12
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended May 3, 1998
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from ____________ to _______________.
Commision File Number
0-18208
MAXXIM MEDICAL, INC.
(Exact name of registrant as specified in its charter)
TEXAS 76-0291634
(State or other jurisdiction of (I.R.S. Employee Identification No.)
incorporation or organization)
10300 49th Street North, Clearwater, Florida 33762
- --------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code......(813)561-2100
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 and 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock:
Class Outstanding at June 5, 1998
- ------------------------- ----------------------------------
Common Stock, $.001 par value 14,201,262
<PAGE>
MAXXIM MEDICAL, INC.
INDEX
PART I. Financial Information Page No.
Item 1. Condensed Consolidated Balance Sheets as of
May 3, 1998 and November 2, 1997 2
Condensed Consolidated Statements of Operations
for the Three Months and Six Months Ended
May 3, 1998 and May 4, 1997 3
Condensed Consolidated Statements of Cash Flows
for the Six Months Ended May 3, 1998 and
May 4, 1997 4
Notes to Condensed Consolidated Financial
Statements 5
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 9
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 10
PART II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports 12
Signatures 13
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MAXXIM MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
May 3, November 2,
1998 1997
----------- -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 28,529 $ 3,130
Accounts receivable, net of allowances of
$2,585 and $3,181, respectively 69,561 77,209
Inventory, net 74,809 83,184
Prepaid expenses, deferred taxes and other 9,353 11,000
----------- -----------
Total current assets 182,252 174,523
Property and equipment 128,444 122,938
Less: accumulated depreciation (35,810) (31,384)
----------- -----------
92,634 91,554
Goodwill and other intangibles, net 145,682 150,234
Deferred taxes and other assets, net 6,471 7,735
----------- -----------
Total assets $ 427,039 $ 424,046
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ - $ 12,750
Accounts payable 33,373 32,194
Accrued liabilities 23,191 26,631
Other short-term obligations 2,731 3,133
----------- -----------
Total current liabilities 59,295 74,708
Long-term debt, net of current maturities - 78,550
10 1/2% Senior subordinated notes 100,000 100,000
6 3/4% Convertible subordinated debentures - 23,352
Other long-term obligations, net of current
maturities 1,769 3,300
Deferred taxes 7,224 6,208
----------- -----------
Total liabilities 168,288 286,118
Commitments and contingencies
Shareholders' equity
Preferred Stock, $1.00 par, 20,000,000 shares
authorized, none issued or outstanding - -
Common Stock, $.001 par, 40,000,000 shares
authorized, 14,200,762 and 8,871,355 shares
issued and outstanding,respectively 14 9
Additional paid-in capital 217,908 103,872
Retained earnings 53,720 45,250
Subscriptions receivable (5,200) (5,200)
Cumulative translation adjustment (7,691) (6,003)
----------- -----------
Total shareholders' equity 258,751 137,928
----------- -----------
Total liabilities and shareholders'
equity $ 427,039 $ 424,046
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
MAXXIM MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- -----------------------
May 3, May 4, May 3, May 4,
1998 1997 1998 1997
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $ 132,958 $ 136,042 $ 260,961 $ 269,443
Cost of sales 98,216 102,603 193,158 203,768
----------- ---------- ---------- ----------
Gross profit 34,742 33,439 67,803 65,675
Operating expenses 23,283 23,040 45,617 45,557
----------- ---------- ---------- ----------
Income from operations 11,459 10,399 22,186 20,118
Interest expense (3,581) (5,641) (7,914) (11,182)
Other income, net 301 96 465 1,895
----------- ---------- ---------- ----------
Income before income taxes 8,179 4,854 14,737 10,831
Income taxes 3,460 2,137 6,267 4,655
----------- ---------- ---------- ----------
Net income $ 4,719 $ 2,717 $ 8,470 $ 6,176
=========== ========== ========== ==========
Basic earnings per share $ 0.38 $ 0.33 $ 0.76 $ 0.76
=========== ========== ========== ==========
Diluted earnings per share $ 0.37 $ 0.31 $ 0.74 $ 0.70
=========== ========== ========== ==========
Basic weighted average
shares outstanding 12,429 8,131 11,111 8,131
=========== ========== ========== ==========
Diluted weighted average
shares outstanding 12,836 9,866 11,668 9,851
=========== ========== ========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
MAXXIM MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, In thousands)
<TABLE>
<CAPTION>
Six Months Ended
---------------------------
May 3, May 4,
1998 1997
------------ -----------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 8,470 $ 6,176
Adjustment to reconcile net income to net cash
provided by operating activities:
Deferred income tax expense 2,637 -
Depreciation and amortization 9,542 9,254
Gain on sale of investment in equity securities - (1,510)
Change in operating assets and liabilities 10,061 4,769
------------ -----------
Net cash provided by operations 30,710 18,689
Cash flows from investing activities:
Proceeds from sale of long-term investment 1,500 -
Proceeds from sale of buildings 1,200 450
Proceeds from available-for-sale securities - 3,130
Purchase of property and equipment (8,703) (4,198)
------------ -----------
Net cash used in investing activities (6,003) (618)
Cash flows from financing activities:
Proceeds from secondary stock offering,
net of offering costs 91,394 -
Payments on term loan (81,000) (3,000)
Payments on revolver, net of borrowings (10,300) (4,690)
Decrease in other obligations (2,315) (3,276)
Increase (decrease) in bank overdraft 2,827 (4,317)
Other, net 160 -
------------ -----------
Net cash provided by (used in) financing activities 766 (15,283)
Effect of foreign currency translation adjustment (74) (372)
------------ -----------
Net increase in cash and cash equivalents 25,399 2,416
Cash and cash equivalents at beginning of period 3,130 5,950
------------ -----------
Cash and cash equivalents at end of period $ 28,529 $ 8,366
============ ===========
Supplemental cash flow disclosures:
Interest paid during the period $ 8,139 $ 11,459
Income taxes paid during the period 1,312 3,148
Noncash investing and financing activities
Conversion of 63/4% convertible subordinated
debentures 22,278 -
Conversion of long-term note investment into
stock investment 4,000 -
Note received from the sale of building - 350
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
MAXXIM MEDICAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The accompanying condensed consolidated financial statements include the
accounts of Maxxim Medical, Inc. and its wholly owned subsidiaries
(collectively, the Company). The Company develops, manufactures and markets
specialty hospital products.
The accompanying unaudited condensed consolidated financial statements
reflect all adjustments of a normal recurring nature which, in the opinion of
management, are necessary for a fair presentation of the results for the interim
periods presented. All significant intercompany balances and transactions have
been eliminated in consolidation.
These financial statements should be read in conjunction with the
Company's annual audited financial statements for the year ended November 2,
1997, included in the Company's Annual Report on Form 10-K/A as filed with the
Securities and Exchange Commission.
Certain reclassifications have been made to the fiscal 1997 condensed
consolidated financial statements to conform with the fiscal 1998 presentation.
Note 2 - Summary of Significant Accounting Policies
Fiscal Year.
Commencing in fiscal year 1994 the Company implemented a fiscal year which
ends on the Sunday nearest to the end of the month of October. Normally each
fiscal year will consist of 52 weeks, but every five or six years, the fiscal
year will consist of 53 weeks. For fiscal 1998, the year end date will be
November 1 compared to a 1997 year end date of November 2. Fiscal 1998 will
consist of 52 weeks. The second quarter of fiscal 1998 ended on May 3 compared
to the fiscal 1997 second quarter end date of May 4.
Translation of Foreign Currency Financial Statements.
Assets and liabilities of foreign subsidiaries have been translated into
United States dollars at the applicable rates of exchange in effect at the end
of the period reported. Revenues and expenses have been translated at the
applicable weighted average rates of exchange in effect during the period
reported. Translation adjustments are reflected as a separate component of
stockholders' equity.
Earnings Per Share.
Statement of Financial Accounting Standards No. 128, "Earnings per Share",
specifies new measurement, presentation and disclosure requirements for earnings
per share and is required to be applied retroactively upon initial adoption. The
Company has adopted SFAS No. 128 effective with the release of February 1, 1998,
earnings data, and accordingly, has restated herein all previously reported
earnings per share data. Basic earnings per share is based on the weighted
average shares outstanding without any dilutive effects considered. Diluted
earnings per share reflects dilution from all contingently issuable shares,
including options and convertible debt. A reconciliation of such earnings per
share data is as follows:
5
<PAGE>
MAXXIM MEDICAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended May Six Months Ended May
3, 1998 3, 1998
------------------------- ------------------------
Per Per
Share Share
Income Shares Amounts Income Shares Amounts
-------- ------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Basic EPS
Net Income $ 4,719 12,429 $ 0.38 $ 8,470 11,111 $ 0.76
======= =======
Effect of dilutive
securities
Convertible Debt 107 182
Options 407 375
------- ------ ------- -------
Diluted EPS $ 4,719 12,836 $ 0.37 $ 8,577 11,668 $ 0.74
======= ====== ======= ======= ======= =======
Three Months Ended May Six Months Ended May
4, 1997 4, 1997
------------------------- ------------------------
Per Per
Share Share
Income Shares Amounts Income Shares Amounts
------- ------- -------- ------- ------- --------
Basic EPS
Net Income $ 2,717 8,131 $ 0.33 $ 6,176 8,131 $ 0.76
======= =======
Effect of dilutive
securities
Convertible Debt 341 1,597 682 1,597
Options 138 123
-------- ------- ------- -------
Diluted EPS $ 3,058 9,866 $ 0.31 $ 6,858 9,851 $ 0.70
======= ====== ======= ======= ====== ======
</TABLE>
Estimates Involved in Preparing the Condensed Consolidated Financial
Statements.
The Company's interim financial statements are prepared in accordance with
the same accounting policies as those followed at year end. Certain items in the
financial statements can be determined on an interim basis only by making
accounting estimates. The accuracy of such amounts is dependent upon facts that
will exist and procedures that will be accomplished by the Company later in the
year. Certain of the significant accounting estimates related to the
accompanying statements are stated below.
Inventories.
The amount reflected as inventory as of May 3, 1998, and the related
amount for the cost of sales, have been determined using the Company's normal
accounting procedures. In management's opinion, no significant adjustment would
have been required had an actual count of the inventory been made. Inventory as
of May 3, 1998, and November 2, 1997, included the following:
<TABLE>
<CAPTION>
May 3, November 2,
1998 1997
---------- -----------
(In thousands)
<S> <C> <C>
Raw materials $ 31,635 $ 36,613
Work in progress 7,603 7,227
Finished goods 39,153 43,393
Reserve (3,582) (4,049)
---------- ----------
$ 74,809 $ 83,184
========== ===========
</TABLE>
6
<PAGE>
MAXXIM MEDICAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
Income Taxes.
The Company has calculated current and deferred income tax provisions for
the periods ended May 3, 1998, and May 4, 1997, based on its best estimate of
the effective income tax rate expected to be applicable for the full fiscal
year.
New Accounting Pronouncements
In June1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
130"), which establishes standards for reporting and display of comprehensive
income and its components. The components of comprehensive income refer to
revenues, expenses, gains and losses that are excluded from net income under
current accounting standards, including foreign currency translation items,
minimum pension liability adjustments and unrealized gains and losses on certain
investments in debt and equity securities. SFAS 130 requires that all items that
are recognized under accounting standards as components of comprehensive income
be reported in a financial statement displayed in equal prominence with other
financial statements; the total or other comprehensive income for a period is
required to be transferred to a component of equity that is separately displayed
in a statement of financial position at the end of an accounting period. SFAS
130 is effective for both interim and annual periods beginning after December
15, 1997. The Company plans to adopt SFAS 130 in the first quarter of fiscal
1999.
Note 3 - Sale of Nonoperating Assets
In the second quarter of fiscal 1998, the Company's prior headquarters was
sold for $1,200,000. A resulting gain of $25,000, was recorded and is reflected
in other income in the financial statements.
In the first quarter of fiscal 1997, the Compay recorded a one-time gain
from the sale of an investment in marketable equity securities in the amount of
$1,510,000, which is reflected in other income in the financial statements.
Note 4 - 6 3/4% Convertible Subordinated Debentures
In March 1993, the Company issued $28,750,000 in principal amount of 6
3/4% Convertible Subordinated Debentures (the "Debentures") due March 1, 2003.
The Debentures were convertible at the option of the holder into Common Stock at
a conversion price of $18 per share and paid interest every six months
commencing September 1, 1993, through maturity on March 1, 2003.
On October 3, 1997, the Company called for the redemption of $10,000,000,
in principal amount, of the Debentures effective as of November 4, 1997 (the
"First Redemption Date"). On the First Redemption Date, the redemption price of
104.17% of the principal amount, or $1,041.70 plus accrued interest of $11.81
per $1,000 face amount of the Debentures was paid to the holders of Debentures
called for redemption who did not exercise their right to convert their
Debentures into common stock. On November 12, 1997, the Company called for the
redemption of the remaining outstanding Debentures effective as of December 12,
1997 (the "Second Redemption Date"). On the Second Redemption Date, the
redemption price of 104.17% of the principal amount, or $1,041.70 plus accrued
interest of $18.94 per $1,000 face amount of the Debentures, was paid to the
holders who had not exercised their right to convert their Debentures into
common stock.
As of May 3, 1998, $28,381,000 of the Debentures had converted into
1,576,614 shares of the Company's common stock and debt issuance costs of
$867,000 related to these converted Debentures were written off to additional
paid-in capital. During the conversion, $369,000 in principal amount was paid to
Debenture holders who presented their Debentures for redemption.
7
<PAGE>
MAXXIM MEDICAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)
Note 5 - Management Stock Purchase Plan
On May 23, 1997, the Company issued 400,000 shares of common stock
pursuant to a Senior Management Stock Purchase Plan at $13.00 per share, the
closing stock price on April 30, 1997. The stock was issued in exchange for an
aggregate of $5.2 million in non-interest bearing, full recourse promissory
notes due May 23, 2000, from the participating managers. These notes have been
recorded as subscriptions receivable and are included in the shareholders'
equity section of the balance sheet. Payment of these notes is also secured by
the pledge of the 400,000 shares of common stock. Net compensation costs
associated with these shares was not significant.
Note 6 - Public Offering of Common Stock
In March 1998, the Company completed an offering of 4,025,000 shares of
its common stock at a price to the public of $24.00 per share, including 525,000
shares pursuant to the underwriters' exercise of the overallotment option. After
deducting offering costs and commissions, the Company received net proceeds of
approximately $91,400,000.
Note 7 - Subsequent Events
On May 20, 1998, the Company announced its agreement in principle to
acquire Winfield Medical, a private developer, manufacturer and distributor of
medical products. Maxxim will acquire Winfield through a cash merger transaction
expected to be funded with cash on hand. The transaction is expected to
be consumated in June 1998 and is subject to final negotiation and execution
of a definitive merger agreement.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
The following discussion should be read in conjunction with the Condensed
Consolidated Financial Statements and related Notes appearing
elsewhere in this report.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the percentage
which selected items in the Condensed Consolidated Statements of Operations bear
to net sales:
<TABLE>
<CAPTION>
Percentage of Net Sales
----------------------------------------------
Three Months Ended Six Months Ended
---------------------- ---------------------
May 3, May 4, May 3, May 4,
1998 1997 1998 1997
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 73.9% 75.4% 74.0% 75.6%
---------- ---------- --------- ----------
Gross profit 26.1% 24.6% 26.0% 24.4%
Operating expenses 17.5% 16.9% 17.5% 16.9%
---------- ---------- --------- ----------
Income from operations 8.6% 7.7% 8.5% 7.5%
Interest expense (2.7%) (4.1%) (3.0%) (4.2%)
Other income, net 0.2% 0.0% 0.2% 0.7%
---------- ---------- --------- ----------
Income before income tax 6.1% 3.6% 5.7% 4.0%
Income taxes 2.6% 1.6% 2.4% 1.7%
---------- ---------- --------- ----------
Net income 3.5% 2.0% 3.3% 2.3%
========== ========== ========= ==========
</TABLE>
Net sales - Net Sales for the second fiscal quarter of 1998 decreased 2.3%
to $132,958,000 from $136,042,000 reported for the second quarter of 1997. Net
sales for the first six months of fiscal 1998 were $260,961,000, a 3.1% decrease
from the $269,443,000 reported for the comparable period in the prior fiscal
year. This decrease is primarily due to the planned cessation of certain low
margin custom procedure trays.
Gross profit - In the second quarter of fiscal 1998 the Company's gross
profit increased to $34,742,000, compared to $33,439,000 reported in the second
quarter of last year. The Company's gross profit rate increased to 26.1% in the
second quarter of fiscal 1998 from 24.6% in the second quarter of fiscal 1997.
For the six months ended May 3, 1998 and the six months ended May 4, 1997 gross
profit was $67,803,000 and $65,675,000, or 26.0% and 24.4% of net sales
respectively. The increase in both dollars and rate are primarily attributable
to the improved gross profit in the Company's custom procedure trays.
Operating expenses - Operating expenses for the second quarter were
$23,283,000 or 17.5% of net sales for fiscal 1998 compared to $23,040,000 or
16.9% of net sales for fiscal 1997. For the first six months of fiscal 1998 and
1997 operating expenses were $45,617,000 and $45,557,000, or 17.5% and 16.9% of
net sales, respectively. The increase in operating expense as a percentage of
net sales is primarily attributable to increases in administrative fees paid on
contracts with group purchasing organizations and the effect of lower net sales
as discussed above.
Income from operations - Income from operations increased to $11,459,000,
or 8.6% of net sales, in the second quarter of fiscal 1998 from $10,399,000, or
7.7% of net sales, in the comparable period of the prior fiscal year. This is an
increase of 10.2% over the prior fiscal period. For the first six months of
fiscal 1998 and 1997 income from operations were $22,186,000 and $20,118,000, or
8.5% and 7.5% of net sales, respectively.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION - (Continued)
Interest expense - The Company's interest expense decreased from
$5,641,000 in the second quarter of fiscal 1997 to $3,581,000 in the second
quarter of fiscal 1998. For the six months ended May 3, 1998 and May 4, 1997
interest expense was $7,914,000 and $11,182,000, respectively. The decrease in
interest expense for the fiscal 1998 periods is due to the reduced debt balances
in fiscal 1998 versus fiscal 1997.
Other income - A one-time gain of $1,510,000 from the sale of investment
securities was included in other income for the first quarter of fiscal 1997.
Income taxes - The Company's effective tax rate for the six months ended
May 3, 1998 and May 4, 1997 was 42.5% and 42.9%, respectively and is higher than
the statutory rate primarily due to non-deductible goodwill from acquisitions.
Net income - As a result of the foregoing, net income for the second
quarter of fiscal 1998 was $4,719,000 versus $2,717,000 for fiscal 1997. Diluted
earnings per share was $0.37 compared to $0.31 for the same period last year.
For the six months of fiscal 1998 and 1997, net income was $8,470,000 versus
$6,176,000, respectively. Diluted earnings per share was $0.74 compared to $0.70
for the same period last year.
LIQUIDITY AND CAPITAL RESOURCES
At May 3, 1998, the Company had cash and cash equivalents of $28,529,000,
working capital of $122,957,000, long-term liabilities of $108,993,000 and
shareholders' equity of $258,751,000. For the six months ended May 3, 1998, cash
flow from operations was favorably impacted by a reduction in operations working
capital of $10,061,000 primarily resulting from improved management of accounts
receivable and inventory.
On October 3, 1997, the Company called for redemption of $10,000,000 in
principal amount of its $28,750,000 6 3/4% Debentures due March 1, 2003,
effective as of November 4, 1997. On November 12, 1997, the Company called for
the redemption of the remaining outstanding principal amount of Debentures
effective as of December 12, 1997. In fiscal 1998, $22,983,000 of the Debentures
converted into 1,276,732 shares of common stock and debt issuance costs of
$705,000 related to these converted Debentures were written off to additional
paid-in capital. The balance of $369,000 was paid to Debenture holders upon
surrender of their certificates.
In March 1998, the Company completed an offering of 4,025,000 shares of
its common stock at a price to the public of $24.00 per share, including 525,000
shares pursuant to the underwriters' exercise of the overallotment option. After
deducting offering costs and commissions, the Company received net proceeds of
approximately $91,400,000. The Company plans to use approximately $20,000,000 to
expand glove production capacity and the balance to repay certain outstanding
bank debt.
In the first six months of fiscal 1998, the Company repaid $91,300,000 of
bank debt which extinguished its term loan and revolver credit facility
balances. As a result of debt repayments, the Company has an unused commitment
of $75,000,000 on its revolver credit facility.
The Company believes that its present cash balances together with
internally generated cash flows and borrowings under its existing credit
facility will be sufficient to meet its future working capital requirements.
Year 2000 Compliance
The Company is in the process of remediating certain software for the
impact of Year 2000 issues on its computer systems and applications. Management
believes that such remediation effort will not have a significant impact on the
financial results or prospects of the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to the registrant at this time.
10
<PAGE>
PART II. OTHER INFORMATION
Items 1, 2, 3 and 5 for which provision is made in the applicable
regulations of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefore have been omitted.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its 1998 Annual Meeting of Shareholders on March 12,
1998, and took the following actions:
(1) As set forth in the table below, the following directors were elected to
serve until the next annual meeting of shareholders or until their respective
successors are elected and qualified:
<TABLE>
<CAPTION>
VOTES VOTES
NAME FOR WITHHELD
<S> <C> <C>
Kenneth W. Davidson 7,803,842 59,520
Donald R. DePriest 7,803,442 59,920
Peter G. Dorflinger 7,803,917 59,445
Martin Grabois, M.D. 7,804,017 59,345
Ernest J. Henley, Ph.D. 7,802,917 60,445
Richard O. Martin, Ph.D. 7,803,742 59,620
Henk R. Wafelman, Ing. 7,803,017 60,345
</TABLE>
(2) The shareholders approved the 1998 Non-Employee Directors' Stock Option Plan
("Directors' Plan") providing for the reservation of up to 40,000 shares in
connection with the grant of options to purchase such shares to non-employee
directors, and approved the grant of options to purchase 30,000 shares to
current non-employee directors, with 7,516,925 shares voting for the Directors'
Plan and grant, 322,887 shares voting against the Directors' Plan and grant and
23,550 shares abstaining.
(3) The shareholders approved the Senior Management Stock Purchase Plan (the
"Plan") and subsequent sale of 400,000 shares of common stock of the Company
thereunder with 7,697,883 shares voting for the Plan and sale, 140,335 shares
voting against the Plan and sale and 25,144 shares abstaining.
(4) The shareholders approved the appointment of KPMG Peat Marwick LLP as the
Company's independent auditors for fiscal year 1997 with 7,843,733 shares voting
for the appointment, 7,605 shares voting against the appointment and 12,024
shares abstaining.
All of the foregoing are discussed in further detail in the Company's definitive
Proxy Statement and related documents filed with the Securities and Exchange
Commission in connection with the 1998 Annual Meeting of Shareholders.
Item 5. OTHER INFORMATION
<TABLE>
<CAPTION>
Restatement of Earnings Per Share Data
November 2, November 3, October 29, October 30, October 31,
1997 1996 1995 1994* 1993
----------- ------------ ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
As Previously Reported
Primary earnings per share $ 1.51 $ 1.05 $ 0.36 $ 1.05 $ 0.94
Fully diluted earnings per
share $ 1.40 $ 1.01 $ 0.36 $ 1.00 $ 0.91
As Restated for SFAS No. 128,
"Earnings per Share"
Basic earnings per share $ 1.55 $ 1.08 $ 0.36 $ 1.05 $ 0.94
Diluted earnings per share $ 1.42 $ 1.02 $ 0.36 $ 1.01 $ 0.92
* Primary and fully diluted as well as basic and diluted earnings per
share exclude a $.05 and $.04 adjustment respectively, to reflect the
change in accounting for income taxes.
</TABLE>
The Company has restated all previous earnings per share data to comply
with Statement of Financial Accounting Standards No. 128 "Earnings per
Share,"which became effective on a retroactive basis with the issuance of
February 1, 1998 earnings data.
11
<PAGE>
Item 6. EXHIBITS AND REPORTS
(a) Exhibits
27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
12
<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.
MAXXIM MEDICAL, INC.
Date: 6/11/98 By: /s/ Kenneth W. Davidson
Kenneth W. Davidson
Chairman of the Board, President &
Chief Executive Officer
(principal executive officer)
Date: 6/11/98 By: /s/ Peter M. Graham
Peter M. Graham
Executive Vice President,
Chief Operating Officer & Secretary
(principal financial officer)
Date: 6/11/98 By: /s/ Alan S. Blazei
Alan S. Blazei
Treasurer, Vice President,
& Corporate Controller
(principal accounting officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
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<CIK> 0000858660
<NAME> Maxxim Medical
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Nov-01-1998
<PERIOD-START> Nov-03-1997
<PERIOD-END> May-03-1998
<CASH> 28,529
<SECURITIES> 0
<RECEIVABLES> 72,146
<ALLOWANCES> 2,585
<INVENTORY> 74,809
<CURRENT-ASSETS> 182,252
<PP&E> 128,444
<DEPRECIATION> 35,810
<TOTAL-ASSETS> 427,039
<CURRENT-LIABILITIES> 59,295
<BONDS> 100,000
0
0
<COMMON> 14
<OTHER-SE> 258,737
<TOTAL-LIABILITY-AND-EQUITY> 427,039
<SALES> 260,961
<TOTAL-REVENUES> 260,961
<CGS> 193,158
<TOTAL-COSTS> 238,775
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,914
<INCOME-PRETAX> 14,737
<INCOME-TAX> 6,267
<INCOME-CONTINUING> 8,470
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,470
<EPS-PRIMARY> .76
<EPS-DILUTED> .74
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