-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FibScEd1uzeFIv/8itNcd6+QZyMI8tZfbdp20mj1qtxJoN1QFhtiDxatVz3CWCB5 CuG86z7lRC/XAc20lWwQaQ== 0000928385-95-000511.txt : 19951106 0000928385-95-000511.hdr.sgml : 19951106 ACCESSION NUMBER: 0000928385-95-000511 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951103 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LIFE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000727737 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 340431300 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14991 FILM NUMBER: 95586972 BUSINESS ADDRESS: STREET 1: 8717 GROVEMONT CIRCLE CITY: GAITHERSBURG STATE: MD ZIP: 20877 BUSINESS PHONE: 3018408000 10-Q 1 FORM 10-Q ============================================================================== 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 September 30, 1995 ------------------------ 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 0-14991 --------- LIFE TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) DELAWARE 34-0431300 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 8717 GROVEMONT CIRCLE, GAITHERSBURG, MD 20877 (Address of principal executive offices) (Zip Code) -------------------------------- Registrant's telephone number, including area code: (301) 840-8000 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. Class Outstanding at Oct. 31, 1995 ----- ---------------------------- Common Stock, par value $.01 per share 15,460,000 shares - ------------------------------------------------------------------------------- PART I ------ FINANCIAL INFORMATION --------------------- Item 1. Financial Statements -------------------- CONSOLIDATED BALANCE SHEET (amounts in thousands)
September 30, December 31, 1995 1994 - -------------------------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 24,150 $ 13,246 Accounts receivable, net 51,969 36,163 Inventories: Materials and supplies 10,869 8,811 In process and finished 54,919 49,894 LIFO reserve (6,676) (5,995) -------- -------- 59,112 52,710 Prepaid expenses 3,502 1,974 Current deferred tax assets 3,480 3,475 -------- -------- Total current assets 142,213 107,568 Property, plant and equipment 86,750 79,348 Less accumulated depreciation (36,438) (31,305) -------- -------- 50,312 48,043 Investments and other assets 7,332 9,796 Excess of cost over net assets of businesses acquired, net 6,223 6,340 -------- -------- Total assets $206,080 $171,747 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 995 $ - Accounts payable 16,099 14,358 Dividends payable 756 749 Accrued income taxes 16,155 11,326 Accrued liabilities and expenses 15,838 11,593 -------- -------- Total current liabilities 49,843 38,026 Long-term debt 2,488 - Deferred income taxes 1,869 1,871 Minority interests 2,035 541 Other 1,161 1,180 -------- -------- Total liabilities 57,396 41,618 Stockholders' equity: Common stock 151 150 Additional paid-in capital 45,125 42,561 Retained earnings 103,530 89,184 Currency exchange effects (122) (1,766) -------- -------- Total stockholders' equity 148,684 130,129 -------- -------- Total liabilities and stockholders' equity $206,080 $171,747 ======== ========
Amounts as of September 30, 1995 are unaudited. 2 Part I -- Financial Statements (continued) CONSOLIDATED STATEMENT OF INCOME (amounts in thousands, except per share data)
Three months ended Nine months ended September 30 September 30 ------------------------------- ----------------------------- 1995 1994 Change 1995 1994 Change --------- --------- --------- --------- -------- ------- Revenues: Net sales $66,981 $59,098 + 13% $202,077 $ 176,339 + 15% Net royalties 67 - - 67 67 - ------- ------- -------- --------- 67,048 59,098 + 13% 202,144 176,406 + 15% Operating expenses: Cost of sales 33,012 31,538 + 5% 102,376 92,697 + 10% Marketing and 22,199 17,531 + 27% 63,250 51,309 + 23% administrative Research and development 3,756 3,533 + 6% 11,814 11,460 + 3% ------- ------- -------- --------- 58,967 52,602 + 12% 177,440 155,466 + 14% ------- ------- -------- --------- Operating income 8,081 6,496 + 24% 24,704 20,940 + 18% Other income (expense): Investment income 149 111 + 34% 514 411 + 25% Interest expense (20) (1) - (25) (24 + 4% Other, net 124 43 +188% 367 161 +128% ------- ------- -------- --------- 253 153 + 65% 856 548 + 56% ------- ------- -------- --------- Income before income taxes 8,334 6,649 + 25% 25,560 21,488 + 19% Income taxes 2,917 2,394 + 22% 8,946 7,736 + 16% ------- ------- -------- --------- Income before minority 5,417 4,255 + 27% 16,614 13,752 + 21% interests Minority interests (50) 97 - (11) (83 - 87% ------- ------- -------- --------- Net income $ 5,367 $ 4,352 + 23% $ 16,603 $ 13,669 + 21% ======= ======= ======== ========= Average shares outstanding 15,341 15,077 + 2% 15,233 15,065 + 1% ======= ======= ======== ========= Net income per share $0.35 $0.29 + 21% $1.09 $0.91 + 20% ======= ======= ======== ========= Dividends per share $0.05 $0.05 - $0.15 $0.15 - ======= ======= ======== =========
Amounts are unaudited. 3 Part I - Financial Statements (continued) CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (amounts in thousands)
Nine months ended September 30 ----------------- 1995 1994 - ----------------------------------------------------------------------- CASH INFLOWS (OUTFLOWS) Operations: Net income $16,603 $ 13,669 Non-cash items: Depreciation and amortization 5,745 4,887 Other (621) 1,026 Changes in assets and liabilities (4,511) (7,992) ------- -------- 17,216 11,590 Investments: Capital expenditures (7,752) (9,848) Acquisitions/joint ventures (724) (1,191) ------- -------- (8,476) (11,039) Financing: Dividends paid (2,250) (2,245) Proceeds from exercise of stock options 2,299 290 ------- -------- 49 (1,955) Effect of exchange rate changes on cash (19) 317 ------- -------- Increase in cash and cash equivalents 8,770 (1,087) Cash included from consolidation of a subsidiary which became majority owned in 1995 2,134 - Cash and cash equivalents at beginning of period 13,246 7,927 ------- -------- Cash and cash equivalents at end of period $24,150 $ 6,840 ======= ========
Amounts are unaudited. Notes To Financial Statements: - ----------------------------- Net income per share figures in the Consolidated Statement of Income are based on the weighted average number of shares and common stock equivalents outstanding as indicated for each period. In the opinion of the Company's management, the unaudited financial statements reflect all adjustments (which consist of normal recurring adjustments) necessary to present a fair statement of the results for the interim periods. The results for the nine-month period ended September 30, 1995 are not necessarily indicative of the results for the entire year 1995. The financial data included herein have been reviewed by the registrant's independent public accountants, Coopers & Lybrand L.L.P., and their report is attached. 4 Part I - (continued) Item 2. Management's Discussion and Analysis of Financial ------------------------------------------------- Condition and Results of Operations ----------------------------------- THIRD QUARTER RESULTS Net sales were $67.0 million for the third quarter of 1995, an increase of 13% over the comparable quarter of 1994. Sales of products other than fetal bovine serum (FBS) increased by 14%, when comparing the third quarter of 1995 with the comparable period in 1994 and excluding the effect of changes due to different currency translation rates. Lower unit sales of FBS decreased net sales by $1.2 million while higher unit selling prices of FBS increased net sales by $0.5 million when comparing the third quarter of 1995 with the third quarter of 1994. FBS sales represented 15% of net sales in the third quarter of 1995 and 18% in the third quarter of 1994. The effect of changes in currency exchange rates increased third quarter 1995 net sales by $1.5 million when compared with the third quarter of 1994. Gross margins were 50.7% of net sales in the third quarter of 1995 compared with 46.6% in the third quarter of 1994. FBS gross margins were higher in the third quarter of 1995 than in the comparable quarter a year earlier as FBS unit selling prices increased while unit costs decreased. Marketing and administrative expenses were 33.1% of net sales in the third quarter of 1995 and 29.7% in the third quarter of 1994. The effect of consolidating the Company's Japanese subsidiary increased marketing and administrative expenses by $0.9 million, or 1.3% of net sales. Expenses related to the Company's new direct sales offices and custom oligonucleotide business also contributed to the increase in marketing and administrative expenses in the third quarter of 1995. Research and development expenses were $3.8 million in the third quarter of 1995, representing a 6% increase over the $3.5 million reported in the third quarter of 1994. Operating income of $8.1 million for the quarter ended September 30, 1995 represented a 24% increase over the third quarter of 1994. Other income increased 65% when comparing the third quarter of 1995 with the third quarter of the previous year, principally due to higher equity income from the Company's Japanese subsidiary reported prior to consolidation and higher investment income in the 1995 period. The Company's effective income tax rate was 35% in the third quarter of 1995 compared with 36% in the third quarter of the previous year. Third quarter 1995 net income of $5.4 million increased 23% over the comparable period a year earlier. Earnings per share of $0.35 in the third quarter of 1995 were 21% greater than the $0.29 per share reported in the prior year's third quarter. 5 Part I - (continued) NINE MONTHS RESULTS For the first nine months of 1995, net sales were $202.1 million, an increase of $25.7 million, or 15%, over the first nine months of 1994. Sales of products other than FBS increased by 13% when comparing the first nine months of 1995 with the comparable period in 1994 and excluding the effect of changes due to different currency translation rates. Lower unit sales of FBS reduced net sales by $2.1 million, while higher FBS unit selling prices increased net sales by $1.4 million in the first nine months of 1995. FBS sales represented 16% of net sales in the first nine months of 1995 and 18% in the comparable period of 1994. Changes in currency exchange rates used to translate sales to U.S. dollars increased net sales in the first nine months of 1995 by $7.4 million when compared with the first nine months of last year. Gross margins for the first nine months of 1995 were 49.3% of net sales compared with 47.4% in the first nine months of 1994. Gross margins on products other than FBS improved in the 1995 period, mostly because the Company reported higher gross margins in markets it served directly in the first nine months of 1995 where these markets were served by distributors for a substantial portion of the comparable period of 1994. FBS gross margins were higher in the first nine months of 1995 as FBS unit selling prices increased at a faster rate than the increase in unit costs. Marketing and administrative expenses represented 31.3% of net sales in the first nine months of 1995 compared with 29.1% of net sales in the comparable period of 1994. The increase as a percentage of sales is principally due to the Company's new direct sales offices and new custom oligonucleotide business. Research and development expenses were $11.8 million in the first nine months of 1995, an increase of 3% over the first nine months of 1994. Operating income increased 18% to $24.7 million in the first nine months of 1995 compared with the first nine months of 1994. Other income increased 56% in the first nine months of 1995 principally due to higher equity income from the Company's Japanese subsidiary reported prior to consolidation and higher investment income in the 1995 period. The Company's effective income tax rate was 35% in the first nine months of 1995 compared with 36% in the first nine months of 1994. Net income of $16.6 million for the first nine months of 1995 was 21% greater than the $13.7 million for the comparable period in 1994. Earnings per share of $1.09 in the first nine months of 1995 represented a 20% increase over earnings per share in the comparable period of 1994. LIQUIDITY AND CAPITAL RESOURCES Operating activities provided $17.2 million in cash during the first nine months of 1995. Net income after adjustments for depreciation and amortization was the principal source of cash from operations in 1995. Working capital increases, largely related to higher sales or seasonal factors, were the principal use of cash from operations. The Company paid $7.8 million for capital expenditures in the first nine months of 1995, including a significant investment in new management information 6 systems. The Company acquired a controlling interest in its Japanese joint venture for $0.2 million increasing its ownership from 50% to 51%. The Company also made an additional equity investment of $0.3 million in a life sciences company in North America and made deferred payments of $0.2 million related to the 1994 purchase of its Swedish operations. Cash used for financing activities included $2.3 million paid in the first nine months of 1995 for the Company's quarterly dividend. Short and long term debt was a result of acquiring an additional 1% interest in the Company's Japanese joint venture and consolidating its results for the first time in the quarter ended September 30, 1995. The Company received $2.3 million in cash related to the exercise of options to acquire the Company's common stock in the first nine months of 1995. Capital expenditures in 1995 are expected to approach $12 million primarily for new and replacement machinery, equipment and management information systems as well as for facilities modernization, including the Company's new corporate R&D center in Maryland. The Company believes it will be able to generate sufficient cash from its operations and its existing credit line from The Dexter Corporation, an affiliate of the Company, to meet its anticipated working capital and capital expenditure requirements in the fourth quarter of 1995. The Company is actively evaluating licensing possibilities, as well as acquisition candidates which complement the Company's core cell and molecular biology and cell culture product lines. The Company may fund these transactions using cash from operations, debt, equity or other sources. PART II - OTHER INFORMATION ------- ----------------- Item 1. Legal Proceedings - Not applicable. ----------------- Item 2. Changes in Securities - Not applicable. --------------------- Item 3. Defaults Upon Senior Securities - Not applicable. ------------------------------- Item 4. Submission of Matters to a Vote of Security Holders - Not applicable. --------------------------------------------------- Item 5. Other Information - Not applicable. ----------------- Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits: 11. Statement re computation of per share earnings. 15. Letter re unaudited interim financial statements. 27. Financial data schedule (b) Reports on Form 8-K. There were no reports on Form 8-K filed for the three months ended September 30, 1995. 7 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 thereto duly authorized. LIFE TECHNOLOGIES, INC. Date: Nov. 3, 1995 By:/s/ Joseph C. Stokes, Jr. ------------------------------ Joseph C. Stokes, Jr. Vice President-Finance, Secretary and Treasurer (Principal Financial Officer and Authorized Signatory) By:/s/ C. Eric Winzer ---------------------------- C. Eric Winzer Controller (Principal Accounting Officer) 8 REPORT OF INDEPENDENT ACCOUNTANTS To the Stockholders and Board of Directors Life Technologies, Inc. We have reviewed the accompanying consolidated balance sheet of Life Technologies, Inc. and its subsidiaries as of September 30, 1995 and the related consolidated statements of income for the three-month and nine-month periods ended September 30, 1995 and 1994, and the related condensed consolidated statements of cash flows for the nine-month periods then ended. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1994 and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended (not presented herein), and in our report dated January 23, 1995 we expressed an unqualified opinion on those consolidated financial statements. /s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Washington, D.C. October 9, 1995 9 EXHIBIT INDEX -------------
Page ---- Exhibit 11 Statement re computation of per share earnings 11-13 Exhibit 15 Letter re unaudited interim financial statements 14-15 Exhibit 27 Financial data schedule 16
10 EX-11 2 EXHIBIT 11 EXHIBIT 11 ---------- STATEMENT RE COMPUTATION OF --------------------------- PER SHARE EARNINGS ------------------ 11 Exhibit 11 ---------- LIFE TECHNOLOGIES, INC. STATEMENT RE COMPUTATION OF PRIMARY PER SHARE EARNINGS ------------------------------------------------------ for the three and nine months ended September 30, 1995 and 1994 (amounts in thousands, except per share data)
Three months ended Nine months ended September 30 September 30 ------------------- ------------------ 1995 1994 1995 1994 ---- ---- ---- ---- Net income $ 5,367 $ 4,352 $16,603 $13,669 ======= ======= ======= ======= Weighted average shares outstanding 15,078 14,974 15,035 14,968 Weighted average effect of common stock equivalents 263 103 198 97 ------- ------- ------- ------- 15,341 15,077 15,233 15,065 ======= ======= ======= ======= Primary net income per share $ .35 $ .29 $ 1.09 $ .91 ======= ======= ======= =======
12 Exhibit 11 ---------- LIFE TECHNOLOGIES, INC. STATEMENT RE COMPUTATION OF FULLY DILUTED PER SHARE EARNINGS ------------------------------------------------------------ for the three and nine months ended September 30, 1995 and 1994 (amounts in thousands, except per share data)
Three months ended Nine months ended September 30 September 30 ------------------ ----------------- 1995 1994 1995 1994 ---- ---- ---- ---- Net income $ 5,367 $ 4,352 $16,603 $13,669 ======= ======= ======= ======= Weighted average shares outstanding 15,078 14,974 15,035 14,968 Weighted average effect of common stock equivalents 320 130 335 133 ------- ------- ------- ------- 15,398 15,104 15,370 15,101 ======= ======= ======= ======= Fully diluted net income per share $ .35 $ .29 $ 1.08 $ .91 ======= ======= ======= ======= Primary net income per share $ .35 $ .29 $ 1.09 $ .91 ======= ======= ======= =======
13 EX-15 3 EXHIBIT 15 EXHIBIT 15 ---------- LETTER RE UNAUDITED INTERIM FINANCIAL STATEMENTS ------------------------------------------------ 14 Exhibit 15 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 We are aware that our report dated October 9, 1995 on our review of interim financial information of Life Technologies, Inc. (the Company) for the three- month and nine month periods ended September 30, 1995 and 1994, included in this Form 10-Q is incorporated by reference in the Company's registration statements on Form S-8, Registration No. 33-59741, Registration No. 33-21807 and Registration No. 33-956, and the Company's registration statement on Form S-3, Registration No. 33-29536. Pursuant to Rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the registration statements prepared or certified by us within the meaning of Section 7 and 11 of that Act. /s/ Cooper & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Washington, D.C. October 27, 1995 15 EX-27 4 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Balance Sheet, Income Statement and Exhibit 11 and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS DEC-31-1995 SEP-30-1995 24,150 0 52,650 681 59,112 142,213 86,750 36,438 206,080 49,843 2,488 151 0 0 148,533 206,080 202,077 202,144 102,376 102,376 0 0 25 25,560 8,946 16,603 0 0 0 16,603 1.09 1.08
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