<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ---
ACT OF 1934
FOR THE QUARTER ENDED MAY 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-10261
VIVRA INCORPORATED
DELAWARE I.R.S. EMPLOYER IDENTIFICATION NO. 94-3096645
1850 GATEWAY DRIVE, FIFTH FLOOR
SAN MATEO, CALIFORNIA 94404
415-577-5700
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 outstanding of each of the issuer's classes of common stock
as of May 31, 1996 was: 39,005,587
This document contains 14 pages and the Exhibit Index is on Page 13.
Page 1 of 14
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VIVRA INCORPORATED
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE
- ------- --------------------- ----
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of May 31, 1996 and
November 30, 1995 3
Condensed Consolidated Statements of Earnings for the Three
and Six Months Ended May 31, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows for the Three
and Six Months Ended May 31, 1996 and 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition 7
PART II. OTHER INFORMATION
- -------- -----------------
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 12
Exhibit Index 13
Exhibit 11 Computation of Earnings Per Share 14
Page 2 of 14
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Vivra Incorporated
Condensed Consolidated Balance Sheets
(IN THOUSANDS)
<TABLE>
<CAPTION>
May 31, Nov. 30
1996 1995
----- -----
(NOTE A)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 29,263 $ 53,990
Short-term investments - held-to-maturity and available-for-sale 27,401 43,616
Accounts receivable, less allowance for doubtful accounts (5/31/96 - $15,026 and
11/30/95 - $13,279) 75,490 64,004
Inventories 11,061 9,030
Prepaid expenses and other current assets 5,150 1,959
Deferred income taxes 14,198 14,514
-------------------
Total Current Assets 162,563 187,113
Marketable non-current investments - held-to-maturity 31,379 22,510
Property, buildings and equipment - at cost, less allowances for depreciation
(5/31/96 - $45,663 and 11/30/95 - $40,775 83,585 76,189
Other Assets 10,317 8,479
Goodwill and other intangibles, less accumulated amortization
(5/31/96 - $8,350 and 11/30/95 - $6,727) 154,926 113,935
-------------------
$442,770 $408,226
===================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 9,515 $ 11,004
Accrued payroll and related benefits 22,282 22,693
Other accrued expenses 17,872 10,768
Income taxes 3,366 4,674
Current portion of deferred income taxes 3,304 3,791
Current maturities of long-term debt 1,210 1,477
-------------------
Total Current Liabilities 57,549 54,407
Long-term debt - exclusive of current maturities 2,137 1,840
Deferred income taxes 7,583 6,643
Minority interest 1,025 (238)
STOCKHOLDERS' EQUITY:
Common stock, par value $.01 per share; authorized 80.0 million shares; issued 39.0
million shares in 1996 and 38.1 million in 1995 390 381
Additional paid-in capital 150,866 142,762
Retained earnings 218,475 197,361
Net unrealized gain on marketable securities, less applicable income taxes 4,745 5,070
------------------
Total Stockholders' Equity 374,476 345,574
------------------
$442,770 $408,226
==================
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page 3 of 14
<PAGE>
Vivra Incorporated
Condensed Consolidated Statements of Earnings
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MAY 31, MAY 31,
1996 1995 1996 1995
---------------------- ----------------------
<S> <C> <C> <C> <C>
REVENUES
Operating revenues $120,174 $92,536 $226,788 $179,750
Other income 2,161 3,550 4,039 4,236
-------- ------- -------- --------
Total Revenues 122,335 96,086 230,827 183,986
COSTS AND EXPENSES
Operating 84,225 62,469 160,889 120,973
General and administrative 14,555 14,242 25,181 26,743
Depreciation 3,389 2,724 6,512 5,164
Interest 58 131 100 334
-------- ------- -------- --------
Total Costs and Expenses 102,227 79,566 192,682 153,214
Earnings from continuing
operations, before minority
interest and income taxes 20,108 16,520 38,145 30,772
Minority interest (4) (163) (14) (186)
-------- ------- -------- --------
Earnings from continuing
operations, before income
taxes 20,104 16,357 38,131 30,586
Income taxes 7,703 6,374 14,519 11,917
-------- ------- -------- --------
NET EARNINGS $12,401 $9,983 $23,612 $18,669
======== ======= ======== ========
NET EARNINGS PER SHARE $.32 $.27 $.61 $.53
======== ======= ======== ========
AVERAGE NUMBER OF COMMON
SHARES 38,738 36,911 38,498 35,171
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page 4 of 14
<PAGE>
Vivra Incorporated
Condensed Consolidated Statements of Cash Flows
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
May 31,
1996 1995
------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $23,612 $18,669
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization 9,056 6,211
Gain on sale of property and investments (861) (2,170)
Other (3,811) (2,727)
Changes in assets and liabilities:
Accounts receivable (9,724) (9,549)
Inventories (1,473) (709)
Prepaid expenses and other current assets (3,126) (1,716)
Deferred income taxes 318 (4,649)
Accounts payable (3,266) 7,586
Accrued payroll and related benefits (390) (877)
Other accrued expenses 2,546 (3,973)
Income taxes (476) 2,034
------------------
Net cash flow from operations 12,405 8,130
FINANCING ACTIVITIES
Payments on long-term debt (2,299) (5,547)
Proceeds from Common Stock offering - 59,597
Proceeds from exercise of stock options and
related transactions 5,565 13,036
------------------
Net cash flow from financing 3,266 67,086
INVESTING ACTIVITIES
Purchase of property, buildings and equipment (13,370) (12,048)
Purchase of held-to-maturity investments (29,968) (41,575)
Redemption of held-to-maturity investments 30,670 -
Proceeds from sale of available-for-sale investments 8,373 -
Proceeds from sale of property, buildings and equipment 593 1,211
Proceeds from investments in partnerships 1,700 -
Payment for business acquisitions, net of cash acquired (38,396) (30,063)
------------------
Net cash flow used in investing (40,398) (82,475)
------------------
Net decrease in cash and cash equivalents (24,727) (7,259)
Beginning cash and cash equivalents 53,990 80,620
------------------
Ending cash and cash equivalents $29,263 $73,361
==================
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page 5 of 14
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VIVRA INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION
The condensed consolidated financial statements are unaudited pursuant to the
rules and regulations of the Securities and Exchange Commission.
Accordingly, certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. In the opinion of
management, all adjustments necessary for a fair presentation of the
financial position, results of operations and cash flows for the periods
presented have been made and are of a normal recurring nature. The Company
completed business combinations with Orthonet, Inc. on February 28, 1996,
Brennan, Martell and Mirmelli, M.D's, P.A. and Allergy & Asthma Institute of
South Florida, P.A. on May 1, 1996 and Kidney Centers of Charleston, Inc. on
May 1, 1996 in stock for stock exchanges or mergers with the Company. Due to
the materiality of these pooling transactions completed in 1996, the
Company's historical results have been restated as if such combinations had
been completed as of the beginning of 1995.
The condensed consolidated financial statements should be read in conjunction
with the Company's consolidated supplemental financial statements and the
notes thereto included in the registrant's Form S-4 as filed on
June 21, 1996 (File No. 333-06495).
The balance sheet at November 30, 1995 has been derived from the audited
financial statements at that date.
B. ACQUISITIONS
During the three months ended May 31, 1996, the Company acquired seventeen
dialysis centers. Total consideration paid was $47.5 million, consisting of
cash of $28.9 million and 662,761 shares of the Company's common stock, which
exceeded the fair market value of net assets acquired by $29.0 million.
Also during the three months ended May 31, 1996, the Company acquired nine
specialty physician networks and practices. Total consideration paid was
$30.3 million, consisting of cash of $9.1 million and 754,853 shares of the
Company's common stock, which exceeded the fair market value of net assets
acquired by $9.2 million.
C. RECENT ACCOUNTING PRONOUNCEMENTS
Effective March 1995, the Financial Accounting Standards Board issued
Statement No. 121, ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR
LONG-LIVED ASSETS TO BE DISPOSED OF ("FAS 121"), which requires impairment
losses to be recorded on long-lived assets used in operations, or to be
disposed of, when such impairment has been determined. On December 1, 1995,
the Company adopted FAS 121 and the impact of this adoption did not have a
material effect on the Company.
D. CONVERTIBLE SUBORDINATED NOTES PRIVATE PLACEMENT
On July 2, 1996, the Company completed a $150 million issuance of 5%
Convertible Subordinated Notes Due 2001 in a private placement.
The net proceeds from this private placement are approximately
$146 million.
Page 6 of 14
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
WHEN USED IN THIS DISCUSSION, THE WORDS "ESTIMATE," "PROJECT" AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH
STATEMENTS, WHICH INCLUDE STATEMENTS CONCERNING CAPITAL AND ACQUISITION
EXPENDITURES, ARE SUBJECT TO CERTAIN RISK AND UNCERTAINTIES, INCLUDING THOSE
DISCUSSED IN THE RISK FACTORS SECTION OF THE COMPANY'S REGISTRATION STATEMENT ON
FORM S-4 FILED ON JUNE 21, 1996 (REGISTRATION NO. 333-06495) AND THOSE DISCUSSED
HEREIN WHICH COULD CAUSE ACTUAL RESULTS TO MATERIALLY DIFFER FROM THOSE
PROJECTED. THESE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE HEREOF.
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES.
RESULTS OF OPERATIONS
The Company provides services through Vivra Renal Care ("VRC") and Vivra
Specialty Partners ("VSP"). VRC is the second largest provider of dialysis
services in the United States. VSP provides specialty physician network and
disease management services to entities responsible for coordinating health care
for a patient population, principally managed care organizations. VSP
coordinates care in multiple specialties, including asthma/allergy, cardiology,
diabetes, dialysis/nephrology, otolaryngology ("ENT"), obstetrics/gynecology
("OB/GYN") and orthopedics.
THREE MONTHS ENDED MAY 31, 1996 COMPARED WITH THREE MONTHS ENDED MAY 31, 1995
As compared to the three months ended May 31, 1995, revenues increased $26.2
million, or 27.3%; costs and expenses increased $22.7 million, or 28.5%; and
earnings from continuing operations before taxes increased $3.7 million, or
22.9%. In total, net earnings for the period increased $2.4 million to $12.4
million, or 24.2%.
Operating revenues increased $27.6 million, or 29.9%, to $120.2 million.
Revenues from VRC increased $24.2 million to $100.4 million, or 31.8%; VSP
increased $13.4 million to $19.8 million; and Other Services decreased $10.0
million. The increase in revenues from VRC was attributable to the growth in
the number of treatments provided and growth in the administration of the drug
Erythropoietin ("EPO"), prescribed for dialysis patients suffering from anemia.
Treatments grew 27.0% from 378,622 to 480,948 as a result of the net addition of
51 centers. For the second quarter of 1996, revenues from EPO were $20.5
million, compared to $12.8 million in the prior year, a 60.2% increase. This
growth was due to an increase in the number of patients receiving EPO and in the
average size of dosages. The increase in revenues from VSP was due to the
addition of the OB/GYN and orthopedics specialties after the second quarter of
1995 and growth in the cardiology and asthma/allergy specialties. The decrease
in Other Services revenues was a direct result of the sale and discontinuation
of the Company's ambulatory surgery center, rehabilitation therapy and primary
care physician practice management businesses in 1995. Other income of $2.2
million, included interest earned on tax-free marketable securities and a $1.3
million gain from the sale of available-for-sale marketable investments.
Operating costs increased $21.8 million, or 34.8%, to $84.2 million. VRC
operating costs increased $15.5 million to $67.5 million, or 29.9%; VSP
increased $13.1 million to $16.7 million; and Other Services decreased $6.8
million. The increase in VRC operating costs was due to the increased volume of
dialysis business, expenses associated with the operation of newly developed
dialysis centers and the cost of the administration of EPO. VSP operating costs
increased due to the addition and growth of the OB/GYN and orthopedics
specialties after the second quarter of 1995 and growth in the cardiology and
asthma/allergy specialties. Operating costs of Other Services decreased as a
result of the sale of the ambulatory surgery, rehabilitation therapy and primary
care physician practice management businesses in 1995. General and
administrative expenses increased $0.3 million to $14.6 million, or an increase
of 2.2%. Depreciation increased $0.7 million, or 24.4%, to $3.4 million, due to
an increase in depreciable assets of the dialysis and asthma/allergy businesses.
Page 7 of 14
<PAGE>
The effective tax rate for the period was 38.3% of earnings before income
taxes, compared with 39.0% a year earlier. This decrease was due, in large
part, to the Company's cash assets being invested in tax-free marketable
securities, which had the effect of lowering the overall tax rate.
SIX MONTHS ENDED MAY 31, 1996 COMPARED WITH SIX MONTHS ENDED MAY 31, 1995
As compared to the six months ended May 31, 1995, revenues increased $46.8
million, or 25.5%; costs and expenses $39.5 million, or 25.8%; and earnings from
continuing operations before taxes increased $7.5 million, or 24.7%. In total,
net earnings for the period increased $4.9 million to $23.6 million, or 26.5%.
Operating revenues increased $47.0 million, or 26.2%, to $226.8 million.
Revenues from VRC increased $41.9 million to $189.7 million, or 28.4%; VSP
increased $25.2 million to $37.1 million; and Other Services decreased $20.1
million. The increase in revenues from VRC was attributable to the growth in
the number of treatments provided and growth in the administration of the drug
Erythropoietin ("EPO"), prescribed for dialysis patients suffering from anemia.
Treatments grew 28.4% from 719,032 to 922,925 as a result of the increase in
dialysis centers from 178 to 229. For the first six months of 1996, revenues
from EPO were $38.6 million, compared to $24.4 million in the prior year, a
58.2% increase. This growth was due to an increase in the number of patients
receiving EPO and in the average size of dosages. The increase in revenues from
VSP was due to the addition and growth of the OB/GYN, cardiology and orthopedics
specialties after the second quarter of 1995 and growth in the asthma/allergy
specialty. The decrease in Other Services revenues was a direct result of the
sale and discontinuation of the Company's ambulatory surgery, rehabilitation
therapy and primary care physician practice management businesses
in 1995. Other income of $4.0 million, included interest earned on tax-free
marketable securities and $2.0 million in gains from the sale of
available-for-sale marketable investments.
Operating costs increased $39.9 million, or 33.0%, to $160.9 million. VRC
operating costs increased $29.6 million to $129.4 million, or 29.7%; VSP
increased $23.7 million to $31.5 million; and Other Services decreased $13.4
million. The increase in VRC operating costs was due to the increased volume of
dialysis business, expenses associated with the operation of newly developed
dialysis centers and the cost of the administration of EPO. VSP operating costs
increased due to the addition and growth of the OB/GYN, cardiology and
orthopedics specialties after the second quarter of 1995 and growth in the
asthma/allergy specialty. Operating costs of Other Services decreased as a
result of the sale of the ambulatory surgery, rehabilitation therapy and primary
care physician practice management businesses in 1995. General and
administrative expenses decreased $1.6 million to $25.2 million, or a 5.8%
decrease. General and administrative expenses decreased as a result of the sale
and discontinuation of the Other Services segment businesses. The businesses
incurred $6.3 million during the first six months of 1995. Depreciation
increased $1.3 million, or 26.1%, to $6.5 million, due to an increase in
depreciable assets of the dialysis and asthma/allergy businesses.
The effective tax rate for the period was 38.1% of earnings before income
taxes, compared with 39.0% a year earlier. This decrease was due, in large
part, to the Company's cash assets being invested in tax-free marketable
securities, which had the effect of lowering the overall tax rate.
LIQUIDITY AND CAPITAL RESOURCES
The Company requires significant capital for the acquisition and development of
dialysis facilities and specialty care businesses and on-going capital
expenditures for property, plant and equipment. Acquisition expenditures were
$98.3 million, consisting of $38.4 million in cash and 2,006,613 shares of the
Company's Common Stock and $40.8 million, consisting of $30.1 million in cash
and 500,232 shares of the Company's Common Stock for the six months ended May
31, 1996 and 1995, respectively. Routine capital expenditures were $13.4
million and $12.0 million for the same periods, respectively.
Cash flow from operations was $12.4 million and $8.1 million for the six
months ended May 31, 1996 and 1995, respectively. Cash flow from financing
activities decreased by $63.8 million to $3.3 million at May 31, 1996. This
decrease was primarily the result of the Company's February 16, 1995 public
offering
Page 8 of 14
<PAGE>
in which the Company sold 2,992,500 shares of Common Stock and received net
proceeds of $59.6 million.
For the remainder of fiscal 1996, the Company currently plans to continue
to acquire and develop new dialysis facilities and expand its specialty
businesses. The Company expects that its capital and acquisition expenditures
for fiscal 1996 will exceed expenditures for fiscal 1995. To the extent the
Company is able to identify significant attractive investment opportunities,
such expenditures could exceed $150 million. The Company believes that the net
proceeds from its July 1996 Convertible Subordinated Notes Private Placement
together with cash generated from operations, available cash and the ability to
issue Common Stock for acquisitions will be adequate to meet the Company's
planned capital expenditure, acquisition and development and liquidity needs
through fiscal 1997.
INFLATION AND CHANGES IN PRICES
Approximately 71% of the Company's dialysis revenues were funded by Medicare and
Medicaid, at an average rate of $126 per dialysis treatment, before ancillary
services, for the six months ended May 31, 1996 and 1995, respectively. Despite
periods of significant inflation, the Medicare and Medicaid reimbursement rate
has remained relatively constant since 1983. The Company is unable to predict
what, if any, future changes may occur in the reimbursement rate and, if made,
whether such changes will help alleviate or increase inflationary pressures on
the Company's margins.
The balance of dialysis revenues, 29% in 1996 and 1995, are paid at rates
significantly in excess of Medicare and Medicaid, 29% in 1996 and 1995. Of
these revenues, the largest portion came from private insurance, including
managed care organizations. Reimbursement from hospitals for acute dialysis
treatments was also significant. In general, these sources of reimbursement are
at rates significantly in excess of Medicare and Medicaid rates. The Company
believes that private payers may be required in the future to assume a greater
percentage of the costs of dialysis care as the existing ESRD program is
reviewed by the United States Congress. Irrespective of legislative action, the
Company expects that these non-governmental payers will reduce payment for
dialysis services. In addition, as managed care organizations expand, they will
have a strong incentive to further reduce the costs of specialty care and will
aggressively seek to reduce amounts paid for dialysis treatments. If private
payer rates are reduced significantly, the Company's revenues and net earnings
will be materially and adversely affected.
The dialysis industry is highly competitive with respect to the acquisition
of existing dialysis facilities and the recruitment of Medical Directors for new
centers. In the past two years, acquisition prices and the competition for
Medical Directors and new facilities have increased. To the extent that the
Company is unable to acquire existing dialysis facilities economically, to
develop facilities profitably or to recruit Medical Directors to operate its
facilities, its ability to expand its dialysis business and maintain earnings
per share growth and return on total capital would be adversely impacted.
The Company intends to expand VSP significantly through the acquisition and
development of related businesses, primarily specialty physician networks and
practices. This expansion will require significant capital commitments. The
Company is incurring expenditures to develop its infrastructure and systems for
VSP in anticipation of significant growth. VSP may not realize revenue and
operating margins as predictable as those historically provided by VRC.
Page 9 of 14
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PART II OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 2, 1996, the Company held its Annual Meeting of Stockholders.
A. Election of Directors to serve until the annual meeting in 1999
and until their successors are elected.
<TABLE>
<CAPTION>
TOTAL VOTES
TOTAL VOTES FOR AGAINST/WITHHELD
NOMINEES EACH DIRECTOR FROM EACH DIRECTOR
- -------- ------------- ------------------
<S> <C> <C>
Alan R. Hoops 33,549,400 112,749
David L. Lowe 33,549,437 112,712
John M. Nehra 33,537,909 124,240
</TABLE>
B. Approve the amendment of the Company's Revised 1989 Stock
Incentive Plan.
TOTAL VOTES FOR TOTAL VOTES AGAINST/WITHHELD
--------------- ----------------------------
30,637,657 3,024,492
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
See Exhibit 11 on Page 14
Exhibit 27 - Financial Data Schedule
b) Reports on Form 8-K
(1) Current Report of the Company on Form 8-K (File No. 1-10266)
dated March 14, 1996, reporting on Item 7, Financial Statements
and Exhibits, and filing as exhibits certain acquisition
agreements of the Company.
(2) Current Report of the Company on Form 8-K (File No. 1-10266)
dated March 29, 1996, reporting on Item 7, Financial Statements
and Exhibits, and filing as exhibits certain acquisition
agreements of the Company.
(3) Current Report of the Company on Form 8-K (File No. 1-10266)
dated April 11, 1996, reporting on Item 7, Financial Statements
and Exhibits, and filing as exhibits certain acquisition
agreements of the Company.
(4) Current Report of the Company on Form 8-K (File No. 1-10266)
dated May 1, 1996, reporting on Item 5, Other Events and Item 7,
Financial Statements and Exhibits, for filing the audited
Financial Statement of certain acquired businesses.
Page 10 of 14
<PAGE>
(5) Current Report of the Company on Form 8-K (File No. 1-10266) dated
May 14, 1996, reporting on Item 7, Financial Statements and
Exhibits and filing as exhibits certain acquisition agreements of
the Company.
Page 11 of 14
<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.
VIVRA INCORPORATED
------------------------------------
(Registrant)
Date: July 11, 1996 /s/ LeAnne M. Zumwalt
---------------------- ------------------------------------
LeAnne M. Zumwalt
Chief Financial Officer and
Secretary / Treasurer
Page 12 of 14
<PAGE>
VIVRA INCORPORATED
EXHIBIT INDEX
EXHIBIT NO. PAGE NO.
---------- --------
11 Computation of Earnings Per Share 14
27 Financial Data Schedule
Page 13 of 14
<PAGE>
EXHIBIT 11
VIVRA INCORPORATED
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
May 31, May 31,
1996 1995 1996 1995
----------------------------------------
<S> <C> <C> <C> <C>
PRIMARY:
Average shares outstanding 38,738 36,911 38,498 35,171
Stock options granted to employees, based
on the treasury-stock method using
average market price 711 * 654 * 713 * 785 *
------- ------ ------- -------
Total 39,449 37,565 39,211 35,956
Net earnings $12,401 $9,983 $23,612 $18,669
======= ====== ======= =======
Net earnings per share $.32 $.27 $.61 $.53
======= ====== ======= =======
FULLY DILUTED:
Average shares outstanding 38,738 36,911 38,498 35,171
Stock options granted to employees, based
on the treasury-stock method using
quarter end market price, if higher than
average market price 792 * 672 * 836 * 792 *
------- ------ ------- -------
Total 39,530 37,583 39,334 35,963
Net earnings $12,401 $9,983 $23,612 $18,669
======= ====== ======= =======
Net earnings per share $.32 $.27 $.61 $.53
======= ====== ======= =======
</TABLE>
_____________
* As the dilutive Common Stock equivalents are less than 3% of the weighted
average outstanding shares, they have not been included in the computation of
earnings per share as shown in the Condensed Consolidated Financial Statements.
<TABLE> <S> <C>
<ARTICLE> 5
<PAGE>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> MAY-31-1996
<CASH> 29,263
<SECURITIES> 27,401
<RECEIVABLES> 90,516
<ALLOWANCES> 15,026
<INVENTORY> 11,061
<CURRENT-ASSETS> 162,563
<PP&E> 129,248
<DEPRECIATION> 45,663
<TOTAL-ASSETS> 442,770
<CURRENT-LIABILITIES> 57,549
<BONDS> 2,137
<COMMON> 390
0
0
<OTHER-SE> 374,086
<TOTAL-LIABILITY-AND-EQUITY> 442,770
<SALES> 226,788
<TOTAL-REVENUES> 230,827
<CGS> 160,889
<TOTAL-COSTS> 160,889
<OTHER-EXPENSES> 31,693
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 100
<INCOME-PRETAX> 38,145
<INCOME-TAX> 14,519
<INCOME-CONTINUING> 23,612
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,612
<EPS-PRIMARY> .61
<EPS-DILUTED> .61
</TABLE>