SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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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 December 31, 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: 000-22673
SCHICK TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-3374812
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
31-00 47th Avenue 11101
Long Island City, New York (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (718) 937-5765
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 [ ]
As of February 17, 1998, 9,982,798 shares of common stock, par value $.01 per
share, were outstanding.
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SCHICK TECHNOLOGIES, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Consolidated Balance Sheet as of December 31, 1997 and
March 31, 1997 ............................................ Page 1
Consolidated Statement of Operations for the three and
nine months ended December 31, 1997 and 1996 ............. Page 2
Consolidated Statement of Cash Flows for the nine
months ended December 31, 1997 and 1996................ Page 3
Notes to Consolidated Financial Statements ................ Page 4
Item 2. Management's Discussion and Analysis of Financial
Condition And Results of Operations.................... Page 7
PART II. OTHER INFORMATION:
Item 2. Changes in Securities and Use of Proceeds................. Page 9
Item 6. Exhibits and Reports on Form 8-K........................... Page 10
SIGNATURE............................................................... Page 11
EXHIBIT 11.............................................................. Page 12
EXHIBIT 27.............................................................. Page 16
PART I. Financial Information
Item 1. Financial Statements
Schick Technologies, Inc.
Consolidated Balance Sheet
Assets December 31, March 31,
1997 1997
------------ ------------
Current assets
Cash and cash equivalents $ 8,849,517 $ 1,710,429
Short-term investments 16,822,964 2,313,226
Accounts receivable, net of allowance for doubtful
accounts of $150,000 and $50,000, respectively 6,920,499 1,927,993
Inventories 8,805,754 2,510,959
Prepayments and other current assets 438,025 327,220
------------ ------------
Total current assets 41,836,759 8,789,827
Equipment, net 4,412,326 1,644,528
Investments 1,489,973 490,000
Other assets 971,021 135,727
Deferred tax asset 434,235 --
------------ ------------
Total assets $ 49,144,314 $ 11,060,082
============ ============
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $ 4,921,429 $ 2,102,293
Accrued salaries and commissions 1,524,215 540,061
Provision for warranty obligations 519,739 329,426
Income taxes payable 420,374 --
Deferred revenue 329,664 141,017
Deposits from customers 180,830 136,628
Capital lease obligations, current -- 22,200
------------ ------------
Total current liabilities 7,896,251 3,271,625
Notes payable -- 1,512,833
Accrued interest on notes payable -- 101,654
Capital lease obligations, long-term -- 86,991
------------ ------------
Total liabilities 7,896,251 4,973,103
Commitments -- --
Stockholders' equity
Preferred stock ($.01 par value; 2,500,000 shares
authorized, none issued and outstanding) -- --
Common stock ($.01 par value; 25,000,000 shares
authorized; 9,982,798 and 7,957,231 shares issued
and outstanding, respectively) 99,828 79,572
Additional paid-in capital 41,165,798 7,562,766
Accumulated deficit (17,563) (1,555,359)
------------ ------------
Total stockholder's equity 41,248,063 6,086,979
Total liabilities and stockholders' equity $ 49,144,314 $ 11,060,082
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
1
Schick Technologies, Inc.
Consolidated Statement of Operations
(unaudited)
Three months ended December 31, Nine months ended December 31,
------------------------------- ------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
Revenue, net $ 11,911,531 $ 4,954,300 $ 26,175,916 $ 10,741,511
Cost of sales 5,528,685 2,359,777 12,226,464 5,431,095
------------ ------------ ------------ ------------
Gross profit 6,382,846 2,594,523 13,949,452 5,310,416
Operating expenses:
Selling and marketing 2,903,561 1,605,038 6,787,070 3,603,418
General and administrative 1,191,762 559,857 2,923,228 1,290,802
Research and development 1,288,663 427,236 2,895,812 1,007,722
Patent litigation settlement -- -- 600,000 --
------------ ------------ ------------ ------------
Total operating expenses 5,383,986 2,592,131 13,206,110 5,901,942
------------ ------------ ------------ ------------
Income (loss) from operations 998,860 2,392 743,342 (591,526)
------------ ------------ ------------ ------------
Other income (expense)
Interest income 360,488 61,126 858,061 116,174
Interest expense (26,283) (43,466) (77,468) (115,460)
------------ ------------ ------------ ------------
Total other income (expense) 334,205 17,660 780,593 714
------------ ------------ ------------ ------------
Income (loss) before income tax 1,333,065 20,052 1,523,935 (590,812)
------------ ------------ ------------ ------------
Provision (benefit) for income
taxes 107,721 -- (13,861) --
------------ ------------ ------------ ------------
Net income (loss) $ 1,225,344 $ 20,052 $ 1,537,796 $ (590,812)
============ ============ ============ ============
Earnings (loss) per share $ 0.12 $ -- $ 0.17 $ (0.08)
============ ============ ============ ============
Earnings (loss) per share
- assuming dilution $ 0.12 $ -- $ 0.16 $ (0.07)
============ ============ ============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
2
Schick Technologies, Inc.
Consolidated Statement of Cash Flows
(unaudited)
Nine months ended December 31
-----------------------------
1997 1996
------------ ------------
Net cash flows from operating activities:
Net income (loss) $ 1,537,796 $ (590,812)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities
Depreciation and amortization 569,530 215,318
Stock and option grant compensation 15,141 --
Accrued interest on investments (435,625) --
Non-cash interest expense -- 98,323
Changes in assets and liabilities:
Accounts receivable (4,992,506) (245,561)
Inventories (6,127,795) (528,828)
Prepayments and other current assets (40,728) 7,438
Other assets (73,166) (86,348)
Deferred income taxes (434,235) --
Accounts payable and accrued expenses 3,993,603 1,533,554
Income taxes payable 420,374 --
Deferred revenue 188,647 107,149
Deposits from customers 44,202 42,636
Accrued interest on notes payable (101,654) 61,500
------------ ------------
Net cash (used in) provided by operating activities (5,436,416) 614,369
------------ ------------
Cash flows from investing activities:
Investment in capitalized software (70,077) --
Purchases of available-for-sale investments -- (500,000)
Purchases of held-to-maturity investments (15,518,115) (2,080,130)
Proceeds from maturities of held-to-maturity investments 1,444,002 --
Business acquisition (1,450,000) --
Purchase of minority interest in Photobit Corporation (999,973) --
Capital expenditures (2,816,455) (921,661)
------------ ------------
Net cash used in investing activities (19,410,618) (3,501,791)
Cash flows from financing activities:
Net proceeds from issuance and sale of common stock 33,608,147 --
Net proceeds from issuance and sale of common stock and
warrants -- 4,311,800
Proceeds from issuance of long-term notes -- 1,000,000
Repayment of notes payable (1,512,833) --
Principal payments on capital lease obligations (109,192) (15,648)
------------ ------------
Net cash provided by financing activities 31,986,122 5,296,152
Net increase in cash and cash equivalents 7,139,088 2,408,730
Cash and cash equivalents at beginning of period 1,710,429 524,917
------------ ------------
Cash and cash equivalents at end of period $ 8,849,517 $ 2,933,647
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
3
Schick Technologies, Inc.
Notes to Consolidated Financial Statements (unaudited)
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1. Basis of Presentation
The consolidated financial statements of Schick Technologies, Inc. and its
subsidiaries (collectively the "Company") have been prepared in accordance
with generally accepted accounting principles for interim financial
information and the rules of the Securities and Exchange Commission (the
"SEC") for quarterly reports on Form 10-Q, and do not include all of the
information and footnote disclosures required by generally accepted
accounting principles for complete financial statements. These statements
should be read in conjunction with the audited financial statements and
notes thereto for the year ended March 31, 1997, included in the Company's
Prospectus dated July 1, 1997 forming a part of the company's Registration
Statement on Form S-1, as amended ("Form S-1"), which was initially filed
with the SEC on May 13, 1997.
In the opinion of management, the accompanying unaudited consolidated
financial statements include all adjustments (consisting of normal,
recurring adjustments) necessary for a fair presentation of results of
operations for the interim periods. The results of operations for the three
and nine months ended December 31, 1997, are not necessarily indicative of
the results to be expected for the full year ending March 31, 1998.
The consolidated financial statements of the Company, at December 31, 1997,
include the accounts of the Company and its wholly owned subsidiaries,
Schick New York (as hereinafter defined) and Schick X-Ray Corporation. All
significant intercompany balances have been eliminated (see Notes 2 and 7).
2. Restructuring and recapitalization
In connection with the Company's initial public offering (the "IPO") under
the Securities Act of 1933, as amended, the Company engaged in the
following restructuring and recapitalization transactions. In April 1997,
Schick Technologies, Inc. ("Schick Delaware" or "The Company") and its
wholly owned subsidiary, STI Acquisition Corporation ("STI") were formed
under the General Corporation Law of the State of Delaware for the purpose
of forming a holding company and changing the state of incorporation of
Schick Technologies, Inc., a New York corporation ("Schick New York" or the
"Predecessor Corporation"). Effective June 4, 1997 (pursuant to a merger
agreement among Schick Delaware, the Predecessor Corporation and STI),
Schick Delaware issued 7,957,231 shares of its common stock for all the
outstanding common stock of the Predecessor Corporation. STI and the
Predecessor Corporation merged and the Predecessor Corporation was the
survivor of the merger, and became a wholly-owned subsidiary of Schick
Delaware. In connection with the restructuring and merger, the holders of
the Predecessor Corporation's outstanding warrants and options converted
such warrants and options to similar warrants and options of Schick
Delaware (based on the same ratio of exchange, 2.8 shares for 1 share,
applicable to the common stock exchange). Schick Delaware's articles of
incorporation also authorize 2,500,000 shares of preferred stock, $.01 par
value.
The 1996 Stock Option Plan of the Predecessor Corporation was amended by
Schick Delaware and the shares available for issuance pursuant to the Plan
were adjusted to 470,000. Schick Delaware also implemented its 1997 Stock
Option Plan for Non-Employee Directors ("the Directors Plan") whereby
nonqualified options to purchase up to 35,000 shares of the Company's
common stock may be granted to non-employee directors. Each option granted
under the Directors Plan becomes exercisable on the second anniversary date
of its grant and must have an exercise price equal to the fair market value
of the Company's common stock on the date of grant.
All common shares, stock options, warrants and related per share data
reflected in the accompanying financial statements and notes thereto, have
been presented as if the recapitalization had been effective for all
periods presented.
References herein to the operations and historical financial information of
the "Company" prior to the date of the restructuring refer to the
operations and historical financial information of the Predecessor
Corporation.
4
Schick Technologies, Inc.
Notes to Consolidated Financial Statements (unaudited)
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3. Inventories
Inventories at December 31, 1997 and March 31, 1997 are comprised of the
following:
December 31, March 31,
1997 1997
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Raw materials .......................... $6,537,056 $1,671,010
Work-in-process ........................ 752,889 421,863
Finished goods ......................... 1,515,809 418,086
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Total inventories .................. $8,805,754 $2,510,959
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4. Initial Public Offering
In July 1997, the Company completed the IPO, selling 2,012,500 shares of
common stock at a price of $18.50 per share providing gross proceeds to the
Company of $37,231,250 and net proceeds, after underwriting discounts and
commissions and estimated offering expenses payable by the Company, of
approximately $35,508,000.
In July 1997, upon the declaration of the effectiveness of the Form S-1
filed in connection with the IPO, the Company repaid, as required by the
note agreement, a secured note payable in the principal amount of
$1,512,833 and accrued interest thereon in the amount of $144,296.
5. Patent Litigation Settlement
In July 1997, the Company , in connection with the settlement of certain
pending patent litigation involving a United States patent directed to a
display for digital dental radiographs, was granted a worldwide,
non-exclusive fully paid license covering such patent in consideration for
a payment by the Company of $600,000. The Company expensed the license fee
in the quarter ended June 30, 1997.
6. Keystone Acquisition
On September 24, 1997, the Company's wholly owned subsidiary, Schick X-Ray
Corporation ("Schick X-Ray"), a Delaware corporation, acquired certain
assets of Keystone Dental X-Ray Inc. ("Keystone"), a manufacturer of x-ray
equipment for the medical and dental radiology field, for $1,450,000 in
cash. Schick X-Ray was formed on September 24, 1997, for the sole purpose
of acquiring the assets of Keystone. Schick X-Ray acquired inventory,
manufacturing equipment, tooling and intellectual property. The acquisition
has been accounted for using the purchase method, and Schick X-Ray has
recorded goodwill in the amount of approximately $750,000, which is
included in other assets and will be amortized on a straight-line basis
over 10 years.
7. Investment in Photobit Corporation
On September 30, 1997, the Company purchased a minority interest of 5%, for
approximately $1,000,000, in Photobit Corporation, a developer of
complementary metal-oxide semiconductor ("CMOS"), active-pixel sensor
("APS") imaging technology. The Company is the exclusive licensee of the
APS technology for medical applications and plans to utilize the technology
in its bone-mineral density device.
8. Net Income (Loss) Per Common Share
Effective December 31, 1997, the Company adopted statement of Financial
Accounting Standards No. 128, "Earnings per Share" ("FAS 128") which
requires presentation of basic earnings per share ("Basic EPS" or "earnings
per share") and diluted earnings per share ("Diluted EPS" or "earnings per
share - assuming dilution"). Basic EPS is computed by dividing income
available to common stockholders by the weighted-average number of common
shares outstanding during the period. Diluted EPS gives
5
effect to all dilutive potential common shares outstanding during the
period. The computation of Diluted EPS does not assume conversion, exercise
or contingent exercise of securities that would have an antidilutive effect
on earnings. The adoption of FAS 128 did not have a significant effect on
earnings per share for the three and nine months ending December 31, 1996.
The computation of earnings per share and earnings per share - assuming
dilution for the three and nine month periods ended December 31, 1997 and
1996 are as follows:
Three months ended Nine months ended
December 31, December 31,
------------------------- -------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
Income (loss) available common
stockholders $ 1,225,344 $ 20,052 $ 1,537,796 $ (590,812)
Interest on convertible notes -- -- -- 23,366
Income (loss) for earnings per share -
assuming dilution $ 1,225,344 $ 20,052 $ 1,537,796 $ (567,446)
=========== =========== =========== ===========
Weighted average shares outstanding for
earnings (loss) per share 9,981,154 7,920,484 9,307,598 7,543,199
Dilutive effect of stock options and
warrants 432,477 161,297 518,861 579,612
----------- ----------- ----------- -----------
Weighted average shares outstanding for
earnings (loss) per share - assuming 10,413,631 8,081,781 9,826,459 8,122,811
dilution
Earnings per share $ 0.12 $ -- $ 0.17 $ (0.08)
=========== =========== =========== ===========
Earnings per share - assuming dilution $ 0.12 $ -- $ 0.16 $ (0.07)
=========== =========== =========== ===========
6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Quarterly report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Actual results,
events and circumstances could differ materially from those set forth in such
statements due to various factors. Such factors include the changing economic
and competitive conditions in the medical and dental digital radiography market,
regulatory approvals, technological developments, protection of technology
utilized by the Company, patent infringement claims and other litigation, and
further risks and uncertainties, including those detailed in the Company's other
filings with the Securities and Exchange Commission.
General
The Company designs, develops and manufactures digital imaging systems and
devices for the dental and medical markets. In the field of dentistry, the
Company has developed, and currently manufactures and markets, an intra-oral
digital radiography system. The Company has also developed a bone mineral
density measurement device to assist in the diagnosis of osteoporosis, which was
introduced in December of 1997, upon receipt of FDA marketing clearance. In
addition, the Company is developing large-area radiographic imaging devices for
digital mammography.
Results of Operations
Net revenue for the three months ended December 31, 1997, increased $6.9 million
(140%) to $11.9 million from $5.0 million for the comparable period of 1996. Net
revenue for the nine months ended December 31, 1997, increased $15.5 million
(144%) to $26.2 million from $10.7 million for the comparable period of 1996.
The increase was attributable principally to an increase in the number of CDRTM
products sold. Also contributing to the increase in sales for the three and nine
months ended December 31, 1997, was the introduction of the Company's AccudexaTM
bone density measurement device in December of 1997. The number of CDRTM
products sold was positively affected by the Company's increased expenditures on
sales and marketing, personnel recruiting, promotional activities, and the
increased use of domestic dental distributors.
Cost of sales for the three months ended December 31, 1997, increased $3.2
million (134%) to $5.5 million (46.4% of net revenue) from $2.3 million (47.6%
of net revenue) for the comparable period of 1996. Cost of sales for the nine
months ended December 31, 1997, increased $6.8 million (125%) to $12.2 million
(46.7% of net revenue) from $5.4 million (50.6% of net revenue) for the
comparable period of 1996. The increase was due to the increase in sales of the
Company's products. The decrease as a percentage of net revenue was primarily
due to increased manufacturing efficiencies, increased production yields,
economies of scale generated by an increase in the number of products sold, and
decreased warranty costs.
Selling and marketing expenses for the three months ending December 31, 1997,
increased $1.3 million (80.9%) to $2.9 million (24.4% of net revenue) from $1.6
million (32.4% of net revenue) for the comparable period of 1996. Selling and
marketing expenses for the nine months ending December 31, 1997, increased $3.2
million (88%) to $6.8 million (25.9% of net revenue) from $3.6 million (33.5% of
net revenue) for the comparable period of 1996. The increase in dollars was
attributable principally to the hiring and training of new salespeople as the
Company continued to increase the size of its national sales force. In addition,
the Company significantly increased its promotional activities to create greater
market awareness, and developed market strategies for new products.
General and administrative expenses for the three months ended December 31,
1997, increased $632 thousand (112.9%) to $1.2 million (10% of net revenue) from
$560 thousand (11.3% of net revenue) for the comparable period of 1996. General
and administrative expenses for the nine months ended December 31, 1997,
increased $1.6 million (126.5%) to $2.9 million (11.2% of net revenue) from $1.3
million (12% of net revenue) for the comparable period of 1996. The increase was
primarily attributable to the hiring of administrative personnel and legal fees
associated with patent infringement litigation.
Research and development expenses for the three months ended December 31, 1997,
increased $861 thousand (202%) to $1.3 million (10.8% of net revenue) from $427
thousand (8.6% of net revenue) for the comparable period of 1996. Research and
development expenses for the nine months ended December 31, 1997,
7
increased $1.9 million (187%) to $2.9 million (11.1% of net revenue) from $1.0
million (9.4% of net revenue) for the comparable period of 1996. The increase
was attributable to the expenses associated with the development of a bone
mineral density measurement device, enhancements to the Company's products, and
initial development of a mammography system.
In July 1997, the Company, in connection with the settlement of certain pending
patent litigation involving a United States patent directed to a display for
digital dental radiographs, was granted a worldwide, non-exclusive fully paid
license covering such patent in consideration for a payment by the Company of
$600 thousand.
Interest income increased to $360 thousand in the three months ended December
31, 1997 from $61 thousand in the comparable period of 1996. Interest income
increased to $850 thousand in the nine months ended December 31, 1997 from $116
thousand in the comparable period of 1996. These increases are attributable to
higher cash balances and investments in interest-bearing securities which were
purchased with the proceeds of the July 1, 1997 Initial Public Offering (the
"IPO"). Interest expense decreased to $26 thousand for the three-month period
ended December 31, 1997 from $43 thousand in the comparable period of 1996.
Interest expense decreased to $77 thousand for the nine-month period ended
December 31, 1997 from $115 thousand in the comparable period of 1996. Interest
expense was attributable principally to the Merck Loan, which was repaid from
the proceeds of the IPO.
Liquidity and Capital Resources
At December 31, 1997, the Company had $8.8 million in cash and cash equivalents,
$16.8 million in short-term investments and $33.9 million in working capital
compared to $1.7 million in cash and cash equivalents, $2.3 million in
short-term investments and $5.5 million in working capital at March 31, 1997.
The increase in working capital for the nine months ended December 31, 1997, is
primarily attributable to the net proceeds from the issuance and sale of common
stock in connection with the Company's IPO (see below).
On July 7, 1997, the Company sold 1,750,000 shares of common stock in an IPO at
a price of $18.50 per share, resulting in net proceeds to the Company of
approximately $28.9 million after deducting expenses. In addition, on July 10,
1997, the Company received approximately $4.5 million, net of expenses, upon the
exercise of the underwriters' over-allotment option to purchase 262,500 shares
of common stock. A portion of the proceeds from the IPO was used to retire the
debt due Merck & Co. in the principal amount of $1.5 million and interest of
$144 thousand (the "Merck Loan"). Additional proceeds were used to purchase
assets in Keystone Dental X-Ray Inc. ("Keystone") and a minority interest in
Photobit Corporation ("Photobit") as described below. The remaining proceeds are
expected to be used (i) to expand the Company's research and development
capabilities, (ii) to expand its sales and marketing effort, (iii) for working
capital and general corporate purposes, and (iv) for expansion of its
facilities. Pending such uses, the Company invests the net proceeds in
investment-grade, interest-bearing securities. From time to time, the Company
may evaluate potential acquisitions of assets, businesses and product lines,
which would complement or enhance the business of the Company. Depending on the
cash requirements of any such acquisition, the Company may finance such
acquisition, in whole or in part, with a portion of the net proceeds of the IPO.
On September 24, 1997, the Company's wholly owned subsidiary, Schick X-Ray
Corporation, acquired certain assets of Keystone Dental X-Ray, Inc., a
manufacturer of x-ray equipment for the medical and dental radiology field, for
$1.5 million in cash. Schick X-Ray acquired inventory, manufacturing equipment,
tooling and intellectual property. The acquisition has been accounted for using
the purchase method.
On September 30, 1997, the Company purchased a minority interest of 5% in
Photobit Corporation, a developer of sensor imaging technology, for
approximately $1.0 million. The Company is the exclusive licensee of a certain
technology for medical applications and plans to utilize the technology in its
bone mineral density measurement device.
8
PART II OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
(c) On October 6, 1997, Cintel Investments exercised Warrants to purchase 11,200
shares of the Company's Common Stock for an exercise price of $8.93 per share,
or $100,016.00 in the aggregate.
Subsequently, on November 21, 1997, Robert Berger CPA Keogh Plan elected to
make a cashless surrender of Warrants exercisable to purchase 2,800 shares of
common stock for an exercise price of $8.93 per share and in return received
1,867 shares of the Company's Common Stock. Such issuances were pursuant to
Section 4(2) of the Securities Act of 1933, as amended.
(d) On July 7, 1997, the Company's initial public offering (the "Offering") of
1,750,000 shares of its common stock, $.01 par value per share (the "Common
Stock") closed. The Company's registration statement on Form S-1 (Registration
No. 333-33731) was declared effective by the Securities and Exchange Commission
on June 30, 1997. As part of the Offering, the Company granted to the
Underwriters over-allotment options to purchase up to 262,500 shares of Common
Stock ("the "Underwriters' Option"). On July 10, 1997, the underwriters
exercised the Underwriters' Option purchasing 262,500 shares of Common Stock
from the Company. The aggregate offering price of 2,012,500 shares of Common
Stock registered for the account of the Company pursuant to the Offering
(inclusive of the Underwriters' Option) was $37,231,250.
The managing underwriter for the Offering was Lehman Brothers. The co-lead
underwriters were J.P. Morgan & Co. and Pacific Growth Equities, Inc.
The aggregate offering price of the 2,012,500 shares of Common Stock sold
in the Offering to the public was $37,231,250 (inclusive of the Underwriters'
Option), with proceeds to the Company (after deduction of the underwriting
discount and commissions in the amount of $2,606,188) of $34,625,062 (before
deducting offering expenses payable by the Company).
During the period of July 1, 1997 through December 31, 1997, the aggregate
expenses incurred by the Company in connection with the issuance and
distribution of the shares of Common Stock offered and sold in the Offering,
including accounting, legal, printing and other expenses, amounted to
$1,116,932.
As the Company's legal counsel in connection with the Offering, Kelly Drye
& Warren LLP received legal expenses paid by the Company. Mark Bane, Esq., a
partner of Kelly Drye & Warren LLP, is a director of the Company. Other than the
payment by the Company of legal expenses to Kelly Drye & Warren LLP, none of the
expenses paid by the Company in connection with the Offering or the exercise of
9
the Underwriters' Option were paid, directly or indirectly, to directors,
officers, controlling stockholders (e.g., persons owning 10% or more of any
class of the Company's stock) of the Company, or affiliates.
The aggregate net proceeds received by the Company from the Offering and as
a result of the exercise of the Underwriters' Option, after deducting
underwriting and commissions and expenses were $33,508,731. During the period of
July 1, 1997 through December 31, 1997, such net proceeds have been applied as
follows: (i) $597,517 for leasehold improvements; (ii) $1,555,725 for property,
plant, and equipment; (iii) $1,450,000 to purchase certain assets of Keystone
Dental X-Ray Corp.; (iv) $1,000,000 to purchase a 5% interest in Photobit, Inc.;
(v) $1,512,833 to pay the notes payable and the interest thereon to Merck & Co.,
Inc.; (vi) $15,518,115 to short term investments; (vii) $6,386,897 to money
market investments; and (viii) the remaining $5,487,644 was used for working
capital purposes. None of the net proceeds were paid, directly or indirectly, to
directors, officers, controlling stockholders, or affiliates of the Company.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(11) Statement re: Computation of Per Share Earnings
(27) Financial Data Schedule
(b) Reports on Form 8-K:
A report on Form 8-K was filed on October 9, 1997 reporting (under
Item 2) the purchase of certain assets by Schick X-Ray Corporation
from Keystone Dental X-Ray, Inc.
10
SCHICK TECHNOLOGIES, INC.
SIGNATURE
Pursuant to the requirement 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.
SCHICK TECHNOLOGIES, INC.
Date: February 17, 1998 By: /S/ David B. Schick
-------------------------
David B. Schick
President and
Chief Executive Officer
By: /S/ David B. Spector
-------------------------
David B. Spector
Chief Financial Officer and
Treasurer
(Principal Financial Officer)
11