<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 QUARTERLY PERIOD ENDED JUNE 30, 1997.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ____________.
COMMISSION FILE NUMBER 0-19955
-------
MOLECULAR DYNAMICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3050031
(State or other jurisdiction (IRS Employer Identification
of incorporation or organization) Number)
928 EAST ARQUES AVENUE, SUNNYVALE, CALIFORNIA 94086
(Address of principal executive offices and zip code)
(408) 773-1222
(Registrant's telephone number, including area code)
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.
[X] Yes [ ] No
As of July 27, 1997, 10,214,449 shares of Common Stock of the Registrant were
outstanding.
1
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MOLECULAR DYNAMICS, INC.
INDEX
PART I. FINANCIAL INFORMATION
PAGE(S)
Item 1. Financial Statements -------
Condensed Consolidated Balance Sheets
June 30, 1997 and December 31, 1996........................... 3
Condensed Consolidated Statements of Income
Three and six months ended June 30, 1997 and 1996............. 4
Condensed Consolidated Statements of Cash Flows
Six months ended June 30, 1997 and 1996....................... 5
Notes to Interim Condensed Consolidated Financial Statements.. 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................. 8-11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders........... 12
Item 6. Exhibits and Reports on Form 8-K.............................. 13
Signatures............................................................. 14
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MOLECULAR DYNAMICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
JUNE 30, DECEMBER 31,
1997 1996
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 8,568 $ 8,024
Securities available-for-sale 11,874 12,617
Accounts receivable, net 14,025 12,561
Inventories 9,105 6,869
Prepaids and other current assets 671 347
------- -------
Total current assets 44,243 40,418
Property and equipment, net 4,086 2,997
Other assets, net 2,457 2,628
------- -------
Total assets $50,786 $46,043
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,777 $ 3,264
Accrued expenses 5,365 5,073
Factoring liability 1,514 1,124
Unearned revenue and customer advances 3,020 3,068
------- -------
Total current liabilities 12,676 12,529
------- -------
Stockholders' equity:
Common stock and additional paid-in capital 38,484 39,964
Retained earnings (accumulated deficit) 168 (2,426)
Cumulative translation adjustment (142) (86)
Unrealized gain on securities available-for-sale 1 5
Less 41,528 and 445,800 shares of common
stock in treasury in 1997 and 1996,
respectively, at cost (401) (3,943)
------- -------
Total stockholders' equity 38,110 33,514
------- -------
Total liabilities and stockholders' equity $50,786 $46,043
------- -------
------- -------
SEE ACCOMPANYING NOTES.
3
<PAGE>
MOLECULAR DYNAMICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales and other revenue $ 13,880 $ 12,151 $ 26,886 $ 23,035
Cost of sales and other revenue 6,149 5,191 11,697 9,941
--------- --------- --------- ---------
Gross profit 7,731 6,960 15,189 13,094
--------- --------- --------- ---------
Operating expenses:
Research and development 1,614 1,743 3,684 3,347
Sales and marketing 3,641 3,804 6,885 7,463
General and administrative 1,026 882 2,198 1,685
--------- --------- --------- ---------
Total operating expenses 6,281 6,429 12,767 12,495
--------- --------- --------- ---------
Operating income 1,450 531 2,422 599
Interest income, net 241 162 516 374
Other income 50 7 7 26
--------- --------- --------- ---------
Income before income taxes 1,741 700 2,945 999
Income taxes 209 70 353 82
--------- --------- --------- ---------
Net income $ 1,532 $ 630 $ 2,592 $ 917
--------- --------- --------- ---------
--------- --------- --------- ---------
Earnings per share $ .14 $ .06 $ .23 $ .09
--------- --------- --------- ---------
--------- --------- --------- ---------
Shares used to compute earnings per share 11,219 10,681 11,144 10,687
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
SEE ACCOMPANYING NOTES.
4
<PAGE>
MOLECULAR DYNAMICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash used in operating activities (1,163) (921)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,393) (556)
Capitalized software development costs (312) (264)
Purchases of securities available-for-sale (22,071) (6,594)
Maturities and sales of securities available-for-sale 22,811 11,564
Other assets 147 17
-------- -------
Net cash (used in) provided by investing activities (818) 4,167
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock - (650)
Reissuance of treasury stock 2,061 478
Net increase in factoring liability 390 -
-------- -------
Net cash provided by (used in) financing activities 2,451 (172)
-------- -------
Effect of exchange rate changes on cash 74 133
-------- -------
Net increase in cash and cash equivalents 544 3,207
Cash and cash equivalents at beginning of period 8,024 2,727
-------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,568 $ 5,934
-------- -------
-------- -------
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
MOLECULAR DYNAMICS, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying condensed consolidated balance sheets of Molecular
Dynamics, Inc. and subsidiaries (Molecular Dynamics or the Company) as of
June 30, 1997 and December 31, 1996 and the related condensed consolidated
statements of income for the three and six month periods ended June 30, 1997
and 1996 and the condensed consolidated statements of cash flows for the six
months ended June 30, 1997 and 1996 have been prepared on substantially the
same basis as are the annual consolidated financial statements. In the
opinion of management, the condensed consolidated financial statements
reflect all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the financial position, operating
results and cash flows for those periods presented. The results of
operations for the three and six months ended June 30, 1997 are not
necessarily indicative of results to be expected for the entire year. These
condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements, and notes thereto, for the year
ended December 31, 1996 included in the Company's Form 10-K/A.
For clarity of presentation the Company has indicated that its second
quarters ended June 30 and its fiscal year ended December 31, whereas in
fact, the Company's second quarters for fiscal years 1997 and 1996 ended on
June 29, 1997 June 30, 1996, respectively, and its fiscal year ended December
29, 1996.
NOTE 2 - INVENTORIES
Inventories consisted of (in thousands):
June 30, December 31,
1997 1996
---- ----
Raw material $ 4,491 $ 3,045
Work-in-process 2,096 1,786
Finished goods 2,518 2,038
------- -------
$ 9,105 $ 6,869
------- -------
------- -------
NOTE 3 - NEW ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128 "Earnings Per Share"
(SFAS No.128), which requires the presentation of basic earnings per share
(EPS) and, for companies with complex capital structures, diluted EPS. SFAS
No. 128 is effective for annual and interim periods ending after December 15,
1997; earlier application is not permitted. The Company expects that basic
EPS will be higher than primary earnings per share as presented in the
accompanying consolidated financial statements, although the two amounts may
round to the same number. The Company has not yet analyzed how the
calculation of diluted earnings per share will compare to primary or fully
diluted earnings per share amounts. All prior period earnings per share
amounts will be restated upon adoption.
6
<PAGE>
NOTE 4. - COLLABORATION WITH AFFYMETRIX, INC.
In the third quarter of 1994, a consortium led by Affymetrix, Inc. and the
Company was awarded funding from the Advanced Technology Program of the
National Institute of Standards and Technology (NIST). The Company and its
partner, Affymetrix, collaborate with researchers at several academic and
research institutions in an effort to develop miniaturized DNA diagnostic
systems. The two companies will receive up to $31 million in matching funds
to be divided 33% to the Company and 67% to Affymetrix over the five years of
the grant beginning in January 1995, for research and development in the
field of DNA diagnostic devices with a total shared project cost of $63
million. Approximately $12 million of the $31 million was available for the
first two years of the grant period, which ended in January 1997. The Company
has received notification from NIST that funding has been authorized for the
remaining term of the grant, which ends in January 2000. The additional
funding will allow the Company to work toward developing new fluorescence
detection technologies and DNA separation devices and apply these to the
expanding field of molecular genetics. In the second quarter and first six
months of 1997, the Company recognized credits to expenses of approximately
$771,000 and $1.4 million, respectively, representing support from the grant,
compared to $475,000 and $994,000 in the prior year periods. In addition, in
the second quarter and first six months of 1997, the Company reduced its
capitalized software by approximately $123,000 and $248,000, respectively,
compared to $77,000 and $156,000 in the prior year periods, respectively,
representing support from the grant.
NOTE 5. - TECHNOLOGY ACCESS PROGRAM
The Company and Amersham Life Science Ltd. are developing systems for
fluorescence analysis of DNA in microarrays. The two companies are pursuing
agreements with genomics, pharmaceutical and biotechnology companies to
provide them with microarray systems prior to their release to the general
market, in exchange for funding and collaborative expertise. In November
1996, the Company entered into one agreement for early access to this
technology. During the second quarter of 1997, the companies entered into
two new technology access agreements. Subsequent to June 30, two additional
agreements have been signed.
NOTE 6. - STOCK REPURCHASE PROGRAM
In May 1994, the Board of Directors authorized the purchase of up to
1,000,000 shares of the Company's common stock in the open market, and in
February 1997 the Board increased this amount by 500,000 shares. The Company
has purchased approximately 1,000,000 shares under this program as of June
30, 1997. Of these, approximately 958,000 shares were reissued under the
Company's Stock Option and Employee Stock Purchase Plans, of which
approximately 404,000 shares were reissued during the first half of 1997.
7
<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 attached
condensed consolidated financial statements and notes thereto, and with the
Company's audited financial statements and notes thereto for the fiscal year
ended December 31, 1996.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS
DISCUSSED IN THIS DOCUMENT ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE
CERTAIN RISKS AND UNCERTAINTIES, INCLUDING THE RISKS AND UNCERTAINTIES SET
FORTH BELOW UNDER "FACTORS THAT MAY AFFECT FUTURE RESULTS".
RESULTS OF OPERATIONS
SALES AND OTHER REVENUE. The Company's second quarter 1997 sales and other
revenue of $13.9 million increased 14% from sales and other revenue of $12.2
million in the second quarter of 1996. This increase resulted primarily from
recognition of revenue pursuant to agreements for early access to technology
for the analysis of DNA in microarrays and increases in sales of the
Company's BioLumin-Registered Trademark- microplate reader, offset by
decreases in sales of the Storm-TM- product line. Additionally, sales and
other revenue for the six months ended June 30, 1997 were $26.9 million, an
increase of 17% from sales of $23.0 million in the comparable prior year
period. This increase resulted primarily from recognition of revenue pursuant
to agreements for early access to technology for the analysis of DNA in
microarrays and increases in sales of the Company's BioLumin-Registered
Trademark- microplate reader products. The Company sells its products in
North America, Europe, Japan and Australia. Changes in foreign currency
exchange rates had the effect of decreasing the Company's sales and other
revenue by approximately $627,000 for the six months ended June 30, 1997
compared to the prior-year period. Foreign currency fluctuations for the
second quarter of 1997 had the effect of decreasing the Company's sales and
other revenue by approximately $155,000 compared to the prior year period.
GROSS MARGINS. Gross margins for the second quarter and first six months of
1997 were 55.7% and 56.5%, respectively, compared to 57.3% and 56.8% in each
of the respective prior year periods. The decrease in gross margins during
the second quarter is primarily due to increased sales of lower-margin
instruments and pre-commercial microarray systems. Although similar factors
impacted the comparable six-month periods, such factors were offset by an
increase in the technology access fees associated with the Company's
Technology Access Program for microarray systems, with no associated cost of
revenue, and slight increases in sales of higher margin instruments during
the first half of 1997.
RESEARCH AND DEVELOPMENT. Research and development expenses for the second
quarter and first six months of 1997 were $1.6 and $3.7 million,
respectively, compared to $1.7 and $3.3 million in the respective prior year
periods. The small difference between the second quarter and the prior year
period was the result of an increase in spending on development programs,
offset by credits representing support of those programs from the Company's
NIST Grant, and credits representing funding from the Company's program for
early access to technology for the analysis of DNA in microarrays. The 10%
increase between the six month periods resulted from the expansion of major
development programs. Research and development expenses decreased as a
percentage of sales and other revenue to 12% and 14% in the second quarter of
1997 and first six months of 1997, respectively, compared to 14% and 15% in
the prior-year periods, primarily due to the increase in revenue between the
two periods. Research and development expenses for the second quarter and
first six months of
8
<PAGE>
1997 were reduced by $771,000 and $1,384,000, respectively, of credits
representing support from the Company's NIST grant, compared to $475,000 and
$994,000 of credits in the prior year periods. . In addition, in the second
quarter and first six months of 1997, the company reduced its capitalized
software by approximately $123,000 and $248,000, respectively, compared to
$77,000 and $156,000 in the prior year periods, respectively, representing
support from the grant.
SALES AND MARKETING. Sales and marketing expenses for the second quarter and
first six months of 1997 were $3.6 and $6.9 million as compared to $3.8 and
$7.5 million in the respective prior year periods. The decreases in 1997 are
primarily the result of improved resource allocations within the Company's
sales and marketing departments and improved efficiency. As a percentage of
revenues, sales and marketing expenses decreased to 26% for both the second
quarter and first six months of 1997, respectively, from 31% and 32% in the
respective prior periods, due both the decrease in expenses and to the
increase in revenues. Changes in foreign currency exchange rates had the
effect of decreasing the Company's sales and marketing expenses by
approximately $185,000 for the six months ended June 30, 1997 compared to the
prior-year period. Foreign currency fluctuations for the second quarter of
1997 had the effect of decreasing the Company's sales and marketing expenses
by approximately $81,000 compared to the prior year period.
GENERAL AND ADMINISTRATIVE. General and administrative expenses for the
second quarter and first six months of 1997 were $1.0 million and $2.2
million, as compared to $882,000 and $1.7 million in the respective prior
periods. These increases were primarily due to legal expenses associated with
patent and general litigation issues. General and administrative expenses,
as a percentage of revenue, were unchanged at 7% for the second quarter of
1997 and 1996, since the increase in expense was offset by the increase in
revenues. These expenses increased to 8% from 7% of revenues in the
respective six-month periods, primarily due to increased expenses not
completely offset by the increase in sales and other revenue.
PROVISION FOR INCOME TAXES. During the second quarter and first six months
of 1997, the Company recorded tax expense utilizing an annual effective tax
rate of 12% as compared to a rate of 8% for the second quarter and first half
of 1996. The increased tax rates in 1997 are attributable to the complete
utilization of several state net operating loss carryovers, resulting in
state regular taxes, while the low tax rates in 1996 are attributable to
usage of net operating loss carryovers, and consist of state and federal
Alternative Minimum Taxes.
EARNINGS PER SHARE. The Company generated earnings per share of $.14 and
$.23, respectively, in the second quarter and first six months of 1997 as
compared to earnings per share of $.06 and $.09 in the respective comparable
periods of 1996. This improvement is due primarily to the increase in
revenue and expense controls. Weighted average shares outstanding used in
computing earnings per share were 11.2 million and 11.1 million shares,
respectively, for the second quarter and first six months of 1997 as compared
to 10.7 million shares for both the comparable periods in 1996.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company believes that results of operations in any quarterly period may
be impacted by factors such as delays in the introduction or shipment of new
products, delays in the expected signing of agreements for early access to
technology, difficulty in acquiring critical product components of acceptable
quality and in required quantity, the effect of announcements of new
competitive products, increases in legal expenses, increased competition,
changes in the Company's product mix, a slower growth rate in the Company's
target markets, order deferrals in anticipation of new product releases, lack
of market acceptance of new products, reduction or delay of government and
private sector funding of research activities, or adverse changes in economic
conditions in any of the countries in which the Company does business.
9
<PAGE>
Also, during periods when a significant portion of net sales and net income
are contributed by international operations, fluctuations of the U.S. dollar
against foreign currencies such as those that have occurred in the past could
affect the Company's results of operations and financial condition in a
particular quarter. There can be no assurance that the Company will be able
to grow in future periods or continue profitability on a quarterly basis.
Due to the factors noted above, the Company's future earnings and stock price
may be subject to significant volatility, particularly on a quarterly basis.
Any shortfall in revenues or earnings from levels expected by securities
analysts could have an immediate and significant adverse effect on the
trading price of the Company's common stock. The Company typically
recognizes a substantial portion of sales near the end of a quarter.
Therefore, the Company may not become aware of such shortfalls until late in
a quarter, which may result in an adverse effect on the trading price of the
Company's common stock.
LIQUIDITY AND CAPITAL RESOURCES
Working capital as of June 30, 1997 was $31.5 million, compared to $27.9
million at December 31, 1996. During the first six months of the year, the
issuance of treasury stock for employee stock option and purchase plans was
the source of approximately $2.0 million of working capital, and working
capital was used to purchase approximately $1.4 million in fixed assets,
primarily related to expansion of the Company's facilities.
The Company's principal commitments at June 30, 1997 consisted of obligations
under operating leases for facilities and equipment. Long term cash
requirements, other than normal operating expenses, are anticipated for
development of new products, enhancement of existing products, financing
continued growth, and possible acquisition of products, technologies or
businesses complementary to the Company's business. The Company believes its
cash, securities available-for-sale, and cash flows from operating activities
will be sufficient to satisfy its working capital requirements for the
foreseeable future.
NEW ACCOUNTING STANDARDS. In February 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 128
"Earnings Per Share" (SFAS No.128), which requires the presentation of basic
earnings per share (EPS) and, for companies with complex capital structures,
diluted EPS. SFAS No. 128 is effective for annual and interim periods ending
after December 15, 1997; earlier application is not permitted. The Company
expects that basic EPS will be higher than primary earnings per share as
presented in the accompanying consolidated financial statements, although the
two amounts may round to the same number. The Company has not yet analyzed
how the calculation of diluted earnings per share will compare to primary or
fully diluted earnings per share amounts. All prior period earnings per share
amounts will be restated upon adoption.
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130 "Reporting Comprehensive Income"
(SFAS 130) which will be effective for financial statements for periods
beginning after December 15, 1997, and establishes standards for reporting
and display of comprehensive income and its components in a full set of
general purpose financial statements. Earlier application is permitted. The
Company will make the required reporting of comprehensive income in its
consolidated financial statements for the fiscal year ending December 31,
1998.
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 131 "Disclosures about Segments of a
Business Enterprise" (SFAS 131) which will be effective for financial
statements beginning after December 15, 1997, and establishes standards for
disclosures about segments of an enterprise. Earlier application is
encouraged. The Company will make the
10
<PAGE>
required disclosures under SFAS 131 in its consolidated financial statements
for the year ended December 31, 1998.
11
<PAGE>
PART II. OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Security-Holders
On May 22, 1997 the Company held its Annual Meeting of Stockholders
(the "Annual Meeting"). The following matters were voted on at the Annual
Meeting:
1. The directors of the Company were all re-elected by the following votes:
NAME VOTES FOR VOTES AGAINST WITHHELD
---- --------- ------------- --------
James Schlater 8,013,991 0 377,001
Jay Flatley 8,013,991 0 377,001
Robert Keeley 8,013,991 0 377,001
Janice M. LeCocq 8,006,879 0 384,113
Jack Lloyd 8,013,991 0 377,001
C. Woodrow Rea, Jr. 8,013,991 0 377,001
2. The appointment of KPMG Peat Marwick LLP as the Company's independent
auditors for the fiscal year ending December 29, 1997. The proposal was
ratified by the following vote:
VOTES FOR VOTES AGAINST VOTES WITHHELD BROKER NON-VOTES
--------- ------------- -------------- ----------------
8,546,925 6,255 12,043 334
3. An extension of the term of the Company's predecessor Restated 1987
Stock Option Plan through April 11, 2007 and an increase of 500,000
shares available for issuance thereunder was approved by the following
vote:
VOTES FOR VOTES AGAINST VOTES WITHHELD BROKER NON-VOTES
--------- ------------- -------------- ----------------
4,406,591 2,159,721 13,746 1,985,499
4. An increase of 500,000 shares to the authorized number of shares
reserved for issuance under the Company's 1993 Employee Stock Purchase
Plan was approved by the following vote:
VOTES FOR VOTES AGAINST VOTES WITHHELD BROKER NON-VOTES
--------- ------------- -------------- ----------------
5,846,523 720,312 12,732 1,985,499
The foregoing matters are described in detail in the Registrant's
definitive proxy statement dated April 23, 1997, for the Annual Meeting of
Stockholders held on May 22, 1997.
12
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Item 6: Exhibits and Reports on Form 8-K
(a) Exhibit 11.1 - Statement re Computation of Earnings Per Share
(b) Exhibit 27 - Financial Data Schedule
(c) There were no reports on Form 8-K during the quarter ended
June 30, 1997.
13
<PAGE>
MOLECULAR DYNAMICS, INC.
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.
MOLECULAR DYNAMICS, INC.
(Registrant)
Date: August 12, 1997 By: /s/ Jay Flatley
--------------- -------------------------------------------
Jay Flatley
President, Chief Executive Officer &
Acting Chief Financial Officer
Date: August 12, 1997 By: /s/ Lynne R. Wagoner
--------------- -------------------------------------------
Lynne R. Wagoner
Director of Finance
(Principal Accounting Officer)
14
<PAGE>
EXHIBIT INDEX
(a) Exhibit 11.1 - Statement re Computation of Earnings Per Share
(b) Exhibit 27 - Financial Data Schedule
<PAGE>
EXHIBIT 11.1
MOLECULAR DYNAMICS, INC. AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 1,532 $ 630 $ 2,592 $ 917
-------- ------- -------- -------
Weighted average shares outstanding:
Common stock 10,144 10,105 10,048 10,113
Common stock equivalents - options 1,075 576 1,096 574
-------- ------- -------- -------
11,219 10,681 11,144 10,687
-------- ------- -------- -------
Earnings per share $ 0.14 $ 0.06 $ 0.23 $ 0.09
-------- ------- -------- -------
-------- ------- -------- -------
</TABLE>
2
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMRY FINANCIAL INFORMATION EXTRACTED FROM MOLECULAR
DYNAMICS, INC'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 8,568
<SECURITIES> 11,874
<RECEIVABLES> 12,633
<ALLOWANCES> 267
<INVENTORY> 9,105
<CURRENT-ASSETS> 44,243
<PP&E> 9,427
<DEPRECIATION> 5,341
<TOTAL-ASSETS> 50,786
<CURRENT-LIABILITIES> 12,676
<BONDS> 0
0
0
<COMMON> 38,084
<OTHER-SE> 27
<TOTAL-LIABILITY-AND-EQUITY> 50,786
<SALES> 26,886
<TOTAL-REVENUES> 26,886
<CGS> 11,697
<TOTAL-COSTS> 11,697
<OTHER-EXPENSES> 12,767
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,945
<INCOME-TAX> 353
<INCOME-CONTINUING> 2,592
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,592
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
