prior year. The decrease was a
direct result of lower costs incurred for the production of the product line.
Gross profit for the period increased by $137k or 83% over the comparable period
prior year. Gross Profit as a percent of sales increased by 3% for the quarter
compared to the same period prior year. The increase is due to lower costs
realized in the production of products.
SELLING, ADMINISTRATIVE & GENERAL EXPENSES
Selling expenses decreased by 16% over the comparable period prior year which is
due to staff reductions implemented in mid 1999. These costs will increase over
the ensuing months as the domestic market is re-staffed and build.
Administrative and General expenses reflected an increase of $11k to $156k or an
increase of 8%. The increase in costs was for professional services and freight
expenses.
OPERATING INCOME
Results from operations totaled $65k and represented a $123k increase over prior
years same period results. This increase is primarily due to the increase in
sales generated for the quarter.
7
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OTHER INCOME/EXPENSES
Other income/expenses increased by $11k for the period over the comparable
period prior year. The increase is attributed to royalty payments which
commenced 3/99 and legal costs incurred for patents filed and to be filed.
NET INCOME
Net income for the quarter was $65K compared to a loss of $58k for the
comparable period prior year. The higher net income is attributable to higher
sales results realized for the period.
FINANCIAL CONDITION
NET CASH FLOW PROVIDED BY OPERATIONS
Cash flow provided increased by $3k to $20k for the period. Cash flow is
continually effected growth in domestic sales and the costs incurred for the
marketing efforts spent.
FINANCING
No new financing activities have been entered into for the quarter.
PART II. OTHER INFORMATION
(a) Exhibit 27. Financial Data Schedule (SEC only)
(b) Reports on Form 8-K. -none-
8
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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: February 20, 2000 By: /s/ Ingo K. Kozak
---------------------------
Ingo K. Kozak
Chief Financial Officer and
Vice President - Finance
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 THREE MONTH PERIOD
ENDED JANUARY 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1999
<PERIOD-END> JAN-31-2000
<CASH> 19,915
<SECURITIES> 0
<RECEIVABLES> 518,111
<ALLOWANCES> 115,256
<INVENTORY> 1,217,333
<CURRENT-ASSETS> 1,660,289
<PP&E> 909,030
<DEPRECIATION> 726,092
<TOTAL-ASSETS> 1,873,534
<CURRENT-LIABILITIES> 756,438
<BONDS> 299,353
0
0
<COMMON> 56,423
<OTHER-SE> 762,820
<TOTAL-LIABILITY-AND-EQUITY> 1,873,534
<SALES> 452,603
<TOTAL-REVENUES> 452,603
<CGS> 150,731
<TOTAL-COSTS> 197,168
<OTHER-EXPENSES> 24,304
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,794
<INCOME-PRETAX> 64,606
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 64,606
<EPS-BASIC> 0.01
<EPS-DILUTED> 0.01
</TABLE>
