This document consists
of 15 pages, of which
this page is number 1 .
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 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_____________
(Amended by Exch Act Rel No. 312905. eff 4/26/93.)
Commission File Number. 000-21930
---------
BIOSOURCE INTERNATIONAL, INC.
-----------------------------
(Exact name of registrant as specified in its charter)
Delaware 77-0340829
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
820 Flynn Road, Camarillo, California 93012
- ------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(805)987-0086
None
- -----------------------------------------------------------------
(Former name, former address, and former fiscal year if changed
since last report)
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 .
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at August 11, 1997 8,291,271
<PAGE 2>
BIOSOURCE INTERNATIONAL, INC.
INDEX TO FINANCIAL STATEMENTS
Item Description Page
PART I FINANCIAL INFORMATION
1. Financial Statements
Consolidated Balance Sheets as of June 30, 1997
and December 31, 1996 ......................... 3
Consolidated Statements of Operations for the six
months ended June 30, 1997 and 1996............ 4
Consolidated Statements of Operations for the three
months ended June 30, 1997 and 1996............ 5
Consolidated Statements of Cash Flows for the six
months ended June 30, 1997 and 1996............ 6
Notes to Consolidated Financial Statements......... 7-10
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............ 11-13
PART II OTHER INFORMATION
1-6 Other Information, Exhibits and Reports on
Form 8-K....................................... 14
SIGNATURES......................................... 15
<PAGE 3>
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM I - FINANCIAL STATEMENTS
BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1997 1996
------------ ------------
(unaudited)
ASSETS
<CAPTION>
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,601,372 $ 3,606,904
Short-term investments, held to maturity 9,752,142 5,766,905
Accounts receivable, net of $39,000
allowance for doubtful accounts 4,513,853 4,286,237
Inventories 7,124,180 7,228,918
Prepaid expenses and other current assets 1,583,484 1,316,416
Deferred income taxes 256,996 202,000
------------ ------------
Total current assets 26,832,027 22,407,380
Long-term investments, held to maturity 816,429 5,561,669
Property and equipment, net 4,726,919 4,788,404
Other assets 662,849 712,374
Deferred income taxes 400,000 400,000
------------ ------------
$ 33,438,224 $ 33,869,827
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of notes payable $ 29,743 $ 28,510
Accounts payable 1,631,756 1,895,310
Accrued expenses 1,463,523 2,318,284
Income taxes payable 177,022 77,767
------------ ------------
Total current liabilities 3,302,044 4,319,871
------------ ------------
Notes payable, less current maturities 1,299,172 1,314,359
Deferred income taxes 84,200 75,000
Stockholders' equity:
Preferred stock, $.001 par value. Authorized
1,000,000 shares; none issued -- --
Common stock, $0.001 par value. Authorized
20,000,000 shares; issued and outstanding
8,324,113 shares at June 30,1997 and
8,318,971 shares at December 31,1996 8,324 8,319
Treasury stock (311,567) --
Additional paid-in capital 28,932,284 28,837,102
Retained earnings (accumulated deficit) 954,767 (679,824)
Accumulated translation adjustment (831,000) (5,000)
------------ ------------
Net stockholders' equity 28,752,808 28,160,597
------------ ------------
$ 33,438,224 $ 33,869,827
============ ============
</TABLE>
<PAGE 4>
<TABLE>
BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30
(UNAUDITED)
1997 1996
---------- ----------
<CAPTION>
<S> <C> <C>
Revenue $ 10,492,856 $ 5,781,195
Cost of goods sold 3,769,751 1,987,138
---------- ----------
Gross profit 6,723,105 3,794,057
---------- ----------
Operating expenses:
Research and development 1,048,305 533,503
Sales & marketing 2,073,927 832,194
General and administrative 1,703,698 816,589
---------- ----------
Total operating expenses 4,825,930 2,182,286
---------- ----------
Operating income 1,897,175 1,611,771
---------- ----------
Other income, net 480,110 100,445
---------- ----------
Income before income taxes 2,377,285 1,712,216
Provision for income taxes 742,695 601,567
---------- ----------
Net income $ 1,634,590 $ 1,110,649
========== ==========
Income per share:
Net income per share $ 0.18 $ 0.17
========== ==========
Weighted average number of
common and common equivalent
shares outstanding 9,049,394 6,573,786
========== ==========
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE 5>
<TABLE>
BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30
(UNAUDITED)
1997 1996
---------- ----------
<CAPTION>
<S> <C> <C>
Revenue $ 5,044,416 $ 3,262,638
Cost of goods sold 1,784,613 1,138,107
---------- ----------
Gross profit 3,259,803 2,124,531
---------- ----------
Operating expenses:
Research and development 524,075 289,484
Sales & marketing 1,017,547 508,752
General and administrative 839,121 443,050
---------- ----------
Total operating expenses 2,380,743 1,241,286
---------- ----------
Operating income 879,060 883,245
---------- ----------
Other income, net 184,475 39,029
---------- ----------
Income before income taxes 1,063,535 922,274
Provision for income taxes 291,100 331,374
---------- ----------
Net income $ 772,435 $ 590,900
========== ==========
Income per share:
Net income per share $ 0.09 $ 0.09
========== ==========
Weighted average number of
common and common equivalent
shares outstanding 9,013,329 6,768,656
========== ==========
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE 6>
<TABLE>
BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
(UNAUDITED)
1997 1996
------------ ------------
<CAPTION>
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,634,590 $ 1,110,649
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 314,254 152,655
Loss on sale of fixed assets 8,674 --
Unrealized exchange loss 64,982 --
Changes in assets and liabilities:
Accounts receivable (653,133) (3,171,721)
Inventories (301,091) (3,609,924)
Prepaid expenses and other current assets (509,928) (1,501,459)
Deferred income taxes (45,800) --
Other assets 173,705 6,628,969
Accounts payable (153,697) 715,874
Accrued expenses and other liabilities (651,938) 1,618,617
Income taxes payable 113,316 --
------------ ------------
Net cash provided by (used in) operating activities (6,066) 1,943,660
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (518,070) (3,338,835)
Purchase of European subsidiary -- (6,868,000)
Purchase of investments (10,853,868) --
Proceeds from sale of investments 11,613,871 --
------------ ------------
Net cash provided by (used in)
investing activities 241,933 (10,206,835)
------------ ------------
Cash flows from financing activities:
Proceeds from the exercise of options 100,102 126,659
Proceeds from the exercise of warrants -- 59,365
Proceeds from issuance of common stock -- 19,365,919
Borrowings from bank -- 1,957,000
Repayments to bank (13,954) (706,348)
Payments to acquire tresury stock (311,567) --
Payments of capital lease obligations -- (23,000)
------------ ------------
Net cash provided by (used in) financing activities (225,419) 20,779,595
------------ ------------
Effect of exchange rate on cash (15,980) 80,000
------------ ------------
Net increase (decrease) in cash and
cash equivalents (5,532) 12,596,420
Cash and cash equivalents at beginning
of period 3,606,904 1,393,092
------------ ------------
Cash and cash equivalents at end
of period $ 3,601,372 $ 13,989,512
============ ============
<PAGE 7>
BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The unaudited financial statements as of June 30, 1997 and for
the six month and three month periods ended June 30, 1997 and
1996 included herein have been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations.
However, the Company believes that the disclosures are adequate
to prevent the information presented from being misleading.
These financial statements should be read in conjunction with the
financial statements and the notes thereto included in the
Company's Form 10-K, which contains financial information for the
year ended December 31, 1996.
The information provided in this report reflects all adjustments
that are, in the opinion of management, necessary to present
fairly the results of operations for these periods. The results
of these periods are not necessarily indicative of the results to
be expected for the full year.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of
BioSource International, Inc. and its wholly owned
subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
The Company is engaged in the licensing, development,
manufacture, marketing and distribution of immunological
reagents, test kits and oligonucleotides used in biomedical
research. The types of products supplied by the Company
include a range of bioactive proteins, enzymes, substrates,
antibodies, human and murine cytokines, growth factors and a
variety of assay systems for the detection of biological
molecules. These products focus on areas of research such as
immunology, AIDS and cancer. The Company focuses its sales
efforts on academic, industrial and governmental
laboratories.
Cash and Cash Equivalents
-------------------------
Cash and cash equivalents includes all cash balances and
highly liquid investments with an original maturity of three
months or less.
Investments
-----------
The Company adopted the provisions of Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," as of January 1,
1994. At June 30, 1997, the Company has investments in U.S.
Treasury securities that are classified in the consolidated
balance sheet as short-term (mature in more than 91 days but
no more than one year) or long-term (maturities beyond one
year). These investments are categorized as held to maturity
and are carried at cost as the Company has both the intent
and the ability to hold these investments until they mature.
<PAGE 8>
BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Inventories
-----------
Inventories are stated at the lower of cost (first-in, first-
out) or market (net realizable value) for raw materials and
work in process and the average-cost method for finished
goods.
Property and Equipment
----------------------
Property and equipment are stated at cost. Depreciation is
provided using the straight-line method over the estimated
useful lives which range from three to seven years.
Leasehold improvements are amortized using the straight-line
method over the estimated useful life or the lease term,
whichever is shorter.
License Agreements
------------------
License agreements are recorded at cost and are amortized
using the straight-line method over the shorter of the
estimated useful lives of the license or the license term
(generally five to ten years). These costs are included with
other assets in the accompanying consolidated balance sheet.
Income Taxes
------------
Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and
operating loss and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period
that includes the enacted date.
Long Lived Assets
-----------------
In March 1995, Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of," was issued.
This statement provides guidelines for recognition of
impairment losses related to long-term assets. Effective
January 1, 1996, the Company adopted Statement No. 121. The
adoption of this new standard did not have a material effect
on the Company's consolidated financial statements.
Accounting for Stock Options
----------------------------
In October 1995, Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation"
("Statement No. 123"), was issued. This statement
encourages, but does not require a fair value based method of
accounting for employee stock options. The Company will
continue to measure compensation costs pursuant to APB
Opinion No. 25, "Accounting for Stock Issued to Employees"
and comply with the pro forma disclosure requirements of
Statement No. 123. Effective January 1, 1996, the Company
adopted Statement No. 123 which had no impact on the
Company's consolidated financial statements.
Net Income per Share
--------------------
Net income per share has been computed using the weighted
average number of common shares outstanding each quarter.
The Company's common share equivalents associated with
dilutive stock options and warrants are immaterial, and
accordingly, primary and fully diluted net income per share
are approximately the same.
<PAGE 9>
BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Inventories
Jun 30, 1997 Dec 31, 1996
Raw materials................... $ 1,086,966 $ 767,378
Work in process................. 2,503,261 3,243,766
Finished goods.................. 3,533,953 3,217,774
------------- -------------
$ 7,124,180 $ 7,228,918
============== ==============
3. Property and Equipment
Jun 30, 1997 Dec 31, 1996
Land............................ $ 360,000 $ 360,000
Building and improvements....... 1,915,567 1,852,075
Machinery and equipment......... 2,815,357 2,797,638
Office furniture and equipment.. 1,062,388 975,258
------------- --------------
6,153,312 5,984,971
Less accumulated depreciation
and amortization 1,426,393 1,196,567
------------- --------------
$ 4,726,919 $ 4,788,404
============== ===============
4. Notes Payable
Long-term debt consists of the following:
Jun 30, 1997 Dec 31, 1996
9.4% first mortgage note payable
in monthly installments of
$6,896, including interest,
with final payment of $535,178
due April 2006.................. $ 728,197 $ 735,155
7.6% second mortgage note payable
due June 2016, payable in
monthly installments of $5,369,
including interest............. 600,718 607,714
------------ ------------
1,328,915 1,342,869
Less current portion............. 29,743 28,510
------------ ------------
$ 1,299,172 $ 1,314,359
<PAGE 10>
BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Shares used in the earnings per share computations are as
follows:
</TABLE>
<TABLE>
Three Months Ended Six Months Ended
------------------------------ ---------------------------
June 30, 1997 June 30, 1996 June 30, 1997 June 30, 1996
<CAPTION>
<S> <C> <C> <C> <C>
Primary:
Weighted average
number of common
shares 8,341,610 6,604,656 8,341,280 6,309,556
Dilutive effect of
stock options and
warrants 671,719 164,000 708,114 264,230
----------- ---------- ---------- ----------
Average common and
common equivalent
shares outstanding 9,013,329 6,768,656 9,049,394 6,573,786
=========== ========== ========== ==========
Fully diluted:
Weighted average
number of common
shares 8,341,610 6,604,656 8,341,280 6,309,556
Dilutive effect of
stock options and
warrants 671,740 164,021 707,252 275,260
----------- ---------- ---------- ----------
Average common and
common equivalent
shares outstanding 9,013,350 6,768,677 9,048,532 6,584,816
=========== ========== ========== ==========
</TABLE>
Fully diluted earnings per share are not separately reported
since the effect of dilution is less than three percent.
6. Statement of Financial Accounting Standards No. 128
The Financial Accounting Standards Board recently issued
Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings Per Share," which is required to be adopted for
financial statements issued for periods ending after
December 15, 1997. This statement establishes new,
simplified standards for computing and presenting
earnings per share. It replaces the traditional
presentations of primary earnings per share and fully
diluted earnings per share with presentations of basic
earnings per share and diluted earnings per share,
respectively. When adopted by the Company, basic earnings
per share is expected to increase slightly from primary
earnings per share and diluted earnings per share is
expected to approximate fully diluted earnings per share.
<PAGE 11>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read
together with the financial statements and the notes thereto
included elsewhere herein.
OVERVIEW
BioSource International, Inc. ("BioSource") develops,
manufactures, markets and distributes products that are
widely used in biomedical research and are instrumental in
the development of new medical diagnostic methods and
pharmaceutical products. The Company's products enable
scientists to better understand the biochemistry, immunology
and cell biology of the human body, aging and certain
diseases such as cancer, arthritis and other inflammatory
diseases, AIDS and certain other infectious diseases. The
Company's products include immunological reagents, including
bioactive proteins (cytokines, growth factors and adhesion
molecules) and monoclonal and polyclonal antibodies. The
Company also develops, manufactures, markets and distributes
oligonucleotides and ELISA test kits, and uses recombinant
DNA technology to produce cytokines and other proteins.
Because the Company's products are currently sold only to
the research market, the Company is not subject to
regulation by the FDA, and therefore undertakes none of the
risks associated with the research and development of new
drugs.
BioSource maintains manufacturing, laboratories and its
executive offices in Camarillo, California. The Company
manufactures oligonucleotides at its laboratory facilities
located in Menlo Park, California.
BioSource Europe, S.A ("BioSource Europe"), the Company's
wholly owned subsidiary is incorporated under Belgian law and
maintains manufacturing laboratories and administrative offices
in Fleurus, Belgium. BioSource Europe also has wholly owned
subsidiaries in France, Germany, Italy and the Netherlands.
On May 31, 1997 BioSource Europe closed down its Italian sales
office located in Milan, Italy replacing the direct sales force
with a direct distributor.
RESULTS OF OPERATIONS
REVENUE. Revenue for the quarter ended June 30, 1997
increased $1,781,778 or 54.6%% to $5,044,416 from $3,262,638
when compared to the quarter ended June 30, 1996. Revenue
for the six months ended June 30, 1997 increased $4,711,661
or 81.5% to $10,492,856 from $5,781,195 when compared to the
six months ended June 30, 1996. Domestic revenue increased
$308,278 (12%) and $903,261 (18%) for the quarter and six
months ended June 30, 1997, respectively. BioSource Europe
revenue increased $1,473,500 (93%) and $3,808,400 (498%) for
the quarter and six months ended June 30, 1997, respectively,
when compared to the prior period which reflected only one
month's revenue from BioSource Europe.
The increase in consolidated revenue is due to the increased
revenue from BioSource Europe for the related periods and
the continued increased sales from the Company's ELISA test
kits both domestically and internationally. ELISA test kits
sales increased 41% and 51% for the quarter and six months
ended June 30, 1997, respectively.
<PAGE 12>
GROSS MARGINS. Gross margins as percentage of revenue for
the quarter ended June 30, 1997 were 64.6%, a decrease 0.5%,
when compared to 65.1% for the quarter ended June 30, 1996.
Gross margins for the six months ended June 30, 1997 were
64.1%, a decrease of 1.5%, when compared to 65.6% for the
six months ended June 30, 1996. Domestic gross margins for
BioSource for the quarter ended June 30, 1997 remained
constant at 67.6% when compared to the quarter ended June
30, 1996. BioSource Europe recognized gross margins of 51.5%
and 51.8% for the quarter and six months ended June 30,
1997, respectively. The primary factor for the decrease in
consolidated gross margins is from the lower margins
recognized in Europe as compared to the domestic operations.
The Company recognized lower margins in Europe due to higher
costs associated with the manufacturing of RIA
(Radioimmunoassay) assays and higher labor and fixed costs
when compared to that of the United States.
RESEARCH AND DEVELOPMENT. The Company's research and
development expenses increased $234,591 (81.0%) and $514,802
(96.5%) for the quarter and six months ended June 30, 1996,
respectively. Domestic research and development increased
$79,691 (33.8%) and $124,302 (25.9%) for the quarter and six
months ended June 30, 1997, respectively. Research and
development expenses for BioSource Europe amounted to
$208,900 and $444,500 for the quarter ended and six months
ended June 30, 1997. The major increase in expenses is due
to the additional expenses incurred with the acquisition of
BioSource Europe expenses. The Company recognized additional
expenses domestically due to the continued development of
new Elisa assays and other reagents including a quantitative
and qualitative ELISA assay kit ViralQuant which is used for
the detection of Cytomeglovirus ("CMV"), one of the eight
recognized members of the herpes virus family. The CMV kit
is the first in a series of molecular diagnostic assays
being developed by the Company. This kit can measure the
viral load and the state of the CMV infection in transplant
and AIDS patients and is useful for clinical research.
SALES AND MARKETING. Sales and marketing expenses increased
$508,795 (100.0%) and $1,241,733 (149.2%) for the quarter
and six months ended June 30, 1997, respectively. Domestic
sales and marketing expenses increased $152,356 (45.8%) and
$276,128 (41.4%) for the quarter and six months ended June
30, 1997, respectively. BioSource Europe sales and
marketing expenses were $532,500 and $1,130,800 for the
quarter and six months ended June 30, 1997, respectively.
The majority of the consolidated sales and marketing expense
increase was due to the incremental sales and marketing
expenses associated with the acquisition of BioSource Europe.
On May 31, 1997 the Italian subsidiary was closed down and
replaced by a distributor located in Milan, Italy. The
expenses related to the closure were minimal as the most
significant portion of the expenses were employee severance
payments which under Italian law, are accrued per pay period.
Therefore, no significant expenses were associated with the
Italian closure. The additional domestic expenses were in the
areas of increased marketing staff, travel, sales promotion
expenditures, which include advertising, catalog expenses,
mailings and trade show attendance.
GENERAL AND ADMINISTRATIVE. General and administrative
increased $396,071 (89.4%) and $887,109 (108.6%) for the
quarter and six months ended June 30, 1997. Domestically,
general and administrative increased $77,083 (22.4%) and
$147,901(20.9%) for the quarter and six months ended June
30. 1997. BioSource Europe general and administrative
expenses were $412,900 and $842,300 for the quarter and six
months ended June 30, 1997, respectively. The domestic
increased expenditures were mainly in the areas of added
personnel to support the growth of the Company, employee
relocation costs, insurance premiums, audit fees and
other general business expense.
INCOME BEFORE INCOME TAXES. Income before income taxes
increased $141,261 (15.3%) to $1,063,535 and $665,069
(38.8%) to $2,377,285 for the quarter and six months ended
June 30, 1997, respectively. The majority of the increase
came from domestic operations in the amount of $255,749 and
$623,297 for the quarter and six months ended June 30, 1997.
BioSource Europe recognized $50,900 and $208,999 in income
before taxes for the quarter and six months ended June 30,
1997.
<PAGE 13>
PROVISION FOR INCOME TAXES. The provision for income taxes
for the quarter and six months ended June 30, 1997 was
provided at the effective rate of approximately 27.4% and
31.2% of consolidated pretax earnings when compared to 35.9%
and 35.1% for the quarter and six months ended June 30,
1996. U.S. corporate taxes reflect the tax benefits of a
foreign sales corporation, credits for increased research
and development expenditures and the California
manufacturers tax credit.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997 cash and cash equivalents, short &
long term marketable securities were $14,169,943 compared to
$14,935,478 at December 31, 1996. Long term marketable
securities at June 30, 1997 amounted to $816,429 all of
which mature in 1998. The Company invests its cash on hand
in low risk short-term commercial paper and U.S. treasury
strips. The Company's policy is to obtain the highest
possible return, maintain liquidity in its investments, to
provide working capital and to have the ability to react to
future potential long term investment opportunities in
complimentary business, products or technologies.
The Company expended $6,066 of cash from its
operating activities for the six months ended June 30, 1997,
a decrease of $1,949,726, when compared to $1,943,660 for the six
months ended June 30, 1996. The decrease in cash from operating
activities is due to the net changes in current assets and
liabilities for the first six months of 1997 in addition to the
effect of the strength of the U.S. dollar against the Belgian
Franc at June 30, 1997 as compared to December 31, 1996.
Capital expenditures for the six months ended June 30,
1997 amounted to $518,070, a decrease of $2,820,765 when
compared to $3,338,835 for the six months ended June 30,
1996. Capital expenditures for the six months ended June
30, 1997 included laboratory and computer equipment for both
BioSource Europe and domestic operations. The Company also
purchased a fully integrated manufacturing and accounting
software package for BioSource Europe, which is currently
being used for its domestic operations. Management believes
this investment will improve reporting, increase
efficiencies in manufacturing, customer support and
customer service.
During the first six months of 1997, the Company purchased
and retired 43,000 shares of Company common stock at a market
value of $311,567 as part of its previous public announcement
of implementing a stock repurchase program. In addition, $100,102
was received upon the exercise of stock options for the six months
ended June 30, 1997 under the Company's stock incentive plan.
Management of the Company expects to be able to meet
its future cash and working capital requirements for
operations and capital additions through currently available
funds and cash generated from operations.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form
10-Q, including without limitation, statements containing the words
"believes," "anticipates," "expects," and words of similar import,
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-
looking statements involve known and unknown risks, uncertainties
and other factors that may cause the actual results, performance
or achievements of the Company or industry results to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Given
these uncertainties, prospective investors are cautioned not to place
undue reliance on such forward-looking statements and are encouraged
to review the risk factors contained in the Company's annual report
on Form 10-K for the year ended December 31, 1996.
<PAGE 14>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
On June 27, 1997 the Proposals below were submitted to a
vote of security holders at the Annual Meeting of the
Shareholders of BioSource International, Inc.:
Proposal 1. The election of the following persons to serve
as directors of BioSource International, Inc., a Delaware
corporation, until the next regular Annual Meeting of the
Shareholders of BioSource International, Inc. and until
their successors have been duly elected and qualified:
FOR AGAINST ABSTAIN NON-VOTES
James H. Chamberlain 7,066,632 0 50,024 0
Leonard M. Hendrickson 7,064,400 0 52,256 0
David S. Moffa, Ph.D. 7,067,000 0 49,656 0
Robert D. Weist 7,067,168 0 49,488 0
John R. Overturf, Jr. 7,060,302 0 56,354 0
Proposal 2. To ratify the appointment of KPMG Peat Marwick LLP
as the Company's independent public accountants for the year
ending December 31, 1997:
FOR AGAINST ABSTAIN NON-VOTES
7,084,815 13,768 18,073 0
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
<PAGE 15>
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.
BIOSOURCE INTERNATIONAL, INC.
By: /s/ Anna Anderson
---------------------------
Anna Anderson
Vice President and
August 14, 1997 Chief Financial Officer
/s/ James H. Chamberlain
---------------------------
James H. Chamberlain
President and
August 14, 1997 Chief Executive Officer
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