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 June 30, 1999 Commission File No. 0-6994
------
NEW BRUNSWICK SCIENTIFIC CO., INC.
State of Incorporation - New Jersey E. I. #22-1630072
-----------
44 Talmadge Road, Edison, N.J. 08818-4005
Registrant's Telephone Number: 732-287-1200
------------
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 5,325,552 Common shares outstanding as of August 3, 1999.
1
NEW BRUNSWICK SCIENTIFIC CO., INC.
Index
PAGE NO.
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PART I. FINANCIAL INFORMATION:
Consolidated Balance Sheets - . . . . . . . . . . .
June 30, 1999 and December 31, 1998. . . . . . . . 3
Consolidated Statements of Operations -
Three and Six Months Ended June 30, 1999 and 1998 4
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1999 and 1998. . . . . . 5
Consolidated Statements of Comprehensive Loss -
Three and Six Months Ended June 30, 1999 and 1998. 6
Notes to Consolidated Financial Statements. . . . . 7
Management's Discussion and Analysis of Results
of Operations and Financial Condition. . . . . . . 9
PART II. OTHER INFORMATION . . . . . . . . . . . . 13
2
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)
ASSETS
------
June 30, December 31,
1999 1998
------------ --------------
Current Assets (Unaudited)
- -------------------------------------------------
Cash and cash equivalents . . . . . . . . . . . $ 687 $ 3,793
Accounts receivable, net. . . . . . . . . . . . 11,813 10,230
Refundable income taxes . . . . . . . . . . . . 76 173
Deferred income taxes . . . . . . . . . . . . . 134 134
Inventories:
Raw materials and sub-assemblies. . . . . . . 6,955 7,091
Work-in-process . . . . . . . . . . . . . . . 3,430 3,457
Finished goods. . . . . . . . . . . . . . . . 5,080 5,375
------------ --------------
Total inventories . . . . . . . . . . . . . 15,465 15,923
Prepaid expenses and other current assets . . . 1,794 2,025
------------ --------------
Total current assets. . . . . . . . . . . . . 29,969 32,278
------------ --------------
Property, plant and equipment, net. . . . . . . . 5,696 5,622
Deferred income taxes . . . . . . . . . . . . . . 361 361
Other assets. . . . . . . . . . . . . . . . . . . 1,071 1,062
------------ --------------
$ 37,097 $ 39,323
============ ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
- -------------------------------------------------
Current Liabilities
- -------------------------------------------------
Revolving credit facility . . . . . . . . . . . $ 1,250 $ -
Current installments of long-term debt. . . . . 23 27
Accounts payable and accrued expenses . . . . . 5,376 8,118
------------ --------------
Total current liabilities . . . . . . . . . . 6,649 8,145
------------ --------------
Long-term debt, net of current installments . . . 199 239
------------ --------------
Other liabilities . . . . . . . . . . . . . . . . 492 492
Shareholders' equity:
Common stock, $0.0625 par authorized 25,000,000
shares; outstanding, 1999 - 5,325,552;
1998 - 4,770,444; net of shares held in
treasury, 1999 - 473,069 and 1998 - 430,063. . 333 298
Capital in excess of par. . . . . . . . . . . . 32,827 28,361
Retained earnings . . . . . . . . . . . . . . . (1,262) 3,137
Accumulated other comprehensive loss. . . . . . (1,803) (985)
Notes receivable from exercise of stock options (338) (364)
------------ --------------
Total shareholders' equity. . . . . . . . . . 29,757 30,447
------------ --------------
$ 37,097 $ 39,323
============ ==============
See notes to consolidated financial statements.
3
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
1999 1998 1999 1998
---------- ----------- ----------- ----------
Net sales. . . . . . . . . . . . . . . . . $ 14,591 $ 10,076 $ 26,345 $ 21,026
Operating costs and expenses:
Cost of sales. . . . . . . . . . . . . . 8,396 6,136 16,111 12,975
Selling, general and administrative
expenses. . . . . . . . . . . . . . . . 3,949 3,603 7,619 6,991
Research, development and engineering
expenses. . . . . . . . . . . . . . . . 1,522 1,188 2,893 2,340
---------- ----------- ----------- ----------
Total operating costs and expenses . . 13,867 10,927 26,623 22,306
---------- ----------- ----------- ----------
Income (loss) from operations. . . . . . . 724 (851) (278) (1,280)
Other income (expense):
Interest income. . . . . . . . . . . . . 10 33 24 62
Interest expense . . . . . . . . . . . . (13) (3) (15) (5)
Other income (expense), net. . . . . . . (23) (14) (16) (19)
Equity in loss in joint venture company. (6) - (18) -
---------- ----------- ----------- ----------
(32) 16 (25) 38
---------- ----------- ----------- ----------
Income (loss) before income taxes. . . . . 692 (835) (303) (1,242)
Income tax benefit . . . . . . . . . . . . - (201) - (299)
---------- ----------- ----------- ----------
Net income (loss). . . . . . . . . . . . . $ 692 $ (634) $ (303) $ (943)
========== =========== =========== ==========
Basic earnings (loss) per share. . . . . . $ .13 $ (.12) $ (.06) $ (.18)
========== =========== =========== ==========
Diluted earnings (loss) per share. . . . . $ .13 $ (.12) $ (.06) $ (.18)
========== =========== =========== ==========
Basic weighted average number of
shares outstanding. . . . . . . . . . . . 5,306 5,135 5,285 5,125
========== =========== =========== ==========
Diluted weighted average number of
shares outstanding. . . . . . . . . . . . 5,485 5,135 5,285 5,125
========== =========== =========== ==========
See notes to consolidated financial statements.
4
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
-------------------
1999 1998
--------- --------
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . $ (303) $ (943)
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation . . . . . . . . . . . . . . . . . . 495 507
Change in related balance sheet accounts:
Accounts receivable. . . . . . . . . . . . . . . (2,087) 2,530
Refundable income taxes. . . . . . . . . . . . . 97 (80)
Inventories. . . . . . . . . . . . . . . . . . . 198 (1,714)
Prepaid expenses and other current assets. . . . 153 (100)
Accounts payable and accrued expenses. . . . . . (1,245) (295)
Advance payments from customers. . . . . . . . . (1,260) (120)
--------- --------
Net cash used in operating activities. . . . . . . (3,952) (215)
--------- --------
Cash flows from investing activities:
Additions to property, plant and equipment . . . (717) (729)
Sale of equipment. . . . . . . . . . . . . . . . 25 56
--------- --------
Net cash used in investing activities. . . . . . . (692) (673)
--------- --------
Cash flows from financing activities:
Repayment of long-term debt. . . . . . . . . . . (10) (66)
Borrowings under revolving credit facility . . . 1,250 -
Proceeds from issue of shares under Employee
Stock Purchase Plan . . . . . . . . . . . . . . 49 44
Proceeds from issue of common stock under
stock option plans. . . . . . . . . . . . . . . 329 167
Proceeds from notes receivable related to
exercised stock options . . . . . . . . . . . . 26 -
--------- --------
Net cash provided by financing activities. . . . . 1,644 145
--------- --------
Net effect of exchange rate changes on cash. . . . (106) 6
--------- --------
Net decrease in cash and cash equivalents. . . . . (3,106) (737)
Cash and cash equivalents at beginning of period . 3,793 3,968
--------- --------
Cash and cash equivalents at end of period . . . . $ 687 $ 3,231
========= ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . . . . $ 19 $ 5
Income taxes . . . . . . . . . . . . . . . . . . 75 89
Supplemental disclosure of non-cash financing
activities:
Tax benefit related to exercise of stock options $ 27 $ -
See notes to consolidated financial statements.
5
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
--------------- ----------------
1999 1998 1999 1998
------- ------ -------- ------
Net income (loss). . . . . . . . . . . . . $ 692 $(634) $ (303) $(943)
Other comprehensive income (loss):
Foreign currency translation adjustment. (348) 57 (818) 183
------- ------ -------- ------
Net comprehensive income (loss). . . . . . $ 344 $(577) $(1,121) $(760)
======= ====== ======== ======
See notes to consolidated financial statements.
6
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
(Unaudited)
Note 1 - Interim results:
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting only of normal recurring
accruals) necessary to present fairly, its financial position as of June 30,
1999 and the results of its operations and cash flows for the three and six
months ended June 30, 1999 and 1998. Interim results may not be indicative of
the results that may be expected for the year.
Note 2 - Segment Information:
Three Months Ended Six Months Ended
June 30 . . . . . . . June 30
----------------- ---------------------
Laboratory . . Drug Laboratory Drug
Research . . Lead Research Lead
Equipment.. Discovery Total Equipment Discovery Total
----------- --------- ------ ---------- --------- -----
1999
- -----------------
Net sales from external customers. 12,991 1,600 14,591 24,745 1,600 26,345
Income (loss) from operations. . . (104) 828 724 (466) 188 (278)
Depreciation (1) . . . . . . . . . 236 - 236 495 - 495
1998
- -----------------
Net sales from external customers. 10,076 - 10,076 21,026 - 21,026
Loss from operations . . . . . . . (295) (556) 851 (243) (1,037) (1,280)
Depreciation (1) . . . . . . . . . 175 - 175 507 - 507
<FN>
(1) Depreciation related to the Drug Lead Discovery segment is not allocated
to the segment as the related assets are owned directly by New Brunswick
Scientific Co., Inc. and are included in the Laboratory Research Equipment
Segment. However, rental expense in lieu of depreciation expense is charged to
the Drug Lead Discovery segment which is comprised of DGI BioTechnologies, the
Company's drug lead discovery operation.
Note 3 - Earnings (loss) per Common share:
Basic earnings (loss) per share is calculated by dividing net income (loss) by
the weighted average number of shares outstanding. Diluted earnings (loss) per
share is calculated by dividing net income (loss) by the sum of the weighted
average number of shares outstanding plus the dilutive effect of stock options
which have been issued by the Company unless the effect of the stock options is
antidilutive. The dilutive effect of stock options for the three months ended
June 30, 1999 was 178,870 shares.
7
Note 4 - Credit Agreement:
The Company had a $5 million secured revolving credit agreement with Summit Bank
which was effective through May 31, 1999. On April 16, 1999, the Company
terminated the credit agreement with Summit Bank and entered into an agreement
(the Bank Agreement) with First Union National Bank for a three year, $31
million secured line of credit. The Bank Agreement provides the Company with a
$5 million revolving credit facility for both working capital and for letters of
credit, a $1 million revolving line of credit for equipment acquisition
purposes, a $15 million credit line for acquisitions and a $10 million foreign
exchange facility. There are no compensating balance requirements and any
borrowings under the Bank Agreement bear interest at various rates based upon a
function of the bank's prime rate or Libor at the discretion of the Company.
All of the Company's domestic assets, which are not otherwise subject to lien,
have been pledged as security for any borrowings under the Bank Agreement. The
Bank Agreement contains various business and financial covenants including,
among other things, a debt service coverage ratio, a net worth covenant, and a
ratio of total liabilities to tangible net worth.
Note 5 - Consolidated statements of shareholders' equity:
Six Months Ended
June 30,
----------------------
1999 1998
------- --------
(In thousands)
Balance at beginning of period. . . . . . . . . . $ 30,447 $30,087
Net loss. . . . . . . . . . . . . . . . . . . . . (303) (943)
Other comprehensive income (loss) . . . . . . . . (818) 183
Proceeds from issuance of shares under
stock option plans . . . . . . . . . . . . . . . 329 167
Proceeds from issuance of shares under
Employee Stock Purchase Plan . . . . . . . . . . 49 44
Tax benefit related to exercise of stock options. 27 -
Proceeds from notes receivable related to
exercised stock options. . . . . . . . . . . . . 26 -
------------------ --------
Balance at end of period. . . . . . . . . . . . . $ 29,757 $29,538
================== ========
Note 6 - Stock Dividend
On March 17, 1999, the Company declared a 10% stock dividend, payable May 14,
1999 to shareholders of record as of April 15, 1999. Upon distribution of the
stock dividend, the weighted average number of shares outstanding for the three
and six months ended June 30, 1998 have been restated.
Note 7 - Research and License Agreement
On May 28, 1999, DGI BioTechnologies, LLC., majority owned by the Company,
entered into a Research and License Agreement (the Agreement) with Novo Nordisk
A/S, a corporation based in Denmark (Novo). Under the terms of the Agreement,
DGI granted to Novo a license to use and sell products worldwide under certain
DGI patent rights and technology. In exchange, DGI will receive $1.6 million in
non-refundable license fees of which $1.1 million was paid in July 1999 and the
remaining $500 thousand is due in June 2000. In addition, the Agreement
provides for additional payments if specified development milestones are met and
the payment of royalties on future sales of a Novo product resulting from the
use of DGI's technology.
8
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Forward-looking statements, within the meaning of Section 21E of the Securities
Exchange Act of 1934, are made throughout this Management's Discussion and
Analysis of Financial Condition and Results of Operations. For this purpose,
any statements contained herein that are not statements of historical fact may
be deemed to be forward-looking statements. Without limiting the foregoing, the
words "believes," "anticipates," "plans," "expects," "seeks," "estimates," and
similar expressions are intended to identify forward-looking statements. There
are a number of important factors that could cause the results of the Company to
differ materially from those indicated by such forward-looking statements.
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 and six months ended June 30, 1999.
Results of Operations
---------------------
Quarter Ended June 30, 1999 vs. Quarter Ended June 30, 1998.
- ----------------------------------------------------------------------
For the quarter ended June 30, 1999, net sales were $14,591,000 compared with
net sales of $10,076,000 for the quarter ended June 30, 1998, an increase of
44.8%. Net income for the 1999 quarter of $692,000 or $.13 per diluted share
compared with a net loss of $634,000 or $.12 per diluted share for the second
quarter of 1998.
The increase in sales for the 1999 quarter is primarily attributable to
$1,600,000 of revenues for DGI BioTechnologies LLC. (DGI), the Company's
drug-lead discovery operation, received as a result of its research and license
agreement with Novo Nordisk A/S and significant increases for the Company's
fermentation and cell culture products, particularly in its export and European
markets. Gross margins increased during the quarter ended June 30, 1999 to
42.5% from 39.1% during the quarter ended June 30, 1998 primarily as a result of
the inclusion of $1,600,000 of licensing income for DGI against which there is
no cost of sales and was partially offset by lower margins on its core products
to a significant increase in export sales which carry lower margins than sales
in the U.S. market.
Selling, general and administrative expenses increased 9.6% during the 1999
quarter compared with the first quarter of 1998 as a result of normal year to
year increases, expenses related to the higher level of sales and the
strengthening of the Company's European sales and marketing organization
including the operating costs of Inceltech, the French fermentor manufacturer
acquired by the Company in late 1998.
The increase of 28% in research, development and engineering expenses is
primarily attributable to increased spending of $272,000 by DGI. Interest
income declined during the 1999 quarter due to a lower level of average
available cash. Equity in loss in joint venture company relates to the
Company's interest in NBS Projects, a joint venture with an engineering company,
which provides turnkey bioprocess projects for pharmaceutical and biotechnology
industry customers which began operations in mid-1998. No income tax provision
was provided for the quarter ended June 30, 1999 as a valuation allowance had
been established to offset the deferred tax asset created by the net operating
loss generated in the first quarter of 1999 and which still exists at June 30,
1999 since the Company was still in a net loss position for the six months ended
June 30, 1999.
9
Six Months Ended June 30, 1999 vs. Six Months Ended June 30, 1998.
- ------------------------------------------------------------------------------
For the six months ended June 30, 1999, net sales were $26,345,000 compared with
net sales of $21,026,000 for the six months ended June 30, 1998, an increase of
25.3%. The net loss for the first half of 1999 of $303,000 or $.06 per diluted
share compared with a net loss of $943,000 or $.18 per diluted share for the
first half of 1998.
The increase in net sales for the six months ended June 30, 1999 of 25.3% vs.
the first half of 1998 is primarily attributable to $1,600,000 of revenues for
DGI as a result of its agreement with Novo Nordisk A/S and significant increases
in the Company's shaker, fermentation, cell culture and ultra low freezer
product lines.
Gross margins benefited in the 1999 period from the inclusion in net sales of
the $1,600,000 of licensing income for DGI against which there is no cost of
sales and was partially offset by lower margins on its core products due to a
significant increase in export sales which carry lower margins than sales in the
U.S. market.
Selling, general and administrative expenses increased 9.0% during the 1999
period compared with the first six months of 1998 as a result of normal year to
year increases, expenses related to the higher level of sales and the
strengthening of the Company's European sales and marketing organization
including the operating costs of Inceltech, the French fermentor manufacturer
acquired by the Company in late 1998.
The increase of 23.6% in research, development and engineering expenses is
primarily attributable to increased spending of $375,000 by DGI. Interest
income declined during the 1999 quarter due to a lower level of average
available cash. Equity in loss in joint venture company relates to the
Company's interest in NBS Projects, which began operations in mid-1998. No
income tax benefit was established for the period ended June 30, 1999 as a
valuation allowance was established to offset the deferred tax asset created by
the net operating loss generated in the first six months of 1999.
Financial Condition
-------------------
Liquidity and Capital Resources
- ----------------------------------
Working capital decreased from $24,133,000 at December 31, 1998 to $23,320,000
at June 30, 1999 and cash and cash equivalents decreased from $3,793,000 at
December 31, 1998 to $687,000 at June 30, 1999 as a result of the following:
Cash Flows from Operating Activities
- ----------------------------------------
During the six months ended June 30, 1999 and 1998 net cash used in operating
activities amounted to $3,952,000 and $215,000, respectively. The primary
reasons for the $3,737,000 change between the two periods were an increase in
accounts receivable of $2,087,000 in 1999 vs. a decrease of $2,530,000 in 1998,
a decrease in accounts payable and accrued expenses of $1,245,000 in 1999 vs. a
decrease of $295,000 in 1998 and a decrease in advance payments from customers
in 1999 of $1,260,000 vs. a decrease of $120,000 in 1998 partially offset by a
decrease inventories in 1999 of $198,000 vs. an increase of $1,714,000 in 1998
and the net loss of $303,000 in 1999 vs. a net loss of $943,000 in 1998.
Cash Flows from Investing Activities
- ----------------------------------------
Net cash used in investing activities amounted to $692,000 in 1999 vs. $673,000
in 1998, primarily as a result of additions to property, plant and equipment in
both periods.
10
Cash Flows from Financing Activities
- ----------------------------------------
Net cash provided by financing activities amounted to $1,644,000 in 1999 vs.
$145,000 in 1998. The 1999 amount includes $329,000 from the exercise of stock
options and the 1998 amount includes $167,000 from the exercise of stock options
and the 1999 period includes $1,250,000 of borrowings under the Company's
revolving credit facility partially offset in both periods by the repayment of
long-term debt.
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 the funding commitments for DGI BioTechnologies.
Credit Agreement
- -----------------
The Company had a $5 million secured revolving credit agreement with Summit Bank
which was effective through May 31, 1999. On April 16, 1999, the Company
terminated the credit agreement with Summit Bank and entered into an agreement
(the Bank Agreement) with First Union National Bank for a three year, $31
million secured line of credit. The Bank Agreement provides the Company with a
$5 million revolving credit facility for both working capital and for letters of
credit, a $1 million revolving line of credit for equipment acquisition
purposes, a $15 million credit line for acquisitions and a $10 million foreign
exchange facility. There are no compensating balance requirements and any
borrowings under the Bank Agreement bear interest at various rates based upon a
function of the bank's prime rate or Libor at the discretion of the Company.
All of the Company's domestic assets, which are not otherwise subject to lien,
have been pledged as security for any borrowings under this Bank Agreement. The
Bank Agreement contains various business and financial covenants including,
among other things, a debt service coverage ratio, a net worth calculation, and
a debt to tangible net worth ratio.
Year 2000
- ----------
The Company has no internally developed software that it utilizes for its
operations, but uses Version 11 of Computer Associates ManMan Classic software,
a total MRPII system which it employs for its manufacturing, sales and
accounting needs and Windows NT which is used for the Company's network.
Management believes, based on the representations of the software companies,
that both of these software packages are Year 2000 (Y2K) compliant. In
addition, the Company uses a number of computer controlled machine tools which
are all Y2K compliant.
Most of the Company's products have no date functions and consequently do not
have a Y2K problem with the exception of its process control software products,
which do have date related functions but with one exception are Y2K compliant.
The exception is a now obsolete DOS-based process control system introduced in
1987 for which a Y2K compliant upgrade is available.
The Company has sent letters to the majority of its suppliers and companies
accounted for using the equity method requesting information as to their
readiness for the Y2K and based upon the responses believes that the respondents
are prepared for the Y2K. Any costs, which will be incurred as the result of
the acceleration of purchases due to Y2K considerations, are not material to the
consolidated financial statements.
The Company is in the process of developing business contingency plans to
mitigate the risk of the potential of a noncompliant vendor or system and will
continue to assess its exposure to possible Y2K problems or potential
disruptions. Based upon all of the information it has developed to date,
Management believes that no disruptions will occur in the Company's operations.
However, the Company is subject to financial and other risks should the Company
or a third party vendor or service provider be unable to resolve issues related
to the Year 2000.
11
Costs of addressing the Year 2000 issue have not been material to date and,
based on information gathered to date from the Company and its vendors, are not
currently expected to have a material adverse impact on the Company's
consolidated financial position, results of operations or cash flows.
Euro Conversion
- ----------------
On January 1, 1999, eleven of the fifteen member countries of the European Union
(the "participating countries") - established fixed conversion rates between
their existing sovereign currencies (the "legacy currencies") and the Euro. The
participating countries adopted the Euro as their common legal currency on that
date. As of January 1, 1999, a newly created European Central Bank was
established to control monetary policy, including money supply and interest
rates for the participating countries. The legacy currencies are scheduled to
remain legal tender in the participating countries as denominations of the Euro
between January 1, 1999 and January 1, 2002 (the "transition period"). During
the transition period, public and private parties may pay for goods and services
using either the Euro or the participating country's legacy currency on a "no
compulsion, no prohibition" basis.
The Company has initiated and is evaluating on an on-going basis the effects, if
any, of the Euro conversion upon its business. Factors being considered
include, but are not limited to: the possible impact of the Euro conversion on
revenues, expenses and income from operations, the ability to adapt information
technology to accommodate Euro-denominated transactions, the market risks with
respect to financial instruments, the continuity of material contracts, and the
potential tax consequences.
The Company believes that the Euro-conversion will not have a material
operational or financial impact.
Recent Accounting Pronouncements
- ----------------------------------
In June 1998, Statement of Financial Accounting Standards (SFAS) No. 133
"Accounting for Derivative Instruments and hedging Activities", was issued to
establish standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It
requires that an entity recognizes all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. This statement was effective for all quarters of fiscal years
beginning after June 15, 1999. In June 1999, SFAS No. 137 was issued which
defers the effective date of SFAS No. 133 so that it is effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000. The company does
not believe that this statement will have a material impact on the financial
statements.
12
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ------------------------------------------------
The exhibits to this report are listed on the Exhibit Index included elsewhere
herein.
No reports on Form 8-K have been filed during the quarter ended June 30, 1999.
13
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.
NEW BRUNSWICK SCIENTIFIC CO., INC.
--------------------------------------
(Registrant)
Date: August 16, 1999 /s/ Ezra Weisman
------------------
Ezra Weisman
President
(Chief Executive Officer)
/s/ Samuel Eichenbaum
-----------------------
Samuel Eichenbaum
Vice President - Finance
(Principal Accounting Officer)
14
NEW BRUNSWICK SCIENTIFIC CO., INC. AND SUBSIDIARIES
EXHIBIT INDEX
- -----------------
Exhibit No Exhibit Page No.
- ---------- ------- --------
Research and Licensing Agreement
Between DGI BioTechnologies LLC.
And Novo Nordisk A/S dated May 28
1999 [Confidential portions of this
document have been omitted and
filed separately with the Commission
pursuant to a confidential treatment
10.18 request by Registrant] 1
Credit Agreement Between New
Brunswick Scientific Co., Inc. and
First Union National Bank dated
10.19 April 1, 1999 1
Financial Data Schedule
27 (Filed electronically with SEC only) 1
15