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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934
FILING NO. 1 FOR THE MONTH OF MAY, 2001
VISIBLE GENETICS INC.
(Exact name of Registrant)
700 BAY STREET, SUITE 1000, TORONTO ON, CANADA M5G 1Z6
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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VISIBLE GENETICS INC.
On May 10, 2001, we reported our financial results for the first
quarter of 2001. We reported sales of $3.6 million for the first quarter
ended March 31, 2001, compared to $3.6 million for the same period in 2000.
Sales of genotyping kits and consumables increased 85% from such sales in the
first quarter in 2000, and 23% over such sales in the fourth quarter of 2000.
The net loss attributable to common shareholders for the quarter was $9.4
million or $0.58 per share, compared to a net loss attributable to common
shareholders of $6.7 million or $0.55 for the same period in 2000. The
increased costs in the quarter were due primarily to expenses related to
growth in personnel and other costs related to the Atlanta facility, and a
$540,000 provision taken in anticipation of the closure of the Pittsburgh
facility. The Pittsburgh facility will be phased out as the Atlanta kit
manufacturing facility becomes operational. (All amounts are in US dollars.)
This Form 6-K contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are subject to risks,
uncertainties and other factors which may cause our results to differ
materially from expectations. These include risks relating to the ability to
obtain regulatory approval, market acceptance of genotyping and our products,
delays in product development, delays in making the new Atlanta manufacturing
facility operational, and other risks detailed from time to time in our SEC
filings, including our most recent Annual Report on Form 20-F. These
forward-looking statements speak only as of the date hereof. We disclaim any
intent or obligation to update these forward-looking statements.
We hereby incorporate by reference this Form 6-K into our
Registration Statements on Form F-3, and into the prospectuses contained
therein, (File Nos. 333-67607, 333-68939, 333-91155, 333-94649 and 333-40616)
and our outstanding Registration Statements on Form S-8 and into the reoffer
prospectuses contained therein.
Exhibit 1. First Quarter Financial Results
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.
VISIBLE GENETICS INC.
Date: May 10, 2001 By: /s/ THOMAS CLARKE
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Name: Thomas Clarke
Title: Chief Financial Officer
VISIBLE GENETICS INC.
CONSOLIDATED BALANCE SHEETS
( UNITED STATES DOLLARS)
MARCH 31 DECEMBER 31
2001 2000
--------------- ---------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,166,079 $ 18,476,303
Short-term investments 65,609,187 61,922,687
Trade receivables, net of allowance for doubtful accounts 3,577,672 3,214,934
Other receivables 1,399,911 884,995
Prepaid and deposits 712,880 452,124
Inventory 2,353,070 2,268,877
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TOTAL CURRENT ASSETS 74,818,799 87,219,920
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FIXED ASSETS 16,229,120 10,292,282
PATENTS AND LICENSES 11,458,237 12,182,112
OTHER LONG TERM ASSETS 670,515 661,591
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$ 103,176,671 $ 110,355,905
=============== ===============
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 3,802,346 $ 3,847,364
Accrued liabilities 6,355,626 5,265,864
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TOTAL CURRENT LIABILITIES 10,157,972 9,113,228
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MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED SHARES 24,292,123 24,397,398
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SHAREHOLDERS' EQUITY
Share capital 171,060,408 169,717,379
Other equity (1,428,969) (646,363)
Cumulative translation adjustment (1,112,902) (1,013,459)
Deficit (99,791,961) (91,212,278)
--------------- ---------------
68,726,576 76,845,279
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$ 103,176,671 $ 110,355,905
=============== ===============
VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNITED STATES DOLLARS)
THREE MONTHS ENDED MARCH 31
2001 2000
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SALES
Products $ 3,532,687 $ 3,441,467
Services 41,140 202,588
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3,573,827 3,644,055
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COST OF SALES
Products 2,284,687 2,137,896
Services 28,443 146,485
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2,313,130 2,284,381
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GROSS MARGIN 1,260,697 1,359,674
EXPENSES
Sales, general and administrative 7,757,560 5,418,203
Research and development 2,720,060 2,082,558
Exit costs 540,000 -
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11,017,620 7,500,761
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LOSS FROM OPERATIONS BEFORE INTEREST (9,756,923) (6,141,087)
Interest income 1,178,195 430,348
Interest and financing expense (955) (4,839)
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NET LOSS FOR THE PERIOD (8,579,683) (5,715,578)
Cumulative preferred dividends and accretion
of discount attributable to preferred stock (832,946) (967,767)
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NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (9,412,629) $(6,683,345)
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Weighted average number of common
shares outstanding 16,293,708 12,248,002
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BASIC AND FULLY DILUTED LOSS PER SHARE $ (0.58) $ (0.55)
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNITED STATES DOLLARS)
THREE MONTHS ENDED MARCH 31
2001 2000
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CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net loss for the period $ (8,579,683) $ (5,715,578)
Add: Items not involving cash -
Depreciation 1,230,469 501,804
Amortization 756,381 76,771
Foreign exchange (77,758) (15,079)
Increase ( decrease ) from changes in -
Trade receivables (399,565) 526,746
Other receivables (549,514) (214,742)
Prepaid and deposits (265,735) (374,928)
Inventory (120,715) (647,855)
Other long term assets (8,924) 26,726
Accounts payable 10,516 787,658
Accured liabilities 1,217,919 (516,316)
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(6,786,609) (5,564,793)
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INVESTING ACTIVITIES
Purchase of fixed assets (7,017,719) (1,194,795)
Licenses and patents acquired (32,506) (2,158,320)
Purchase of short-term investments (10,895,636) (2,608,625)
Redemption of short-term investments 7,209,136 10,243,108
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(10,736,725) 4,281,368
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FINANCING ACTIVITIES
Common shares issued, net of expenses 355,705 2,192,485
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355,705 2,192,485
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EFFECT OF EXCHANGE RATE FLUCTUATIONS ON CASH BALANCES (142,595) 224,247
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INCREASE (DECREASE) IN CASH DURING THE YEAR (17,310,224) 1,133,307
CASH, BEGINNING OF PERIOD 18,476,303 2,792,985
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CASH, END OF PERIOD $ 1,166,079 $ 3,926,292
=============== ==============
VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(UNITED STATES DOLLARS)
THREE MONTHS ENDED MARCH 31
2001 2000
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Net loss for the period $ (8,579,683) $ (5,715,578)
Other comprehensive income:
Foreign currency translation adjustments (99,443) (283,601)
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Comprehensive loss for the period $ (8,679,126) $ (5,999,179)
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VISIBLE GENETICS INC.
CONSOLIDATED STATEMENTS OF DEFICIT
(UNITED STATES DOLLARS)
THREE MONTHS ENDED MARCH 31
2001 2000
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Deficit, beginning of year $ (91,212,278) $ (59,438,142)
Net loss for the period (8,579,683) (5,715,578)
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Deficit, end of the period $ (99,791,961) $ (65,153,720)
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VISIBLE GENETICS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies
The accompanying financial statements have been prepared in United States
dollars, in accordance with accounting principles generally accepted in the
United States. The principal accounting policies of the Company have been
applied on a consistent basis. See the Company's 2000 Annual Report for a
description of the Company's significant accounting policies. These interim
financial statements do not include all of the information and note disclosure
required by generally accepted accounting principles. In the opinion of
management, all adjustments considered necessary for a fair presentation of
results for the reported periods have been included.
Note 2 - Inventory
MARCH 31,
-------------------------
2001 2000
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Raw materials $1,055,404 $1,355,854
Work in process 451,205 94,823
Finished goods 846,461 1,643,120
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$2,353,070 $3,093,797
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Note 3 - Conversion of Series A Mandatorily Redeemable Convertible Preferred
Shares
On March 15, 2001 a holder of 3,948 shares of the Company's Series A Mandatorily
Redeemable Convertible Preferred Shares (the Series A Shares) converted a total
of 1,000 of the Series A Shares, plus a total of $139,050 of dividends that
accrued on those shares, into 103,550 of the Company's common shares. Upon
conversion of the 1,000 Series A Shares, approximately $938,221 attributable to
such shares and carried in Mandatorily Redeemable Convertible Preferred Shares
on the Balance Sheet was transferred to Share Capital.
As of March 31, 2001, a total of 25,153 Series A Shares remain outstanding, and
such shares, including dividends accrued on such shares through March 31, 2001,
are convertible into 2,651,326 shares of the Company's common stock.
Note 4 - Exit costs
During the first quarter of 2001 the Company approved a plan to close its
Pittsburgh facility and move all of its kit manufacturing to productions lines
that are currently under construction in the Company's facility in Atlanta. It
is expected that the Pittsburgh facility will be closed in the second half of
2001.
As a result of the decision to centralize kit manufacturing in Atlanta certain
employees will be terminated and the Pittsburgh facility will be vacated.
Accordingly, the Company recorded a charge of $540,000 in the statement of
operations in the first quarter of 2001, which is included in accrued
liabilities at March 31, 2001. This amount represents the expected severance
payments to be made to terminated employees, the remaining future lease
commitments, the unamortized balance of leasehold improvements and other costs
related to closure of the facility.
Note 5 - Segment Information
The Company's reportable segments are Sequencing Systems, Gene Kits and Other
Consumables, and Testing, Sequencing and Other Services. Total assets shown
below are as of March 31st, while all other numbers are for the three-month
period ended March 31st, of the respective year.
March 31, 2001
GeneKits Testing,
Sequencing and Other Sequencing and Reconciling
Systems Consumables Other Services Items(A) Total
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Revenues $ 590,908 $ 2,941,779 $ 41,140 $ -- $ 3,573,827
Depreciation & Amtz. 529,349 1,207,179 250,322 -- 1,986,850
(Loss) from operations
before interest (1,632,411) (8,111,843) (12,669) -- (9,756,923)
Additions to fixed assets 60,992 6,870,180 86,547 -- 7,017,719
Total assets 3,162,279 31,334,150 1,904,976 66,775,266 103,176,671
March 31, 2000
Revenues $ 1,852,889 $ 1,588,578 $ 202,588 $ -- $ 3,644,055
Depreciation & Amtz. 247,185 238,612 93,917 -- 579,714
(Loss) from operations
before interest (3,270,804) (2,842,985) (27,298) -- (6,141,087)
Additions to fixed assets 215,744 299,385 672,542 -- 1,187,671
Total assets 5,523,064 10,693,156 2,431,108 36,186,787 54,834,115
(A) Reconciling items consist of cash, cash equivalents and short-term
investments.