SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
Commission file number 0-26224
INTEGRA LIFESCIENCES CORPORATION
---------------------------------
(Exact name of registrant as specified in its charter)
Delaware 51-0317849
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
105 Morgan Lane
Plainsboro, New Jersey 08536
---------------------- ------
(Address of principal executive offices) (Zip code)
(609) 275-0500
--------------
(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 August 8, 1996, the registrant had outstanding 28,518,777 shares
of Common Stock, $.01 par value.
1
<PAGE>
INTEGRA LIFESCIENCES CORPORATION
INDEX
<TABLE>
<CAPTION>
Page Number
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 1996
and December 31, 1995 (Unaudited) 3
Condensed Consolidated Statements of Operations for the
three and six months ended June 30, 1996 and 1995 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 1996 and 1995 (Unaudited) 5
Notes to Unaudited Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
Exhibit 13
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INTEGRA LIFESCIENCES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------- -----------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents .............................................. $ 9,669,642 $ 4,512,434
Short-term investments ................................................. 23,907,198 1,197,812
Accounts receivable, net ............................................... 2,738,805 1,768,099
Inventories ............................................................ 2,769,186 1,372,313
Prepaid expenses and other current assets .............................. 295,474 468,547
------------- -------------
Total current assets ................................................. 39,380,305 9,319,205
Property and equipment, net ............................................... 9,111,244 9,605,796
Investments ............................................................... 3,961,680 -
Intangibles and other assets .............................................. 111,093 452,719
------------- -------------
Total assets ........................................................... $ 52,564,322 $ 19,377,720
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade ................................................ $ 355,943 $ 321,304
Accrued expenses ....................................................... 1,486,500 1,261,771
Deferred revenue ....................................................... 10,650 10,650
Short-term debt - related party ........................................ - 10,314
Other current liabilities .............................................. 37,137 148,173
Accrual for plant closing .............................................. - 90,914
------------- -------------
Total current liabilities ............................................ 1,890,231 1,843,126
Other liabilities ......................................................... 152,948 107,908
------------- -------------
Total liabilities ...................................................... 2,043,179 1,951,034
------------- -------------
Stockholders' Equity:
Preferred stock, $.01 par value (15,000,000
authorized shares; no shares issued or out-
standing)............................................................... - -
Common stock, $.01 par value (60,000,000 authorized shares; 28,518,777 and
23,493,916 issued and outstanding at June 30, 1996
and December 31, 1995, respectively) ................................... 285,188 234,939
Additional paid-in capital ................................................ 104,977,836 68,730,310
Notes receivable - related parties ........................................ (34,875) (84,875)
Unrealized losses on investments .......................................... (146,934) -
Accumulated deficit ....................................................... (54,560,073) (51,453,688)
------------- -------------
Total stockholders' equity ........................................... 50,521,142 17,426,686
------------- -------------
Total liabilities and stockholders' equity ................................ $ 52,564,322 $ 19,377,720
============= =============
</TABLE>
The accompanying notes are an integral part
of the condensed consolidated financial statements
3
<PAGE>
INTEGRA LIFESCIENCES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Product sales .............................................. $ 3,229,351 $ 2,071,347 $ 5,541,605 $ 4,049,984
Research grants ............................................ 226,549 230,054 433,535 520,013
Product license fees ....................................... - - 500,000 -
Royalties .................................................. 75,625 49,608 137,993 120,357
Contract product development ............................... 8,350 - 33,866 -
------------ ------------ ------------ ------------
Total revenue ........................................... 3,539,875 2,351,009 6,646,999 4,690,354
COSTS AND EXPENSES
Cost of product sales ...................................... 1,433,264 1,092,254 2,886,885 2,020,954
Research and development ................................... 1,690,553 1,091,505 3,222,735 2,034,105
Selling, general and administrative ........................ 2,471,385 1,410,648 4,524,530 2,810,819
------------ ------------ ------------ ------------
Total costs and expenses ................................ 5,595,202 3,594,407 10,634,150 6,865,878
Operating income (loss) .................................... (2,055,325) (1,243,398) (3,987,149) (2,175,524)
Interest income ............................................ 492,127 46,033 841,525 80,385
Interest expense - related party ........................... - (73,917) (126) (127,583)
Loss on sale of investments ................................ (26,176) - (26,176) -
Gain on sale of assets ..................................... 42,840 5,387 65,539 5,387
------------ ------------ ------------ ------------
Net income (loss) .......................................... $ (1,546,532) $ (1,265,895) $ (3,106,385) $ (2,217,335)
============ ============ ============ ============
Net income (loss) per share ................................ $ (0.05) $ (0.06) $ (0.11) $ (0.11)
============ ============ ============ ============
Weighted average number of common and common
equivalent shares outstanding .............................. 28,496,355 19,583,375 27,679,81 19,527,310
============ ============ ============ ============
</TABLE>
The accompany notes are an integral part
of the condensed consolidated financial statements
4
<PAGE>
INTEGRA LIFESCIENCES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
----------------------------
1996 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss ............................................................... $ (3,106,385) $ (2,217,335)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization ........................................ 1,042,275 532,375
Gain on sale of assets ............................................... (65,539) (5,387)
Loss on sale of investments .......................................... 26,176 -
Common stock issued for services rendered ............................ - 70,000
Amortization of discount and interest on investments ................. (451,986) -
Changes in assets and liabilities:
Accounts receivable ................................................ (970,706) (67,544)
Inventories ........................................................ (1,396,873) (184,920)
Prepaids and other current assets .................................. 173,073 119,562
Non-current assets ................................................. 134,402 (59,387)
Accounts payable, accrued expenses and other liabilities ........... 150,213 (433,673)
------------ ------------
Net cash used in operating activities ................................ (4,465,350) (2,246,309)
------------ ------------
INVESTING ACTIVITIES:
Proceeds from sale of assets ........................................... 184,190 12,628
Payments of acquired bankruptcy claims ................................. (10,409) -
Purchases of investments ............................................... (33,530,331) -
Proceeds from the sales/maturities of investments ...................... 7,138,142 -
Purchases of property and equipment .................................... (713,827) (1,324,154)
------------ ------------
Net cash used in investing activities .................................. (26,932,235) (1,311,526)
------------ ------------
FINANCING ACTIVITIES:
Principal payment on notes payable ..................................... - (4,000)
Payments of long-term debt ............................................. (10,314) -
Principal payment on notes receivable - related parties ................ 50,000 -
Proceeds from long-term debt ........................................... - 1,877,583
Proceeds from exercised stock options .................................. 760,632 49,555
Proceeds from sale of common stock ..................................... 35,754,475 1,000,001
------------ ------------
Net cash provided by financing activities ............................ 36,554,793 2,923,139
------------ ------------
Net (decrease) increase in cash and cash equivalents ...................... 5,157,208 (634,696)
Cash and cash equivalents at beginning of period .......................... 4,512,434 3,331,445
------------ ------------
Cash and cash equivalents at end of period ................................ $ 9,669,642 $ 2,696,749
============ ============
Supplemental disclosure of non-cash financing activities:
Debt to equity conversion .............................................. - $ 1,500,005
</TABLE>
The accompanying notes are an integral part
of the condensed consolidated financial statements
5
<PAGE>
INTEGRA LIFESCIENCES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the June 30 unaudited condensed consolidated
financial statements contain all adjustments (consisting only of normal
recurring accruals) which the Company considers necessary for a fair
presentation of the financial position and results of operations of the
Company. Operating results for the interim periods ended June 30, 1996 are
not necessarily indicative of the results to be expected for the entire
year. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The preparation of
financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, including
disclosures of contingent assets and liabilities, and the reported amounts
of revenues and expenses during the reporting periods. Actual results could
differ from those estimates. These unaudited condensed consolidated
financial statements should be read in conjunction with the Company's
consolidated financial statements for the year ended December 31, 1995
included in the Company's Annual Report on Form 10-K.
2. The Company's current investment policy is to invest available cash
balances in high quality debt securities with maturities not to exceed 18
months. As of June 30, 1996, the Company's marketable securities, which are
all classified as available-for-sale, are comprised of the following:
<TABLE>
<CAPTION>
Amortized Cost Unrealized Losses Fair Value
-------------- ----------------- ----------
<S> <C> <C> <C>
U.S. Government securities.............. $ 2,058,259 $ (13,372) $ 2,044,887
U.S. Government agency securities....... 25,996,820 (133,562) 25,823,991
----------- --------- -----------
Total investments..................... 27,798,584 (146,934) 27,868,878
Short-term portion of investments....... $23,798,584 $(108,614) $23,907,198
=========== ========== ===========
Long-term portion of investments........ $ 4,000,000 $ (38,320) $ 3,961,680
=========== ========== ===========
</TABLE>
All long-term investments are securities with call options within one
year.
3. Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------- -----------------
<S> <C> <C>
Finished goods ....................................... $1,090,364 $ 480,343
Work-in-process....................................... 1,315,853 516,840
Raw materials ........................................ 362,969 375,130
---------- ----------
$2,769,186 $1,372,313
========== ==========
</TABLE>
4. On February 1, 1996, the Company completed the issuance of 4,671,250 shares
of common stock through a public offering resulting in net proceeds of
approximately $35.6 million.
5. Net loss per share is based on the weighted average number of common and
common equivalent shares outstanding during the periods. Options and
warrants have been excluded in the calculation of common and common
equivalent shares for the periods they are antidilutive.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
General
The Company is engaged in the manufacturing and sale of collagen and other
biomaterials-based medical products and related product development, and in the
development of collagen and other biomaterials-based regenerative medicine
technologies. The Company's business strategy has been to selectively acquire a
number of synergistic biomaterials and extracellular matrix-based technologies.
The Company acquired ABS LifeSciences, Inc. in November 1990, Colla-Tec, Inc. in
June 1991, Vitaphore Corporation in April 1993, Biomat Corporation in June 1993,
another company's interest in a joint venture with Vitaphore in December 1993
and Telios Pharmaceuticals, Inc. ("Telios") in August 1995. As a result of the
Company's acquisition of Telios, the consolidated financial results for the
periods presented below may not be directly comparable.
Results of Operations
Three Months Ended June 30, 1996 Compared to Three Months Ended June 30, 1995
Total revenues increased to approximately $3.5 million for the three months
ended June 30, 1996 from $2.4 million for the three months ended June 30, 1995.
Increases in product sales, royalty revenue and contract product development
revenue were offset by a decrease in research grant revenue. Product sales
increased to $3.2 million for the three months ended June 30, 1996 from $2.1
million for the three months ended June 30, 1995, due primarily to $770,000 in
sales of the INTEGRA(Trademark) Artificial Skin product following U.S. Food and
Drug Administration (FDA) approval of the Company's Premarket Approval
Application. Factors influencing sales of the INTEGRA(Trademark) Artificial Skin
product include physician training prior to product use, the collection of
pharma-economic data to address initial product reimbursement issues, and
additional positive clinical results.
Product sales of the Company's other medical devices increased in the
infection control, dental and surgical and hemostasis product lines and were
offset by decreases in its wound care and ophthalmic product lines. The largest
increases included the Company's BioMend product which commenced market roll-out
in August 1995, and the Company's BioPatch product which experienced increases
in annual contract minimums and a fluctuation in timing of shipments to the
Company's marketing partner. The Company's Chronicure product sales were down as
a result of a contract dispute with a private label distributor which forced the
Company to market the product directly. Export sales for the three months ended
June 30, 1996 increased to $480,000 from $220,000 for the three months ended
June 30, 1995, and included $135,000 in INTEGRA(Trademark) Artificial Skin
product sales.
Research grant revenue decreased slightly for the three-month period ended
June 30, 1996 compared to the same period in 1995 due to increased expenditures
under the Company's National Institute of Standards and Technology grant being
offset by funding decreases due to the completion of two grants. Royalty revenue
increased to $76,000 for the three months ended June 30, 1996 from $50,000 for
the three months ended June 30, 1995 primarily due to increases in marketing
partners' sales of the Company's products. The Company continues to seek
research grants, licensing and development funding for several of its
technologies. The timing and amount of this funding, if any, can not be
predicted.
Cost of product sales increased to approximately $1.4 million (44% of
product sales) for the three months ended June 30, 1996 from $1.1 million (53%
of product sales) for the three months ended June 30, 1995. The decrease in
costs of product sales as a percentage of sales is attributable to increases in
sales of products with higher gross margins, including the INTEGRA(Trademark)
Artificial Skin product. The Company believes that its current capacity to
produce INTEGRA(Trademark) Artificial Skin and its other medical device products
is sufficient to support significant growth, and the utilization of this
capacity will affect its gross margin on product sales.
7
<PAGE>
Research and development expense increased to approximately $1.7 million
for the three-month period ended June 30, 1996 from $1.1 million for the
three-month period ended June 30, 1995, due primarily to $695,000 in research
and development expense incurred by the Company's Telios operation. The Company
has recently completed relocating its Telios operation to a smaller facility
which should result in lower facility costs. The Company's research and
development efforts involving INTEGRA(Trademark) Artificial Skin decreased
significantly between the 1995 and 1996 periods as a result of the transfer of
the product to manufacturing. Additional increases in other research and
development projects partially offset the decrease related to INTEGRA(Trademark)
Artificial Skin. These increases included costs associated with the addition of
full-time and part-time research and development staff and increased
expenditures for outside contract research activities related to the Company's
regenerative medicine technologies. The Company expects the level of research
and development expenditures in 1996 to continue to exceed 1995 expenditures due
to the inclusion of Telios for a full year, expenditures related to a planned
post approval study of INTEGRA(Trademark) Artificial Skin and clinical trials
for the Company's regenerative and matrix medicine technologies. The amount of
resources and the allocation of those resources to fund research and development
will vary depending upon a number of factors, including the progress of
development of the Company's technologies, changing competitive conditions and
determinations with respect to the commercial potential of the Company's
technologies.
Selling, general and administrative expense increased to approximately $2.5
million for the three-month period ended June 30, 1996 from $1.4 million for the
three-month period ended June 30, 1995, due in part to $420,000 of general and
administrative expense incurred by the Company's Telios operation. A significant
portion of Telios' administrative expense is maintaining its intellectual
property. Sales and marketing expenses increased by $650,000 as a result of the
domestic and international market introduction of INTEGRA(Trademark) Artificial
Skin, which included six domestic and four international surgeon training
programs during the second quarter of 1996. These costs were partially offset by
a decrease in costs resulting from a reduction in the size of the Company's
direct sales force for certain medical product lines. The Company is
anticipating sales and marketing expenses to remain higher than 1995 levels due
to the ongoing introduction of INTEGRA(Trademark) Artificial Skin. Additional
smaller increases in expenses were incurred in administrative and regulatory
areas related to the expansion of the Company's business and public company
reporting requirements.
Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995
Total revenues increased to approximately $6.6 million for the six months
ended June 30, 1996 from $4.7 million for the six months ended June 30, 1995.
Increases in product sales, licensing fees, royalty revenue and contract product
development revenue were offset by a decrease in research grant revenue. Product
sales increased to $5.5 million for the six months ended June 30, 1996 from $4.0
million for the six months ended June 30, 1995, due primarily to $950,000 in
INTEGRA(Trademark) Artificial Skin product sales. Additional increases in
product sales were from in the Company's infection control and dental product
lines, and were offset by decreases in its wound care, ophthalmic, and surgical
and hemostasis product lines. The largest sales increases were in the Company's
BioMend and BioPatch products and the largest decrease was in the Company's
Chronicure wound care product. Export sales for the six months ended June 30,
1996 increased to $750,000 from $486,000 for the six months ended June 30, 1995,
which included $280,000 in INTEGRA(Trademark) Artificial Skin product sales in
eight countries.
Research grant revenue decreased for the six-month period ended June 30,
1996 compared to the same period in 1995 due primarily to the completion of
funding under a Contraceptive Research and Development Program grant. The
Company received a $500,000 licensing fee in February 1996 as part of an
agreement with Cambridge Antibody Technology Limited involving the Company's
human antibody development program.
8
<PAGE>
Cost of product sales increased to approximately $2.9 million (52% of
product sales) for the six months ended June 30, 1996 from $2.0 million (50% of
product sales) for the six months ended June 30, 1995. The increase in costs of
product sales is attributable to higher product sales and costs associated with
scale-up of the Company's INTEGRA(Trademark) Artificial Skin manufacturing
process during the first quarter of 1996.
Research and development expense increased to approximately $3.2 million
for the six-month period ended June 30, 1996 from $2.0 million for the six-month
period ended June 30, 1995, due primarily to $1.4 million in research and
development expense incurred by the Company's Telios operation. The Company's
research and development efforts involving INTEGRA(Trademark) Artificial Skin
decreased significantly between the 1995 and 1996 periods as a result of the
transfer of the product to manufacturing. Additional increases in other research
and development projects partially offset the decrease related to
INTEGRA(Trademark) Artificial Skin. These increases included costs associated
with the addition of full-time and part-time research and development staff and
increased expenditures for outside contract research activities related to the
Company's regenerative medicine technologies.
Selling, general and administrative expense increased to approximately $4.5
million for the six-month period ended June 30, 1996 from $2.8 million for the
six-month period ended June 30, 1995, due in part to $920,000 of general and
administrative expense incurred by the Company's Telios operation. Sales and
marketing expenses increased by $730,000 as a result of the domestic and
international market introduction of INTEGRA(Trademark) Artificial Skin, which
included seven domestic and seven international surgeon training programs
during the first six months of 1996. These costs were partially offset by a
decrease in costs resulting from a reduction in the size of the Company's
direct sales force for certain medical product lines. Additional smaller
increases in expenses were incurred in administrative and regulatory areas
related to the expansion of the Company's business and public company
reporting requirements.
Liquidity and Capital Resources
At June 30, 1996, the Company had cash and cash equivalents of
approximately $9.7 million, short-term and long-term investments totaling $27.9
million and no long-term debt. The Company's principal sources of liquidity
during the six-month period ended June 30, 1996 were the receipt of $35.8
million in proceeds from an underwritten public offering of the Company's common
stock, $760,000 from the exercise of stock options under the Company's stock
option plans and $160,000 from the sale of fixed assets. The principal uses of
funds during the period were $4.4 million for operations and $710,000 in
purchases of property and equipment. As a result of the public offering, the
Company's revolving line of credit terminated in accordance with its terms.
The Company anticipates that it will continue to use its liquid assets to
fund operations until sufficient revenues can be generated through product sales
and collaborative arrangements. The Company also expects that it will need to
fund additional growth in its accounts receivable and inventory in conjunction
with the INTEGRA(Trademark) Artificial Skin product. There can be no assurance
that the Company will be able to generate sufficient revenues to obtain
profitability.
9
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In January 1994, ABS LifeSciences, Inc., a wholly-owned subsidiary of the
Company, entered into a five-year distribution agreement with the distributor of
the Company's Chronicure product pursuant to which the distributor is obligated
to purchase certain minimum quantities of wound care products. In October 1995,
the Company's subsidiary filed a complaint in the United States District Court
for the District of New Jersey claiming the distributor breached the
distribution agreement by, among other things, not paying the subsidiary for
certain products delivered. In November 1995, the distributor filed an
affirmative defense and counterclaim alleging, among other things, fraudulent
misrepresentation and breach of contract and seeking damages of approximately
$1.2 million plus unspecified punitive damages. The Company believes the
counterclaim is without merit and intends to defend the counterclaim vigorously.
On or about July 18, 1996, Telios Pharmaceuticals, Inc.("Telios"), a
wholly-owned subsidiary of Company, filed a patent infringement lawsuit against
three parties: Merck KGaA, a German Corporation, Scripps Research Institute, a
California nonprofit corporation, and David A. Cheresh, Ph.D., a research
scientist with Scripps. The lawsuit was filed in the U.S. District Court for the
Southern District of California. The complaint charges, among other things, that
the defendant Merck KGaA "willfully and deliberately induced, and continues to
willfully and deliberately induce, defendants Scripps Research Institute and Dr.
David A. Cheresh to infringe United States Letters Patent No. 4,729,255." This
patent is one of a group of five patents granted to The Burnham Institute that
are based on the interaction between a family of cell surface proteins called
integrins and the arginine-glycine-aspartic acid (known as "RGD") peptide
sequence found in many extracellular matrix proteins. The Company is pursuing
numerous medical applications of the "RGD" technology in the fields of
anti-thrombic agents, cancer, osteoporosis, and a cell adhesive coating designed
to improve the performance of implantable devices and their acceptance by the
body.
On March 27, 1996, Telios filed a motion in the United State Bankruptcy
Court for the Southern District of California, in the Telios chapter 11 case,
No. 95-00770-H11, regarding "cure" requirements for assumed executory contracts
with The University of Utah and The University of Utah Research Foundation
(collectively, the "University"). The motion seeks to resolve certain disputes
concerning Telios' licensing rights under a certain License Agreement and
Research Agreement entered into between Telios and the University. Discovery
relating to the motion is ongoing with a status conference with the court
scheduled for September 5, 1996. In addition, on March 22, 1996, the University
filed a complaint against Telios in the United States District Court for the
District of Utah, styled as Case No. 2:96CV-0262W, seeking a declaration that
the Research Agreement and License Agreement were terminated or terminable. On
May 13, 1996, the parties stipulated that the action be dismissed without
prejudice, with each party to bear its own costs. The action has been so
dismissed.
10
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on May 24, 1996 and in
connection therewith, proxies were solicited by management pursuant to
Regulation 14 under the Securities Exchange Act of 1934. An aggregate of
28,466,581 shares of the Company's common stock ("Shares") were outstanding and
entitled to a vote at the meeting. At the meeting the following matters (not
including ordinary procedural matters) were submitted to a vote to the holders
of Shares, with the results indicated below:
1. Election of directors to serve until the 1997 Annual Meeting. The following
persons, all of whom were serving as directors and were management's nominees
for reelection, were reelected. There was no solicitation in opposition to such
nominees. The tabulation of votes was as follows:
Nominee For Withheld
------- --- --------
Keith Bradley 23,402,709 50,562
Richard E. Caruso 23,403,668 49,603
William M. Goldstein 23,403,755 49,516
Frederic V. Malek 23,402,562 50,709
George W. McKinney, III 23,403,989 49,282
James M. Sullivan 23,402,649 50,622
Robert J. Towarnicki 23,403,749 49,522
Edmund L. Zalinski 23,402,385 50,886
2. Approval of the Company's 1996 Incentive Stock Option and Non-Qualified Stock
Option Plan. The Company's 1996 Incentive Stock Option and Non-Qualified Stock
Option Plan was approved. The tabulation of votes was as follows:
For Against Abstentions
--- ------- -----------
21,101,121 847,324 25,563
3. Ratification of independent auditors. The appointment of Coopers & Lybrand
L.L.P. as the Company's independent auditors was ratified. The tabulation of
votes was as follows:
For Against Abstentions
--- ------- -----------
23,389,560 57,861 5,844
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Statement of Computation of Per Share Amounts
(b) Reports on Form 8-K
None
11
<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.
INTEGRA LIFESCIENCES CORPORATION
Date: August 14, 1996 /s/ Richard E. Caruso
-----------------------------------------------
Richard E. Caruso, Ph.D.
Chairman, President and Chief Executive Officer
Date: August 14, 1996 /s/ John R. Emery
-----------------------------------------------
John R. Emery
Senior Vice President, Operations and Finance
12
Exhibit 11
Statement of Computation of Per Share Amounts
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Primary:
Net loss for the period .......................... $ (1,546,532) $ (1,265,895) $ (3,106,385) $ (2,217,335)
============ ============ ============ ============
Weighted average number of shares of common stock
outstanding ................................ 28,496,355 19,583,375 27,679,817 19,527,310
Shares issuable upon exercise of outstanding
options and warrants ........................ -- -- -- --
Shares assumed to be acquired in accordance with
the treasury stock method ................... -- -- -- --
------------ ------------ ------------ ------------
Shares used in computing per share loss .......... 28,496,355 19,583,375 27,679,817 19,527,310
------------ ------------ ------------ ------------
Net loss per share ............................... $ (0.05) $ (0.06) $ (0.11) $ (0.11)
============ ============ ============ ============
Fully Diluted:
Net loss for the period .......................... $ (1,546,532) $ (1,265,895) $ (3,106,385) $ (2,217,335)
============ ============ ============ ============
Weighted average number of shares of common stock
outstanding ................................ 28,496,355 19,583,375 27,679,817 19,527,310
Shares issuable upon exercise of outstanding
options and warrants ........................ 3,230,640 3,737,509 3,299,329 3,621,779
Shares assumed to be acquired in accordance
with the treasury stock method .............. (1,239,330) (1,715,129) (1,313,331) (1,596,411)
------------ ------------ ------------ ------------
Shares used in computing per share loss .......... 30,487,665 21,605,755 29,665,815 21,552,678
------------ ------------ ------------ ------------
Net loss per share ............................... $ (0.05) $ (0.06) $ (0.11) $ (0.10)
============ ============ ============ ============
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,669,642
<SECURITIES> 27,868,878
<RECEIVABLES> 2,738,805
<ALLOWANCES> 0
<INVENTORY> 2,769,186
<CURRENT-ASSETS> 39,380,305
<PP&E> 12,439,393
<DEPRECIATION> 3,328,149
<TOTAL-ASSETS> 52,564,322
<CURRENT-LIABILITIES> 1,890,231
<BONDS> 0
0
0
<COMMON> 285,188
<OTHER-SE> 50,235,954
<TOTAL-LIABILITY-AND-EQUITY> 52,564,322
<SALES> 5,541,605
<TOTAL-REVENUES> 6,646,999
<CGS> 2,886,885
<TOTAL-COSTS> 2,886,885
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 126
<INCOME-PRETAX> (3,106,385)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,106,385)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,106,385)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
