UNITED STATES
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 January 23, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-14429
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Isco, Inc.
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(Exact name of registrant as specified in its charter)
Nebraska 47-0461807
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(State of Incorporation) (I.R.S. Employer Identification No)
4700 Superior Street, Lincoln, Nebraska 68504-1398
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(Address of principal executive offices) (Zip Code)
(402) 464-0231
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of February 27, 1998:
Common Stock, $0.10 par value 5,672,092
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Class Number of Shares
ISCO, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
Number
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited):
Condensed Consolidated Statements of Earnings 3
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
27 - Financial Data Schedule 13
(b) Reports on Form 8-K 12
2
ISCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Amounts in thousands, except per share data)
Three months ended Six months ended
Jan 23 Jan 24 Jan 23 Jan 24
1998 1997 1998 1997
------- ------ ------- -------
Net sales $10,384 $9,846 $21,885 $19,071
Cost of sales 4,545 4,448 9,379 8,604
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5,839 5,398 12,506 10,467
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Expenses:
Selling, general, and administrative 4,817 4,417 9,670 8,734
Research and engineering 1,447 1,103 3,042 2,194
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6,264 5,520 12,712 10,928
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Operating loss (425) (122) (206) (461)
Non-operating income 275 410 498 776
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Earnings (loss) before income taxes (150) 288 292 315
Income tax provision (benefit) (104) 69 46 7
------- ------ ------- -------
Net earnings (loss) $ (46) $ 219 $ 246 $ 308
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Basic earnings (loss) per share $(.01) $.04 $.04 $.06
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------- ------ ------- -------
Diluted earnings (loss) per share $(.01) $.04 $.04 $.06
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Weighted average number of shares outstanding 5,672 5,352 5,593 5,352
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Cash dividend per share $.05 $.05 $.10 $.10
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The accompanying notes are an integral part of the condensed consolidated
financial statements.
3
ISCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Columnar amounts in thousands)
Jan 23 Jul 25
1998 1997
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ASSETS
Current assets:
Cash and cash equivalents $ 6,733 $ 1,810
Short-term investments 3,775 8,813
Accounts receivable - trade, net of allowance
for doubtful accounts of $74,407 and $82,320 8,152 8,456
Inventories (Note 3) 10,985 8,005
Other current assets 2,036 1,874
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Total Current Assets 31,681 28,958
Property, plant, and equipment, net of accumulated
depreciation of $19,523,000 and $17,947,000 11,104 7,144
Long-term investments 1,415 6,602
Other assets 7,302 4,004
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Total Assets $51,502 $46,708
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,011 $ 1,325
Note payable (Note 4) 949 --
Other current liabilities 2,500 2,378
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Total Current Liabilities 5,460 3,703
Long-term notes payable (Note 4) 703 --
Deferred income taxes 536 525
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Total Liabilities 6,699 4,228
Shareholders' equity (Note 5):
Preferred stock, $.10 par value, authorized 5,000,000
shares; issued none
Common stock, $.10 par value,
authorized 15,000,000 shares; issued 6,297,391
and 5,978,538 shares 630 598
Additional paid-in capital 39,458 36,846
Retained earnings 6,362 6,683
Net unrealized holding gain on
available-for-sale securities 14 14
Treasury stock, at cost, 625,299 shares (1,661) (1,661)
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Total Shareholders' Equity 44,803 42,480
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Total Liabilities and Shareholders' Equity $51,502 $46,708
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The accompanying notes are an integral part of the condensed consolidated
financial statements.
4
ISCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Columnar amounts in thousands)
Six months ended
Jan 23 Jan 24
1998 1997
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Cash flows from operating activities:
Net earnings $ 246 $ 308
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 1,202 1,103
Change in operating assets and liabilities 423 (1,894)
Other 73 131
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Total adjustments 1,698 (660)
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Net cash provided by (used for) operating activities 1,944 (352)
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Cash flows from investing activities:
Proceeds from sale of available-for-sale securities 2,674 619
Proceeds from maturity of available-for-sale securities 6,999 771
Proceeds from maturity of held-to-maturity securities 500 770
Proceeds from sale of property, plant, and equipment 128 168
Purchase of available-for-sale securities (34) (441)
Purchase of property, plant, and equipment (3,538) (468)
Disbursements for issuance of notes receivable (350) (100)
Purchase of Suprex assets -- (2,624)
Purchase of Geomation and STIP - Net of cash and cash
equivalents acquired (2,654) --
Other (179) (151)
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Net cash used in investing activities 3,546 (1,456)
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Cash flows from financing activities:
Cash dividends paid (567) (536)
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Net cash used in financing activities (567) (536)
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Cash and cash equivalents:
Net increase (decrease) 4,923 (2,344)
Balance at beginning of year 1,810 4,420
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Balance at end of period $ 6,733 $ 2,076
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During the six months ended January 23, 1998 and January 24, 1997, the
Company made income tax payments of approximately $477,000 and $423,000,
respectively.
The accompanying notes are an integral part of the condensed consolidated
financial statements.
5
ISCO, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Columnar amounts in thousands, except per share data)
January 23, 1998
NOTE 1: In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all the adjustments necessary for a
fair presentation of the financial position of the Company and the results of
operations for the interim periods presented herein. All such adjustments are
of a normal recurring nature. Results of operations for the current unaudited
interim period are not necessarily indicative of the results which may be
expected for the entire fiscal year. All significant inter-company
transactions and accounts have been eliminated.
While the Company believes that the disclosures presented are adequate to make
the information not misleading, it is suggested that these condensed
consolidated financial statements be read in conjunction with the consolidated
financial statements and notes to the consolidated financial statements
included in the Annual Report on Form 10K for the year ended July 25, 1997.
NOTE 2: Certain reclassifications have been made to the prior period's
financial statements to conform to the current period's presentation.
NOTE 3: Inventories are valued at the lower of cost or market, principally on
the last-in, first-out (LIFO) basis. The composition of inventories is as
follows:
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Jan 23, 1998 Jul 25, 1997
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Raw materials $ 4,591 $3,389
Work-in-process 3,462 2,755
Finished goods 2,932 1,861
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$10,985 $8,005
============ ============
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Had inventories been valued on the first-in, first-out (FIFO) basis, they
would have been approximately $1,440,000 and $1,344,000 higher than reported
on the LIFO basis at January 23, 1998 and July 25, 1997, respectively.
NOTE 4: Debt of STIP Siepmann and Teutscher GmbH (STIP) (refer to Note 9)
consists of the following:
Short-term debt:
STIP maintains a revolving credit agreement which provides for borrowing up to
DM2,500,000 (US$1.4 million) guaranteed by the Company. This agreement
provides for interest rates ranging from 5.85 percent to 8.5 percent and
matures in March 1998. The amount outstanding at January 23, 1998 was
DM1,686,000 (US$949,000).
Long-term debt:
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Jan 23, 1998
------------
Note due March 2000, 7.5% $281
Note due June 2003, 7.5% 422
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$703
========
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NOTE 5: On February 19, 1998, the Board of Directors declared a quarterly cash
dividend of $.05 per share, payable April 1, 1998 to shareholders of record on
March 13, 1998.
6
NOTE 6: ACCOUNTING PRONOUNCEMENTS. Statement of Financial Accounting
Standards No. 130 "Report Comprehensive Income", and Statement of Financial
Accounting Standards No. 131 "Disclosure about Segments of an Enterprise and
Related Information", have been issued by the Financial Accounting Standards
Board. The Company does not expect the adoption of these statements to be
material to the consolidated financial statements.
NOTE 7: The Financial Accounting Standards Board issued SFAS 128, "Earnings
Per Share", which is effective for 1998 financial statements presenting
earnings per share information. SFAS 128 requires dual presentation of basic
and diluted earnings per share, as well as restatement of earnings per share
for all periods for which a statement of earnings is presented. Basic earnings
per share data are based on the weighted-average number of common shares
outstanding during the period. Diluted earnings per share data are based on
the weighted-average number of common shares outstanding and the dilutive
effect of stock options and common stock equivalents outstanding using the
treasury stock method. The following table provides a reconciliation between
basic and diluted earnings per share:
Computation of earnings per share
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Three months ended Six months ended
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1/23/98 1/24/97 1/23/98 1/24/97
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Basic earnings per share:
Weighted average number of shares
of common stock outstanding 5,672 5,352 5,593 5,352
Net earnings (loss) $(46) $219 $246 $308
Per share amount $(.01) $.04 $.04 $.06
Diluted earnings per share:
Weighted average number of shares
of common stock outstanding 5,672 5,352 5,593 5,352
Additional shares assuming exercise
of common stock equivalents and
dilutive stock options -- 4 14 2
------ ----- ----- ------
Total 5,672 5,356 5,607 5,354
Net earnings (loss) $(46) $219 $246 $308
Per share amount $(.01) $.04 $.04 $.06
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Options to purchase 320,935 and 133,180 shares of common stock at prices
ranging from $9.18 to $13.04 were outstanding during the periods ended January
23, 1998 and January 24, 1997, respectively. Those options were not included
in the computation of diluted earnings per share because the exercise price was
greater than the average market price of the common shares.
NOTE 8: On September 17, 1997, the Company acquired the remaining
approximately 82 percent of Geomation, Inc., of Golden, Colorado. The
acquisition required approximately $929,000 in cash and the issuance of 318,853
shares of the Company's common stock. The transaction also included an earn-
out provision, which depending upon the performance of Geomation through July
1998, may require the payment of up to approximately $250,000 of additional
cash and the issuance of additional shares of the Company's common stock with a
market value of up to approximately $750,000. The transaction was accounted
for as a purchase with resulting intangibles of approximately $2,093,000 being
amortized over periods ranging from 3 to 15 years. The transaction also
included approximately $302,000 of "purchased R&D" which was expensed in the
first quarter of fiscal 1998.
7
The following unaudited pro forma financial information sets forth the results
of operations of Isco, Inc. as if the acquisition of Geomation had occurred on
July 27, 1996:
Pro forma financial information
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Three months ended Six months ended
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1/23/98 1/24/97 1/23/98 1/24/97
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Net sales $10,384 $10,506 $21,885 $20,400
Net earnings (loss) $(46) $15 $246 $121
Basic earnings (loss) per share $(.01) $.00 $.04 $.02
Weighted average number of
shares outstanding 5,672 5,671 5,607 5,671
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NOTE 9: On December 29, 1997, the Company acquired 100 percent of the STIP
Siepmann and Teutscher GmbH (STIP), of Gross Umstadt, Germany. The share
purchase of STIP required cash of approximately $230,000. STIP produces a
broad line of process monitoring instrumentation designed specifically for
wastewater treatment applications. In a separate and simultaneous transaction,
the Company also acquired 100 percent of the technology covering the products
produced by STIP. This technology was acquired from a partnership owned by
Messrs. Siepmann and Teutscher for cash of approximately $1,690,000. The
acquisition includes an earn-out from January 1, 1998 through December 31,
1999. Based on the performance (with respect to sales and profitability of
STIP) during the earn-out period, the amount of the earn-out payment could
range up to $1.7 million. The transactions are being accounted for as
purchases with the resulting intangibles of approximately $1,690,000 being
amortized over periods ranging from 7 to 15 years.
The following unaudited pro forma financial information sets forth the results
of operations of Isco, Inc. as if the acquisition of STIP had occurred on July
27, 1996:
Pro forma financial information
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Three months ended Six months ended
-------------------- ----------------------
1/23/98 1/24/97 1/23/98 1/24/97
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Net sales $11,384 $11,017 $21,885 $20,400
Net earnings (loss) $(119) $160 $101 $189
Basic earnings (loss) per share $(.02) $.03 $.02 $.04
Weighted average number of
shares outstanding 5,672 5,352 5,593 5,352
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NOTE 10: On January 22, 1998, Zellweger Analytics, Inc. ("Zellweger") filed an
action against the Company in the United States District Court for the Southern
District of Texas in Galveston, Texas, alleging patent and trade dress
infringement involving the EZ TOC product of the Company. Zellweger seeks to
enjoin the Company from making, using, and selling the EZ TOC and seeks
unspecified damages. On January 23, 1998, the Court issued a preliminary
injunction, expiring July 8, 1998, enjoining the Company's production, use, and
sales of EZ TOC. Zellweger is obligated to post a $500,000 bond for the
injunction to become operative.
The Company has filed a Motion to Dismiss the action. Management does not know
at this time whether Zellweger will post a bond and, if it does, what the
effect of the injunction will be. Management believes that the patent upon
which Zellweger bases its action lapses on September 4, 1999. Management does
not believe that the number of EZ TOC products manufactured and sold to date
would subject it to any material damage claims. The Company intends to
vigorously defend the charges and believes that it will ultimately prevail in
this matter.
8
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS CONTAIN TREND ANALYSIS AND 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 COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-LOOKING
STATEMENTS WITHIN THIS DOCUMENT.
SALES ANALYSIS AND REVIEW.
Sales for the three-month and six-month periods, ended January 23, 1998, were
$10,384,000 and $21,885,000, respectively. Included, were Geomation sales of
$307,000 and $637,000 for those periods, respectively. For the periods under
review, sales were five percent and 14 percent higher than for the same periods
one year earlier. Sales of the Company's core products (wastewater samplers,
flow meters, and liquid chromatography products) were flat for the three
months, while for the same period, sales of other products which include:
syringe pumps, supercritical fluid extraction (SFE) products, Geomation
products, and process monitoring products, were 26 percent higher. For the six
months, sales of the core products were up eight percent, while for the same
period, sales of other products were up 41 percent.
The Company's three-month and six-month U.S. sales were up seven percent and 11
percent, respectively, when compared with the same periods last year.
Excluding Geomation sales, the Company's U.S. sales for the same periods were
up six percent and nine percent, respectively. The U.S. sales of the core
products for the same periods were down four percent and up two percent,
respectively. The reduced attention the federal government is directing toward
environmental compliance monitoring is having, what management believes to be,
a short-term negative effect on the wastewater sampler and flow meter sales.
The U.S. sales of the other products, including Geomation products, for the same
periods were up 99 percent and 82 percent, respectively. The realignment of
the Company's U.S. sales force along product lines, recognizing specialized
market expertise of sales staff, is showing much success in the area of new and
non-core products.
The Company's three-month and six-month international sales were flat and up 24
percent, respectively, when compared with the same periods last year.
Excluding Geomation sales, the Company's international sales for the same
periods were down nine percent and up 18 percent, respectively. International
sales of the core products for the same periods were up 12 percent and 31
percent, respectively. International sales of the other products, including
Geomation products, for the same periods were down 18 percent and up nine
percent, respectively. Management believes that initiatives begun last fiscal
year to provide more sales and marketing support for the Company's
international dealers is being successful and that the Company has large
opportunities to gain international market share.
Net orders for the three months and six months were $10.4 million and $21.3
million, respectively. Orders were four percent higher for each of the periods
compared with the same periods one year ago. During the current year's
reporting periods, orders received by Geomation were $400,000 and $800,000,
respectively. At mid-year, the Company's order backlog, including $572,000 and
$653,000, respectively, of Geomation and STIP, was $4.4 million, 13 percent
higher than at the beginning of the fiscal year, prior to the acquisition of
Geomation and STIP.
OPERATING INCOME ANALYSIS AND REVIEW.
For the three months and six months ended January 23, 1998, the Company,
including Geomation operations, had operating losses of $425,000 and $206,000,
respectively. This compares with operating losses of $122,000 and $461,000,
respectively, for the same periods last year. For the same periods, the gross
margin percentage increased 1.4 percent and 2.3 percent, respectively, when
compared with the same periods last year. The improvement in gross margin is
primarily the result of higher levels of production.
Selling, general, and administrative expenses (on a consolidated basis)
increased nine percent and 11 percent, respectively, for the three months and
six months of fiscal 1998 when compared with the same periods last year. The
growth in selling expenses was primarily the result of: increased personnel
expenses (salaries and benefits) which included nine additional employees along
with increased travel expenses to better serve the customers; the planned
increase in more focused advertising; increased commissions on higher sales
volume of manufacturers' representatives and distributors; and the amortization
of intangibles arising out of acquisitions. In the general and administrative
area, the increase included: increased personnel expenses which included three
additional employees; higher continuing education expenses arising out
9
of management's effort to upgrade the computer utilization skills of
employees, company-wide, in preparation for implementing the enterprise
resource planning (ERP) system. The Company incurred significant expenses
related to the implementation of the ERP system. These increased
expenditures will continue into the third fiscal quarter of 1998.
Engineering expenses (on a consolidated basis) increased 31 percent and 38
percent, respectively, for the three months and six months of fiscal 1998 when
compared with the same periods last year. The growth in expenses for the six-
month period includes approximately $302,000 of "purchased R&D" acquired in the
Geomation acquisition. Management's focus on getting new products to market
faster and ensuring that the new products more adequately meet the needs of the
customer has been the driver for the growth in engineering expenses. There has
been a small increase in staff along with a significant increase in
expenditures during the recently completed three months for outside
professional services and consultants to achieve the accelerated pace of
product introduction.
RESULTS OF OPERATIONS.
The following table sets forth, for the three-month and six-month periods
indicated, the percentages which certain components of the Condensed
Consolidated Statements of Earnings bear to net sales and the percentage of
change of such components (based on actual dollars) compared with the same
periods of the prior year.
- --------------------------------------------------------------------------------------------
Three months ended Six months ended
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1/23/98 1/24/97 Change 1/23/98 1/24/97 Change
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Net sales 100.0 100.0 5.5 100.0 100.0 14.8
Cost of sales 43.8 45.2 2.2 42.9 45.1 9.0
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56.2 54.8 8.2 57.1 54.9 19.5
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Expenses:
Selling, general, & administrative 46.4 44.9 9.1 44.2 45.8 10.7
Research & engineering 13.9 11.2 31.2 13.9 11.5 38.6
------- ------- ------- -------
60.3 56.1 13.5 58.1 57.3 16.3
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Operating loss (4.1) (1.2) (248.4) (1.0) (2.4) 55.3
Non-operating income 2.6 4.2 (32.9) 2.3 4.1 (35.9)
------- ------- ------- -------
Earnings before income taxes (1.5) 2.9 -- 1.3 1.7 (7.3)
Income taxes (1.0) .7 -- .2 -- 657.1
------- ------- ------- -------
Net earnings (0.5) 2.2 -- 1.1 1.6 (20.1)
------- ------- ------- -------
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The underlying reasons for the changes in operating income were discussed in
the previous section. The Company's investment income for fiscal year 1998 to-
date is lower than the same period last year due to the liquidation of
investments to improve the Company's computer technological capabilities,
progress payments related to the expansion of the Company's Superior Street
facility, and the acquisition of Geomation, Inc. and STIP Siepmann and
Teutscher, GmbH (STIP). The Company's operating results for the most recent
three-month period were not materially affected by the December 29, 1997
acquisition of STIP.
The effective income tax rate for the six months of fiscal 1998 was 15.7
percent compared with 2.2 percent for the same period last year. The change is
primarily the result of increased taxable income along with lower tax-exempt
income for the period.
FINANCIAL CONDITION AND LIQUIDITY.
At January 23, 1998, the Company's working capital was $26 million. The
Company has in place, with it primary U.S. commercial bank, an unused,
unsecured $3 million line of credit.
10
The Company, after many years of being debt-free, now has both short-term and
long-term debt on its balance sheet. The share purchase of STIP included
retaining on STIP's balance sheet the existing bank loan, with the Company
guaranteeing bank borrowings up to DM2.5 million (US$1.4 million). Also
remaining, in place, were two long-term economic development loans totaling
DM1.25 million (US$703,000) from the State of Hessen, Germany.
During the recent three-month period, the Company's inventories (excluding the
Geomation and STIP inventories of $1,700,000) increased $360,000 as a result of
higher levels of production to meet the forecast customer needs. Excluding
Geomation and STIP, during the recent three-month period the Company's accounts
payable increased $300,000 and other current liabilities decreased $600,000.
The Company will continue to have significant cash needs during the remainder
of calendar year 1998. During this time frame, management expects to complete
the expansion and renovation of the Superior Street facility and the
acquisition of significantly more efficient production machinery, complete the
installation and implementation of the (ERP) system, and the completion of
other business expansion opportunities.
RECENT DEVELOPMENTS.
Management believes that the December 29, 1997 acquisition of STIP Siepmann and
Teutscher GmbH and the related process monitoring instrumentation technologies
will enhance significantly the Company's existing presence in the wastewater
treatment market which includes the total organic carbon and hydrogen sulfide
analyzers. The Company, as the U.S. distributor, now will be able to provide
additional high quality and innovative products to its U.S. customers to
improve their wastewater treatment processes and reduce their operating costs.
Management believes that the Asian monetary crisis will have a small negative
effect upon sales of the Company in the near-term. However, it believes that
in the long-term the Company must maintain and even grow its presence in that
region. This will be accomplished by supporting, through incentives, its key
dealer relationships in the region.
INFLATION.
The effect of inflation on the costs of the Company and its ability to pass on
cost increases in the form of increased prices is dependent upon market
conditions and the competitive environment. The general level of inflation in
the U.S. economy has been relatively low for the past several years and has not
had a significant effect on the Company.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
A. On January 22, 1998, Zellweger Analytics, Inc. ("Zellweger") filed an
action against the Company in the United States District Court for the
Southern District of Texas in Galveston, Texas, alleging patent and
trade dress infringement involving the EZ TOC product of the Company.
Zellweger seeks to enjoin the Company from making, using, and selling
the EZ TOC and seeks unspecified damages. On January 23, 1998, the
Court issued a preliminary injunction, expiring July 8, 1998, enjoining
the Company's production, use, and sales of EZ TOC. Zellweger is
obligated to post a $500,000 bond for the injunction to become operative.
The Company has filed a Motion to Dismiss the action. Management does not
know at this time whether Zellweger will post a bond and, if it does,
what the effect of the injunction will be. Management believes that the
patent upon which Zellweger bases its action lapses on September 4,
1999. Management does not believe that the number of EZ TOC products
manufactured and sold to date would subject it to any material damage
claims. The Company intends to vigorously defend the charges and
believes that it will ultimately prevail in this matter.
11
ITEM 4. Submission of Matters to a Vote of Security Holders.
The Company's annual meeting of shareholders was held on December 11, 1997.
A. The following persons were elected to serve a two-year term on the
Company's Board of Directors:
-----------------------------------------------------------
Votes
-------------------------
Nominee In Favor Withheld
------------------- -------------------------
Robert W. Allington 5,107,654 86,564
James L. Linderholm 5,108,708 86,564
Dale L. Young 5,105,685 86,564
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ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
27 - Financial Data Schedule
(b) Reports on Form 8-K - None
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.
ISCO, INC.
Date: March 4, 1998 BY /s/ Robert W. Allington
---------------------------------
Robert W. Allington, Chairman
Date: March 4, 1998 BY /s/ Philip M. Wittig
----------------------------------
Philip M. Wittig, Treasurer
and Chief Financial Officer
12