U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-36120
BRADLEY PHARMACEUTICALS, INC.
(Exact name of small business issuer as specified in its charter)
New Jersey 22-2581418
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
383 Route 46 W., Fairfield, NJ
(Address of principal executive offices)
(973) 882-1505
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 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
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Title of Each Class Number of Shares Outstanding
of Common Stock as of November 12, 1997
Class A, No Par Value 8,052,033
Class B, No Par Value 431,552
Transitional Small Business Disclosure Format (check one):
Yes No X
BRADLEY PHARMACEUTICALS, INC.
INDEX TO FORM 10 - QSB
September 30, 1997
Page
Number
Part I - Financial Information
Financial Statements (unaudited):
Condensed Consolidated Balance Sheet -
September 30, 1997 3
Condensed Consolidated Statements of
Operations - three and nine months
ended September 30, 1997 and 1996 4
Condensed Consolidated Statements of Cash
Flows - nine months ended September 30, 1997
and 1996 5
Condensed Notes to Consolidated Financial
Statements 7
Management's Discussion and Analysis 8
Part II - Other Information
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
BRADLEY PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED
BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)
ASSETS
Current assets
Cash and cash equivalents $ 225,003
Accounts receivable - net 1,880,309
Finished goods inventory 938,632
Prepaid samples and materials 1,355,353
Prepaid expenses and other 116,065
Due from affiliate 37,965
Total current assets 4,553,327
Property and equipment - net 317,939
Intangibles - net 13,257,489
Other assets 57,500
Total Assets $ 18,186,255
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 581,703
Accounts payable and accrued expenses 3,230,441
Revolving credit line 904,342
Accrued income taxes 326,214
Total current liabilities 5,042,700
Long-term debt, less current maturities 288,780
Commitments & contingencies
Stockholders' equity
Preferred stock, no par value;
authorized, 2,000,000 shares; issued, none -
Common, Class A, no par value, authorized
26,400,000; issued 8,064,797 shares at
September 30, 1997 14,570,726
Common, Class B, no par value, authorized
900,000 shares, issued and outstanding,
431,552 shares at September 30, 1997 845,448
Treasury Stock, at cost (85,470 shares at
September 30, 1997) (112,284)
Accumulated deficit (2,449,115)
12,854,775
Total Liabilities & Stockholders' Equity $ 18,186,255
See Notes to Condensed Consolidated Financial Statements
3
BRADLEY PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Net sales $ 3,454,575 $ 2,144,441 $ 10,828,545 $ 9,052,940
Cost of sales 1,035,072 627,579 2,842,448 2,308,619
2,419,503 1,516,862 7,986,097 6,744,321
Selling, general and
administrative expenses 1,743,089 1,510,164 5,754,899 5,047,148
Depreciation and amortization 385,110 478,001 1,191,174 1,390,180
Other income - litigation
settlement (net of expenses) (A)(1,768,155) (A)(1,645,132)
Interest expense - net 72,304 135,548 254,904 476,297
2,200,503 355,558 7,200,977 5,268,493
Income before
income taxes 219,000 1,161,304 785,120 1,475,828
Income tax expense 10,000 150,000 233,750 150,000
Net income $ 209,000 $(A)1,011,304 $ 551,370 $(A)1,325,828
Net income
per common share $ 0.03 $ 0.14 $ 0.07 $ 0.18
Weighted average number
of common shares 8,300,000 7,100,000 8,300,000 7,200,000
See Notes to Condensed Consolidated Financial Statements
(A) Includes non-recurring charges from proceeds of litigation with Trans
CanaDerm, net of expenses.
4
BRADLEY PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
1997 1996
Cash flows from operating activities:
Net income $ 551,370 $ 1,325,828
Depreciation & amortization 1,191,174 1,390,180
Effects on cash from changes in operating
assets & liabilities
Decrease (increase) in assets:
Accounts receivable 855,728 1,533,352
Settlement receivable (1,645,132)
Inventory and prepaid samples
and materials 445,199 535,773
Refundable/accrued income taxes 1,969,069
Prepaid expenses and other (63,082) 32,080
Due from affiliate (37,965) (50,417)
(Decrease) increase in liabilities:
Accounts payable and accrued expenses (1,510,534) (4,255,648)
Net cash provided by operating activities 1,431,890 835,085
Cash flows from investing activities:
Investment in Doak Pharmacal Co., Inc. - net
of cash acquired (2,371) (6,190)
Acquisition/disposition of trademarks,
patents and other assets (82,777) (324,790)
Acquisition/disposition of common stock (and
distribution agreement with) of
ITG Laboratories, Inc. - 28,500
Purchase of property & equipment - net (78,826) (13,955)
Net cash used in investing
activities (163,974) (316,435)
Cash flows from financing activities:
Repayment of notes payable (1,834,971) (2,530,610)
Revolving credit line, net 904,342
Bank overdraft - 1,467,418
Purchase of treasury shares (112,284) -
Net cash used in financing activities (1,042,913) (1,063,192)
Increase (decrease) in cash and cash
equivalents 225,003 (544,542)
Cash and cash equivalents at beginning
of period - 556,064
Cash and cash equivalents at end
of period $ 225,003 $ 11,522
(Continued)
5
BRADLEY PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
1997 1996
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 121,047 $ 207,790
Income taxes $ 87,594 $ -
Reference is made to the Liquidity and Capital Resource portion of
Management's Discussion and Analysis as to the non-cash portions of the
Note Payable reduction relating to the Berlex settlement.
See Notes to Condensed Consolidated Financial Statements
6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Balance Sheet, Cash Flow and Statement of Operations and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 225,003
<SECURITIES> 0
<RECEIVABLES> 1,948,174
<ALLOWANCES> 67,865
<INVENTORY> 938,632
<CURRENT-ASSETS> 4,553,327
<PP&E> 1,326,537
<DEPRECIATION> 1,008,598
<TOTAL-ASSETS> 18,186,255
<CURRENT-LIABILITIES> 5,042,700
<BONDS> 288,780
0
0
<COMMON> 15,416,174
<OTHER-SE> (2,561,399)
<TOTAL-LIABILITY-AND-EQUITY> 18,186,255
<SALES> 10,828,545
<TOTAL-REVENUES> 10,828,545
<CGS> 2,842,448
<TOTAL-COSTS> 2,842,448
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 254,904
<INCOME-PRETAX> 785,120
<INCOME-TAX> 233,750
<INCOME-CONTINUING> 551,370
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 551,370
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
BRADLEY PHARMACEUTICALS, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - Summary of Accounting Policies
The unaudited interim financial statements of Bradley Pharmaceuticals, Inc.
(the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles of complete financial statements.
In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (consisting of normal recurring entries)
necessary to present fairly the financial position as of September 30, 1997 and
the results of operations for the three and nine month periods ended September
30, 1997 and 1996 and cash flows for the nine months ended September 30,
1997 and 1996, respectively.
The accounting policies followed by the Company are set forth in Note A
of the Company's financial statements contained in the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1996 filed with the Securities
and Exchange Commission. The financial statements contained in the Form
10-KSB contain additional data and information with respect to long-term debt,
intangible assets, stock agreements, stock option plans, private placements of
securities and reserved shares, escrowed shares, chargebacks and rebates,
related party transactions, income taxes, commitments, economic dependency
and other items, and is incorporated herein by reference.
The results reported for the three and nine month periods ended September
30, 1997 are not necessarily indicative of the results of operations which
may be expected for a full year. This report contains certain forward
looking statements with respect to the results of operations and business
of the Company. These forward looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ materially
from those contemplated, projected, forecast, estimated or budgeted in such
forward looking statements include, among others, the following possibi-
lities: (i) failure of the Company to carry out successfully its business
plan; (ii) failure of the Company to secure additional financing on favorable
terms, if necessary, to support operations; (iii) loss of key executives;
(iv) heightened competition; (v) general economic and business conditions
which are less favorable than expected; and (vi) unanticipated changes in
industry trends. See "Management's Discussion and Analysis."
BRADLEY PHARMACEUTICALS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
On September 30, 1997, the Company had negative working capital of
($489,373). This is a positive increase of $2,339,427 from the Company's
negative working capital of ($2,828,800) at December 31, 1996. Improvement in
the Company's working capital position at September 30,1997 was primarily
due to a decrease of $2,862,866 in current maturities of long-term debt
attributable, principally, to the negotiated settlement in September 1997
of all outstanding obligations owing to Berlex Laboratories, Inc. ("Berlex"),
as more fully discussed below. There were also decreases in Accounts
Receivable, Finished Goods Inventory and Pre-paid Samples/Materials
reflecting the normal seasonality of Third Quarter 1997 sales. The Fourth
Quarter, with the onset of the cough/cold season, has traditionally shown
seasonal increases in both sales and accounts receivable.
On September 19, 1997 (the "Closing"), the Company consummated the
negotiated settlement of all of its outstanding obligations to Berlex arising
out of the Company's 1993 acquisition of the DECONAMINE(R) line of cough and
cold products. Immediately prior to the Closing, the Company was indebted to
Berlex in the approximate aggregate amount of $2,500,000. As security for the
satisfaction of its obligations to Berlex, the Company had granted to Berlex
a lien covering all of the Company's accounts receivable and warranted to
Berlex that until such time as all of the Company's obligations to Berlex
were satisfied, the Company would not, generally, without Berlex's consent,
grant any person a security interest in, or create a lien upon, any of the
Company's assets.
At the Closing, in satisfaction of all outstanding obligations then owing to
Berlex and in consideration of Berlex's release of its lien covering the
Company's accounts receivable, the Company (i) paid to Berlex $1,150,000 in
cash, plus accrued interest (the "Cash Payment"), (ii) issued to Berlex
450,000 shares of Class A Common Stock of the Company (which, when added
with the other shares of Class A Common Stock previously issued to Berlex,
represented, at the time of issuance, approximately 19% of the outstanding
Class A Common Stock of the Company) and (iii) agreed to issue to Berlex,
when permissible in accordance with applicable state corporate law, warrants
entitling Berlex to purchase, under certain conditions, up to an additional
750,000 shares of Class A Common Stock at an exercise price of $1.25 per
share. These warrants are subject to certain anti-dilution provisions and
expire two years after issuance, subject to extension under certain conditions.
In order to raise the funds necessary for the Company to make the Cash
Payment to Berlex, the Company, concurrently with the Closing, entered into a
$3,000,000 revolving credit facility with The Cit Group/Credit Finance, Inc.
("CIT"). Advances under this facility are calculated pursuant to a formula
which is based upon the Company's then "eligible" accounts receivable and
inventory levels. This line of credit has an initial term of three years and
is renewable for successive periods of two years each. Interest accrues on
amounts from time to time outstanding under this facility at the rate equal
to the prime rate of interest from time to time announced by The Chase
Manhattan Bank as its prime rate of interest plus 2-1/4%. The Company's
obligations under this credit facility have been secured by the grant by the
Company to CIT of a lien upon, and the pledge of a security interest in,
substantially all of the Company's assets, including the Company's accounts
receivable, inventory and intangible assets (subject, however, to prior liens).
The credit facility contains certain covenants and restrictions concerning the
Company's operations, generally, and the Company's obligations under this
facility have been personally guaranteed, to a limited extent, by Daniel
Glassman, the Company's Chairman of the Board and Chief Executive Officer.
All over-the-counter cough/cold products are regulated by The United
States Food and Drug Administration (the "FDA") pursuant to monographs which
specify permissible active ingredients, labeling and indications and also
determine when specific drug products, such as the DECONAMINE(R) line of
products, change from prescription to over-the-counter status (i.e., a status
not requiring a prescription for the product purchase). The Company's
DECONAMINE(R) product line, which currently has prescription status, falls
under these monographs. Once a final monograph is issued by the FDA with
respect to a product, the product historically can remain as a prescription
product for up to one additional year. The Company anticipates that final
monographs for the Company's DECONAMINE(R) product line, thereby converting
the product line from prescription status to over-the-counter status, are
expected to be issued by the FDA after April 1998. The Company currently
intends to continue to market and distribute its DECONAMINE(R) line of
products as prescription products for as long as it may lawfully continue to
do so. The Company is presently exploring its marketing and distribution
strategy relating to its DECONAMINE(R) product line after final monographs
covering these products are issued, and, as such, it is not currently
possible for the Company to predict how its operations and financial con-
dition will be affected, or whether it will have resources sufficient to
aggressively market the DECONAMINE(R) line of products, if, and when, this
product line is converted from prescription status to over-the-counter status.
Further, the Company's DECONAMINE(R) SR product requires the Company to
file an Abbreviated New Drug Application ("ANDA") with the FDA to be in
compliance with the regulation that all controlled release products, like
DECONAMINE(R) SR, be the subject of an ANDA. The cost of this ANDA is
approximately $900,000. The Company has entered into an agreement with
Phoenix International to perform the clinical studies required for the
issuance of the ANDA. The Company has paid approximately $180,000 with
respect to this project to date. This project is expected to be completed
and submitted to the FDA during 1998. Completion of this research and
development project is subject, however, to the Company's either generating
sufficient cash flow from operations to fund the same or obtaining requisite
financing from outside sources, of which there can be no assurance. There-
fore, the Company cannot at this time reasonably anticipate the timing of the
expenditure of funds necessary for completing the ANDA with respect to its
DECONAMINE(R) SR product. The inability of the Company to further develop
and/or file the necessary ANDA for DECONAMINE(R) SR would have a material
adverse effect on the Company's business.
While the Company, at September 30, 1997, had approximately $700,000
of accounts payable that were more than 90 days past due, the Company has
received indications from creditors that they are willing to continue to
refrain from commencing enforcement or collection actions against the Company
while the Company negotiates or attempts to restructure its financial obli-
gations to these creditors. Moreover, the Company believes that it has meri-
torious defenses and legitimate rights of offset with respect to a portion of
these accounts payable. Notwithstanding the foregoing, the Company presently
lacks the cash resources or borrowing base necessary to satisfy in full these
past due accounts payable if the Company were required to satisfy them
immediately.
With the exception of the capital necessary for the Company to complete
the ANDA with respect to the Company's DECONAMINE(R) SR product and to
satisfy its past due accounts payable, if necessary, the Company believes
that it will have sufficient cash flow from operations to support its working
capital requirements over the next twelve months.
RESULTS OF OPERATIONS
Chargebacks and rebates are the difference between prices at which the
Company sells its products (principally DECONAMINE(R) SR) to wholesalers and
the sales price ultimately paid by the end-user (often governmental agencies
and managed care buying groups) pursuant to fixed price contracts. The Company
records an estimate of the amount either to be charged-back to the Company or
rebated to the end-user at the time of sale to the wholesaler.
GROSS SALES (sales prior to chargebacks, rebates, returns and discounts)
for the three and nine months ended September 30, 1997 were $4,592,927 and
$15,119,997, respectively. These sales results represent a $1,727,468 and
$964,443 increase, respectively, from sales results for the three and nine
month periods ended September 30, 1996. The increase of $1,727,468 for the
three months ended September 30, 1997 was principally due to a $1,024,336
increase in DECONAMINE(R) sales, including a large advance sale to a major
customer and a $503,657 increase in Doak Dermatologics' products sales,
especially CARMOL(R). The increase of $964,443 for the nine months ended
September 30, 1997 was due, primarily, to year-to-date increases in the sales,
particularly international sales, of Doak Dermatologics' products, and
principally CARMOL(R), FORMULA 405(R) A.H.A, TERSASEPTIC(R) , ACID MANTLE(R)
and TRANS-VER-SAL(R). Gross sales of the Company's DECONAMINE(R) product line
accounted for approximately 59% of gross sales for the three and nine months
ended September 30, 1997,respectively, as compared to 58% and 66%, respec-
tively, for the three and nine months ended September 30, 1996.
NET SALES (net of all adjustments to sales) for the three and nine month
periods ended September 30, 1997 were $3,454,575 and $10,828,545, respectively,
representing an increase in net sales of $1,310,134 from the comparable 1996
three month period, and an increase in net sales of $1,775,605 from the
comparable 1996 nine month period. The three month net sales increase is
due to an $880,338 increase in sales of Kenwood products, particularly
DECONAMINE(R) SR 500 capsule sales and the aforementioned advance sale, and
certain managed care contract renegotiations which resulted in an increase in
net sales of approximately $300,000. Additionally, sales of Doak Dermatologics'
products, principally CARMOL(R), increased by $429,809. The nine month net
sales increase, is principally due to a $1,268,814 increase in the sales of
Doak Dermatologics' products, especially international and principally
CARMOL(R), FORMULA 405(R) A.H.A, ACID MANTLE(R), TERSASEPTIC(R) AND
TRANS-VER-SAL(R).
COST OF SALES for the three and nine months ended September 30,1997 were,
$1,035,072 and $2,842,448, respectively, representing increases from the
comparable 1996 three and nine month periods of $407,493 and $533,829,
respectively. The Company's gross profit margin for the three and
nine month periods ended September 30, 1997 were 70% and 74%, respectively, as
compared to 71% and 74%, respectively, for the three and nine month periods
ended September 30, 1996. The Third Quarter decrease in gross profit margins
reflects the seasonal shift in sales mix to lower margin Doak Dermatologics'
products.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES were $1,743,089
and $5,754,899, respectively, for the three and nine month periods ended
September 30, 1997, representing increases of $232,925 and $707,751,
respectively, over the comparable 1996 three and nine month periods.
The increases in selling, general and administrative expenses continue to
reflect increased investment in the Company's sales and marketing areas, with
resulting increases in employee benefits and payroll taxes. The Company,
however, continues to implement steps designed to reduce expenses and maintain
cost controls.
DEPRECIATION and AMORTIZATION EXPENSES for the three and nine
months ended September 30, 1997 were $385,110 and $1,191,174,
respectively, representing decreases of $92,891 and $199,006, respectively,
from comparable 1996 three and nine month periods. This decrease reflects
lower amortization expenses on product acquisitions, principally due to
intangible asset reductions associated with the restructuring of the Company's
obligations to Berlex arising out of the DECONAMINE(R) acquisition.
OTHER INCOME - Litigation Settlement of $1,768,155 and $1,645,132 for
the three and nine months ending September 30, 1996 represent, principally,
the non-recurring proceeds of litigation with Trans CanaDerm (as discussed
below), net of expenses.
INTEREST EXPENSE - NET for the three and nine months ended September
30, 1997 was $72,304 and $254,904, respectively. This was $63,244 and
$221,393 lower than the respective periods during 1996 principally due to debt
reduction associated with the DECONAMINE(R) product acquisition from Berlex.
NET INCOME for the three and nine months ended September 30, 1997
was $209,000 and $551,370, respectively, representing decreases of $802,304
and $774,458, respectively, as compared to the three and nine month periods
ended September 30, 1996. These decreases primarily reflect the non-recurring
impact of the Trans CanaDerm legal settlement which resulted in a one-time
income addition of $1,645,132 during the year ended December 31, 1996.
Decreases in 1997 net income have been offset by the positive affects of year
to year sales gains, the recent managed care contract adjustment discussed
above and the reversal of reserves reflecting improvements in processing
of chargebacks and rebates. Excluding the impact of the Trans CanaDerm legal
settlement in 1996, net income would have had increases of $965,851 for the
three months ended September 30, 1997, and $870,674 for the nine months ended
September 30, 1997 versus the respective periods last year.
NET INCOME PER COMMON SHARE for the three and nine months ended
September 30, 1997 was $.03 and $.07, respectively, representing a decrease of
$.11 as compared to the comparable three and nine month periods in 1996. This
decrease principally reflects the non-recurring impact of the Trans CanaDerm
legal settlement. Computations of net income per common share for the three
and nine months ended September 30, 1997 include the effect of stock equi-
valents. Such inclusion, however, does not materially dilute earnings per
share. Excluding the impact of the Trans CanaDerm legal settlement in 1996,
earnings per share would have had increases of $.14 for the three months, and
$.11 for the nine months ended September 30, 1997 versus the respective
periods last year.
Part II - Item 5. Other Information
Recent Developments
The Company has signed an agreement with Osmotics Corporation, a
Colorado manufacturer of dermal patch cosmetic delivery systems, to be the
distributor in the U.S., as well as in international markets of an anti-
wrinkle patch. This arrangement, within a defined marketing segment, com-
menced immediately and will run for five years. The product is being marketed
in the U.S. by Doak Dermatologics under the Le Pont(R) trademark.
Marketing was launched for this product during October 1997 to chain and
independent drugstores and mass merchandisers.
Other Information
On April 8, 1994, the Company was apprised by the New York State
Department of Environmental Conservation ("NYSDEC") that Doak's current
leased manufacturing facility located on adjoining parcels at 62 Kinkel
Street and 67 Sylvester Street, Westbury, New York and former leased facility
located at 128 Magnolia Avenue, Westbury, New York are located in the New
Cassel Industrial Area, which has been designated by the NYSDEC on the
Registry of Inactive Hazardous Waste Sites (the "Registry"). The real
property on which Doak's current manufacturing facility is situated is owned
by and leased to the Company by Dermkraft, Inc., an entity owned by the
former controlling shareholders and officers of Doak.
On February 7, 1995, the company was apprised by NYSDEC that the
current manufacturing facility will be excluded from the Registry. By letter
dated April 21, 1995, the NYSDEC notified the Company that it intended to
investigate the Company's current manufacturing facility to determine if
hazardous substances had previously been deposited on that property. By
letter dated October 24, 1995, NYSDEC notified Dermkraft, Inc. that the
Company's current manufacturing facility is included in or near an inactive
hazardous waste site described as "Kinkel and Sylvester Streets" and that
NYSDEC intends to conduct a Preliminary Site Assessment to study the site and
immediate vicinity. The Company has been advised that NYSDEC has made a pre-
liminary determination to include the 62 Kinkel Street portion of the current
manufacturing facility on the Registry and that the 67 Sylvester Street
portion of the facility will not be included, but those determinations could
change before they are finalized. Thereafter, by letter dated May 3, 1996
and addressed to Dermkraft, Inc., the NYSDEC notified Dermkraft that the site
at 62 Kinkel Street has been listed on the Registry due to the presence of
trichloroethylene ("TCE") in soils and groundwater due to the use of TCE by
LAKA Tools and Stamping and LAKA Industries, a former tenant from 1971
through 1984. The NYSDEC documents refer to Doak Dermatologics as the current
tenant but do not refer to any activities of Doak Dermatologics or the
Company as a basis for the listing in the Registry. The Company cannot at
this time determine whether the cost associated with the investigation and
required remediation, if any, of the current manufacturing facility will be
material. With respect to the former manufacturing facility on Magnolia
Avenue, which remains designated by the NYSDEC as part of the Registry,
management believes that Doak will not be obligated to contribute to any
remediation costs, if any are required.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirement of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BRADLEY PHARMACEUTICALS, INC.
(REGISTRANT)
Date: November 14, 1997 /s/ Daniel Glassman
Daniel Glassman
Chairman of The Board, President and
Chief Executive Officer
(Principal Executive Officer)
Date: November 14, 1997 /s/ Lawrence R. Lenz
Lawrence R. Lenz
Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
