SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Period Ended June 30, 2002 Commission File Number 0-10763
Atrion Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 63-0821819
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
One Allentown Parkway, Allen, Texas 75002
(Address of Principal Executive Offices) (Zip Code)
(972) 390-9800
(Registrant's Telephone Number, Including Area Code)
Indicate by check 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.
Number of Shares Outstanding at
Title of Each Class August 9, 2002
- --------------------------------------- -------------------------------
Common stock, Par Value $0.10 per share 1,722,921
ATRION CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
PART I. Financial Information 2
Item 1. Financial Statements
Consolidated Statements of Income (Unaudited)
For the Three and Six Months Ended
June 30, 2002 and 2001 3
Consolidated Balance Sheets
June 30, 2002 (Unaudited) and December 31, 2001 4
Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended
June 30, 2002 and 2001 5
Notes to Consolidated Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
PART II. Other Information 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on
Form 8-K 14
SIGNATURES 15
1
PART I
FINANCIAL INFORMATION
2
ATRION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
---------------------- ----------------------
2002 2001 2002 2001
-------- -------- -------- --------
(In thousands, except per share data)
Revenues $ 14,775 $ 14,776 $ 29,600 $ 29,579
Cost of goods sold 9,648 9,156 19,085 18,286
-------- -------- -------- --------
Gross profit 5,127 5,620 10,515 11,293
-------- -------- -------- --------
Operating expenses:
Selling expense 1,433 1,706 2,836 3,484
General and administrative 1,777 1,923 3,667 3,887
Research and development 516 478 1,057 996
-------- -------- -------- --------
3,726 4,107 7,560 8,367
-------- -------- -------- --------
Operating income 1,401 1,513 2,955 2,926
-------- -------- -------- --------
Other income (expense):
Interest expense, net (88) (76) (199) (192)
Other income 1 430 2 432
-------- -------- -------- --------
(87) 354 (197) 240
-------- -------- -------- --------
Income from continuing operations before
provision for income taxes 1,314 1,867 2,758 3,166
Provision for income taxes 384 599 821 994
-------- -------- -------- --------
Income from continuing operations 930 1,268 1,937 2,172
Gain on disposal of discontinued operations, net
of income taxes 165 165 165 165
-------- -------- -------- --------
Income before cumulative effect of change in
accounting principle 1,095 1,433 2,102 2,337
Cumulative effect of change in accounting
principle, net of income taxes -- -- (1,641) --
-------- -------- -------- --------
Net income $ 1,095 $ 1,433 $ 461 $ 2,337
======== ======== ======== ========
Earnings (loss) per basic share:
Income from continuing operations $ 0.54 $ 0.63 $ 1.13 $ 1.08
Gain on disposal of discontinued operations 0.10 0.08 0.10 0.08
Cumulative effect of change in accounting
principle -- -- (0.96) --
-------- -------- -------- --------
$ 0.64 $ 0.71 $ 0.27 $ 1.16
======== ======== ======== ========
Weighted average basic shares outstanding 1,719 2,023 1,707 2,009
======== ======== ======== ========
Earnings (loss) per diluted share:
Income from continuing operations $ 0.49 $ 0.56 $ 1.02 $ 0.97
Gain on disposal of discontinued operations 0.09 0.07 0.09 0.07
Cumulative effect of change in accounting
principle -- -- (0.87) --
-------- -------- -------- --------
$ 0.58 $ 0.63 $ 0.24 $ 1.04
======== ======== ======== ========
Weighted average diluted shares outstanding 1,890 2,277 1,894 2,239
======== ======== ======== ========
The accompanying notes are an integral part of these consolidated statements.
3
ATRION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
Assets 2002 2001
----------- ------------
(unaudited)
(In thousands)
Current assets:
Cash and cash equivalents $ 592 $ 542
Accounts receivable 8,536 7,559
Inventories 11,156 11,114
Prepaid expenses and other 1,485 1,463
-------- --------
21,769 20,678
-------- --------
Property, plant and equipment:
Original cost 40,712 39,866
Less accumulated depreciation and amortization 16,322 14,488
-------- --------
24,390 25,378
-------- --------
Other assets:
Patents 2,555 2,707
Goodwill 9,730 12,216
Other 2,798 3,308
-------- --------
15,083 18,231
-------- --------
$ 61,242 $ 64,287
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 4,896 $ 5,337
Accrued income and other taxes 141 109
-------- --------
5,037 5,446
-------- --------
Long-term debt 14,480 17,125
-------- --------
Other noncurrent liabilities 1,705 2,541
-------- --------
Stockholders' equity:
Common shares, par value $0.10 per share; authorized
10,000,000 shares, issued 3,419,953 shares 342 342
Paid-in capital 8,125 7,991
Retained earnings 62,121 61,660
Treasury shares,1,699,032 in 2002 and 1,732,032
in 2001, at cost (30,568) (30,818)
-------- --------
Total stockholders' equity 40,020 39,175
-------- --------
$ 61,242 $ 64,287
======== ========
The accompanying notes to consolidated financial statements are an integral part
of these Balance Sheets.
4
ATRION CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30
--------------------
2002 2001
------- -------
(In thousands)
Cash flows from operating activities:
Net income $ 461 $ 2,337
Adjustments to reconcile net income to
net cash provided by operating activities:
Goodwill impairment, net of income taxes 1,641 --
Gain on disposal of discontinued operations (165) (165)
Depreciation and amortization 2,142 2,271
Deferred income taxes 119 61
Other 453 (94)
------- -------
4,651 4,410
Change in current assets and liabilities:
Increase in accounts receivable (977) (2,752)
Increase in other current assets (64) (901)
Increase in accounts payable 250 1,207
(Decrease) increase in other current liabilities (659) 253
------- -------
Net cash provided by continuing operations 3,201 2,217
Net cash provided by discontinued operations 165 165
------- -------
3,366 2,382
Cash flows from investing activities:
Property, plant and equipment additions (1,002) (1,283)
Property, plant and equipment sales -- 176
Patent sale -- 428
------- -------
(1,002) (679)
------- -------
Cash flows from financing activities:
Decrease in long-term indebtedness (2,645) (1,880)
Issuance of common stock 331 256
Repurchase of common stock -- (98)
------- -------
(2,314) (1,722)
------- -------
Net change in cash and cash equivalents 50 (19)
Cash and cash equivalents at beginning of period 542 159
------- -------
Cash and cash equivalents at end of period $ 592 $ 140
======= =======
Cash paid for:
Interest $ 215 $ 252
Income taxes $ 191 $ 694
The accompanying notes are an integral part of these consolidated statements.
5
ATRION CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation
In the opinion of management, all adjustments necessary for a fair
presentation of results of operations for the periods presented have been
included in the accompanying unaudited consolidated financial statements
of Atrion Corporation (the "Company"). Such adjustments consist of normal
recurring items. The accompanying financial statements have been prepared
in accordance with the instructions to Form 10-Q and include the
information and notes required by such instructions. Accordingly, the
consolidated financial statements and notes thereto should be read in
conjunction with the financial statements and notes included in the
Company's 2001 Annual Report on Form 10-K.
(2) Intangible Assets
In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS
142, "Goodwill and Other Intangible Assets." Under SFAS 142, goodwill is
no longer subject to amortization, but is now subject to at least an
annual assessment for impairment by applying a fair value-based test. SFAS
142 became effective for the Company on January 1, 2002. Goodwill
amortization, which approximated $603,000 annually, ceased effective
January 1, 2002. The Company has completed the process of performing an
impairment analysis as required by SFAS 142, resulting in a write-down of
goodwill in the first quarter of 2002 of $1.6 million, net of income tax.
The charge reflected a reduction in the goodwill resulting from the
acquisition of Quest Medical in February 1998. The impairment loss was
recorded as the cumulative effect of a change in accounting principle. Net
income before cumulative effect of change in accounting principle for the
three and six months ended June 30, 2002 and net income for the three and
six months ended June 30, 2001 adjusted as though the non-amortization
provisions of SFAS 142 had been in effect for that period are as follows:
Three Months ended Six Months ended
June 30, June 30,
2002 2001 2002 2001
----------------------- -----------------------
(in thousands) (in thousands)
Income before cumulative effect of
change in accounting principle $ 1,095 $ 1,433a $ 2,102 $ 2,337a
Add back: Goodwill amortization, net of
tax -- 106 -- 213
----------------------- -----------------------
Adjusted net income $ 1,095 $ 1,539 $ 2,102 $ 2,550
======================= =======================
Three Months ended Six Months ended
June 30, June 30,
2002 2001 2002 2001
----------------------- -----------------------
Basic net income per share:
Income before cumulative effect of
change in accounting principle $ 0.64 $ 0.71b $ 1.23 $ 1.16b
Add back: Goodwill amortization, net of
tax -- 0.05 -- 0.11
----------------------- -----------------------
Adjusted basic net income per share $ 0.64 $ 0.76 $ 1.23 $ 1.27
======================= =======================
a - includes $273,000, net of tax, one-time gain on a patent sale
b - includes $0.13 per share from a one-time gain on a patent sale
6
ATRION CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Three Months ended Six Months ended
June 30, June 30,
2002 2001 2002 2001
Diluted net income per share:
Income before cumulative effect of
change in accounting principle $0.58 $0.63c $1.11 $1.04c
Add back: Goodwill amortization, net of
tax -- 0.05 -- 0.10
--------------- ---------------
Adjusted diluted net income per share $0.58 $0.68 $1.11 $1.14
=============== ===============
c - includes $0.12 per share from a one-time gain on a patent sale
Intangible assets consist of the following (in thousands, except average
life):
June 30, 2002 December 31, 2001
--------------------------------------------------
Average Gross Gross
Life Carrying Accumulated Carrying Accumulated
(years) Amount Amortization Amount Amortization
---------------------------------------------------------------
Amortized intangible assets:
Patents 12.85 $ 9,250 $6,695 $ 9,250 $6,543
Intangible assets not subject
to amortization:
Goodwill 25 $16,330 $6,600 $16,330 $4,114
Aggregate amortization expense for the six months ended June 30, 2002 was
$152,000.
Estimated amortization expense for each of the years ended December 31, is
as follows (in thousands):
2002 $304
2003 $304
2004 $304
2005 $271
2006 $169
The change in the carrying amounts of goodwill for the six-month period
ended June 30, 2002 is as follows (in thousands):
Balance as of January 1, 2002 $12,216
Impairment loss 2,486
-------
Balance as of June 30, 2002 $ 9,730
=======
7
ATRION CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(3) New accounting pronouncements
In August 2001, FASB issued SFAS 143 "Accounting for Asset Retirement
Obligations." SFAS 143 addresses the recognition and remeasurement of
obligations associated with the retirement of tangible long-lived assets.
SFAS 143 will be effective for the Company's fiscal year beginning January
1, 2003. The Company has not yet determined the impact of adoption of the
pronouncement.
(4) Inventories
Inventories are stated at the lower of cost or market. Cost is determined
by using the first-in, first-out method. The following table details the
major components of inventory (in thousands):
June 30, December 31,
2002 2001
-----------------------------------------------------------------------
Raw materials $ 6,101 $ 6,037
Finished goods 2,836 4,189
Work in process 2,219 888
-----------------------------------------------------------------------
Net inventory $11,156 $11,114
=======================================================================
(5) Earnings per share
The following is the computation for basic and diluted earnings per share
before cumulative effect of change in accounting principle:
Three months ended Six months ended June
June 30, 30,
2002 2001 2002 2001
------------------ ---------------------
(in thousands, except per share amounts)
Income from continuing operations $ 930 $1,268a $1,937 $2,172a
Gain on disposal of discontinued operations 165 165 165 165
------------------ ---------------------
Income before cumulative effect of change
in accounting principle $1,095 $1,433 $2,102 $2,337
================== ==================
Weighted average basic shares outstanding 1,719 2,023 1,707 2,009
Add: Effect of dilutive securities
(options) 171 254 187 230
------------------ ---------------------
Weighted average diluted shares
outstanding 1,890 2,277 1,894 2,239
================== ==================
a - includes $273,000, net of tax, one-time gain on a patent sale
8
ATRION CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
Three months ended June Six months ended June
30, 30,
2002 2001 2002 2001
----------------------- ----------------------
(in thousands, except per share amounts)
Earnings per basic share:
Income from continuing operations $ 0.54 $ 0.63b $ 1.13 $ 1.08b
Gain on disposal of discontinued
operations 0.10 0.08 0.10 0.08
---------------------- ----------------------
Earnings before cumulative effect of
change in accounting principle $ 0.64 $ 0.71 $ 1.23 $ 1.16
====================== ======================
Earnings per diluted share:
Income from continuing operations $ 0.49 $ 0.56c $ 1.02 $ 0.97c
Gain on disposal of discontinued
operations 0.09 0.07 0.09 0.07
---------------------- ----------------------
Earnings before cumulative effect of
change in accounting principle $ 0.58 $ 0.63 $ 1.11 $ 1.04
====================== ======================
b - includes $0.13 per share from a one-time gain on a patent sale
c - includes $0.12 per share from a one-time gain on a patent sale
Outstanding options that were not included in the diluted earnings per
share calculation because their effect would be anti-dilutive totaled
29,500 for each of the three and six-month periods ended June 30, 2002.
9
ATRION CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results for the three months ended June 30, 2002
The Company's consolidated net income for the quarter ended June 30, 2002
was $1.1 million, or $0.64 per basic and $0.58 per diluted share, compared
with consolidated net income of $1.4 million, or $0.71 per basic and $0.63
per diluted share, for the second quarter of 2001. Net income for the
second quarter of 2001 included a one-time gain of $428,000 ($273,000 net
of tax, or $0.13 per basic and $0.12 per diluted share) attributable to
the sale of a patent. The earnings per basic share computations are based
on weighted average basic shares outstanding of 1,718,881 in the 2002
period and 2,022,515 in the 2001 period. The earnings per diluted share
computations are based on weighted average diluted shares outstanding of
1,889,949 in the 2002 period and 2,276,570 in the 2001 period.
Consolidated revenues of $14.8 million for the second quarter of 2002 were
flat compared with revenues of $14.8 million for the second quarter of
2001. A decline in sales of certain products that the Company's customers
distribute through retail outlets was offset by growth in sales of
products used by hospitals and surgeons. Cost of goods sold of $9.6
million for the second quarter of 2002 was 5 percent higher than in the
comparable 2001 period. The increase in cost of goods sold is primarily
related to a shift in product mix to products with lower gross profit
margins.
Gross profit of $5.1 million in the second quarter of 2002 was $493,000,
or 9 percent, lower than in the comparable 2001 period. The Company's
gross profit percentage in the second quarter of 2002 was 34.7 percent of
revenues compared with 38.0 percent of revenues in the second quarter of
2001. This decrease is primarily related to the previously mentioned shift
in product mix.
The Company's second quarter 2002 operating expenses of $3.7 million were
$381,000 lower than the operating expenses for the second quarter of 2001.
This decrease was the result of decreased general and administrative (G&A)
expenses and decreased selling expenses partially offset by an 8 percent
increase in research and development (R&D) expenses in the current year
period. Selling expenses for the second quarter of 2002 were $273,000
lower than selling expenses for the second quarter of 2001 primarily
related to spending controls. G&A expenses for the second quarter of 2002
were $146,000 lower than G&A expenses for the same period in 2001
primarily as a result of a $151,000 reduction in goodwill amortization in
the current year period due to the adoption of SFAS 142 as discussed in
Note 2 to the Company's Consolidated Financial Statements (unaudited)
included herein. Additionally, G&A expense savings from restructuring
certain of the Company's operations partially offset increases in
insurance, wages and benefits. Operating income of $1.4 million in the
second quarter of 2002 was $112,000, or 7 percent, lower than the
operating income in the second quarter of 2001.
Net interest expense for the second quarter of 2002 was $88,000 compared
to net interest expense of $76,000 for the same period in the prior year.
This slight increase in net interest expense is primarily related to a
significant reduction in interest rates for the 2002 period offset by
higher average borrowings for the second quarter of 2002 as compared with
the second quarter of 2001. Other income for the second quarter of 2002
was $1,000 compared to other income of $430,000 for the same period in the
prior year.
10
This decrease is primarily attributable to the Company's one-time gain of
$428,000 on the sale of a patent in the second quarter of 2001.
Income tax expense for the second quarter of 2002 was $384,000 compared to
income tax expense of $599,000 for the same period in the prior year. The
effective tax rates for the three months ended June 30, 2002 and 2001 were
29.2 percent and 32.1 percent, respectively.
The Company recorded a gain on the disposal of discontinued operations
relating to the sale of its natural gas operations of $165,000 after tax,
or $0.10 per basic and $0.09 per diluted share, for the second quarter of
2002 compared with a gain of $165,000 after tax, or $0.08 per basic and
$0.07 per diluted share, for the second quarter of 2001.
Results for the six months ended June 30, 2002
The Company's consolidated income before cumulative effect of change in
accounting principle for the six months ended June 30, 2002 was $2.1
million, or $1.23 per basic and $1.11 per diluted share, compared with
income before cumulative effect of change in accounting principle of $2.3
million, or $1.16 per basic and $1.04 per diluted share, for the same
period of 2001. Consolidated net income before cumulative effect of change
in accounting principle for the six months ended June 30, 2001 included a
one-time gain of $428,000 ($273,000 net of tax, or $0.13 per basic and
$0.12 per diluted share) attributable to the sale of a patent. As
previously mentioned, the Company adopted SFAS 142 effective January 1,
2002. The required adoption of SFAS 142 is considered a change in
accounting principle and the cumulative effect of adopting this standard
resulted in a $1.64 million, or $0.96 per basic and $0.87 per diluted
share, non-cash, after tax charge in the first quarter of 2002.
Consolidated net income, including the cumulative effect of change in
accounting principle, totaled $461,000, or $0.27 per basic and $0.24 per
diluted share, in the first six months of 2002. This is compared with
consolidated net income of $2.3 million, or $1.16 per basic and $1.04 per
diluted share, in the first six months of 2001. The earnings per basic
share computations are based on weighted average basic shares outstanding
of 1,707,314 in the 2002 period and 2,008,883 in the 2001 period. The
earnings per diluted share computations are based on weighted average
diluted shares outstanding of 1,894,034 in the 2002 period and 2,238,622
in the 2001 period.
Consolidated revenues of $29.6 million for the six months ended June 30,
2002 were flat compared to revenues for the same period of 2001. Growth in
sales of products used by hospitals and surgeons was primarily offset by a
decline in sales of certain products that the Company's customers
distribute through retail outlets. Cost of goods sold of $19.1 million for
the first six months of 2002 was 4 percent higher than in the comparable
2001 period. The increase in cost of goods sold is primarily related to a
shift in product mix to products with lower gross profit margins.
Gross profit of $10.5 million in the first six months of 2002 was
$778,000, or 7 percent, lower than in the comparable 2001 period. The
Company's gross profit percentage for the six months ended June 30, 2002
was 35.5 percent of revenues compared with 38.2 percent of revenues in the
six months ended June 30, 2001. This decrease is primarily related to the
previously mentioned shift in product mix.
11
The Company's operating expenses for the first six months of 2002 of $7.6
million were $807,000 lower than the operating expenses for the comparable
2001 period. This decrease was the result of decreased G&A expenses and
decreased selling expenses partially offset by a 6 percent increase in R&D
expenses in the current six-month period. Selling expenses for the six
months ended June 30, 2002 were $648,000 lower than selling expenses for
the first six months of 2001 primarily related to spending controls. G&A
expenses for the first six months of 2002 were $220,000 lower than G&A
expenses for the same period in 2001 primarily as a result of a $301,000
reduction in goodwill amortization in the current year period due to the
adoption of SFAS 142 as mentioned above. Savings realized from
restructuring certain of the Company's operations partially offset
increases in insurance, outside services, wages and benefits during the
six months ended June 30, 2002. Operating income of $3.0 million in the
first six months of 2002 was $29,000, or 1 percent, higher than the
operating income in the comparable 2001 period.
Net interest expense for the six months ended June 30, 2002 was $199,000
compared to net interest expense of $192,000 for the same period in the
prior year. This slight increase in net interest expense is primarily
related to a significant reduction in interest rates for the 2002 period
offset by higher average borrowings for the first six months of 2002 as
compared with the first six months of 2001. Other income for the six
months ended June 30, 2002 was $2,000 compared to other income of $432,000
for the same period in 2001. This decrease is primarily attributable to
the Company's one-time gain of $428,000 on the sale of a patent in the six
months ended June 30, 2001.
Income tax expense for the six months ended June 30, 2002 was $821,000
compared to income tax expense of $994,000 for the same period in the
prior year. The effective tax rates for the six months ended June 30, 2002
and 2001 were 29.8 percent and 31.4 percent, respectively. The lower
effective tax rate in 2002 is primarily due to the impact of tax credits
on lower income levels.
The Company recorded a gain on the disposal of discontinued operations
relating to the sale of its natural gas operations of $165,000 after tax,
or $0.10 per basic and $0.09 per diluted share, for the first six months
of 2002 compared with a gain of $165,000 after tax, or $0.08 per basic and
$0.07 per diluted share, for the first six months of 2001.
Liquidity and Capital Resources
At June 30, 2002, the Company had cash and cash equivalents of $592,000
compared with $542,000 at December 31, 2001. The Company had borrowings of
$14.5 million under its $25 million revolving credit facility (Credit
Facility) at June 30, 2002 and borrowings of $17.1 million under its
Credit Facility at December 31, 2001. The decrease in long-term debt from
December 31, 2001 to June 30, 2002 is primarily attributable to the
Company's use of cash flows from continuing operations to reduce its
borrowing level. The term of the Credit Facility expires November 12, 2004
and may be extended under certain circumstances. At any time during the
term, the Company may convert any or all outstanding amounts under the
Credit Facility to a term loan with a maturity of two years. The Company's
ability to borrow funds under the Credit Facility from time to time is
contingent on meeting certain covenants in the loan agreement. At June 30,
2002, the Company was in compliance with all financial covenants.
12
Cash flows from continuing operations contributed $3.2 million for the
first six months of 2002. The Company used $1.0 million for the purchase
of equipment and machinery during the six months ended June 30, 2002. As
mentioned above, the level of borrowing under the Company's Credit
Facility was reduced by $2.6 million during the first six months of 2002.
The Company believes that its existing cash and cash equivalents, cash
flows from operations, borrowings available under the Company's credit
facility, supplemented, if necessary, with equity or debt financing, which
the Company believes would be available, will be sufficient to fund the
Company's cash requirements for at least the foreseeable future.
Forward-Looking Statements
The statements in this Management's Discussion and Analysis that are
forward-looking are based upon current expectations, and actual results
may differ materially. Therefore, the inclusion of such forward-looking
information should not be regarded as a representation by the Company that
the objectives or plans of the Company would be achieved. Such statements
include, but are not limited to, the Company's expectations regarding
future liquidity and capital resources. Words such as "anticipates,"
"believes," "expects," "estimated" and variations of such words and
similar expressions are intended to identify such forward-looking
statements. These statements involve risks and uncertainties. The
following are some of the factors that could cause actual results to
differ materially from those expressed in or underlying the Company's
forward-looking statements: changing economic, market and business
conditions; market acceptance of the Company's products; the effects of
governmental regulation; acts of war or terrorism; competition and new
technologies; slower-than-anticipated introduction of new products or
implementation of marketing strategies; changes in the prices or
availability of raw materials; changes in product mix; product liability
claims and product recalls; the ability to attract and retain qualified
personnel and the loss of any significant customer. In addition,
assumptions relating to budgeting, marketing, product development and
other management decisions are subjective in many respects and thus
susceptible to interpretations and periodic review which may cause the
Company to alter its marketing, capital expenditures or other budgets,
which in turn may affect the Company's results of operations and financial
condition.
13
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its 2002 Annual Meeting of Stockholders on May 30, 2002
at its offices in Allen, Texas. At such meeting, the Company's
stockholders ratified the Board of Director's appointment of Grant
Thornton LLP as independent accountants with 1,582,497 shares voted for
ratification, 4,297 voted against and 410 abstentions. The voting with
respect to the nominees for election as directors was as follows:
Nominee Votes For Votes Withheld
------- --------- --------------
Emile A. Battat 1,572,801 14,403
John H. P. Maley 1,572,846 14,358
The terms of the following directors continued after the meeting: Richard
O. Jacobson, Jerome J. McGrath, Hugh J. Morgan, Jr., John P. Stupp, Jr.
and Roger F. Stebbing.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
99.1 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted
Pursuant To Section 906 Of The Sarbanes - Oxley Act Of 2002
99.2 Certification Pursuant To 18 U.S.C. Section 1350, As Adopted
Pursuant To Section 906 Of The Sarbanes - Oxley Act Of 2002
(b) No reports on Form 8-K have been filed during the quarter ended June
30, 2002.
14
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.
Atrion Corporation
------------------
(Registrant)
Date: August 14, 2002 /s/ Emile A. Battat
----------------------------------------
Emile A. Battat
Chairman, President and
Chief Executive Officer
Date: August 14, 2002 /s/ Jeffery Strickland
----------------------------------------
Jeffery Strickland
Vice President and
Chief Financial Officer
15