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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 1996
OR
| | 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 0-26268
MINIMED INC.
(Exact Name of Registrant as Specified in its Charter)
--------------------
Delaware 95-4408171
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12744 San Fernando Road, Sylmar, CA 91342
(818) 362-5958
--------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
Title of each class Outstanding at August 2, 1996
Common Stock, $.01 par value 11,606,143
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<PAGE>
INDEX
MINIMED INC.
Page
Number
---------
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements and Notes
(Unaudited) 3
Consolidated Balance Sheets--December 29, 1995
and June 28, 1996 3
Consolidated Statements of Operations--Three
months and six months ended June 28, 1996 and
June 30, 1995 4
Consolidated Statements of Cash Flows--Six months
ended June 28, 1996 and June 30, 1995 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION 12
Item 1. Litigation 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURE 14
Index to Exhibits 15
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements and Notes
<TABLE>
MINIMED INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
A S S E T S
December 29, June 28,
1995 1996
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents.........................$14,762,000 $8,717,000
Short-term investments............................ $8,724,000 $13,786,000
Accounts receivable, net of allowance for
doubtful accounts of $1,327,000 and $1,843,000
at December 29, 1995 and June 28, 1996,
respectively................................... 10,562,000 10,102,000
Receivables due from related entities............. 23,000 -
Inventories....................................... 5,165,000 6,969,000
Deferred tax assets, net.......................... 789,000 789,000
Prepaid expenses and other current assets......... 1,065,000 794,000
----------- -----------
Total current assets..................... 41,090,000 41,157,000
PROPERTY AND EQUIPMENT - NET......................... 10,553,000 11,604,000
----------- -----------
TOTAL ASSETS..........................................$51,643,000 $52,761,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable.................................. $1,895,000 $1,195,000
Current portion of notes payable.................. 600,000 600,000
Accrued payroll related expenses.................. 1,966,000 2,044,000
Accrued warranties................................ 3,243,000 3,139,000
Other accrued expenses............................ 1,577,000 378,000
----------- -----------
Total current liabilities................ 9,281,000 7,356,000
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $0.01;
20,000,000 shares authorized; 11,405,933 and
11,604,693 shares issued and outstanding as of
December 29, 1995 and (unaudited) June 28, 1996
respectively.................................... 114,000 116,000
Additional capital................................ 43,912,000 45,394,000
Accumulated deficit............................... (1,664,000) (105,000)
----------- -----------
Total stockholders' equity............... 42,362,000 45,405,000
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............$51,643,000 $52,761,000
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
MINIMED INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended Six Months Ended
June 28, June 30, June 28, June 30,
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ----------- ----------
(Unaudited)
<S> <C> <C> <C> <C>
NET SALES.............................$13,343,000 $10,989,000 $25,552,000 $19,290,000
COST OF SALES......................... 4,571,000 3,902,000 8,883,000 7,085,000
---------- ---------- ----------- ----------
Gross profit.................... 8,772,000 7,087,000 16,669,000 12,205,000
OPERATING EXPENSES:
Selling, general and administrative. 5,818,000 4,934,000 11,142,000 9,191,000
Research and development............ 1,953,000 2,005,000 3,775,000 3,374,000
---------- --------- ----------- ----------
Total operating expenses.... 7,771,000 6,939,000 14,917,000 12,565,000
INCOME (LOSS) FROM OPERATIONS.......... 1,001,000 148,000 1,752,000 (360,000)
OTHER:
Interest expense.............. 0 (157,000) 0 (311,000)
Other income.................. 301,000 110,000 497,000 320,000
----------- --------- ----------- ----------
INCOME (LOSS) BEFORE INCOME TAXES...... 1,302,000 101,000 2,249,000 (351,000)
Provision for income taxes............. (370,000) 0 (690,000) 0
----------- ---------- ----------- ----------
NET INCOME (LOSS)...................... $932,000 $101,000 $1,559,000 ($351,000)
=========== ========== =========== ==========
Net income (loss) per share............ $0.08 $0.01 $0.13 ($0.04)
=========== ========== =========== ==========
Weighted average common and common-
equivalent shares outstanding..........12,300,000 9,407,000 12,160,000 8,948,000
=========== ========== =========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
MINIMED INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Six Months Ended
-------------------------
June 28, June 30,
------------ -----------
1996 1995
------------ -----------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................. $1,559,000 ($351,000)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation................................... 928,000 539,000
Changes in operating assets and liabilities:
Accounts receivable, net.................... 460,000 1,024,000
Receivables due from related entities....... 23,000 (20,000)
Inventories................................. (1,804,000) (1,557,000)
Prepaid expenses and other current assets... 271,000 315,000
Accounts payable............................ (700,000) 70,000
Accrued expenses............................ (701,000) 650,000
------------ -----------
Net cash provided by operating activities...... 36,000 670,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Short-term investments............................ (5,062,000) 0
Purchase of property and equipment................ (1,979,000) (1,694,000)
------------ -----------
Net cash used in investing activities.......... (7,041,000) (1,694,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercise of stock options....... 960,000 0
------------ -----------
Net cash provided by financing activities...... 960,000 0
NET DECREASE IN CASH.................................. (6,045,000) (1,024,000)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD....... 14,762,000 10,348,000
------------ -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD............. $8,717,000 $9,324,000
============ ===========
See notes to consolidated financial statements.
- ----------
<FN>
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes $877,000 $0
============ ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITY:
The Company has recognized a reduction in income taxes payable of $520,000
during the six months ended June 28, 1996 related to the exercise of
nonqualified stock options.
During the six months ended June 30, 1995, the Company recorded $187,000 in
accretion of preferred stock to redemption value and $251,000 in accrued
preferred stock dividends directly to accumulated deficit.
</FN>
</TABLE>
<PAGE>
MINIMED INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 28, 1996
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all normal, recurring adjustments
considered necessary for a fair presentation have been included. The financial
statements should be read in conjunction with the audited financial statements
included in the Annual Report of MiniMed Inc. (the "Company") filed on Form 10-K
with the Securities and Exchange Commission for the year ended December 29,
1995. The results of operations for the three months and six months ended June
28, 1996 are not necessarily indicative of the results that may be expected for
the fiscal year ending December 27, 1996.
Note 2. Income Taxes
Net income and earnings per share for the three months and six months
ended June 28, 1996 reflect income taxes which have been recorded at the
Company's estimated effective income tax rate for the year. This estimated
income tax rate has been determined by giving consideration to the pretax
earnings and losses applicable to foreign and domestic tax jurisdictions and the
estimated reduction of valuation allowances which offset deferred tax assets of
the Company under the provisions of FASB Statement No. 109, "Accounting for
Income Taxes". No provision for income taxes was recorded in the Company's
operating results for the three months and six months ended June 30, 1995 as its
taxable income for these periods was offset by net operating loss carryovers.
Note 3. Weighted Average Number of Common and Common Equivalent Shares
Outstanding
Earnings (losses) per common and common equivalent share for the three
months and six months ended June 28, 1996, and June 30, 1995, were computed by
dividing net income (loss) by the weighted average common and common equivalent
shares outstanding during the periods presented, computed in accordance with the
treasury stock method. As required by rules promulgated by the Securities and
Exchange Commission, shares, options, warrants or convertible preferred shares
issued at prices below the initial public offering price in the twelve months
prior to the initial public offering have been included in the calculations as
if outstanding using the treasury stock method for the three months and six
months ended June 30, 1995.
<PAGE>
<TABLE>
MINIMED INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONTINUED
June 28, 1996
(Unaudited)
Note 4. Consolidated Balance Sheet Components
Certain balance sheet components are as follows:
<CAPTION>
December 29, June 28,
1995 1996
------------------------------------
(Unaudited)
<S> <C> <C>
Inventories:
Raw materials $2,994,000 $3,927,000
Work-in-progress 929,000 901,000
Finished goods 1,242,000 2,141,000
------------------------------------
$5,165,000 $6,969,000
====================================
Property, plant and equipment
Land, buildings and improvements $6,028,000 $6,349,000
Machinery and equipment 4,987,000 5,938,000
Tooling and molds 2,299,000 2,676,000
Furniture and fixtures 1,131,000 1,461,000
------------------------------------
14,445,000 16,424,000
Less accumulated depreciation (3,892,000) (4,820,000)
====================================
Total $10,553,000 $11,604,000
====================================
</TABLE>
5. Contingencies
On June 7, 1996, Disetronic Medical Systems, Inc. ("Disetronic"), a
competitor to the Company, filed a lawsuit in the United States District Court
in Tampa, Florida, alleging that the Company and a named sales representative
engaged in improper sales tactics and false and misleading advertising. The
complaint was amended on June 14, 1996. On July 1, 1996, the Company filed its
answer to the lawsuit in which the Company denied the allegations of improper
conduct. In addition to filing the answer, the Company filed a counterclaim
against Disetronic alleging, among other things, that Disetronic has
disseminated false and misleading statements regarding the Company, its business
and its products, and has disseminated false and misleading statements about the
insulin infusion pumps Disetronic markets in the United States. Both the Company
and Disetronic, in their respective claims, seek monetary damages in unspecified
amounts and injunctive relief. No trial date has been set and discovery has not
yet commenced. While the Company believes that the Disetronic claims are without
merit and the Company is entitled to relief on its counterclaims, because of the
preliminary status of the litigation, the Company is unable to predict what
financial impact the lawsuit may have.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
The following table summarizes the Company's results of operations as a
percentage of net sales for the three months and six months ended June 28, 1996
and June 30, 1995:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------- --------------------
June 28, June 30, June 28, June 30,
1996 1995 1996 1995
------------------- --------------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 34.3 35.5 34.8 36.7
------------------- --------------------
Gross profit 65.7 64.5 65.2 63.3
Operating expenses:
Selling, general and administrative 43.6 44.9 43.6 47.6
Research and development 14.6 18.2 14.8 17.5
------------------- --------------------
Total operating expenses 58.2 63.1 58.4 65.1
------------------- --------------------
Operating income (loss) 7.5% 1.4% 6.8% (1.8)%
=================== ====================
</TABLE>
Net Sales
The following table summarizes net sales by product line for the
three-month and six-month periods ended June 28, 1996 and June 30, 1995:
<TABLE>
<CAPTION>
Dollars in thousands % of Net Sales
------------------------------------- ------------------------------------
Three Six Three Six
Months Months Months Months
Ended Ended Ended Ended
------------------------------------- ------------------------------------
June 28, June 30, June 28, June 30, June 28, June 30, June 28, June 30,
1996 1995 1996 1995 1996 1995 1996 1995
------------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales:
External pumps
and related
disposables:
Domestic $11,186 $8,635 $21,107 $15,748 83.8% 78.6% 82.6% 81.6%
International 1,429 1,557 3,394 2,723 10.7 14.2 13.3 14.1
------------------------------------ -------------------------------------
Subtotal 12,615 10,192 24,501 18,471 94.5 92.8 95.9 95.7
Implantable
pumps 728 797 1,051 819 5.5 7.2 4.1 4.3
==================================== =====================================
Net sales $13,343 $10,989 $25,552 $19,290 100.0% 100.0% 100.0% 100.0%
==================================== =====================================
</TABLE>
Net sales increased $2,354,000 or 21.4% during the three months ended June
28, 1996 over the three months ended June 30, 1995 to $13,343,000 from
$10,989,000. Net sales increased 32.5% during the six months ended June 28, 1996
over the six months ended June 30, 1995 to $25,552,000 from $19,290,000. The
increase is the result of an increase in the sales of external pumps and related
disposables, a 23.8% increase in the three months ended June 28, 1996 and a
32.6% increase in the six months ended June 28, 1996 over the comparable periods
in 1995. These increases in net sales represent a volume increase in pump and
disposable units sold and a customer shift to more expensive disposable products
offered by the Company since June 1995.
<PAGE>
Included in international net sales of external pumps and related
disposables are sales of external insulin pumps in Europe pursuant to a
pre-existing contractual arrangement with Novo Nordisk, a leading international
supplier of insulin. For the three-month and six-month periods ended June 28,
1996, approximately 6.3% and 28.4%, respectively, of international sales of
external pumps and related disposables pertained to this agreement, compared to
24.8% and 16.8% of international sales of external pumps and related disposables
for the three-month and six-month periods ended June 30, 1995, respectively.
Under a 1993 agreement, external pumps previously manufactured and sold by Novo
Nordisk were replaced with pumps purchased from the Company. The Company
completed its obligations under the contract with Novo Nordisk during the
quarter ended June 28, 1996.
Sales of implantable pumps decreased by $69,000 during the three-month
period ended June 28, 1996 over the three-month period ended June 30, 1995 to
$728,000 from $797,000. Implantable pump sales increased by $232,000 during the
six-month period ended June 28, 1996 over the six-month period ended June 30,
1995 to $1,051,000 from $819,000. Business activity for the implantable pump
product line remains sporadic due to the lack of regulatory approval for this
device in the United States and the availability and continued uncertainty
related to regulatory approval of the special insulin required for the
implantable insulin pump.
Future sales of the Company's implantable insulin pumps may be adversely
affected by the availability of the special insulin utilized in the implantable
pumps as well as the ability to receive regulatory approval for the insulin,
seasonality, and overall market acceptance of this product line.
Cost of Sales and Gross Profits
The following table summarizes gross profit by product line:
<TABLE>
<CAPTION>
Dollars in thousands % of Net Sales
------------------------------------ ------------------------------------
Three Six Three Six
Months Months Months Months
Ended Ended Ended Ended
------------------------------------ ------------------------------------
June 28, June 30, June 28, June 30, June 28, June 30, June 28, June 30,
1996 1995 1996 1995 1996 1995 1996 1995
------------------------------------ ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross Profits:
External pumps
and related
disposables $8,820 $7,155 $16,853 $12,280 66.1% 65.1% 66.0% 63.7%
Implantable
pumps (48) (68) (184) (75) (0.4) (0.6) (0.7) (0.4)
===================================== ====================================
Total $8,772 $7,087 $16,669 $12,205 65.7% 64.5% 65.3% 63.3%
===================================== ====================================
</TABLE>
Cost of sales increased 17.1% during the three-month period ended June 28,
1996 over the three-month period ended June 30, 1995 to $4,571,000 from
$3,902,000. Cost of sales as a percentage of sales decreased to 34.3% in the
three-month period ended June 28, 1996 from 35.5% in the three-month period
ended June 30, 1995. Cost of sales increased 25.4% during the six-month period
ended June 28, 1996 over the six-month period ended June 30, 1995 to $8,883,000
from $7,085,000. Cost of sales as a percentage of sales decreased to 34.8% in
the six-month period ended June 28, 1996 from 36.7% in the six-month period
ended June 30, 1995.
<PAGE>
The decrease in cost of sales as a percentage of sales for the three months and
six months ended June 28, 1996 compared to the same periods in 1995 is the
result of continued cost improvements and economies of scale related to
increased sales volume. Cost of sales for the three months ended June 28, 1996
included manufacturing start-up expenses related to the Company's release of its
latest generation external insulin pump, the model 507, in June 1996. Continued
increases due to such start-up costs may adversely impact gross profits over the
balance of 1996. The Company's gross profits have been adversely impacted by the
implantable pump product line during all periods due to low volumes and
development issues.
Selling, General and Administrative
Selling, general and administrative expenses increased 17.9% in the three
months ended June 28, 1996 over the three months ended June 30, 1995 to
$5,818,000 from $4,934,000. Selling, general and administrative expenses as a
percentage of sales decreased to 43.6% in the three-month period ended June 28,
1996 from 44.9% in the three-month period ended June 30, 1995. Selling, general
and administrative expenses increased 21.2% in the six months ended June 28,
1996 over the six months ended June 30, 1995 to $11,142,000 from $9,191,000.
Selling, general and administrative expenses as a percentage of sales decreased
to 43.6% in the six-month period ended June 28, 1996 from 47.6% in the six-month
period ended June 30, 1995. This reduction as a percentage of sales indicates
that with increased sales the Company has achieved a degree of leverage with its
fixed selling, general and administrative expenses. The overall increase in
selling expenses in the three months and six months ended June 28, 1996 over
the comparable periods ended June 30, 1995 relates primarily to increased sales
volume, the introduction of the Model 507 external insulin pump, increased
marketing efforts to educate patients, professionals and payors in the intensive
management of diabetes and increased spending in international sales and
marketing efforts. The international expense increase is primarily associated
with bringing in-house to the Company's French subsidiary certain administrative
functions that had been previously performed by various third parties and the
organization and continuing start-up costs of the Company's German subsidiary,
which was formed in December 1995. Additionally, the Company has added sales
representatives and support staff to enhance its selling, marketing and
educational efforts. General and administrative expenses increased in the
three months and six months ended June 28, 1996 over the comparable periods
ended June 30, 1995 due to costs associated with the Company's status as a
public reporting entity, staff increases necessary to support increased business
volume, and increased international business activity.
Research and Development
Research and development expenses decreased 2.6% in the three months ended
June 28, 1996 over the three months ended June 30, 1995 to $1,953,000 from
$2,005,000. As a percentage of sales, research and development expenses
decreased to 14.6% of sales for the three months ended June 28, 1996 from 18.2%
for the three months ended June 30, 1995. Research and development expenses
increased 11.9% in the six months ended June 28, 1996 over the six months ended
June 30, 1995 to $3,775,000 from $3,374,000. As a percentage of sales, research
and development expenses decreased to 14.8% of sales for the six months ended
<PAGE>
June 28, 1996 from 17.5% for the six months ended June 30, 1995. The increases
in certain of the research and development activities for the three and six
month periods ended June 28, 1996 compared to the relevant periods in the prior
year for the external pumps and disposables product line was primarily related
to expenses incurred in connection with the development and introduction of the
new model external micro-infusion insulin pump which was released commercially
in June. Partially offsetting this increase were decreases in spending relative
to the Company's implantable pump. The following table summarizes the Company's
estimated research and development expense by product line based upon the
Company's internal records:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 28, June 30, June 28, June 30,
1996 1995 1996 1995
------------------------ --------------------------
<S> <C> <C> <C> <C>
External pumps and
related disposables $ 854 $ 489 $1,656 $ 902
Implantable pumps 707 1,090 1,235 1,640
Glucose sensor 392 426 884 832
------------------------ --------------------------
Total: $1,953 $2,005 $3,775 $3,374
======================== ==========================
</TABLE>
Interest and Other
Other income consists primarily of interest income generated from the
Company's increased cash and cash equivalent balances as a result of the initial
public offering. The Company incurred interest expense in the three months and
six months ended June 30, 1995, however no interest expense was incurred
during the comparable periods in 1996 as all debt was retired in connection with
the Company's July 1995 initial public offering.
Operating results for the three months and six months ended June 28, 1996
reflect income tax expense at the Company's estimated effective rate for fiscal
1996. This effective tax has been computed giving consideration to the pretax
earnings and losses applicable to Company's foreign and domestic tax
jurisdictions and a continual decrease in the Company's valuation allowance
against net deferred tax assets due to the Company's continued improved
operating results.
Liquidity and Capital Resources
During the six months ended June 28, 1996, the Company had cash flow from
its operating activities of $36,000 compared to cash flow provided by operations
of $670,000 in the comparable period in 1995. Cash provided by operations
decreased primarily due to the Company's increased inventories associated with
the new product launch. The Company's capital expenditures increased to
$1,979,000 during the six months ended June 28, 1996 compared to $1,694,000 for
the six months ended June 30, 1995, which increase was attributable to continued
improvement of the Company's operating facilities.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On June 7, 1996, Disetronic filed a lawsuit against the Company in the
United States District Court, Middle District of Florida (Case No.
96-1113-CIV-T-25E), which complaint was amended on June 14, 1996. The action
initiated by Disetronic alleges that the Company and one of its sales
representatives engaged in improper sales tactics and false and misleading
advertising. Disetronic seeks injunctive relief and monetary damages in an
unspecified amount. On July 1, 1996, the Company filed an answer to the lawsuit
denying its allegations of improper conduct and filed a counterclaim against
Disetronic alleging, among other things, that Disetronic had disseminated false
and misleading statements regarding the Company, its business and its products,
and has disseminated false and misleading statements about the insulin infusion
pumps marketed in the United States by Disetronic. The counterclaim filed by the
Company seeks both injunctive relief and monetary damages based on allegations
of unfair competition, false and misleading advertising, defamation, product
disparagement and intentional interference with business relations. No trial
date has been set and discovery has not yet commenced. While the Company
believes that the Disetronic claims are without merit and the Company is
entitled to relief on its counterclaims, because of the preliminary status of
the litigation, the Company is unable to predict with certainty the final
outcome of the claims and counterclaims in this action.
Item 4. Submission of Matters to a Vote of Security Holders
On May 30, 1996, the Company held its 1996 Annual Meeting of Stockholders
(the "Annual Meeting"). At the Annual Meeting, stockholders of the Company voted
upon proposals to (1) elect six directors for a term of one year and until their
respective successors are elected and qualified ("Proposal One"); (2) ratify the
appointment of Deloitte & Touche LLP as auditors for the fiscal year ending
December 27, 1996 ("Proposal Two"); (3) approve the MiniMed Inc. Non-Employee
Director Deferred Stock Units Plan ("Proposal Three"); (4) approve certain
amendments to the MiniMed Inc. Amended and Restated 1994 Stock Incentive Plan
("Proposal Four"); and (5) approve the MiniMed Inc. Employee Stock Purchase Plan
("Proposal Five").
In total, 11,577,753 shares of Common Stock were eligible to vote at the
Annual Meeting, and holders of 10,395,823 shares of Common Stock were
represented in person or by proxy at the Annual Meeting, constituting 89.79% of
the eligible shares. The following provides voting information for all matters
voted upon at the meeting:
Proposal One - No fewer than 10,390,915 shares, or 99.95% of the shares
voted, were voted for the election of each of the Directors nominated.
Proposal Two related to the proposal to ratify the appointment of Deloitte
& Touche LLP as auditors of the Company for the fiscal year ending December 27,
1996. 10,391,812 shares (89.76%) were voted for Proposal Two, 2,170 shares were
voted against Proposal Two (.02%), and 1,841 shares abstained from voting on
Proposal Two (.01%).
<PAGE>
Proposal Three consisted of a proposal to approve the MiniMed Inc.
Non-Employee Director Deferred Stock Units Plan, pursuant to which 50,000 shares
will be made available for issuance to Directors in lieu of retainer and/or
meeting fees payable to Directors. With respect to Proposal Two, 9,369,457
shares were voted for approval of the proposal three (98.75%), 5,903 shares were
voted against the proposal three (.54%), 67,621 shares abstained from voting
(.71%) and there were 907,842 non-votes (7.84%).
Proposal Four consisted of a proposal to approve the Second Amended and
Restated 1994 Stock Incentive Plan, which included an increase from 1,250,000 to
2,250,000 shares the number of shares issuable pursuant to such plan, as well as
certain additional changes to the terms of such plan. 8,635,264 shares were
voted for Proposal Four (91.01%), 792,963 shares (8.36%) were voted against
Proposal Four, 59,754 shares (.63%) abstained and there were 907,842 non-votes
(7.84%).
Proposal Five consisted of a proposal to approve the MiniMed Inc. Employee
Stock Purchase Plan, pursuant to which up to 1,000,000 shares may be issuable to
employees who purchase such shares through regular payroll deductions. With
respect to Proposal Five, 9,452,135 shares voted for the proposal (99.53%),
18,720 shares voted against Proposal Five (.20%), 26,126 shares abstained from
voting (.27%) and there were 898,842 non-votes (7.76%).
Accordingly, all of the Proposals were approved.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Exhibit
11.1 Calculation of earnings per share
(b) Reports on Form 8-K
No Current Reports on Form 8-K were filed by the Company during the
quarterly period ended June 28, 1996.
<PAGE>
SIGNATURE
Pursuant to 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.
MiniMed Inc.
Date: August 7, 1996 /S/ Kevin R. Sayer
----------------------------------
Kevin R. Sayer
Senior Vice President, Finance &
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description Page No.
11.1 Calculation of earnings (loss) per share 16
<PAGE>
<TABLE>
MINIMED INC.
STATEMENT OF COMPUTATION OF
NET INCOME (LOSS) PER SHARE
<CAPTION>
Three Six
Months Months
Ended Ended
------------------------ -----------------------
June 28, June 30, June 28, June 30,
1996 1995 1996 1995
------------------------ -----------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Weighted average common
shares outstanding 11,589,000 7,730,000 11,505,000 7,730,000
Redeemable, convertible,
preferred stock --- 1,111,000 --- 1,111,000
Common equivalent shares from
stock options and warrants 711,000 566,000 655,000 107,000
------------------------ -----------------------
Shares used in per share
calculation 12,300,000 9,407,000 12,160,000 8,948,000
======================== =======================
Net income (loss) $932,000 $101,000 $1,559,000 ($351,000)
======================== =======================
Net income (loss) per share $0.08 $0.01 $0.13 $(0.04)
======================== =======================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Financial Condition at June 28, 1996 (Unaudited) and
the Consolidated Statement of Operations for the Three and Nine Months Ended
June 28, 1996, and June 30, 1995 (Unaudited) and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<CIK> 0000945801
<NAME> MiniMed Inc.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-27-1996
<PERIOD-START> DEC-30-1995
<PERIOD-END> JUN-28-1996
<CASH> 8,717,000
<SECURITIES> 13,786,000
<RECEIVABLES> 11,945,000
<ALLOWANCES> 1,843,000
<INVENTORY> 6,969,000
<CURRENT-ASSETS> 41,157,000
<PP&E> 16,424,000
<DEPRECIATION> 4,820,000
<TOTAL-ASSETS> 52,761,000
<CURRENT-LIABILITIES> 7,356,000
<BONDS> 0
0
0
<COMMON> 116,000
<OTHER-SE> 45,289,000
<TOTAL-LIABILITY-AND-EQUITY> 52,761,000
<SALES> 25,552,000
<TOTAL-REVENUES> 26,049,000
<CGS> 8,883,000
<TOTAL-COSTS> 23,800,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 516,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,249,000
<INCOME-TAX> 690,000
<INCOME-CONTINUING> 1,559,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,559,000
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.13
</TABLE>
