<PAGE> 1
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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 March 28, 1997
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
incorporated 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:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OUTSTANDING AT MAY 6, 1997
------------------- --------------------------
<S> <C>
Common Stock, $.01 par value 12,716,336
</TABLE>
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<PAGE> 2
INDEX
MINIMED INC.
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements and Notes (Unaudited) 3
Consolidated Balance Sheets--December 27, 1996 and March 28, 1997 3
Consolidated Statements of Operations--Three months ended March 29, 1996 and
March 28, 1997 4
Consolidated Statements of Cash Flows--Three months ended March 29, 1996 and
March 28, 1997 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
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURE 13
INDEX TO EXHIBITS 14
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
MINIMED INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 27, 1996 AND MARCH 28, 1997
ASSETS
<TABLE>
<CAPTION>
1996 1997
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents ..................................... $ 10,286,000 $ 18,824,000
Short-term investments ....................................... 9,517,000 252,000
Accounts receivable, net of allowance for doubtful accounts of
$2,575,000 and $2,905,000 at December 27, 1996 and March 28,
1997, respectively ......................................... 15,617,000 14,191,000
Receivable due from related entities .......................... 90,000 88,000
Inventories ................................................... 6,725,000 7,815,000
Deferred income taxes ......................................... 3,003,000 3,156,000
Prepaid expenses and other current assets ..................... 1,042,000 998,000
------------ ------------
Total current assets .............................. 46,280,000 45,324,000
OTHER ASSETS .................................................... 577,000 680,000
LAND, BUILDINGS, PROPERTY AND EQUIPMENT - Net ................... 12,646,000 13,092,000
------------ ------------
TOTAL ........................................................... $ 59,503,000 $ 59,096,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable .............................................. $ 1,642,000 $ 2,021,000
Accrued salaries and related benefits ......................... 2,065,000 1,666,000
Accrued sales commissions ..................................... 1,568,000 293,000
Accrued warranties ............................................ 2,873,000 2,910,000
Income taxes payable .......................................... 463,000 657,000
Other accrued expenses ........................................ 460,000 263,000
------------ ------------
Total current liabilities .......................... 9,071,000 7,810,000
------------ ------------
Deferred Tax Liabilities ........................................ 806,000 806,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $01; 20,000,000 shares authorized;
11,636,175 and 11,643,155 shares issued and outstanding as
of December 27, 1996 and March 28, 1997, respectively ...... 116,000 116,000
Additional capital ........................................... 46,502,000 46,502,000
Translation .................................................. -- (244,000)
Retained Earnings ............................................ 3,008,000 4,106,000
------------ ------------
Total stockholders' equity ........................ 49,626,000 50,480,000
------------ ------------
TOTAL ........................................................... $ 59,503,000 $ 59,096,000
============ ============
See notes to consolidated financial statements
</TABLE>
3
<PAGE> 4
MINIMED INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 29, 1996 AND THREE MONTHS ENDED
MARCH 28, 1997
<TABLE>
<CAPTION>
1996 1997
----------- -----------
(Unaudited)
<C> <C>
NET SALES .................................... $12,209,000 $15,265,000
COST OF SALES ................................ 4,312,000 5,084,000
----------- -----------
GROSS PROFIT ................................. 7,897,000 10,181,000
----------- -----------
OPERATING EXPENSES:
Selling, general and administrative ........ 5,324,000 6,564,000
Research and development ................... 1,822,000 2,005,000
----------- -----------
Total operating expenses ......... 7,146,000 8,569,000
----------- -----------
OPERATING INCOME ............................. 751,000 1,612,000
OTHER INCOME, Including interest income ...... 196,000 152,000
----------- -----------
INCOME BEFORE INCOME TAXES .................. 947,000 1,764,000
PROVISION FOR INCOME TAXES ................... 320,000 666,000
----------- -----------
NET INCOME ................................... $ 627,000 $ 1,098,000
=========== ===========
NET INCOME PER SHARE ........................ $ 0.05 $ 0.09
=========== ===========
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING ........................ 12,100,000 12,389,000
=========== ===========
</TABLE>
See notes to consolidated financial statement.
4
<PAGE> 5
MINIMED INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS THREE
MONTHS ENDED MARCH 29, 1996 AND THREE MONTHS ENDED MARCH 28, 1997
<TABLE>
<CAPTION>
1996 1997
------------ ------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .................................. $ 627,000 $ 1,098,000
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation .............................. 444,000 559,000
Deferred income taxes ..................... --- (153,000)
Changes in operating assets and
liabilities:
Accounts receivable, net ................ 647,000 1,426,000
Receivable due from related entities .... --- 2,000
Inventories ............................. (998,000) (1,090,000)
Prepaid expenses and other current assets (126,000) 44,000
Other assets ............................ --- (103,000)
Accounts payable ........................ (720,000) 379,000
Accrued expenses ........................ (631,000) (1,640,000)
------------ ------------
Net cash provided by (used in) operating
activities ........................... (757,000) 522,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES -
Short-term investments .................. 260,000 9,265,000
Purchase of land, buildings, property
and equipment ........................ (1,046,000) (1,005,000)
------------ ------------
Net cash provided by (used in) investing
activities ........................... (786,000) 8,260,000
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES -
Proceeds from stock option exercises .... 659,000 ---
------------ ------------
Net cash provided by financing
activities .......................... 659,000 ---
------------ ------------
Effect of foreign exchange rates on cash --- (244,000)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS .............................. (884,000) 8,538,000
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD ................................... 14,762,000 10,286,000
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD
$ 13,878,000 $ 18,824,000
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Income taxes ............................... $ 705,000 $ 650,000
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITY - The Company has
recognized a reduction in income taxes payable of $320,000 during the three
months ended March 29, 1996 related to the exercise of nonqualified stock
options.
See notes to consolidated financial statements.
5
<PAGE> 6
MINIMED INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 29, 1996 AND THREE MONTHS ENDED MARCH 28, 1997
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of MiniMed Inc. (the
"Company") have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q 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 27, 1996. The results of operations for the three months ended March
28, 1997 are not necessarily indicative of the results that may be expected for
the fiscal year ending January 2, 1998.
NOTE 2. INCOME TAXES
Net income and earnings per share for the three months ended March 29,
1996 and March 28, 1997 reflect income taxes which have been recorded at the
Company's estimated effective 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".
NOTE 3. WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES
OUTSTANDING
Earnings per common and common equivalent share for the three months
ended March 29, 1996 and March 28, 1997, were computed by dividing net income by
weighted average common and common equivalent shares outstanding during the
periods presented, computed in accordance with the treasury stock method.
NOTE 4. CONSOLIDATED BALANCE SHEET COMPONENTS
Certain balance sheet components are as follows:
<TABLE>
<CAPTION>
December 27, March 28,
1996 1997
------------ ------------
(Unaudited)
<S> <C> <C>
Inventories:
Raw materials ........................................ $ 3,465,000 $ 4,057,000
Work-in-progress ..................................... 1,117,000 1,060,000
Finished Goods ....................................... 2,143,000 2,698,000
------------ ------------
$ 6,725,000 $ 7,815,000
============ ============
Property, plant and equipment:
Land, buildings and improvements ..................... $ 7,058,000 $ 7,243,000
Machinery and equipment .............................. 6,682,000 6,762,000
Tooling and molds .................................... 2,979,000 3,072,000
Furniture and fixtures ............................... 1,733,000 1,888,000
------------ ------------
18,452,000 18,965,000
Less accumulated depreciation .......................... (5,806,000) (5,873,000)
============ ============
Total................................................... $12,646,000 $ 13,092,000
============ ============
</TABLE>
6
<PAGE> 7
MINIMED INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THREE MONTHS ENDED MARCH 29, 1996 AND THREE MONTHS ENDED MARCH 28, 1997
NOTE 5. CONTINGENCIES
On September 11, 1996, the Company filed a lawsuit against Fimed, Inc.
("Fimed") in Los Angeles County Superior Court seeking declaratory relief and
rescission of a product distribution contract. Fimed was appointed the Company's
exclusive authorized distributor of certain products to customers using third
party consumer financing. The Company is claiming that it is entitled to such
relief because it was fraudulently induced by Fimed to enter into the agreement.
Subsequent to the filing of this action, Fimed has filed a counterclaim seeking
compensatory damages of approximately $600 million and punitive damages of $300
million. No significant amount of the Company's products has even been sold
using third-party consumer financing, and Fimed never made any sales under the
agreement. The Company believes that it has meritorious defenses to the
counterclaim asserted by Fimed. The Company intends to prosecute its claim
against Fimed and defend against the counterclaim vigorously. Discovery has
commenced in the litigation, but the matter has not yet been set for trial.
During the normal course of business, the Company may be subject to
litigation involving various business matters. Management believes that an
adverse outcome of any such known matters would not have a material impact to
the Company.
NOTE 6. SUBSEQUENT EVENT
The Company completed a public equity offering during April 1997 which
generated net proceeds of $22.7 million. In connection with this offering,
outstanding warrants were exercised to provide the Company with an additional
$1.9 million. Warrants to purchase an additional 50,000 shares of common stock
at an exercise price of $13 per share expire on June 22, 1997.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS GENERAL
The Company has focused its efforts on three product lines: external
pumps and related disposables, implantable insulin pumps and a subcutaneous
glucose monitoring system. There have been no sales of the glucose monitoring
system to date and sales activity of the implantable insulin pump is in an early
stage, primarily in Europe, where the product is approved for commercial
distribution. While the Company's historical efforts have focused on the
application of these product lines in the treatment of diabetes, the Company is
increasing its research and development and marketing activities to apply its
technologies to the treatment of other medical conditions.
RESULTS OF OPERATIONS
The following table sets forth for the three months ended March 28,
1997 and the three months ended March 29, 1996 the percentage relationship to
net sales of certain items in the Company's consolidated statements of
operations and the percentage changes in the dollar amounts of such items on a
comparative basis.
<TABLE>
<CAPTION>
PERCENTAGE OF NET SALES
-------------------------------------------
THREE THREE
MONTHS ENDED MONTHS ENDED
MARCH 28, MARCH 29, % INCREASE
1997 1996 (DECREASE)
-------- -------- -------
<S> <C> <C> <C>
Net sales 100.0% 100.0% 25.0%
Cost of sales 33.3 35.3 17.9
----- ----- -----
Gross profit 66.7 64.7 28.9
Operating expenses
Selling, general and
administrative 43.0 43.6 23.3
Research and development 13.1 14.9 10.0
----- ----- -----
Total operating expenses 56.1 58.5 19.9
----- ----- -----
Operating income 10.6% 6.2% 114.6%
===== ===== =====
</TABLE>
The following table sets forth domestic and international net sales,
gross profits and research and development expenditures related to the Company's
three primary product lines for the three months ended March 28, 1997 and for
the three months ended March 29, 1996.
<TABLE>
<CAPTION>
----------------------------- -----------------------------
DOLLARS IN THOUSANDS % OF NET SALES
----------------------------- -----------------------------
THREE MONTHS THREE MONTHS THREE MONTHS THREE MONTHS
ENDED MARCH ENDED MARCH ENDED MARCH ENDED MARCH
28, 1997 29, 1996 28, 1997 29, 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
DOMESTIC AND INTERNATIONAL NET SALES
External pumps and related disposables
Domestic $ 13,506 $ 9,922 88.5% 81.3%
International 1,556 1,957 10.2 16.0
-------- -------- ----- -----
Subtotal $ 15,062 $ 11,879 98.7 97.3
Implantable Pumps 203 330 1.3 2.7
-------- -------- ----- -----
Net Sales $ 15,265 $ 12,209 100.0% 100.0%
======== ======== ===== =====
GROSS PROFITS
External pumps and related disposables $ 10,538 $ 8,028 69.0% 65.7%
Implantable pumps (357) (131) (2.3) (1.0)
-------- -------- ----- -----
Total $ 10,181 $ 7,897 66.7% 64.7%
======== ======== ===== =====
RESEARCH AND DEVELOPMENT EXPENSES
External pumps and related disposables $ 538 $ 802 3.5% 6.6%
Implantable pumps and other applications 590 528 3.9 4.3
Glucose sensor 877 492 5.7 4.0
-------- -------- ----- -----
Total $ 2,005 $ 1,822 13.1% 14.9%
======== ======== ===== =====
</TABLE>
8
<PAGE> 9
THREE MONTHS ENDED MARCH 28, 1997 AND MARCH 29, 1996
Net Sales--Net sales increased 25.0% during the three months ended
March 28, 1997 over the three months ended March 29, 1996 to $15,265,000 from
$12,209,000. This increase is principally the result of an increase of 26.8%, or
$3,183,000, in the sales volume of external pumps and related disposables.
Domestic sales of these products grew 36.1% or $3,584,000 from the first quarter
of 1996 to the first quarter of 1997, while international sales decreased 20.5%
or $401,000. The domestic net sales increase was primarily the result of
increased volume of external pumps and related disposables, with external pump
sales growing at an increasingly faster rate than disposable sales. With the
introduction of the Company's new model 507 insulin pump in June 1996, domestic
average sales prices on external pumps increased from 1996 to 1997, while the
related disposable products experienced relative price stability.
International sales of external pumps and related disposables for the
first quarter of 1996 include the sale of external pumps to Novo Nordisk, which
previously manufactured an external insulin pump and related disposables which
were sold in Europe for treatment of diabetes. Under an agreement with the
Company entered into in late 1993, the external insulin pumps that Novo Nordisk
previously manufactured and sold were replaced with the Company's external
insulin pumps. Sales of external pumps to Novo Nordisk represented 46.0% of
international sales of external pumps and related disposables during the three
months ended March 29, 1996. Excluding the non-recurring 1996 sales to Novo
Nordisk, international net sales of external pumps and related disposables for
the first quarter of 1997 increased by 47.3% over the 1996 first quarter and
worldwide net sales increased 35.0% over the 1996 first quarter sales. The
Company completed its obligations under the contract with Novo Nordisk during
the quarter ended June 28, 1996.
Sales of implantable pumps decreased by $127,000, or 38.5% during the
three months ended March 28, 1997 over the three months ended March 29, 1996.
Due to problems encountered with the special insulin formulation manufactured by
Hoechst AG, a German company ("Hoechst") and used in the implantable pump, such
sales were limited during the three months ended March 28, 1997. Although the
Company received certification under the applicable directives issued by the EU
and received the CE Mark in March 1995 for the implantable pump (permitting
commercial sale throughout the EU), separate approval from the EU is required
for commercial sale of the insulin, and this approval is not expected until
later in 1997 at the earliest. No assurance can be given that such approval will
be received. Future sales of the Company's implantable insulin pumps may be
adversely affected by the availability of the special insulin utilized in the
implantable pump as well as the ability to receive regulatory approval for the
insulin, seasonality, and overall market acceptance of this product line.
The Company and Hoechst are continuing to work towards commercial
distribution of a stable, highly concentrated insulin for use in the Company's
implantable pump. No assurance can be given as to the potential for success of
these efforts. The Company has submitted to the FDA certain portions of its
regulatory filing prior to the completion of testing of the stabilized insulin.
There is no assurance that the FDA will accept or act upon the final NDA/PMA
submission. If the insulin efforts are not successful or if the insulin is not
approved, the business, results of operations or prospects for the Company could
be materially adversely effected. Additionally, under a supply agreement, the
Company has a financial obligation to purchase special component parts for this
product line. The Company purchased $262,500 of these components in the quarter
ended March 28, 1997 and is obligated to purchase $612,500 additional components
through December 31, 1997. These components are included in the Company's
inventory balances and other long-term assets. The Company may elect to extend
this supply agreement through purchasing an additional $875,000 of these
components in 1998.
Cost of Sales and Operating Expenses--Cost of sales increased 17.9%
during the three months ended March 28, 1997 over the three months ended March
29, 1996 to $5,084,000 from $4,312,000. As a percentage of net sales, cost of
sales in 1997 decreased to 33.3% from 35.3% in 1996. Increased sales volume
enabled the Company to spread its fixed manufacturing costs over a larger sales
base and to achieve certain economies of scale. The Company has continued to
implement manufacturing efficiency programs which have had a positive effect
upon labor, overhead and materials costs. Additionally, the Company achieved
lower product costs for certain disposable products by bringing their
manufacturing process in-house during the second half of 1996.
Gross margins on the primary product line increased to 69.0% of sales
during the 1997 first quarter, compared to 65.7% for this product line during
the 1996 first quarter. The Company's gross profits have been adversely impacted
by the implantable pump product line during the three months ended March 28,
1997 due to continued limited sales prior to full commercial release which has
inhibited the Company's ability to realize
9
<PAGE> 10
manufacturing efficiencies on this product line. The Company expects this trend
to continue for the foreseeable future.
Selling, general and administrative expenses increased 23.3% during the
three months ended March 28, 1997 over the three months ended March 29, 1996 to
$6,564,000 from $5,324,000. As a percentage of net sales, these expenses
decreased to 43.0% during the three months ended March 28, 1997 from 43.6%
during the three months ended March 29, 1996. Selling and marketing expenses
increased primarily due to increased sales volume, which leads to increases in
sales commissions and other variable costs related to the field sales
organization. Other significant increases in selling and marketing expenses
related to a significant expansion of the Company's domestic sales force and
administrative support staff to enhance its selling, marketing and education
efforts. General and administrative expenses also increased during the three
months ended March 28, 1997 over the three months ended March 29, 1996 due to
costs associated with staff increases necessary to support the Company's
increased business activities.
Research and development expenses increased 10.0% during the three
months ended March 28, 1997 over the three months ended March 29, 1996 to
$2,005,000 from $1,822,000. As a percentage of sales, research and development
expenses decreased to 13.1% during the three months ended March 28, 1997 from
14.9% during the similar period in 1996. The 1997 first quarter increase in
research and development costs resulted from greater resources directed to the
subcutaneous glucose sensor system as regulatory filings and clinical trials are
scheduled to occur throughout 1997. Expenses related to the implantable insulin
pump product line decreased during the three months ended March 28, 1997
compared to the similar period in 1996, as the Company awaits approval of the
special insulin required for this product. Expenses related to the external
insulin pump and related disposables product line decreased during the first
quarter of 1997 compared to the similar period in 1996, as the Company directed
greater resources to the design and introduction of its next generation external
insulin pump, which was commercially introduced in June1996. The Company
anticipates that research and development expenditures for future periods will
include amounts expended for the further development of the Company's existing
technologies for use in other medical conditions.
Other--Other income during the three months ended March 28, 1997 and
during the three months ended March 29, 1996 consists primarily of interest
income generated from the Company's cash, cash equivalents, and short-term
investment balances.
The Company's effective tax rate during the three months ended March
28, 1997 and March 29, 1996 has been computed giving consideration to the pretax
earnings and losses applicable to the Company's foreign and domestic tax
jurisdictions and a continual decrease in the Company's valuation allowance
against net deferred tax assets due to improved operating results. The Company
anticipates that future income tax rates for financial statement purposes will
be lower than statutory state and federal income tax rates, as future income tax
payments will be offset through the recognition of deferred income tax assets
related to differences between financial reporting and income tax reporting
accounting requirements. The Company has not incurred any material foreign
income tax expense to date. Inflation has not significantly impacted the
Company's results of operations for the past two years.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended March 28, 1997, the Company had cash flow
provided by operations of $522,000 compared to cash flow used in operations of
$757,000 in the comparable period in 1996. Cash provided by operations increased
primarily due to increased collections of accounts receivable during the first
quarter of 1997. The Company's capital expenditures of $1,005,000 during the
three months ended March 28, 1997 were consistent with the $1,046,000 spent
during the comparable period in 1996. Capital expenditures by the Company during
the three months ended March 28, 1997 related primarily to continued building
improvement, manufacturing expansion, research and development engineering
equipment and information systems requirements. The Company anticipates that
future capital expenditures will continue to increase, as additional facilities
improvements are mandatory under local regulations and additional equipment and
improvements will be required for the manufacture, development and improvement
of the Company's current products and anticipated new product offerings over the
next three years.
The Company completed a public equity offering during April 1997 which
generated net proceeds to the Company of $22.7 million. In connection with this
offering, outstanding warrants were exercised which
10
<PAGE> 11
provided the Company with an additional $1.9 million. Warrants to purchase an
additional 50,000 shares of common stock at an exercise price of $13.00 per
share expire on June 22, 1997. There were no significant equity transactions
during 1996. On January 21, 1997, the Company entered into an unsecured line of
credit agreement which enables MiniMed to borrow up to $10.0 million through
January 31, 1999. The line of credit, if used, bears interest at an adjustable
rate equal to the 30-day commercial paper rate plus 2.15% (7.89% as of March 28,
1997). The Company is also required to maintain certain cash, net worth and debt
conditions under the provisions of this agreement. The Company is currently in
compliance with all of these conditions. The Company also is involved in certain
litigation, the financial impact of which is uncertain. See "Notes to
Consolidated Financial Statements" and "Legal Proceedings" herein.
11
<PAGE> 12
PART II. OTHER INFORMATION
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
12
<PAGE> 13
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: May 12, 1997 /s/ Kevin R. Sayer
_______________________________
Kevin R. Sayer
Senior Vice President, Finance &
Chief Financial Officer
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ----------- --------
<S> <C> <C>
11.1 Calculation of earnings per share. 15
</TABLE>
14
<PAGE> 1
Exhibit 11.1
MINIMED INC.
STATEMENT OF COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 29, March 28,
1996 1997
----------- -----------
<S> <C> <C>
Weighted average common shares outstanding 11,502,000 11,640,000
Common equivalent shares from stock options and warrants 598,000 749,000
----------- -----------
Shares used in per share calculation 12,100,000 12,389,000
=========== ===========
Net income $ 627,000 $ 1,098,000
=========== ===========
Net income per share $ 0.05 $ 0.09
=========== ===========
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-02-1998
<PERIOD-START> DEC-28-1996
<PERIOD-END> MAR-28-1997
<CASH> 18,824
<SECURITIES> 252
<RECEIVABLES> 17,096
<ALLOWANCES> 2,905
<INVENTORY> 7,815
<CURRENT-ASSETS> 45,324
<PP&E> 18,965
<DEPRECIATION> 5,873
<TOTAL-ASSETS> 59,096
<CURRENT-LIABILITIES> 7,810
<BONDS> 0
0
0
<COMMON> 116
<OTHER-SE> 50,364
<TOTAL-LIABILITY-AND-EQUITY> 59,096
<SALES> 15,265
<TOTAL-REVENUES> 15,417
<CGS> 5,084
<TOTAL-COSTS> 13,653
<OTHER-EXPENSES> 0
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</TABLE>
