x
|
Quarterly
Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of
1934 for the Quarterly Period Ended June 30,
2008
|
o
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the Transition Period
from to
|
Delaware
|
63-0821819
|
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification No.)
|
Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller reporting company o |
Title
of Each Class
|
Number
of Shares Outstanding at
July
30, 2008
|
|
Common
stock, Par Value $0.10 per share
|
1,967,285
|
2
|
||
Item
1.
|
||
3
|
||
4
|
||
5
|
||
6
|
||
Item
2.
|
8
|
|
Item 3.
|
12
|
|
Item
4.
|
13
|
|
PART II. Other Information |
14
|
|
Item
1.
|
14
|
|
Item
1A.
|
14
|
|
Item
4.
|
14
|
|
Item
6.
|
14
|
|
15
|
Three
Months Ended
June 30,
|
Six
Months Ended
June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||
Revenues
|
$ | 24,242 | $ | 23,199 | $ | 48,844 | $ | 46,237 | ||||||||
Cost
of goods sold
|
13,137 | 12,880 | 27,059 | 26,258 | ||||||||||||
Gross
profit
|
11,105 | 10,319 | 21,785 | 19,979 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Selling
|
1,646 | 1,672 | 3,345 | 3,323 | ||||||||||||
General
and administrative
|
2,505 | 2,471 | 5,245 | 5,088 | ||||||||||||
Research
and development
|
823 | 750 | 1,610 | 1,405 | ||||||||||||
4,974 | 4,893 | 10,200 | 9,816 | |||||||||||||
Operating
income
|
6,131 | 5,426 | 11,585 | 10,163 | ||||||||||||
Other
income:
|
||||||||||||||||
Interest
income
|
49 | 10 | 85 | 20 | ||||||||||||
Interest
expense
|
-- | (77 | ) | -- | (218 | ) | ||||||||||
Other
income (expense), net
|
1 | -- | 1 | -- | ||||||||||||
50 | (67 | ) | 86 | (198 | ) | |||||||||||
Income
before provision for income taxes
|
6,181 | 5,359 | 11,671 | 9,965 | ||||||||||||
Provision
for income taxes
|
(2,046 | ) | (1,741 | ) | (3,880 | ) | (3,210 | ) | ||||||||
Net
income
|
$ | 4,135 | $ | 3,618 | $ | 7,791 | $ | 6,755 | ||||||||
Income
per basic share
|
$ | 2.11 | $ | 1.92 | $ | 4.00 | $ | 3.60 | ||||||||
Weighted
average basic shares outstanding
|
1,956 | 1,883 | 1,946 | 1,878 | ||||||||||||
Income
per diluted share
|
$ | 2.06 | $ | 1.83 | $ | 3.89 | $ | 3.42 | ||||||||
Weighted
average diluted shares outstanding
|
2,005 | 1,978 | 2,004 | 1,977 | ||||||||||||
Dividends
per common share
|
$ | 0.24 | $ | 0.20 | $ | 0.48 | $ | 0.40 |
June 30,
|
December 31,
|
|||||||
Assets
|
2008
|
2007
|
||||||
(in
thousands, except per share amounts)
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 7,803 | $ | 3,531 | ||||
Accounts
receivable
|
12,116 | 9,601 | ||||||
Inventories
|
20,231 | 17,387 | ||||||
Prepaid
expenses
|
1,167 | 1,483 | ||||||
Other
|
607 | 607 | ||||||
41,924 | 32,609 | |||||||
Property,
plant and equipment
|
92,819 | 89,736 | ||||||
Less
accumulated depreciation and amortization
|
38,187 | 35,686 | ||||||
54,632 | 54,050 | |||||||
Other
assets and deferred charges:
|
||||||||
Patents
|
1,853 | 2,011 | ||||||
Goodwill
|
9,730 | 9,730 | ||||||
Other
|
1,102 | 913 | ||||||
12,685 | 12,654 | |||||||
$ | 109,241 | $ | 99,313 | |||||
Liabilities and
Stockholders’ Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued liabilities
|
$ | 6,473 | $ | 6,349 | ||||
Accrued
income and other taxes
|
1,862 | 515 | ||||||
8,335 | 6,864 | |||||||
Line
of credit
|
-- | -- | ||||||
Other
non-current liabilities
|
7,150 | 7,007 | ||||||
Stockholders’
equity:
|
||||||||
Common
shares, par value $0.10 per share; authorized 10,000 shares, issued 3,420
shares
|
342
|
342
|
||||||
Paid-in
capital
|
18,674 | 15,790 | ||||||
Accumulated
other comprehensive loss
|
(486 | ) | (486 | ) | ||||
Retained
earnings
|
110,865 | 104,021 | ||||||
Treasury
shares,1,453 at June 30, 2008 and 1,509 at December 31, 2007, at
cost
|
(35,639
|
) | (34,225 | ) | ||||
Total
stockholders’ equity
|
93,756 | 85,442 | ||||||
$ | 109,241 | $ | 99,313 |
Six
months Ended
June 30,
|
||||||||
2008
|
2007
|
|||||||
|
(In thousands) | |||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 7,791 | $ | 6,755 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
3,054 | 2,637 | ||||||
Deferred
income taxes
|
242 | 333 | ||||||
Stock-based
compensation
|
327 | 131 | ||||||
Other
|
37 | 35 | ||||||
11,451 | 9,891 | |||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(2,515 | ) | (1,026 | ) | ||||
Inventories
|
(2,844 | ) | 140 | |||||
Prepaid
expenses
|
316 | 303 | ||||||
Other
non-current assets
|
(189 | ) | (35 | ) | ||||
Accounts
payable and current liabilities
|
125 | 294 | ||||||
Accrued
income and other taxes
|
1,347 | 572 | ||||||
Other
non-current liabilities
|
(98 | ) | 118 | |||||
7,593 | 10,257 | |||||||
Cash
flows from investing activities:
|
||||||||
Property,
plant and equipment additions
|
(3,515 | ) | (3,758 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Line
of credit advances
|
-- | 13,826 | ||||||
Line
of credit repayments
|
-- | (20,525 | ) | |||||
Exercise
of stock options
|
525 | 499 | ||||||
Shares
tendered for employees’ taxes on stock option exercises
|
(870 | ) | (47 | ) | ||||
Tax
benefit related to stock options
|
1,481 | 456 | ||||||
Dividends
paid
|
(942 | ) | (756 | ) | ||||
194 | (6,547 | ) | ||||||
Net
change in cash and cash equivalents
|
4,272 | (48 | ) | |||||
Cash
and cash equivalents at beginning of period
|
3,531 | 333 | ||||||
Cash
and cash equivalents at end of period
|
$ | 7,803 | $ | 285 | ||||
Cash
paid for:
|
||||||||
Interest
(net of capitalization)
|
$ | -- | $ | 258 | ||||
Income
taxes
|
$ | 261 | $ | 1,220 |
(1)
|
Basis
of Presentation
|
(2)
|
Inventories
|
June 30,
2008
|
December 31,
2007
|
|||||||
Raw
materials
|
$ | 8,384 | $ | 7,452 | ||||
Work
in process
|
5,378 | 4,513 | ||||||
Finished
goods
|
6,469 | 5,422 | ||||||
Total
inventories
|
$ | 20,231 | $ | 17,387 |
(3)
|
Income
per share
|
(1)
|
Three
months ended
June 30,
|
Six
months ended
June 30,
|
||||||||||||||
(2)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
(3)
|
(in
thousands, except per share amounts)
|
|||||||||||||||
Net
income
|
$ | 4,135 | $ | 3,618 | $ | 7,791 | $ | 6,755 | ||||||||
Weighted
average basic shares outstanding
|
1,956 | 1,883 | 1,946 | 1,878 | ||||||||||||
Add: Effect
of dilutive securities
|
49 | 95 | 58 | 99 | ||||||||||||
Weighted
average diluted shares outstanding
|
2,005 | 1,978 | 2,004 | 1,977 | ||||||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ | 2.11 | $ | 1.92 | $ | 4.00 | $ | 3.60 | ||||||||
Diluted
|
$ | 2.06 | $ | 1.83 | $ | 3.89 | $ | 3.42 |
(4)
|
Pension
Benefits
|
Three
Months ended
June 30,
|
Six
Months ended
June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Service
cost
|
$ | -- | $ | 65 | $ | -- | $ | 130 | ||||||||
Interest
cost
|
56 | 80 | 112 | 160 | ||||||||||||
Expected
return on assets
|
(55 | ) | (123 | ) | (110 | ) | (246 | ) | ||||||||
Prior
service cost amortization
|
-- | (9 | ) | -- | (18 | ) | ||||||||||
Actuarial
loss
|
8 | 15 | 16 | 30 | ||||||||||||
Net
periodic pension cost
|
$ | 9 | $ | 28 | $ | 18 | $ | 56 |
(5)
|
Recent
Accounting Pronouncements
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
|
·
|
Focusing
on customer needs;
|
|
·
|
Expanding
existing product lines and developing new
products;
|
|
·
|
Maintaining
a culture of controlling cost; and
|
|
·
|
Preserving
and fostering a collaborative, entrepreneurial management
structure.
|
Three
Months ended
June 30,
|
||||||||
2008
|
2007
|
|||||||
Fluid
Delivery
|
$ | 8,648 | $ | 7,533 | ||||
Cardiovascular
|
7,116 | 6,009 | ||||||
Ophthalmology
|
3,588 | 4,863 | ||||||
Other
|
4,890 | 4,794 | ||||||
Total
|
$ | 24,242 | $ | 23,199 |
Six
Months ended
June 30,
|
||||||||
2008
|
2007
|
|||||||
Fluid
Delivery
|
$ | 16,896 | $ | 14,747 | ||||
Cardiovascular
|
14,584 | 12,061 | ||||||
Ophthalmology
|
7,368 | 9,517 | ||||||
Other
|
9,996 | 9,912 | ||||||
Total
|
$ | 48,844 | $ | 46,237 |
Quantitative
and Qualitative Disclosures About Market
Risk
|
Controls
and Procedures
|
Legal
Proceedings
|
Risk
Factors
|
Submission
of Matters to a Vote of Security
Holders
|
Nominee
|
Votes
For
|
Votes
Withheld
|
Emile A. Battat
|
1,716,449
|
58,975
|
Ronald N. Spaulding
|
1,366,343
|
409,081
|
Exhibits
and Reports on Form 8-K
|
(a)
|
Exhibits
|
|
2006
Equity Incentive Plan (As last amended on May 9, 2008)
|
||
Sarbanes-Oxley
Act Section 302 Certification of Chief Executive
Officer
|
||
Sarbanes-Oxley
Act Section 302 Certification of Chief Financial
Officer
|
||
Certification
Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
The Sarbanes – Oxley Act Of 2002
|
||
Certification
Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
The Sarbanes – Oxley Act Of 2002
|
||
(b)
|
Reports
on Form 8-K
|
Date: August
8, 2008
|
/s/ Emile A. Battat
|
Emile A. Battat
|
|
Chairman
and
|
|
Chief
Executive Officer
|
|
Date: August
8, 2008
|
/s/ Jeffery Strickland
|
Jeffery
Strickland
|
|
Vice
President and
|
|
Chief
Financial Officer
|