<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 1997
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Commission file number 0-26224
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INTEGRA LIFESCIENCES CORPORATION
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(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, 1997 the registrant had outstanding 29,797,366 shares
of Common Stock, $.01 par value.
<PAGE>
INTEGRA LIFESCIENCES CORPORATION
INDEX
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<TABLE>
<CAPTION>
Page Number
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<S> <C>
PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 1997
and December 31, 1996 (Unaudited) 3
Condensed Consolidated Statements of Operations for the
three and six months ended June 30, 1997 and 1996 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 1997 and 1996 (Unaudited) 5
Notes to Unaudited Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
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 12
SIGNATURES 13
Exhibits 14
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements
INTEGRA LIFESCIENCES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and cash equivalents ............................... $ 4,272 $ 11,762
Short-term investments .................................. 27,972 22,514
------------- ----------------
Total cash and investments .......................... 32,244 34,276
Accounts receivable, net ................................ 2,769 2,902
Inventories ............................................. 1,993 2,635
Prepaid expenses and other current assets ............... 365 338
------------- ----------------
Total current assets ................................ 37,371 40,151
Property and equipment, net ................................. 7,840 8,554
Other assets ................................................ 29 36
------------- ----------------
Total assets ............................................. $ 45,240 $ 48,741
============= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts payable, trade ................................... $ 195 $ 162
Accrued expenses and other current liabilities ............ 1,981 2,053
------------- ----------------
Total current liabilities ........................... 2,176 2,215
Other liabilities ........................................... 159 142
------------- ----------------
Total liabilities ................................... 2,335 2,357
------------- ----------------
Stockholders' Equity:
Preferred stock, $.01 par value (15,000,000
authorized shares; no shares issued or -- --
outstanding) ..............................................
Common stock, $.01 par value (60,000,000
authorized shares; 29,797,366 and 28,551,315
issued and outstanding at June 30, 1997 and
December 31, 1996, respectively) .......................... 298 285
Additional paid-in capital ................................... 105,765 105,447
Unearned compensation related to stock options ............... (267) (328)
Notes receivable - related parties ........................... (35) (35)
Unrealized losses on investments ............................. (5) (4)
Accumulated deficit .......................................... (62,851) (58,981)
------------- ----------------
Total stockholders' equity .......................... 42,905 46,384
------------- ----------------
Total liabilities and stockholders' equity .................. $ 45,240 $ 48,741
============= ================
</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,
--------------------------- --------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE
- -------
Product sales .............................. $ 4,120 $ 3,230 $ 7,090 $ 5,542
Research grants ............................ 144 226 298 433
Product license fees ....................... 5 -- 5 500
Royalties .................................. 38 76 102 138
Contract product development ............... -- 8 -- 34
----------- ----------- ----------- -----------
Total revenue .......................... 4,307 3,540 7,495 6,647
COSTS AND EXPENSES
Cost of product sales ...................... 2,287 1,434 3,843 2,888
Research and development ................... 1,669 1,691 3,086 3,223
Selling, general and administrative ........ 2,914 2,471 5,447 4,524
----------- ----------- ----------- -----------
Total costs and expenses ............... 6,870 5,596 12,376 10,635
----------- ----------- ----------- -----------
Operating income (loss) .................... (2,563) (2,056) (4,881) (3,988)
Other income ............................... 524 510 1,012 882
----------- ----------- ----------- -----------
Net income (loss) .......................... $ (2,039) $ (1,546) $ (3,869) $ (3,106)
=========== =========== =========== ===========
Net income (loss) per share ................ $ (0.07) $ (0.05) $ (0.13) $ (0.11)
=========== =========== =========== ===========
Weighted average number of common and common
equivalent shares outstanding .......... 29,792 28,496 29,366 27,680
=========== =========== =========== ===========
</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)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------- ----------
1997 1996
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss ......................................................... $ (3,869) $ (3,106)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ................................. 950 1,042
Gain on sale of assets ........................................ (86) (66)
Loss on investments ........................................... -- 26
Amortization of discount and interest on investments .......... (36) (452)
Amortization of unearned compensation ......................... 61 --
Changes in assets and liabilities:
Accounts receivable ........................................ 133 (971)
Inventories ................................................ 642 (1,397)
Prepaid expenses and other current assets .................. (27) 173
Non-current assets ......................................... -- 133
Accounts payable, accrued expenses and other liabilities ... (23) 149
---------- ----------
Net cash used in operating activities ......................... (2,255) (4,465)
---------- ----------
INVESTING ACTIVITIES:
Proceeds from sale of assets ..................................... 94 184
Payments of acquired bankruptcy claims ........................... -- (10)
Purchases of available-for-sale investments ...................... (19,422) (33,530)
Proceeds from sale/maturity of investments ....................... 14,000 7,138
Purchases of property and equipment .............................. (237) (714)
---------- ----------
Net cash used in investing activities ......................... (5,565) (26,932)
---------- ----------
FINANCING ACTIVITIES:
Principal payment on notes receivable - related parties .......... -- 50
Payments of long-term debt ....................................... -- (10)
Proceeds from exercise of stock options .......................... 330 761
Proceeds from sale of common stock ............................... -- 35,754
---------- ----------
Net cash provided by financing activities ..................... 330 36,555
---------- ----------
Net increase (decrease) in cash and cash equivalents ................ (7,490) 5,158
Cash and cash equivalents at beginning of period ..................... 11,762 4,512
---------- ----------
Cash and cash equivalents at end of period ........................... $ 4,272 $ 9,670
========== ==========
</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 periods ended
June 30, 1997 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, 1996
included in the Company's Annual Report on Form 10-K.
2. Inventories consist of the following (In thousands):
June 30, 1997 December 31, 1996
------------- -----------------
Finished goods ... $ 961 $ 1,007
Work-in-process .. 653 1,270
Raw materials .... 379 358
------------- ----------------
$ 1,993 $ 2,635
============= ================
3. In May 1997, the Company's Stock Option Committee and Board of
Directors approved an option exchange program pursuant to which
employees with options having an exercise price in excess of $4.00 per
share under the Company's Stock Option Plans could elect to exchange
such options for new stock options with an exercise of $4.00. Under the
exchange program, (i) the number of replacement options issued in
exchange for the original options was determined by the utilization of
a formula based on the percentage decrease in exercise price from the
original options (not to exceed 25% of the original options and
excluding the first 1,000 options), (ii) each replacement option was
issued with an expiration date one year later than the original
option's expiration date, and (iii) the vesting terms of the
replacement options were adjusted to proportionately reflect the
decrease in options, when applicable. Under the exchange program,
1,134,417 options with exercise prices ranging from $4.25 to $12.50
were exchanged for 903,317 options granted with an exercise price of
$4.00.
To date, the Company has not calculated the pro-forma affect of the
exchange program under the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation". The Company believes the exchange program is likely to
increase the pro forma expense associated with the stock option plans
because a significant amount of the original options were granted prior
to 1995 and therefore did not impact the disclosure previously.
4. In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS 130"). SFAS 130 establishes standards of disclosure and
financial statement display for reporting comprehensive income and the
components thereof. This statement defines comprehensive income as the
change in equity of a business during a period from transactions and
other events and circumstances from non-owner sources. SFAS 130
requires that comprehensive income be presented in the financial
statements as a separate statement, in the statement of changes in
equity or below the total of net income or loss in the income
statement. SFAS 130 is effective for fiscal years beginning after
December 15, 1997, with earlier application permitted. The Company is
currently evaluating the effect SFAS 130 will have on its financial
statements.
6
<PAGE>
5. In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131"). SFAS 131
establishes standards for the way that public business enterprises
report information about operating segments in annual financial
statements and requires that those enterprises report selected
information about operating segments in interim financial reports
issued to shareholders. Operating segments are components of an
enterprise about which separate financial information is available and
is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance. This
Statement requires that a public business enterprise report descriptive
information about the way that the operating segments were determined
and the products and services provided by the operating segments.
This statement requires that a public business enterprise report a
measure of segment profit or loss, certain specific revenue and expense
items, and segment assets. It requires reconciliations of total segment
revenues, total segment profit or loss, total segment assets, and other
amounts disclosed for segments to corresponding amounts in the
enterprise's general-purpose financial statements. It also requires
that all public business enterprises report information about the
revenues derived from the enterprise's products and services, about the
countries in which the enterprise earns revenues and holds assets, and
about major customers regardless of whether that information is used in
making operating decisions. SFAS 131 is effective for financial
statements for periods beginning after December 15, 1997. The Company
is currently evaluating the effect SFAS 131 will have on its financial
statements.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion contains trend information and other
forward-looking statements related to the future use of INTEGRA(TM) Artificial
Skin and anticipated expenditure levels and are made pursuant to the safe harbor
provisions of the Securities Litigation Reform Act of 1995. Such statements
involve risks and uncertainties which may cause results to differ materially
from those set forth in these statements. In addition, the economic,
competitive, governmental, technological and other factors identified in the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission could affect such results.
General
The Company is dedicated to the development and marketing of
BioSmart(TM) absorbable products to regenerate specific body tissues and organs.
The Company has developed principally by combining existing businesses,
acquiring synergistic technologies and forming strategic business and
technological alliances.
Results of Operations
Three Months Ended June 30, 1997 Compared to Three Months Ended June 30, 1996
Total revenues increased to approximately $4.3 million for the three
months ended June 30, 1997 from $3.5 million for the three months ended June
30,1996, as an increase in product sales was offset by decreases in research
grant revenue and royalties. Product sales increased to $4.1 million for the
three months ended June 30, 1997 from $3.2 million for the three months ended
June 30, 1996. Sales of INTEGRA(TM) Artificial Skin ("INTEGRA") increased to
$1.75 million for the three months ended June 30, 1997 compared to $770,000 in
the second quarter of 1996. INTEGRA received U.S. Food and Drug Administration
premarket approval in March 1996. In the second quarter of 1997, North American
INTEGRA sales represented 69% of total INTEGRA product sales. Since FDA
approval, the product has been used in hospitals making up over 50% of the
specialized burn care beds in the United States. The Company believes that
INTEGRA has overcome the early adopter threshold and is now entering what the
Company calls an "intensity of use" stage. The Company is focusing on increasing
the annual per bed use of INTEGRA in centers where the product has already been
used.
The primary application of INTEGRA has been for patients with severe
life-threatening burns. The Company is also aware of its application in
reconstructive and wound healing procedures and is continuing to focus its
strategy on expanding the approved indications for use of INTEGRA. The Company
believes that INTEGRA can offer improved results compared to existing treatments
for relief of painful scars, wound contractures and hypertrophic scarring. The
Company believes that the following factors will have the greatest influence on
the use and sale of INTEGRA; i) physician training prior to product use, ii) the
collection of pharma-economic data to address initial product reimbursement
issues, iii) the publication of positive clinical results, iv) the expansion
into international markets, and v) the Company's ability to obtain FDA approvals
for additional indications.
Sales of the Company's other medical products were approximately $2.4
million for the three months ended June 30, 1997 down from $2.5 million for the
three months ended June 30, 1996. Increases in the Company's Dental product
line, largely due to continued increases in BioMend, were offset by a decline in
international Surgical and Hemostasis product sales. The Company has announced
that it is in discussions to cease the sale of its corneal shield product, which
is marketed through Alcon Surgical, Inc. The Company does not believe that the
loss of this product will have a significant impact on the Company as the
ophthalmic product accounted for only 3% of product sales for the year ended
December 31, 1996 and 4% of sales in the second quarter of 1997. Sales of the
Company's other medical products can vary significantly on a quarter to quarter
basis depending on the timing of shipments to private label customers
8
<PAGE>
and contract distributors. Export sales for the three months ended June 30, 1997
increased to $660,000 from $370,000 for the three months ended June 30, 1996 and
included an increase of $420,000 in international INTEGRA sales. In addition,
the Company recently completed an exclusive importation and sales agreement for
INTEGRA in Japan with Century Medical, Inc., a wholly owned subsidiary of ITOCHU
Corporation. Under the agreement, Century Medical will oversee and manage the
Company's clinical trials required for approval by the Japanese government, and
will then serve as the Company's exclusive distributor and importer in Japan for
regenerative products.
Other revenue, which includes grant revenue, license fees, contract
development revenue and royalties, was approximately $190,000 for the three
months ended June 30, 1997 compared to $310,000 for the three months ended June
30, 1996. The largest decline was in grant revenue due to the completion of a
three-year National Institute of Standards and Technology grant as of December
31, 1996. Grant revenue is expected to continue to be lower in 1997 unless
additional grants are awarded to the Company. The Company continues to seek
research grants, licensing arrangements and development funding for several of
its technologies, although the timing and amount of such revenue, if any, can
not be predicted.
Cost of product sales increased to approximately $2.3 million (56% of
product sales) for the three months ended June 30, 1997 from $1.4 million (44%
of product sales) for the three months ended June 30, 1996. The increase in cost
of product sales as a percentage of product sales is partially attributable to
an inventory write-off of $210,000 related to the likely discontinuation of the
Company's Ophthalmic product line. In addition, the Company's INTEGRA
manufacturing unit operated at a lower utilization compared to the prior year as
the Company continued to reduce inventory levels. Due to the high fixed costs of
the manufacturing facility for INTEGRA, the Company is anticipating higher unit
costs until there is a requirement for higher production volume. The Company
believes its current capacity to produce INTEGRA and its other medical products
is sufficient to support significant growth, and that better utilization of this
capacity will improve its gross margin on product sales.
Research and development expense was approximately $1.7 million for the
three-month periods ended June 30, 1997 and June 30, 1996. Decreases in research
facility costs associated with the Company's California operations were offset
by increases in costs associated with the Company's post-approval clinical study
for INTEGRA and additional INTEGRA development activities. The Company expects
the level of research and development expenditures in 1997 to exceed 1996
expenditures as expenditures related to the post-approval study of INTEGRA and
pre-clinical and clinical trials for the Company's regenerative and matrix
medicine technologies expand during the year. 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, the timing and outcome of pre-clinical and clinical
results, changing competitive conditions and determinations with respect to the
commercial potential of the Company's technologies.
Selling, general and administrative expense increased to approximately
$2.9 million for the three-month period ended June 30, 1997 from $2.5 million
for the three-month period ended June 30, 1996. Sales and marketing expenses
declined slightly due to three national training sessions for INTEGRA in 1996.
Excluding the national training sessions, sales and marketing costs increased as
additional technical personnel and consultants were added and promotional
activities involving INTEGRA continued. General and administrative expenses
increased largely due to increased legal and professional costs and additional
management personnel. The Company is anticipating modest increases in sales and
marketing expenses over 1996 levels as a result of the continued introduction of
INTEGRA. General and administrative expenses are likely to increase and will
depend, in part, on the progress of the Company's patent litigation lawsuit.
9
<PAGE>
Six Months Ended June 30, 1997 Compared to Six Months Ended June 30, 1996
Total revenues increased to approximately $7.5 million for the six
months ended June 30, 1997 from $6.6 million for the six months ended June
30,1996, as an increase in product sales was offset by decreases in research
grant revenue and product license fees. Product sales increased to $7.1 million
for the six months ended June 30, 1997 from $5.5 million for the six months
ended June 30, 1996. Sales of INTEGRA increased to $3.0 million for the six
months ended June 30, 1997 compared to $950,000 for the six months ended June
30, 1996. Included in the first six-month sales of 1997 is $750,000 in
international INTEGRA sales, including over $150,000 in sales to Germany,
France, Australia and England, and compared to $270,00 in sales for the prior
year period. Product sales of the Company's other medical products were $4.1
million for the six months ended June 30, 1997 down from $4.6 million for the
six months ended June 30, 1996. Increases in the Company's Dental product line
were offset by a decline in the Company's Infection Control product line. The
largest decline was in the Company's BioPatch product, which was largely due to
the timing of shipments between contract years. Sales of the Company's other
medical products can vary significantly on a period to period basis depending on
the timing of shipments to private label customers and contract distributors.
Export sales, including INTEGRA, for the six months ended June 30, 1997
increased to $950,000 from $630,000 for the six months ended June 30, 1996.
Other revenue was approximately $410,000 for the six months ended June
30, 1997 compared to $1.1 million for the six months ended June 30, 1996. The
largest decline was in product license fees due to a $500,000 licensing fee
received in 1996 as part of an agreement with Cambridge Antibody Technology
Limited involving the Company's human antibody development program. Grant
revenue also declined due to the completion of a three-year National Institute
of Standards and Technology grant as of December 31, 1996.
Cost of product sales increased to approximately $3.8 million (54% of
product sales) for the six months ended June 30, 1997 from $2.9 million (52% of
product sales) for the six months ended June 30, 1996. The increase in cost of
product sales as a percentage of product sales is attributable to higher
inventory write-offs and lower manufacturing utilization compared to the prior
year.
Research and development expense was approximately $3.1 million for the
six months ended June 30, 1997 compared to $3.2 million for the six months ended
June 30, 1996. Decreases in research facility costs associated with the
Company's California operations were offset by increases in costs associated the
Company's post-approval clinical study for INTEGRA.
Selling, general and administrative expense increased to approximately
$5.4 million for the six months ended June 30, 1997 from $4.5 million for the
six months ended June 30, 1996. Sales and marketing expenses increased due to
domestic and international costs associated with INTEGRA. A decline in national
training session costs was offset by increased costs associated with additional
technical personnel and consultants as well as additional promotional
activities. General and administrative expenses increased due to additional
legal and professional costs and additional management personnel.
Liquidity and Capital Resources
At June 30, 1997, the Company had cash, cash equivalents and short-term
investments of approximately $32.2 million and no long-term debt. The Company's
principal uses of funds during the six-month period ended June 30, 1997 were
$2.3 million for operations and $240,000 in purchases of property and equipment.
The Company also received $330,000 in funds from the exercise of stock options
under the Company's stock option plans. 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. There can
be no assurance that the Company will be able to generate sufficient revenues to
obtain positive operating cash flows or profitability.
10
<PAGE>
Other Information
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
130"). SFAS 130 establishes standards of disclosure and financial statement
display for reporting comprehensive income and the components thereof. This
statement defines comprehensive income as the change in equity of a business
during a period from transactions and other events and circumstances from
non-owner sources. SFAS 130 requires that comprehensive income be presented in
the financial statements as a separate statement, in the statement of changes in
equity or below the total of net income or loss in the income statement. SFAS
130 is effective for fiscal years beginning after December 15, 1997, with
earlier application permitted. The Company is currently evaluating the effect
SFAS 130 will have on its financial statements.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS 131"). SFAS 131 establishes standards
for the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. Operating segments are components of an
enterprise about which separate financial information is available and is
evaluated regularly by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. This Statement requires that a
public business enterprise report descriptive information about the way that the
operating segments were determined and the products and services provided by the
operating segments.
SFAS 131 requires that a public business enterprise report a measure of segment
profit or loss, certain specific revenue and expense items, and segment assets.
It requires reconciliations of total segment revenues, total segment profit or
loss, total segment assets, and other amounts disclosed for segments to
corresponding amounts in the enterprise's general-purpose financial statements.
It also requires that all public business enterprises report information about
the revenues derived from the enterprise's products and services, about the
countries in which the enterprise earns revenues and holds assets, and about
major customers regardless of whether that information is used in making
operating decisions. SFAS 131 is effective for financial statements for periods
beginning after December 15, 1997. The Company is currently evaluating the
effect SFAS 131 will have on its financial statements.
11
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on May 19, 1997 and in
connection therewith, proxies were solicited by management pursuant to
Regulation 14 under the Securities Exchange Act of 1934. An aggregate of
29,630,496 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 1998 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 26,514,133 68,862
Richard E. Caruso 26,503,119 79,876
William M. Goldstein 26,514,662 68,333
Frederic V. Malek 26,514,226 68,769
George W. McKinney, III 26,514,623 68,372
James M. Sullivan 26,513,226 69,372
Edmund L. Zalinski 26,513,362 69,633
2. Ratification of independent auditors. The appointment of Coopers & Lybrand
L.L.P. as the Company's independent auditors for the current fiscal year was
ratified. The tabulation of votes was as follows:
For Against Abstentions
--- ------- -----------
26,527,881 35,937 19,177
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Statement Re: Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTEGRA LIFESCIENCES CORPORATION
Date: August 14, 1997 /s/ Richard E. Caruso
----------------------
Richard E. Caruso, Ph.D.
Chairman, President and Chief Executive Officer
Date: August 14, 1997 /s/ David B. Holtz
-------------------
David B. Holtz
Vice President, Treasurer
13
<PAGE>
Exhibit 11
Statement of Computation of Per Share Amounts
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- --------------------------
1997 1996 1997 1996
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Primary:
Net loss for the period ............................. $ (2,039) $ (1,546) $ (3,869) $ (3,106)
============ ============ =========== ===========
Weighted average number of shares of common stock
outstanding .................................... 29,792 28,496 29,366 27,680
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 ............. 29,792 28,496 29,366 27,680
Net loss per share .................................. $ (0.07) $ (0.05) $ (0.13) $ (0.11)
============ ============ =========== ===========
Fully Diluted:
Net loss for the period ............................. $ (2,039) $ (1,546) $ (3,869) $ (3,106)
============ ============ =========== ===========
Weighted average number of shares of common stock
outstanding .................................... 29,792 28,496 29,366 27,680
Shares issuable upon exercise of outstanding
options and warrants ........................... 106 3,231 618 3,299
Shares assumed to be acquired in accordance
with the treasury stock method ................. (9) (1,239) (43) (1,313)
------------ ------------ ----------- -----------
Shares used in computing per share loss ............. 29,889 30,488 29,998 29,666
------------ ------------ ----------- -----------
Net loss per share .................................. $ (0.07) $ (0.05) $ (0.13) $ (0.11)
============ ============ =========== ===========
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<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> 4,272
<SECURITIES> 27,972
<RECEIVABLES> 2,769
<ALLOWANCES> 0
<INVENTORY> 1,993
<CURRENT-ASSETS> 37,371
<PP&E> 12,561
<DEPRECIATION> 4,721
<TOTAL-ASSETS> 45,240
<CURRENT-LIABILITIES> 2,176
<BONDS> 0
0
0
<COMMON> 298
<OTHER-SE> 105,765
<TOTAL-LIABILITY-AND-EQUITY> 45,240
<SALES> 7,090
<TOTAL-REVENUES> 7,495
<CGS> 3,843
<TOTAL-COSTS> 3,843
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,869)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,869)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,869)
<EPS-PRIMARY> (.13)
<EPS-DILUTED> (.13)
</TABLE>
