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 June 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 0-15515
APPLIED BIOSCIENCE INTERNATIONAL INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-2734293
------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
4350 N. Fairfax Drive
Arlington, VA 22203-1627
---------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 516-2490
---------------
Indicate by checkmark 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: 28,142,428 shares of common
stock, par value $.01 per share, as of August 1, 1995.
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
INDEX
Part I. FINANCIAL INFORMATION Page
Item 1. Financial Statements.
Consolidated Statements of Operations for the
Three Months and Six Months Ended June 30, 1995 and
June 30, 1994.....................................................................3
Consolidated Balance Sheets at
June 30, 1995 and December 31, 1994...............................................4
Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 1995 and
June 30, 1994.....................................................................5
Notes to Consolidated Financial Statements................................................6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.....................................8
Part II. OTHER INFORMATION
Item 1. Legal Proceedings ........................................................................12
Item 2. Changes in Securities.....................................................................12
Item 3. Defaults upon Senior Securities...........................................................12
Item 4. Submission of Matters to a Vote of Security Holders.......................................12
Item 5. Other Information.........................................................................12
Item 6. Exhibits and Reports on Form 8-K..........................................................12
2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
Three Months Ended June Six Months Ended
June 30, June 30,
------------------------- ----------------------
1995 1994 1995 1994
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Pharmaco LSR revenues, net of subcontractor
costs of $8,120, $5,904, $14,980, and $10,981,
respectively $ 35,164 $ 33,168 $ 68,518 $ 62,880
Environmental sciences revenues, net of
subcontractor costs of $1,885, $1,105, $3,243
and $1,868, respectively 12,728 11,771 25,147 22,254
--------- --------- --------- ---------
47,892 44,939 93,665 85,134
--------- --------- --------- ---------
Direct costs - Pharmaco LSR 24,749 22,990 48,798 44,757
Direct costs - Environmental
sciences 8,743 7,381 17,432 14,062
Selling, general and
administrative expenses 12,494 12,183 24,062 22,780
--------- --------- --------- ---------
45,986 42,554 90,292 81,599
--------- --------- --------- ---------
Operating income 1,906 2,385 3,373 3,535
Interest: (Expense) (818) (771) (1,647) (1,358)
Income 39 150 110 303
Other income, net 243 30 287 126
--------- --------- --------- ---------
Income from continuing operations before
provision for income
taxes 1,370 1,794 2,123 2,606
Provision for income taxes 595 596 912 852
--------- --------- --------- ---------
Income from continuing operations 775 1,198 1,211 1,754
--------- --------- --------- ---------
Discontinued operations:
Operating losses from
discontinued operations (net
of income tax benefit of $0,
$81, $0 and $128,
respectively) -- (181) -- (285)
Estimated loss on disposal of ETC and Paragon
(net of income tax benefit of $0 and $227,
respectively) -- (505) -- (505)
--------- --------- --------- ---------
Loss from discontinued operations
(0) (686) (0) (790)
--------- --------- --------- ---------
Net income $ 775 $ 512 $ 1,211 $ 964
--------- --------- --------- ---------
Weighted average number of common shares 28,425 28,522 28,429 28,456
--------- --------- --------- ---------
outstanding
Earnings per share:
Income from continuing operations
$ 0.03 $ 0.04 $ 0.04 $ 0.06
Loss from discontinued operations
(0.00) (0.02) (0.00) (0.03)
--------- --------- --------- ---------
Earnings per share $ 0.03 $ 0.02 $ 0.04 $ 0.03
--------- --------- --------- ---------
The accompanying notes are an integral part of these consolidated financial
statements.
3
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
June 30, December 31,
ASSETS 1995 1994
(unaudited)
----------- -----------
CURRENT ASSETS
Cash and cash equivalents $ 4,927 $ 7,944
Accounts receivable, net 61,413 63,585
Supply inventories 1,249 1,163
Income tax receivable 2,020 2,297
Prepaid expenses and other current assets 5,745 6,077
---------- ----------
Total current assets 75,354 81,066
PROPERTY AND EQUIPMENT, at cost less
accumulated depreciation and amortization 80,497 82,905
GOODWILL, less accumulated amortization 5,531 5,738
OTHER ASSETS 8,381 8,982
NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS, net 2,923 2,989
---------- ----------
Total assets $ 172,686 $ 181,680
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 4,136 $ 2,406
Accounts payable 3,966 6,156
Accrued liabilities 24,017 24,619
Advance billings 24,714 23,649
Current liabilities of discontinued operations, net 458 553
---------- ----------
Total current liabilities 57,291 57,383
---------- ----------
LONG-TERM DEBT 33,761 42,884
---------- ----------
DEFERRED INCOME TAXES 11,593 11,348
---------- ----------
DEFERRED RENT 1,212 1,357
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 40,000,000 shares
authorized, 29,490,000 and 29,520,000 shares
issued and outstanding, respectively 295 295
Paid-in capital 68,260 68,826
Retained earnings 13,273 12,062
Less: 1,347,000 shares of common stock held in
treasury at cost (9,355) (9,355)
Unrealized loss on investments (1,325) (728)
Cumulative translation adjustment (2,246) (1,561)
Deferred compensation (73) (831)
---------- ----------
Total stockholders' equity 68,829 68,708
---------- ----------
Total liabilities and stockholders' equity $ 172,686 $ 181,680
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
4
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS AS OF JUNE 30, 1995
(in thousands)
Six months ended June 30,
1995 1994
(unaudited) (unaudited)
----------- -----------
Cash flows from operating activities:
Net income $ 1,211 $ 964
Adjustments to reconcile net income to net cash
provided by (used in) by operating activities:
Depreciation and amortization 6,088 4,936
Provision for loss on disposal of
discontinued operations -- 732
Deferred income taxes 316 1,393
Deferred rent benefit (144) (145)
Deferred compensation expense 192 287
Loss on sale of property and equipment (3) --
Change in assets and liabilities:
(Increase) decrease in accounts
receivable, net 2,322 (3,915)
(Increase) decrease in supply inventories,
prepaid expenses and other current assets 667 (363)
(Increase) decrease in other assets -- (952)
Change in assets and liabilities of
discontinued operations 29 484
Increase (decrease) in accounts payable
and accrued liabilities (3,370) (3,051)
Increase (decrease) in current income
taxes 276 (141)
Increase (decrease) in advance billings 933 (3,432)
-------- --------
Net cash provided by (used in) operating activities 8,517 (3,203)
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (5,054) (6,674)
Proceeds from sale of property and equipment 2,061 --
-------- --------
Net cash used in investing activities (2,993) (6,674)
-------- --------
Cash flows from financing activities:
Short-term bank borrowings (repayments), net -- (17,524)
Repayment of long-term debt (49,666) (11,766)
Other long-term borrowings 42,250 33,653
Proceeds from issuance of common stock -- 418
-------- --------
Net cash provided by (used in) financing activities (7,416) 4,781
-------- --------
Effect of exchange rate changes on cash (1,125) 294
-------- --------
Net increase (decrease) in cash and cash equivalents
(3,017) (4,802)
Cash and cash equivalents, beginning of the period 7,944 10,549
-------- --------
Cash and cash equivalents, end of the period $ 4,927 $ 5,747
======== ========
SUPPLEMENTAL INFORMATION
Cash Paid:
Interest expense, net of amount capitalized $ 1,647 $ 1,368
======== ========
Income Taxes $ 261 $ 174
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
5
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
Notes To Consolidated Financial Statements
1. BASIS OF PRESENTATION
---------------------
The financial statements as of June 30, 1995, and for the three
months and for the six months ended June 30, 1995 and 1994, are unaudited. In
the opinion of management of Applied Bioscience International Inc. (the
"Company"), the unaudited financial statements as of June 30, 1995, and for the
three months and for the six months ended June 30, 1995 and 1994, include all
adjustments consisting of normal recurring accruals necessary for a fair
presentation. The results of operations for the interim periods are not
necessarily indicative of the results expected for the full year.
2. SEGMENT RESULTS
Results of the continuing operations by business segment are as
follows (unaudited, dollars in thousands):
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
-------- -------- -------- --------
NET REVENUES
Pharmaco LSR $ 35,164 $ 33,168 $ 68,518 $ 62,880
APBI Environmental Sciences 12,728 11,771 25,147 22,254
--------- --------- --------- ---------
Total $ 47,892 $ 44,939 $ 93,665 $ 85,134
========= ========= ========= =========
OPERATING INCOME
Pharmaco LSR $ 1,589 $ 2,196 $ 3,151 $ 3,264
APBI Environmental Sciences 2,477 2,753 4,929 5,290
Corporate and other (2,160) (2,564) (4,707) (5,019)
--------- --------- --------- ---------
Total $ 1,906 $ 2,385 $ 3,373 $ 3,535
========= ========= ========= =========
3. DISCONTINUED OPERATIONS
-----------------------
As of December 31, 1993, APBI adopted a plan to divest ETC, its
analytical laboratory division. In connection with the plan, APBI wrote down its
investment in ETC to estimated net realizable value and provided for losses
until its expected disposition. On August 3, 1994, the Company's subsidiary APBI
Environmental Sciences Group, Inc. along with PACE, Inc. and Coast-to-Coast
Analytical Services, Inc. each contributed to PACE Incorporated, a newly formed
entity, substantially all of the assets used in their respective environmental
laboratory businesses. This is the first step in the ultimate disposition of
ETC. In the fourth quarter of 1994, the Company recorded additional writedowns
to reduce the carrying value of the investment to the current net realizable
value. In June 1994, the Company adopted a plan to sell, and completed the sale
of, Paragon.
6
4. FINANCING AGREEMENT
-------------------
On May 24, 1994 the Company completed a refinancing of its principal
credit facility. The three-year facility consists of a term loan of $25,000,000
and a secured revolving line of credit of $20,000,000. Approximately 84% or
$21,111,000 of the term loan accrues interest at a fixed rate of 9.25% per annum
and the remainder bears interest at the prime rate plus 1.0%. Repayment of
principal is scheduled to begin on September 1, 1995 at $892,900 per quarter.
The secured revolving line of credit accrues interest at the prime rate plus
1.0%. The proceeds from the loan were used to repay in full the Company's then
existing bank facility and a portion of its other long-term debt and working
capital debt. The unused portion will be used to provide working capital and for
general corporate purposes.
5. NEW ACCOUNTING PRONOUNCEMENT
----------------------------
Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" (SFAS 115), issued in May
1993, changes the accounting treatment of certain equity investments. The
Company implemented SFAS 115 during the first quarter of 1994 with respect to
its investment in the common stock of EnSys. Under SFAS 115, the Company's
investment in EnSys is classified as "available for sale" and is carried at its
fair value of $2,371,000. Unrealized losses of $1,325,000 are reported as a
separate component of stockholders' equity.
6. EARNINGS PER COMMON SHARE
-------------------------
Earnings per common share were computed using the weighted average
number of common stock and common stock equivalents outstanding during the year.
Common equivalent shares are calculated using the treasury stock method and
consist primarily of shares issuable upon exercise of stock options.
7
APPLIED BIOSCIENCE INTERNATIONAL INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
---------------------
General
-------
Applied Bioscience International Inc. (the "Company") recorded net
revenues for the quarter ended June 30, 1995, of $47,892,000, a 6.6% increase
from the second quarter of 1994. Net revenues from the Company's life sciences
business ("Pharmaco LSR") were up 6.0% from the second quarter of 1994. Net
revenues from the Company's Environmental Sciences Group ("APBI Environmental
Sciences Group") were up 8.1% compared to the comparable period last year.
Net income for the second quarter of 1995 was $775,000, or $0.03 per
share compared to $512,000, or $0.02 per share for the second quarter of 1994.
The second quarter net income for 1994 includes a charge of $686,000 or $0.02
per share loss from discontinued operations. The second quarter net income
compares favorably to the net income of $436,000 or $0.02 per share reported in
the first quarter of 1995.
The Company believes, from a strategic standpoint, that its clinical
development services and environmental consulting businesses continue
to provide the best opportunities for profitable growth and enhancement of
shareholder value. As a result, the Company has decided to pursue the
divestiture of its toxicology based business trading as Pharmaco LSR
Toxicology Services World-wide from laboratories in Suffolk, England and
New Jersey, USA. The Company's previously announced divestiture plan with
respect to its Astrix division, which sells and licenses certain software
products, was completed during the second week of August.
The Company in consultation with its outside compensation firm and
ENVIRON's senior management, has been reviewing appropriate incentive
compensation programs for the ENVIRON business unit. As part of such
review, the Company has undertaken to provide significant enhancement
to its Economic Value Added (EVA) plan and to provide a new supplemental
long-term incentive compensation program that utilizes the performance-
related award of stock options or other retention-based awards. The
employment agreements with the four ENVIRON founders will not be continued
after September and their employment, and that of essentially all senior
management and staff, will be on an at-will basis.
Three Months Ended June 30, 1995, versus Three Months Ended June 30, 1994
-------------------------------------------------------------------------
Net revenues increased $2,953,000 (6.6%) to $47,892,000 for the three
months ended June 30, 1995, from $44,939,000 for the three months ended June 30,
1994. Of such increase, $1,996,000 (67.6%) was attributable to the Company's
life sciences business, and $957,000 (32.4%) was attributable to the Company's
environmental sciences business.
The increase in net revenues of Pharmaco LSR was due principally to the
continued increase in demand for the Company's clinical development services.
The clinical development services business in North America and Europe, which
also includes the Company's biostatistical services in North America and Europe,
reported a net revenue increase of $2,073,000 (16.8%) to $14,444,000 for the
three months ended June 30, 1995, from $12,371,000 for the same period last
year. Net revenues from the Company's clinics, labs, and toxicology business
reported a slight decrease of $199,000 (1.0%) to $20,562,000 for the quarter as
compared to $20,761,000 for comparable period last year. Though relatively flat
with last year, second quarter 1995 net revenues for the clinics, labs, and
toxicology business grew 8.5% compared to the first quarter of 1995.
The $957,000 increase in net revenues in the APBI Environmental Sciences
Group resulted from a 13.3% net revenue increase in ENVIRON. Net revenues from
ENVIRON of $12,724,000 were $1,490,000 higher than net revenues of $11,234,000
in the second quarter of 1994. Partially offsetting ENVIRON's net revenue
increase versus last year was $405,000 of net revenue reported in the second
quarter last year without corresponding revenue in the second quarter of 1995
due to a one-time sale of a laboratory software license.
Direct costs increased in the second quarter by $3,121,000 (10.3%) over
the second quarter last year. Of such increase, $1,759,000 was attributable to
Pharmaco
8
LSR and $1,362,000 was attributable to the APBI Environmental Sciences Group.
The increase in the direct costs of Pharmaco LSR relates to the overall increase
in business. The 7.7% increase in direct costs in Pharmaco LSR is slightly
higher than the net revenue increase previously mentioned due to higher
physician costs on fixed priced contracts. Consequently, as a percentage of net
revenue, direct costs of Pharmaco LSR increased to 70.4% in the second quarter
of 1995 as compared to 69.3% during the second quarter last year. In the APBI
Environmental Sciences Group, the percentage of direct costs to net revenues
increased to 68.7% from 62.7%. The increase was principally attributable to the
start up of the new air sciences office in Novato, California, ($480,000) and an
overall increase in staffing by ENVIRON. For comparative purposes, ENVIRON's
performance excluding the Novato operation, reported an increase of direct
costs of 10.3%, which is consistent with the comparable revenue increase of
11.6%. The percentage of direct costs to net revenues in the APBI Environmental
Sciences Group was also adversely affected by $124,000 of cost associated with
the Astrix laboratory software division in the second quarter this year without
a corresponding cost last year.
Selling, general and administrative expenses increased $311,000 (2.6%)
to $12,494,000 in the second quarter of 1995 compared to $12,183,000 for the
same period last year. As a percentage of net revenues, selling, general and
administrative expenses decreased to 26.1% in 1995 compared to 27.1% in 1994.
The lower percentage to net revenues is primarily attributable to lower
marketing costs ($219,000) offset by an increase in general and administrative
expenses of $530,000, reflecting a 5.5% increase compared to last year. The
increase in general and administrative expenses related to depreciation expense
($160,000) associated with the new accounting system and additional staffing and
salary adjustments ($370,000).
Operating income decreased $479,000 (20.1%) to $1,906,000 in the second
three months of 1995 as compared to $2,385,000 for the second three months of
1994. As a percentage of net revenue, operating income decreased to 4.0% in 1995
compared to 5.3% in 1994.
Interest expense, net of interest income, increased to $779,000 in the
second quarter of 1995 from $621,000 in the second quarter of 1994 due
principally to higher interest rates and higher average borrowing levels.
Net income increased to $775,000 for the three months ended June 30, 1995,
compared to $512,000 for the three months ended June 30, 1994.
Six Months Ended June 30, 1995, versus Six Months Ended June 30, 1994
---------------------------------------------------------------------
Net revenues increased $8,531,000 (10.0%) to $93,665,000 for the six
months ended June 30, 1995, from $85,134,000 for the six months ended June 30,
1994. Of such increase, $5,638,000 (66.1%) was attributable to Pharmaco LSR, and
$2,893,000 (33.9%) was attributable to the APBI Environmental Sciences Group.
The increase in net revenues of the life sciences business was due
principally to the continued increase in demand for the Company's clinical
development services. The clinical development services business in North
America and Europe, which also includes the Company's biostatistical services in
North America and Europe, reported a net revenue increase of $5,589,000 (24.2%)
to $28,721,000 for the six months ended June 30, 1995, from $23,132,000 for the
same period last year. Net revenues from the Company's clinics, labs, and
toxicology business reported a slight decrease of $157,000 (0.4%) to $39,514,000
for the half as compared to $39,671,000 for the comparable period last year. Net
revenues in the clinics, labs, and toxicology business were impacted by several
project delays and cancellations at the analytical laboratory in Richmond,
Virginia ($500,000) and lower volume at the toxicology facility in New Jersey
($1,100,000).
The $2,893,000 increase in net revenues in the APBI Environmental Sciences
Group resulted from a 17.0% net revenue increase in ENVIRON. Net revenues from
ENVIRON of $25,135,000 were $3,656,000 higher than net revenues of $21,479,000
in the first half of 1994. Offsetting ENVIRON's net revenue increase versus last
year was a $762,000 decrease relating to the 1994 laboratory software license
revenue ($405,000) as well as other miscellaneous net revenues reported in the
first half last year without corresponding revenue in 1995.
9
Direct costs increased in the first half by $7,411,000 (12.6%) over the
first half of last year. Of such increase, $4,041,000 was attributable to
Pharmaco LSR and $3,370,000 was attributable to the APBI Environmental Sciences
Group. The increase in the direct costs of Pharmaco LSR relates to the overall
increase in business. The 9.0% increase in direct costs in Pharmaco LSR equals
the net revenue increase for the same period. As a percentage of net revenue,
direct costs of the life science business stayed at 71.2% for the first half of
1995 and 1994. In the environmental sciences business, the percentage of direct
costs to net revenues increased to 69.3% from 63.2%. The increase was
attributable to start up of the new air sciences office in Novato, California
($875,000) and increased staffing in other ENVIRON offices to support the
increased volume of business. The number of ENVIRON employees increased from 287
at the end of June 1994 to 331 at the end of June 1995, representing a 15%
increase.
Selling, general and administrative expenses increased $1,282,000
(5.6%) to $24,062,000 in the first half of 1995 compared to $22,780,000 for the
same period last year. As a percentage of net revenues, selling, general and
administrative expenses decreased to 25.7% in 1995 compared to 26.8% in 1994.
The dollar increase was primarily attributable to expenses related to the
Company's investment in a new accounting system and improvements in information
technology. The investments in the form of computer and systems personnel,
higher depreciation and amortization of hardware and software, as well as higher
communications costs, allow the Company to better manage data flow and
collection to improve the overall speed and quality of service to our clients.
Operating income decreased $162,000 (4.6%) to $3,373,000 in the first
six months of 1995 as compared to $3,535,000 for the first six months of 1994.
As a percentage of net revenue, operating income decreased to 3.6% in 1995
compared to 4.2% in 1994.
Interest expense, net of interest income, increased to $1,537,000 in
the first half of 1995 from $1,055,000 in the first half of 1994 due principally
to an increase in the prime rate by approximately three hundred basis points.
Net income increased to $1,211,000 for the six months ended June 30, 1995,
compared to $964,000 for the same period in 1994.
10
Liquidity
---------
During the first half of 1995, the Company expended $5,054,000 for
capital additions. Expenditures included $1,476,000 for expansion and
improvement of offices and laboratory testing facilities and $3,578,000 for new
laboratory, office and computer equipment. Capital expenditures were less than
the comparable period in the prior year and represent a trend toward less
spending on buildings and more on scientific equipment and computer upgrades.
During the second quarter of 1995 the Company sold a building and used the
proceeds to repay approximately $2,000,000 on a mortgage and the revolving
credit facility.
On May 24, 1994, the Company completed a refinancing of its principal
credit facility. The three-year facility consists of a term loan of $25,000,000
and a secured revolving line of credit of $20,000,000. Approximately 84% or
$21,111,000 of the term loan accrues interest at a fixed rate of 9.25% per annum
and the remainder bears interest at the prime rate plus 1.0%. Repayment of the
principal is scheduled to begin on September 1, 1995 at $892,900 per quarter.
The secured revolving line of credit accrues interest at the prime rate plus
1.0%. The variable rate is subject to reduction at March 31, 1995, and each
quarter thereafter if certain covenants related to financial performance are
met. Based on the first quarter of 1995, the variable rate was reduced from 1.5%
to 1.0% over prime. During the first half of 1995 the Company arranged a
$3,000,000 master lease agreement to provide a means to lease rather than
acquire certain equipment for use in the United States without drawing on its
principal credit facility. The unused portion of the loan is available to
provide working capital and for general corporate purposes. As of June 30, 1995,
the Company has $4,927,000 of cash and cash equivalents on hand and has
$18,198,000 available under its lines of credit.
The Company believes that cash flow generated by its own operating
activities, together with its current borrowing capacity, is adequate to finance
its world-wide operations and normal growth of its business. The Company is not
aware of any new trends, events or uncertainties that will have a material
effect on its future liquidity. Accordingly, the Company expects to repay its
outstanding indebtedness through cash generated by its operations, refinancing
of its outstanding indebtedness or some combination thereof. Further growth of
the Company's business also may be funded through additional borrowings, the
sale of non-strategic assets or through issuance of shares of common stock by
the Company.
11
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings.
-----------------
None.
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.
---------------------------------------------------
(a) The 1995 Annual Meeting of Stockholders of the Company was
held on June 22, 1995.
(b) At the Annual Meeting, one director of the Company was
reelected. Frederick Frank was elected to serve for a term
ending at the Annual Meeting of Stockholders to be held in
1998 and until his successor is elected and qualified. The
other members of the Board of Directors, each of whose terms
of office as director continued after the meeting are as
follows: Kenneth H. Harper, Steven A. Fleckman, Frank E. Loy
and Thomas J. Russell.
For Against
Frederick Frank 22,075,857 542,924
(c) At the Annual Meeting, the following proposals also were voted
upon:
(i) The stockholders voted on a proposal to establish a
Stock Option Plan for Outside Directors. The proposal
was approved by the following vote:
For Against Abstain
19,118,079 2,386,145 58,627
(ii) The stockholders voted on a proposal to amend the APBI
Stock Incentive Program (1990) to increase the number
of shares of APBI Common Stock reserved for grants of
options and restricted stock awards under such Program
from 5,000,000 to 6,500,000. The proposal was approved
by the following vote:
For Against Abstain
13,398,978 7,531,997 61,631
(d) Not applicable.
ITEM 5. Other Information.
-----------------
None.
ITEM 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibit No. (11) Computation of Earnings Per Share.
Exhibit No. (27) Financial Data Schedule
(b) Reports on Form 8-K.
None
12
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.
APPLIED BIOSCIENCE INTERNATIONAL INC.
-------------------------------------
(Registrant)
By /s/ Kenneth H. Harper
-----------------------------------
President
(Chief Executive Officer)
By /s/ Jamie G. Donelan
-----------------------------------
Controller
(Chief Accounting Officer)
Date: August 14, 1995
13
INDEX TO EXHIBITS
Sequential
Exhibit Page
Number Number
------- -------
11. Computation of Earnings Per Share
27. Financial Data Schedule