10QSB 1 p_q202.txt FORM 10-QSB, 2-28-2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 2002 Commission File No. 0-21816 PML, INC. (Name of small business issuer in its charter) Delaware 93-1089304 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 27120 SW 95TH Avenue Wilsonville, Oregon 97070 (Address of principal executive offices, including zip code) (503) 570-2500 (Issuer's telephone number) Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 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 --- --- As of February 28, 2002, there were 1,789,441 shares of Class A Common Stock with $0.01 par value outstanding, 211,551 Class B Common Shares with $0.01 par value outstanding and 4,950 Preferred Class A Stock $100 per share outstanding. PML, INC. Index Part I. Financial Information Item 1. Financial Information 2 Consolidated Balance Sheets 3 Consolidated Statements of Operations 4 Consolidated Statements of Stockholders' Equity 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussions and Analysis of Financial Condition and Results of Operations 8 Part II. Other Information Item 1. Legal Proceedings 12 Item 4. Submission of Matters to a Vote of Security Holders 12 Item 6. Exhibits and Reports on Form 8-K 12 Signatures 12 1 Part I. FINANCIAL INFORMATION Item 1. Financial Statements ---------------- PML, INC. For the Fiscal Quarter Ended February 28, 2002 2
PML, INC. CONSOLIDATED BALANCE SHEETS Unaudited February 28, May 31, Assets 2002 2001 ------ ------------ ------------ Current Assets Cash $ 44,069 $ 4,275 Trade accounts receivable, less allowance for doubtful 1,953,164 1,875,892 accounts of $61,932 and $63,221 respectively Inventory 1,656,484 1,599,368 Deferred income tax asset 197,000 220,000 Prepaid expenses and other 95,011 64,363 ------------ ------------ Total Current Assets 3,945,728 3,763,898 ------------ ------------ Property, plant and equipment - net 2,478,012 2,456,818 Intangible assets - net 74,807 38,721 Other assets 53,992 52,788 ------------ ------------ Total Assets $ 6,552,539 $ 6,312,225 ============ ============ Liabilities and Stockholders' Equity ------------------------------------ Current Liabilities Accounts payable $ 1,073,616 $ 1,332,323 Accrued payroll and related 509,708 207,874 Other accrued liabilities 405,659 407,163 Bank line of credit 1,769,190 1,820,631 Current portion capital lease obligations 9,795 12,886 Current portion of borrowings - related parties 92,941 92,941 Current portion of bank borrowing 82,931 65,246 ------------ ------------ Total Current Liabilities 3,943,840 3,939,064 ------------ ------------ Capital lease obligations, less current portion 24,460 30,867 Borrowings - related parties, less current portion 191,662 205,050 Bank Borrowing, less current portion 701,934 654,068 ------------ ------------ Total Borrowings. less current portion 918,056 889,985 ------------ ------------ Deferred Income Tax 136,000 159,000 ------------ ------------ Stockholders' Equity Preferred stock, $.01 par value; 25,000 shares authorized; no shares issued or outstanding - - Class A convertible preferred stock, stated and liquidation value $100 per share; 7,500 shares authorized; 4,950 shares issued and outstanding, including accreted dividends 840,600 831,740 Common stock, $.01 par value; 2,500,000 shares authorized; 1,789,441 shares issued and outstanding 17,894 17,894 Class B common stock, $.01 par value; 250,000 shares authorized; 211,551 shares issued and outstanding 2,116 2,116 Class D common stock, $.01 par value; 100 shares authorized; no shares issued or outstanding. - - Additional paid in capital 150,325 150,325 Retained earnings 543,708 322,101 ------------ ------------ Total Stockholders' Equity 1,554,643 1,324,176 ------------ ------------ Total Liabilities and Stockholders' Equity $ 6,552,539 $ 6,312,225 ============ ============
The accompanying notes are an integral part of these statements. 3
PML, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For The Three Months Ended For The Nine Months Ended February 28, February 28, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Net sales $ 3,092,263 $ 3,269,684 $ 9,703,180 $ 9,781,676 Cost of goods sold 1,809,878 1,984,829 5,711,394 5,998,049 ------------ ------------ ------------ ------------ Gross profit 1,282,385 1,284,855 3,991,786 3,783,627 Operating expenses 1,113,023 1,108,277 3,379,092 3,384,774 ------------ ------------ ------------ ------------ Operating income 169,362 176,578 612,694 398,853 Other (income)/expense Interest expense 34,257 50,346 119,929 165,110 Other 32,021 57,339 91,491 63,953 ------------ ------------ ------------ ------------ Total other (income)/expense 66,278 107,685 211,420 229,063 ------------ ------------ ------------ ------------ Income before income taxes 103,084 68,893 401,274 169,790 Income tax expense 58,107 26,939 152,445 64,520 ------------ ------------ ------------ ------------ Net income $ 44,977 $ 41,954 $ 248,829 $ 105,270 ============ ============ ============ ============ Basic income per share $ 0.02 $ 0.01 $ 0.11 $ 0.03 ============ ============ ============ ============ Diluted income per share $ 0.02 $ 0.01 $ 0.11 $ 0.03 ============ ============ ============ ============
The accompanying notes are an integral part of these statements. 4
PML, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) Class A Class B Convertible Common Common Additional Retained Preferred Shares Shares Shares Paid-in Earnings SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT Capital (Deficit) Total ------ ------ ------ ------ -------- ------ ------- --------- ----- Balance, May 31, 1999 4,950 $ 738,296 1,780,441 $ 17,804 211,551 $ 2,116 $ 146,540 $(167,744)$ 737,012 Preferred Stock dividends accreted 49,348 (49,348) - Stock options exercised 5,000 50 1,825 1,875 Net Income - 392,079 392,079 ------ --------- ---------- -------- -------- -------- --------- --------- ----------- Balance, May 31, 2000 4,950 $ 787,644 1,785,441 $ 17,854 211,551 $ 2,116 $ 148,365 $ 174,987 $ 1,130,966 ====== ========= ========== ======== ======== ======== ========= ========= =========== Balance, May 31, 2000 4,950 $ 787,644 1,785,441 $ 17,854 211,551 $ 2,116 $ 148,365 $ 174,987 $ 1,130,966 Preferred Stock dividends accreted 52,256 (52,256) Preferred Stock dividends accreted-Paid (8,160) (8,160) Common Stock issued 4,000 40 1,960 2,000 Net Income 199,370 199,370 ------ --------- ---------- -------- -------- -------- --------- --------- ----------- Balance, May 31, 2001 4,950 $ 831,740 1,789,441 $ 17,894 211,551 $ 2,116 $ 150,325 $ 322,101 $ 1,324,176 ====== ========= ========== ======== ======== ======== ========= ========= =========== Balance, May 31, 2001 4,950 $ 831,740 1,789,441 $ 17,894 211,551 $ 2,116 $ 150,325 $ 322,101 $ 1,324,176 Preferred Stock dividends accreted 27,222 (27,222) Preferred Stock dividends accreted-Paid (18,362) (18,362 Net Income 248,829 248,829 ------ --------- ---------- -------- -------- -------- --------- --------- ----------- Balance, February 28, 2002 4,950 $ 840,600 1,789,441 $ 17,894 211,551 $ 2,116 $ 150,325 $ 543,708 $ 1,554,643 ====== ========= ========== ======== ======== ======== ========= ========= ===========
The accompanying notes are an integral pat of these statements. 5
PML, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Nine Months Ended February 28, 2002 2001 ---------- ---------- Cash Flows from Operating Activities Net income $ 248,829 $ 105,270 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization 289,765 277,979 Gain on sale of equipment (43) (8,809) Changes in: Accounts receivable (77,272) (40,959) Inventories (57,116) (60,272) Deferred income taxes 23,000 (3,173) Other assets (72,943) (61,603) Accounts payable and accrued liabilities 62,156 276,726 ----------- ----------- Total adjustments 167,547 379,889 ----------- ----------- Net cash from operating activities 416,376 485,159 Cash Flows from Investing Activities Proceeds from sale of assets 1,668 11,200 Purchase of property, plant and equipment (351,112) (770,939) ----------- ----------- Net cash from investing activities (349,444) (759,739) Cash Flows from Financing Activities Net borrowing (repayments) under bank credit line (51,441) 182,308 Proceeds from issuance of capital lease obligations - 54,696 Repayment of capital lease obligations (9,498) (60,131) Proceeds from issuance of long-term debt 121,865 157,473 Repayment of long-term debt (69,702) (275,250) Payments toward accreted dividends (18,362) (2,040) ----------- ----------- Net cash from financing activities (27,138) 57,056 ----------- ----------- Net increase (decrease) in cash 39,794 (217,524) Cash at beginning of period 4,275 298,382 ----------- ----------- Cash at end of period $ 44,069 $ 80,858 =========== =========== Supplemental Disclosures Interest paid $ 148,004 $ 227,396 Income tax paid 61,175 7,964 Non Cash Items: Preferred stock dividends accreted 27,222 40,486
The accompanying notes are an integral part of these statements. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Financial Statements The accompanying unaudited consolidated financial statements include the accounts of PML, Inc. (the "Company") and its wholly owned subsidiary, PML Microbiologicals, Inc. The Company produces and sells diagnostic microbiology products used by both clinical and industrial microbiologists throughout the United States and Canada. In addition, the Company produces a wide variety of products on a private label basis for medical diagnostics companies worldwide. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission"). While these financial statements reflect all necessary, normal and recurring adjustments in the opinion of management required to present fairly, in all material respects, the financial position, results of operations and cash flows of the Company and its subsidiary at February 28, 2002, and for the period then ended, they do not include all information and notes required by generally accepted accounting principles for complete financial statements. Further information is contained in the Company's annual financial statements and notes thereto, for the year ended May 31, 2001, contained in the Company's Form 10-KSB, filed with the Commission pursuant to the Securities Exchange Act of 1934. Operating results for the three-month and nine-month periods ended February 28, 2002 are not necessarily indicative of the results that may be expected for the full year. Note 2. Net Earnings Per Share During the quarter ended February 28, 1998 the Company adopted Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). Under this accounting standard, the effect of equity instruments is excluded whenever the impact on earnings per share would be anti-dilutive.
Information Needed to Calculate Basic Earnings Per Share For the Three Months Ended For the Nine Months Ended February 28, February 28, 2002 2001 2002 2001 ---------- ---------- ----------- ---------- Net income $ 44,977 $ 41,954 $ 248,829 $ 105,271 Preferred stock dividends accreted (7,776) (13,035) (27,222) (40,486) ---------- ---------- ------------ ----------- Net income after accretion of dividends $ 37,201 $ 28,919 $ 221,607 $ 64,785 ========== ========== =========== ========== Average number of common shares outstanding 1,789,441 1,785,441 1,789,441 1,785,441 Average number of Class B common stock outstanding 211,551 211,551 211,551 211,551 ---------- --------- ----------- ----- Average shares used in basic EPS calculation 2,000,992 1,996,992 2,000,992 1,996,992 ========== ========= ============ ========== Basic income per share $ 0.02 $ 0.01 $ 0.11 $ 0.03 ========== ========= ============ ========== 7 Information Needed to Calculate Diluted Earnings Per Share For the Three Months Ended For the Nine Months Ended February 28, February 28, 2002 2001 2002 2001 ---------- ---------- ----------- ---------- Basic income $ 37,201 $ 28,919 $ 221,607 $ 64,785 Preferred stock dividends accreted * - - - - ---------- ---------- ---------- ---------- Net income after accretion of dividends $ 37,201 $ 28,919 $ 221,607 $ 64,789 ========== ========== ========== ========== Average number of common shares outstanding 1,789,441 1,785,441 1,789,441 1,785,441 Average number of Class B common stock outstanding 211,551 211,551 211,551 211,551 Effect of common stock equivalents 51,114 221,300 106,807 206,544 Effect of preferred convertible stock * - - - - ---------- ---------- --------- ---------- Average shares used in basic EPS calculation 2,052,106 2,218,292 2,107,799 2,203,536 ========== ========== ========== ========== Diluted income per share $ 0.02 $ 0.01 $ 0.11 $ 0.03 ========== ========== ========== ==========
* To the extent that the effect of preferred stock dividends accreted, common stock equivalents, and the preferred convertible stock are anti-dilutive, they are not included in the diluted earnings per share calculation. For the three-month period ended February 28, 2002 and 2001, amounts excluded were $7,776 and $13,035 of accreted dividends respectively, and 176,786 and 176,786 shares of preferred convertible stock respectively. For the nine-month period ended February 28, 2002 and 2001, amounts excluded were $27,222 and $40,486 of accreted dividends respectively, and 176,786 and 176,786 shares of preferred convertible stock respectively. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward Looking Statements This report, including without limitation the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations", includes "forward-looking statements" as that term is defined in the Securities Exchange Act of 1934. Forward-looking statements are based on management's beliefs and assumptions based on currently available information. All statements other than statements of historical fact regarding our financial position, business strategy and management's plans and objectives for future operations are forward-looking statements. When used in this report, the words "anticipate," "believe," "plan," "estimate," "expect," and "intend" and words or phrases of similar meaning, as they relate to PML or its management, are intended in part to help identify forward-looking statements. Although PML believes that management's expectations as reflected in forward-looking statements are reasonable, we cannot assure readers that those expectations will prove to be correct. Forward-looking statements are subject to various risks and uncertainties that will cause our actual results to differ from our expectations as indicated in the forward-looking statements, and those deviations may be material and adverse. These risks and uncertainties include our ability to maintain or expand our market share and production capabilities and to implement our marketing and growth strategies. Further, actual results may be affected by our ability to compete on price and other factors with other businesses that produce products similar to ours; our ability to obtain additional debt financing as needed and on acceptable terms; customer acceptance of new products; the outcome of pending litigation; the regulatory environment in which we operate; the effect of foreign currency exchange rates; and general trends in the local, regional and national economies of the United States and Canada. You should be aware that these factors are not an exhaustive list, and you should not assume these are the only factors that may cause our actual results to differ from our expectations. Canadian Currency Exchange PML, Inc. is incorporated in the United States but also has several significant operating locations in Canada. Since management has previously determined that the functional currency of the Canadian operations is the U.S. dollar, the 8 Company must consolidate its foreign operations by using the appropriate foreign exchange rate in accordance with generally accepted accounting principles applied on a consistent basis. Unlike many of its competitors, the Company manufactures both in the United States and Canada and ordinarily receives approximately 40% of its revenues from Canadian sales. The exchange rates between the United States dollar and the Canadian dollar had been relatively consistent until early 1998. However, beginning in April 1998, the exchange rate began to decline and reached as low as $0.63 before stabilizing at about $0.67 in May 1999. Beginning in early 2000, the exchange rate again began a decline, and has continued to decline through the first nine months of fiscal 2002. The average exchange rate in fiscal 2001 was $0.66. The average exchange rate in this third quarter of fiscal 2002 was $0.63, matching its historical low, and at February 28, 2002, the exchange rate was $0.625. For the nine months ended February 28, 2002, the average exchange rate was $0.64, near its historical low. The decline in exchange rates during the three-month period ended February 28, 2002 and 2001 resulted in a charge to earnings of approximately $32,000 and $12,000 respectively. For the nine-month period ended February 28, 2002 and 2001, the decline in the exchange rates resulted in a charge to earning of approximately $56,000 and $29,000 respectively. Results of Operations General In the three-month and nine-month periods ended February 28, 2002 of fiscal 2002, the Company continued to show improvements in operating results over the same periods of fiscal 2001. Income before taxes has shown a dramatic increase during the three and nine month periods ended February 28, 2002. While sales declined from the same periods of fiscal 2001, due principally to the Canadian currency exchange deterioration, the Company continued to improve its cost of goods sold, as it had during the first and second quarters of this year. Operating expenses increased slightly in this three-month period ended February 28, 2002 over the same period of fiscal 2001; however, they have decreased from the same nine-month period of fiscal 2001. This continued improvement in operations has allowed the Company to continue its program, to improve its facilities and upgrade aging equipment by investing approximately $55,000 of cash provided from operating activities, in upgrades in these three months of fiscal 2002. This, however, along with the Company's continued pay down of previously incurred debt, continues to impact cash and working capital. See "Liquidity and Capital Resources" below for further discussion. Three Months Ended February 28, 2002 Compared to February 28, 2001 For the three-month period ended February 28, 2002, sales decreased 5.4% or approximately $177,000 from the same period in fiscal 2001. The negative effect in the continued decline in the Canadian foreign currency exchange translation accounted for 1.8% or approximately $60,000 of the decrease in sales in this three-month period. Further, severe adverse weather in December 2001 and January 2002 on the east coast of the US and Canada, along with extended customer closures during the December 2001 holidays, not experienced in this same period of fiscal 2001, caused sales to go flat in this three-month period. Cost of goods sold as a percentage of sales improved to 58.5% in this three-month period of fiscal 2002 compared to 60.7% for the same period of fiscal 2001. This continued improvement in cost of goods sold reflects management's continued efforts to improve efficiencies and control these costs. Operating expenses as a percentage of sales increased to 36.0% in this three-month period of fiscal 2002 compared to 33.9% for the same period of fiscal 2001. The 2.1% increase is directly related to the decrease in sales reported above. Actual operating expenditures only increased approximately $5,000. 9 Other expenses decreased approximately $41,400 from the same period of fiscal 2001 primarily due to decreases in interest expense from lower borrowing requirements and decreases in the prime lending rate. However, other expenses continue to be negatively affected by the decrease in foreign currency exchange rates as described in "Canadian Currency Exchange" above. Nine Months Ended February 28, 2002 Compared to February 28, 2001 Sales for the nine-month period ended February 28, 2002, are down 0.8% or approximately $78,500 from the same period in fiscal 2001. Excluding the negative affect caused by the continued decline in the Canadian currency exchange translation, actual sales increased 0.7% or approximately $72,800. Cost of goods sold as a percentage of sales improved to 58.9% in this nine-month period of fiscal 2002 compared to 61.3% for the same period of fiscal 2001. Management's goal to bring it's cost of goods sold to 60% of sales or lower has been achieved in this period of fiscal 2002, and is directly related to the Company's investments made in manufacturing facilities and equipment upgrades in fiscal 2001 and 2002. Management believes that to maintain and improve on these costs, the Company will need to continue to invest in modernizing it's equipment to meet future growth and customer demands. Further, management anticipates funding of future investments in equipment to come from operating activities and bank loans. Operating expenses as a percentage of sales increased to 34.8% in this nine-month period of fiscal 2002 compared to 34.6% for the same period of fiscal 2001. However, actual operating expenditures decreased approximately $6,000. Other expenses decreased 7.7% or approximately $17,600 from the same period of fiscal 2001. However, if not for the negative effect as described in "Canadian Currency Exchange" above and approximately $31,400 of costs associated with the final settlement of a legal action brought against the Company, other expense would have improved an additional $58,400 or 25.5% in this nine-month period of fiscal 2002. The following table presents the percentage relationship that certain items in the Company's Consolidated Statements of Operations bear to net sales for the periods indicated.
Three Months Ended Nine Months Ended ------------------ ----------------- February 28, February 28, February 28, February 28, ------------ ------------ ------------ ------------ 2002 2001 2002 2001 ---- ---- ---- ---- Net Sales 100.0% 100.0% 100.0% 100.0% Cost of Goods Sold 58.5 60.7 58.9 61.3 ------ ------ ------ ------ Gross Profit 41.5 39.3 41.1 38.7 Operating Expenses 36.0 33.9 34.8 34.6 ------ ------ ------ ------ Operating Income 5.5 5.4 6.3 4.1 Other Expense 2.1 3.3 2.2 2.3 ------ ------ ------- ------- Income before income taxes 3.4 2.1 4.1 1.8 Income tax expense 1.9 0.8 1.6 .7 ------ ------ ------- ------ Net Income 1.5% 1.3% 2.5% 1.1% ====== ====== ======= =======
Liquidity and Capital Resources The Company has financed its operations over the years principally through funds generated from operations and bank loans. Net cash provided by operating activities in this nine-month period of fiscal 2002 was $416,376 compared to net cash provided by operating activities of $485,159 in the same period of fiscal 2001. The decrease of $68,783 in cash provided from operating activities is directly related to the Company's commitment to pay down its accounts 10 payable and other liabilities. Net cash used in investing activities was $349,444 in this nine-month period of fiscal 2002 compared with $759,739 used in the same period of fiscal 2001. The expenditures in this nine-month period of fiscal 2002 were mainly for facility improvements and manufacturing equipment purchases and replacement of aging equipment at our Wilsonville, Oregon and Toronto, Canada manufacturing facilities. Cash from financing activities, including net repayments under our existing credit line of $51,441, increases of $121,865 in long-term debt, repayments of existing debt obligations of $97,562 and payments toward accreted dividends of $18,362 resulted in net cash used of $27,138 in this nine-month period of fiscal 2002. This compares to cash provided from financing activities of $57,056 in the same period of fiscal 2001. The ratio of current assets to current liabilities is 1.00 at February 28, 2002 compared to 0.95 at May 31, 2001. Quick liquidity (current assets less inventories to current liabilities) is 0.58 at February 28, 2002 and 0.55 at May 31, 2001. At February 28, 2002, the Company had working capital of $1,888 compared with negative working capital of $175,166 at May 31, 2001. Trade receivables at November 30, 2001 had a 47 days average collection period compared to 53 days at May 31, 2001. The Company has a revolving line of credit and a revolving equipment term loan. The line of credit has a maturity date of November 30, 2002. The amount available under the line of credit is limited to $2,500,000 based upon 80% of eligible accounts receivable and 40% of eligible inventory not to exceed $600,000, at the end of each reporting period. The revolving equipment term loan has a limit of $500,000. Each drawdown against the equipment term loan has a five-year amortization with an interest rate equal to the lender's cost of funds plus 2%, fixed on the date of the drawdown. Both lines are secured with substantially all of the Company's assets, and will be repaid primarily out of the Company's receivable collections and other funds from operations. In the three-month period ended February 28, 2002 the Company was in compliance with all operating covenants required by its lender. The Company may require additional capital to finance current operations, enhance or expand its manufacturing capacity in accordance with future developments in its business strategy, or for additional working capital for inventory and accounts payable. The Company also may seek additional funds through public or private debt or through bank borrowings.
The Company's total debt structure at February 28, 2002 is as follows: Long-Term Current Portion ---------- --------------- Revolving credit line at prime plus 0.25%, (5.0% at February 28, 2002), due November 30, 2002 $ $ 1,769,190 Revolving Equipment term loan at 9.16%, due November 7, 2005 36,100 10,103 Revolving Equipment term loan at 8.27%, due January 10, 2006 63,786 17,138 Revolving Equipment term loan at 4.75%, due July 6, 2006 91,301 17,685 Capital Lease obligations, one due June 2002 and one due January 2005 24,460 9,795 Note payable at 6%, due May 2005 30,000 10,000 Note payable at prime less .25%, (4.75% at November 30, 2001) Due May 1, 2010 480,746 28,005 -------- ------------ Total Bank and Term debt 726,393 1,861,916 Notes payable to related parties 191,662 92,941 -------- ------------ Total long and short term debt $ 918,056 $ 1,954,857 ========= ============
11 II. OTHER INFORMATION Item 1. Legal Proceedings There were no legal proceedings brought against the Company in this three-month period ended February 28, 2002. On September 14, 2000 a complaint was filed in North Carolina state court in a case styled, Bayer Corporation v. VWR Scientific Products Corporation and PML Microbiologicals, Inc., alleging breaches of express and implied warranty and products liability claims. The suit seeks unspecified damages, and PML has tendered the claim to its products liability insurance carrier. While management does not believe the outcome of the case will have a material adverse effect upon PML's operating results or its financial condition, plaintiff has asserted damage ranges that substantially exceed applicable insurance coverage. There has been no material activity in this matter in this three-month period of fiscal 2002. Item 4. Submission of Matters to a Vote of Security Holders There were no matters submitted to a vote of security holders during the quarter ended February 28, 2002. Item 6. Exhibits and Reports on Form 8-K No 8-K filings were made during the quarter ended February 28, 2002. 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. PML, INC. (Registrant) Date: April 12, 2002 By: /s/ Kenneth L. Minton ------------------------------------- Kenneth L. Minton President and Chief Executive Officer 12