SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Quarter Ended March 31, 1997 Commission File No. 0-6994
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NEW BRUNSWICK SCIENTIFIC CO., INC.
State of Incorporation - New Jersey E. I. #22-1630072
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44 Talmadge Road, Edison, N.J. 08818-4005
Registrant's Telephone Number: 732-287-1200
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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 twelve (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 ninety (90) days.
Yes [X] No [ ]
There are 3,809,982 Common shares outstanding as of May 5, 1997.
NEW BRUNSWICK SCIENTIFIC CO., INC.
Index
PAGE NO.
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PART I. FINANCIAL INFORMATION:
Item 1:
Consolidated Condensed Balance Sheets -
March 31, 1997 and December 31, 1996 3
Consolidated Statements of Operations -
Three Months Ended March 31, 1997 and 1996 4
Consolidated Condensed Statements of
Cash Flows - Three Months Ended March 31, 1997 and 1996 5
Notes to Consolidated Condensed Financial
Statements 6
Item II:
Management's Discussion and Analysis of Results
of Operations and Financial Condition 7
PART II. OTHER INFORMATION 9
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except for share data)
ASSETS
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March 31, December 31,
1997 1996
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Current Assets (Unaudited)
Cash and cash equivalents $ 3,871 $ 5,196
Accounts receivable, net 8,404 10,108
Refundable income taxes 107 334
Deferred income tax benefit 97 97
Inventories:
Raw materials and sub-assemblies 6,940 6,762
Work-in-process 3,022 2,327
Finished goods 4,161 3,891
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Total inventories 14,123 12,980
Prepaid expenses and other current assets 2,213 1,880
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Total current assets 28,815 30,595
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Property, plant and equipment, net 5,599 5,701
Other assets 1,242 930
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$35,656 $37,226
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current Liabilities
Current installments of long-term debt $ 133 $ 135
Accounts payable and accrued expenses 6,335 7,014
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Total current liabilities 6,468 7,149
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Long-term debt, net of current installments 344 401
Other liabilities 425 425
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Shareholders' equity:
Common stock, $.0625 par, authorized 25,000,000
shares; shares issued and outstanding,
1997 - 3,809,982 and 1996 - 3,808,932 net of
shares held in treasury, 1997 and 1996 - 355,425 238 238
Capital in excess of par 20,781 20,738
Retained earnings 8,764 9,092
Currency translation adjustment (939) (392)
Pension liability adjustment (425) (425)
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Total shareholders' equity 28,419 29,251
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$35,656 $37,226
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See notes to consolidated condensed financial statements.
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
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1997 1996
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Net sales $10,095 $9,707
Operating costs and expenses:
Cost of sales 6,382 5,980
Selling, general and administrative expenses 3,148 2,934
Research, development and engineering expenses 1,001 763
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Total operating costs and expenses 10,531 9,677
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Income (loss) from operations (436) 30
Other income (expense):
Interest income 33 51
Interest expense (8) (12)
Other income (expense), net 1 (1)
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26 38
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Income (loss) before income taxes (410) 68
Income taxes (benefit) (82) 14
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Net income (loss) $ (328) $ 54
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Earnings (loss) per Common share $ (.09) $ .01
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Weighted average number of shares outstanding 3,809 3,775
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See notes to consolidated condensed financial statements.
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
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1997 1996
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Cash flows from operating activities:
Net income (loss) $ (328) $ 54
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation 201 162
Change in related balance sheet accounts:
Accounts receivable 1,348 925
Refundable income taxes 227 -
Inventories (1,362) (690)
Prepaid expenses and other current assets (407) (188)
Accounts payable and accrued expenses 146 167
Advance payments from customers (696) (59)
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Net cash provided (used) by operating activities (871) 371
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Cash flows from investing activities:
Additions to property, plant and equipment (198) (648)
Investment (250) -
Sale of equipment - 1
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Net cash used by investing activities (448) (647)
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Cash flows from financing activities:
Repayment of long-term debt (25) (26)
Discount from fair market value upon issuance
of options under stock option plan for
nonemployee directors 35 -
Proceeds from issue of Common stock under
stock option plan for nonemployee directors 8 -
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Net cash provided (used) by financing activities 18 (26)
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Net effect of exchange rate changes on cash (24) (53)
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Net decrease in cash and cash equivalents (1,325) (355)
Cash and cash equivalents at beginning of period 5,196 6,382
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Cash and cash equivalents at end of period $ 3,871 $ 6,027
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Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 8 $ 7
Income taxes 69 3
See notes to consolidated condensed financial statements.
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Interim Results:
In the opinion of the Company, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting only of normal
recurring accruals) necessary to present fairly, its financial position as of
March 31, 1997 and the results of its of its operations and cash flows for the
three months ended March 31, 1997 and 1996. Interim results may not be
indicative of the results that may be expected for the year.
Note 2 - Earnings per share:
Earnings per Common share are based on the weighted average number of shares
outstanding. Stock options are not included in the calculation as they had no
significant dilutive effect on earnings per share.
Note 3 - Consolidated Condensed Statements of Shareholders' Equity:
Three Months Ended
March 31,
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1997 1996
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(In thousands)
Balance at beginning of period $29,251 $28,181
Net income (loss) (328) 54
Currency translation adjustment (547) (179)
Discount from fair market value upon issuance
of options under stock option plan
for nonemployee directors 35 -
Issue of shares under stock option plan
for nonemployee directors 8 -
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Balance at end of period $28,419 $28,056
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NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The following is Management's discussion and analysis of significant factors
that have affected the Company's operating results and financial condition
during the quarter ended March 31, 1997.
Results of Operations
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Quarter Ended March 31, 1997 vs. Quarter Ended March 31, 1996.
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For the quarter ended March 31, 1997, net sales were $10,095,000 compared with
net sales of $9,707,000 for the quarter ended March 31, 1996. There was a net
loss for the 1997 quarter of $328,000 or $.09 per share compared with net income
of $54,000 or $.01 per share for the first quarter of 1996. The loss for the
1997 quarter was primarily attributable to research, development and engineering
expenses which increased to $1,001,000 in the 1997 quarter from $763,000 in the
1996 quarter to support the operations of DGI BioTechnologies, the Company's
drug lead discovery operation and to a decrease in gross margin due to the
effects of foreign currency exchange rate fluctuations on the Company's European
operations.
Financial Condition
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Liquidity and Capital Resources
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During the period ended March 31, 1997, Cash and Cash Equivalents decreased to
$3,871,000 from $5,196,000 at December 31, 1996. The decrease in cash resulted
primarily from an increase in inventories from $12,980,000 at December 31, 1996
to $14,123,000 at March 31, 1997 of which $695,000 was in work-in-process
inventory in preparation for the introduction of new products; the net loss for
the quarter of $328,000; an increase in prepaid expenses and other current
assets of $333,000 and a reduction in accounts payable and accrued expenses of
$679,000 for the quarter, partially offset by a decrease in accounts receivable
to $8,404,000 at March 31, 1997 from $10,108,000 at December 31, 1996. The
decrease in accounts receivable, resulted from the lower volume of sales during
the quarter ended March 31, 1997 as compared with the quarter ended December 31,
1996.
Cash Flows from Operating Activities
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During the period ended March 31, 1997, net cash used by operating activities
amounted to $871,000 compared with net cash provided of $371,000 for the quarter
ended March 31, 1996. The primary reasons for the $1,242,000 negative change
between the two periods were the following: (a) inventories increased $1,362,000
in 1997 vs. a decrease of $690,000 in 1996: (b) prepaid expenses and other
current assets increased $407,000 in 1997 vs. an increase of $188,000 in 1996;
c) advance payments from customers decreased $696,000 in 1997 vs. a decrease of
$59,000 in 1996 and there was a net loss of $328,000 in 1997 vs. net income of
$54,000 in 1996 and were partially offset by a decrease in accounts receivable
of $1,348,000 in 1997 vs. a decrease of $925,000 in 1996.
Cash Flows from Investing Activities
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Net cash used by investing activities amounted to $448,000 in 1997 vs. $647,000
in 1996, as a result of additions to property, plant and equipment and from an
investment in another entity in
1997. A significant portion of the 1996 capital additions were attributable to
building laboratories and purchasing equipment for DGI BioTechnologies.
Cash Flows from Financing Activities
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Net cash provided by financing activities amounted to $18,000 in 1997 vs.
$26,000 of net cash used in 1996. The 1997 amount includes $35,000 related to
the discount from fair market value upon issuance of options under the Company's
stock option plan for nonemployee directors.
Management believes that the resources available to the Company, including its
line of credit are sufficient to meet its near and intermediate-term needs,
including funding commitments for DGI BioTechnologies, and its strong
unleveraged balance sheet and debt-free real estate provide the basis for any
long-term financing if the need should arise.
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits
(10-18) Distribution Agreement with Fisher Scientific Company
dated January 1, 1997.
(10-19) Amendment dated March 13, 1997, to Loan and Security
Agreement with Summit Bank, the successor to United
Jersey Bank/Central NA dated February 17, 1993.
(b) No reports on Form 8-K have been filed during the quarter ended March
31, 1997.
SIGNATURES
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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.
NEW BRUNSWICK SCIENTIFIC CO., INC.
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(Registrant)
Date: May 5, 1997 /s/ Ezra Weisman
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Ezra Weisman
President
(Chief Executive Officer)
/s/ Samuel Eichenbaum
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Samuel Eichenbaum
Vice President - Finance
(Principal Accounting Officer)