FORM 10-Q
United States
Securities and Exchange Commission
Washington, D. C. 20549
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: November 30, 2002
OR
_ Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number: 0-14820
IMMUCOR, INC.
(Exact name of registrant as specified in its charter)
Georgia 22-2408354
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3130 Gateway Drive P.O. Box 5625 Norcross, Georgia 30091-5625
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (770) 441-2051
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 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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As of December 31, 2002: Common Stock, $0.10 Par Value - 12,603,252
IMMUCOR, INC.
CONSOLIDATED BALANCE SHEETS
- ---------------------------------------------------------------------------------------------------------------------------------
November 30, 2002 May 31, 2002
-------------------------------------------
ASSETS (Unaudited) (Audited)
CURRENT ASSETS:
Cash and cash equivalents $ 5,839,208 $ 4,012,560
Accounts receivable, trade (less allowance for doubtful
accounts of $1,722,624 at November 30, 2002 and
$1,483,688 at May 31, 2002) 27,477,374 27,182,566
Inventories 17,601,402 15,557,034
Income taxes receivable 399,524 592,097
Deferred income taxes 987,491 987,491
Prepaid expenses and other 2,079,664 1,834,521
------------ ------------
Total current assets 54,384,663 50,166,269
LONG-TERM INVESTMENT - At cost 1,000,000 1,000,000
PROPERTY, PLANT AND EQUIPMENT - Net 17,144,100 17,027,024
DEFERRED INCOME TAXES 889,906 889,906
OTHER ASSETS - Net 2,807,870 2,977,130
DEFERRED LICENSING COSTS - Net 1,239,523 1,370,620
CUSTOMER LIST - Net 1,352,500 1,395,000
EXCESS OF COST OVER NET TANGIBLE ASSETS ACQUIRED - Net 26,596,030 26,541,514
------------ ------------
$105,414,592 $101,367,463
============ ============
See notes to consolidated financial statements.
IMMUCOR, INC.
CONSOLIDATED BALANCE SHEETS (continued)
- ----------------------------------------------------------------------------------------------------------------------------------
November 30, 2002 May 31, 2002
--------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY (Unaudited) (Audited)
CURRENT LIABILITIES:
Current portion of borrowings under bank line of credit agreements $ 1,784,510 $ 1,995,630
Current portion of long-term debt 4,644,000 3,662,304
Current portion of capital lease obligations 804,277 975,506
Accounts payable 8,204,310 8,136,198
Income taxes payable 355,307 3,165,247
Accrued salaries and wages 1,292,862 1,821,452
Deferred income taxes 340,980 371,404
Other accrued liabilities 1,756,536 2,968,701
---------------------- --------------------
Total current liabilities 19,182,782 23,096,442
BORROWINGS UNDER BANK LINE OF CREDIT AGREEMENTS - Net of current portion 2,861,151 3,033,683
LONG-TERM DEBT - Net of current portion 20,234,487 27,294,082
CAPITAL LEASE OBLIGATIONS - Net of current portion 1,000,484 1,252,948
DEFERRED INCOME TAXES 2,082,536 2,035,387
OTHER LIABILITIES 1,072,885 702,047
SHAREHOLDERS' EQUITY:
Common stock - authorized 45,000,000 shares, $0.10 par value; 12,600,536 and
11,555,645 issued and outstanding at November 30, 2002 and May 31, 2002,
respectively 1,260,053 1,155,563
Additional paid-in capital 27,552,563 19,520,658
Retained earnings 35,039,301 28,671,351
Accumulated other comprehensive loss (4,871,650) (5,394,698)
---------------------- --------------------
Total shareholders' equity 58,980,267 43,952,874
---------------------- --------------------
$ 105,414,592 $ 101,367,463
====================== ====================
See notes to consolidated financial statements.
IMMUCOR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
November 30, November 30, November 30, November 30,
2002 2001 2002 2001
NET SALES $ 23,675,053 $ 20,918,272 $ 46,890,484 $ 39,558,234
COST OF SALES 10,025,022 9,093,201 19,891,786 18,470,710
------------ ------------ ------------ ------------
GROSS MARGIN 13,650,031 11,825,071 26,998,698 21,087,524
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Research and development 414,396 492,692 780,007 979,704
Selling and marketing 3,359,544 3,175,111 6,696,444 6,004,720
Distribution 1,651,596 1,657,027 3,384,403 3,290,735
General and administrative 2,486,173 2,345,100 4,700,393 4,294,019
Amortization expense 127,181 406,705 199,747 814,516
------------ ------------ ------------ ------------
Total operating expenses 8,038,890 8,076,635 15,760,994 15,383,694
------------ ------------ ------------ ------------
INCOME FROM OPERATIONS 5,611,141 3,748,436 11,237,704 5,703,830
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest income 42,011 2,600 87,283 3,668
Interest expense (558,332) (1,427,519) (1,372,954) (2,579,937)
Other - net 369,201 499,606 170,019 1,172,186
------------ ------------ ------------ ------------
Total other (147,120) (925,313) (1,115,652) (1,404,083)
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 5,464,021 2,823,123 10,122,052 4,299,747
INCOME TAX EXPENSE 2,062,874 591,983 3,726,427 815,931
------------ ------------ ------------ ------------
NET INCOME $ 3,401,147 $ 2,231,140 $ 6,395,625 $ 3,483,816
============ ============ ============ ============
Earnings per share:
Basic $ 0.28 $ 0.20 $ 0.52 $ 0.32
============ ============ ============ ============
Diluted $ 0.26 $ 0.20 $ 0.48 $ 0.32
============ ============ ============ ============
Weighted average shares outstanding:
Basic 12,285,602 10,916,425 12,233,720 10,916,425
============ ============ ============ ============
Diluted 13,264,735 11,025,060 13,238,636 10,984,704
============ ============ ============ ============
See notes to consolidated financial statements.
IMMUCOR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------
Six Months Ended
November 30, November 30,
2002 2001
------------------------------------
OPERATING ACTIVITIES:
Net income $6,395,625 $3,483,816
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment 2,256,840 1,824,443
Amortization of other assets and excess of cost over net tangible assets acquired 199,747 814,516
Amortization of debt issue costs 224,907 76,417
Provision for doubtful accounts 199,054 280,000
Disposal of assets in settlement - 806,108
Impairment of fixed assets - 268,539
Deferred tax provision 16,725 31,525
Changes in operating assets and liabilities:
Accounts receivable, trade (493,862) (4,160,249)
Loan to officer - 145,000
Income taxes (301,175) 420,082
Inventories (2,044,368) 588,683
Other current assets (899,637) (1,445,043)
Other long-term assets (55,039) 269,398
Accounts payable 493,112 1,453,463
Other current liabilities (1,740,753) 1,650,652
Other long-term liabilities 370,840 29,923
----------------- -----------------
Total adjustments (1,773,609) 3,053,457
----------------- -----------------
Cash provided by operating activities 4,622,016 6,537,273
INVESTING ACTIVITIES:
Purchases of / deposits on property and equipment (2,030,936) (1,702,471)
----------------- -----------------
Cash used in investing activities (2,030,936) (1,702,471)
FINANCING ACTIVITIES:
Borrowings under line of credit agreements net of repayments (349,529) (669,274)
Repayment of notes payable - (172,091)
Borrowings under long-term debt and capital lease obligations net of repayments (6,861,688) (4,098,151)
Payment of debt issue costs (425,000) (301,362)
Exercise of stock options and warrants (1,044,892 shares) 6,447,020 -
----------------- ----------------
Cash used in financing activities (1,189,197) (5,240,878)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 424,765 832,544
----------------- ----------------
INCREASE IN CASH AND CASH EQUIVALENTS 1,826,648 426,468
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,012,560 3,124,517
----------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $5,839,208 $3,550,985
================= ================
See notes to consolidated financial statements.
IMMUCOR, INC.
Notes to Consolidated Financial Statements
(Unaudited)
1. BASIS OF
PRESENTATION
The accompanying unaudited consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States for interim financial information and the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. However, there
has been no material change in the information disclosed in the Company’s annual
financial statements dated May 31, 2002, except as disclosed herein. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three-month and six-month periods ended November 30, 2002 are
not necessarily indicative of the results that may be expected for the year
ending May 31, 2003. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company’s Annual
Report on Form 10-K for the year ended May 31, 2002.
Certain prior year
balances have been reclassified to conform to the current year
presentation.
2. INVENTORIES
Inventories are stated at the
lower of first-in, first-out cost or market:
As of As of
November 30, 2002 May 31, 2002
Raw materials and supplies $ 4,910,876 $ 5,725,149
Work in process 1,944,119 1,532,821
Finished goods 10,746,407 8,299,064
---------------------- ----------------------
$17,601,402 $15,557,034
====================== ======================
The Company recorded an increase to inventory of approximately $560,000 during the second quarter related to a change in standard costs. The effect of the adjustment was to increase net income by approximately $354,000, or $0.03 per share (basic and diluted) for the three and six-month periods ended November 30, 2002.
3. EARNINGS
PER SHARE
The following table sets forth the computation of basic and
diluted earnings per share in accordance with Statement of Financial Accounting
Standards (“SFAS”) No. 128, Earnings per Share. The Company implemented a
three-for-two stock split on September 13, 2002 to shareholders of record as of
the close of business on August 26, 2002. The split was effected in the form of
a 50% stock dividend. All share and per share amounts disclosed in this document
have been restated to reflect this stock split discussed in Note 8 to the
consolidated financial statements.
Three Months Ended Six Months Ended
November 30, November 30, November 30, November 30,
2002 2001 2002 2001
---------------- --------------- ---------------- ---------------
Numerator for basic and diluted earnings per share:
Income available to common shareholders $ 3,401,147 $ 2,231,140 $ 6,395,625 $ 3,483,816
=========== =========== =========== ===========
Denominator:
For basic earnings per share - weighted
average shares basis 12,285,602 10,916,425 12,233,720 10,916,425
Effect of dilutive stock options and warrants 979,133 108,635 1,004,916 68,279
----------- ----------- ----------- -----------
Denominator for diluted earnings per share
-adjusted weighted average shares basis 13,264,735 11,025,060 13,238,636 10,984,704
=========== =========== =========== ===========
Basic earnings per share $ 0.28 $ 0.20 $ 0.52 $ 0.32
=========== =========== =========== ===========
Diluted earnings per share $ 0.26 $ 0.20 $ 0.48 $ 0.32
=========== =========== =========== ===========
4. DOMESTIC AND FOREIGN
OPERATIONS
Information concerning the Company's domestic and foreign
operations is summarized below (in 000s):
---------------------------------------------------------------------------------------------------
Three Months Ended November 30, 2002
---------------------------------------------------------------------------------------------------
U.S. Germany Italy Canada Other Eliminations Consolidated
Net reagent revenues:
Unaffiliated customers $14,979 $2,283 $2,070 $1,404 $1,346 $ - $22,082
Affiliates 1,733 117 - 23 47 (1,920) -
---------- ---------- --------- ---------- --------- ------------- -------------
Total 16,712 2,400 2,070 1,427 1,393 (1,920) 22,082
Net instrument revenues:
Unaffiliated customers 616 580 9 - 388 - 1,593
Affiliates 3 888 - - - (891) -
---------- ---------- --------- ---------- --------- ------------- -------------
Total 619 1,468 9 - 388 (891) 1,593
Income from operations 4,978 16 193 320 100 4 5,611
Net income (loss) 3,085 (12) 117 160 50 1 3,401
---------------------------------------------------------------------------------------------------
Three Months Ended November 30, 2001
---------------------------------------------------------------------------------------------------
U.S. Germany Italy Canada Other Eliminations Consolidated
Net reagent revenues:
Unaffiliated customers $13,874 $2,297 $1,529 $1,259 $1,241 $ - $20,200
Affiliates 1,661 53 - 15 23 (1,752) -
---------- ---------- --------- ---------- --------- ------------- -------------
Total 15,535 2,350 1,529 1,274 1,264 (1,752) 20,200
Net instrument revenues:
Unaffiliated customers 478 178 57 - 5 - 718
Affiliates 64 210 - - - (274) -
---------- ---------- --------- ---------- --------- ------------- -------------
Total 542 388 57 - 5 (274) 718
Income (loss) from operations 3,454 93 162 299 (260) - 3,748
Net income (loss) 2,371 19 113 87 (359) - 2,231
---------------------------------------------------------------------------------------------------
Six Months Ended November 30, 2002
---------------------------------------------------------------------------------------------------
U.S. Germany Italy Canada Other Eliminations Consolidated
Net reagent revenues:
Unaffiliated customers $30,652 $4,505 $3,537 $2,862 $2,539 $ - $44,095
Affiliates 3,490 222 4 60 126 (3,902) -
---------- ---------- --------- ---------- --------- ------------- -------------
Total 34,142 4,727 3,541 2,922 2,665 (3,902) 44,095
Net instrument revenues:
Unaffiliated customers 1,371 779 9 - 636 - 2,795
Affiliates 21 1,253 - - - (1,274) -
---------- ---------- --------- ---------- --------- ------------- -------------
Total 1,392 2,032 9 - 636 (1,274) 2,795
Income from operations 10,157 76 155 641 288 (79) 11,238
Net income (loss) 5,819 (14) 101 321 217 (48) 6,396
---------------------------------------------------------------------------------------------------
Six Months Ended November 30, 2001
---------------------------------------------------------------------------------------------------
U.S. Germany Italy Canada Other Eliminations Consolidated
Net reagent revenues:
Unaffiliated customers $25,691 $4,470 $2,925 $2,556 $2,362 $ - $38,004
Affiliates 3,487 119 - 47 150 (3,803) -
---------- ---------- --------- ---------- --------- ------------- -------------
Total 29,178 4,589 2,925 2,603 2,512 (3,803) 38,004
Net instrument revenues:
Unaffiliated customers 1,129 215 85 - 125 - 1,554
Affiliates 97 499 - - - (596) -
---------- ---------- --------- ---------- --------- ------------- -------------
Total 1,226 714 85 - 125 (596) 1,554
Income (loss) from operations 4,589 295 283 645 (85) (23) 5,704
Net income (loss) 3,750 141 (21) 187 (434) (139) 3,484
The Company’s U.S. operations made net export sales to unaffiliated customers of approximately $1,006,000 and $1,440,000 for the three months ended November 30, 2002 and 2001, respectively, and $2,237,000 and $2,793,000 for the six months ended November 30, 2002 and 2001, respectively. The Company’s German operations made net export sales to unaffiliated customers of approximately $919,000 and $814,000 for the three months ended November 30, 2002 and 2001, respectively, and $1,559,000 and $1,015,000 for the six months ended November 30, 2002 and 2001, respectively. The Company’s Canadian operations made net export sales to unaffiliated customers of approximately $490,000 and $387,000 for the three months ended November 30, 2002 and 2001, respectively, and $1,110,000 and $902,000 for the six months ended November 30, 2002 and 2001, respectively. Product sales to affiliates are valued at market prices.
5. COMPREHENSIVE INCOME
The components of
comprehensive income for the three-month and six-month periods ended November
30, 2002 and 2001 are as follows:
Three Months Ended Six Months Ended
November 30, November 30, November 30, November 30,
2002 2001 2002 2001
---------------- ----------------- ---------------- -----------------
Net income $ 3,401,147 $ 2,231,140 $ 6,395,625 $ 3,483,816
Net foreign currency translation (248,917) (157,309) 512,774 794,193
Cumulative effect of the adoption of FAS
133 on June 1, 2001, net of taxes - - - (102,721)
Hedge loss reclassified into earnings 5,137 - 10,274 -
---------------- ----------------- ---------------- -----------------
Comprehensive income $ 3,157,367 $ 2,073,831 $ 6,918,673 $ 4,175,288
================ ================= ================ =================
Accumulated comprehensive loss as of November 30, 2002 and May 31, 2002 was ($4,871,650) and ($5,394,698), respectively. The balance, consisting primarily of net losses on foreign currency translation adjustments and fluctuations in the fair value of the Company’s interest rate swaps, has been disclosed in the shareholders’ equity section of the consolidated balance sheets.
6. IMPACT OF
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, the Financial
Accounting Standards Board (“FASB”) issued SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. This statement provides a
comprehensive and consistent standard for the recognition and measurement of
derivatives and hedging activities. In June 2000, the FASB issued SFAS No. 138,
Accounting for Certain Derivative Instruments and Certain Hedging
Activities-an Amendment to FASB Statement No. 133. This statement amended
certain provisions of SFAS No. 133. Accordingly, the Company adopted SFAS No.
133, as amended by SFAS No. 138, effective the first quarter of fiscal 2002. The
cumulative effect of the adoption of SFAS No. 133 on June 1, 2001 resulted in a
comprehensive loss (a component of Shareholders’ Equity on the balance sheet) of
approximately $103,000, net of $26,000 in income taxes, relating to the interest
rate swap agreements. Since the swap agreement related to the Canadian line of
credit matured in December 2001, an adjustment of approximately $15,000 was made
to comprehensive loss and reclassified to earnings as interest expense in fiscal
2002. Due to the ineffectiveness of the swap related to the U.S. loan,
approximately $16,000 was reclassified from comprehensive loss to earnings as
interest expense and approximately $267,000 was charged directly to interest
expense in fiscal 2002. The remaining balance of approximately $72,000 will be
amortized over the remaining term of the loan. Approximately $5,100 and $10,300
of this ineffectiveness was charged to interest expense for the three-month and
six-month periods ended November 30, 2002, respectively and approximately
($39,000) and $77,000 was charged directly to interest for the three-month and
six-month periods ended November 30, 2002, respectively.
See Note 9 to the consolidated financial statements for a discussion of SFAS No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets.
In October 2001, the FASB
issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets. The Statement supercedes SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of,
however it retains the fundamental provisions of that statement related to the
recognition and measurement of the impairment of long-lived assets to be “held
and used.” The Statement is effective for year-ends beginning after December 15,
2001. The Company adopted SFAS No. 144 effective June 1, 2002 without impact on
its financial position or results of operations.
7. INCOME
TAXES 8. STOCK
SPLIT 9. ADOPTION OF
NEW ACCOUNTING STANDARD The Company has applied the new
accounting rules to goodwill and intangible assets, all of which were acquired
prior to July 1, 2001. As of November 30, 2002, the financial statements
included acquisition-related goodwill of $26.6 million, net of previous
amortization of $6.5 million. Goodwill, net of amortization, totaled $17.8
million, $2.4 million, $0.8 million and $5.6 million in the U.S., Germany, Italy
and Canada, respectively. The Company tested goodwill for impairment as of June
1, 2002, as required by SFAS No. 142, utilizing a combination of valuation
techniques including the expected present value of future cash flows and a
market multiple approach. This analysis did not result in an impairment at June
1, 2002. The Company no longer amortizes acquisition-related goodwill. The table
below shows the periods ended November 30, 2002 and 2001 on a comparative basis
given the adoption of the amortization provisions of SFAS 142. Excess of Cost Over Net
Tangible Assets Acquired had included a $1.7 million customer list that is now
reported separately on the balance sheet. Accumulated amortization of the
customer list as of November 30, 2002 and May 31, 2002, was $0.35 million and
$0.30 million, respectively. The customer list is being
amortized over a useful life of 20 years. The estimated amortization expense
relating to the customer list for each of the next five fiscal years is as
follows: 10. LOAN
AMENDMENT ITEM
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. Critical Accounting
Policies The Company recognizes revenue
in accordance with SEC Staff Accounting Bulletin No. 101, Revenue Recognition
in Financial Statements (“SAB 101”), as amended by SAB 101A and 101B. SAB
101 requires that four basic criteria must be met before revenue can be
recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has
occurred or services rendered; (3) the fee is fixed and determinable; and (4)
collectibility is reasonably assured. Should changes in conditions cause
management to determine these criteria are not met for certain future
transactions, revenue recognized for any reporting period could be adversely
affected. Revenue from the sale of the Company’s reagents is recognized upon
shipment since both title and risk of loss transfers to the customer upon
shipment. Revenue from the sale of the Company’s medical instruments is
recognized upon shipment and completion of contractual obligations relating to
training and/or installation based on terms of the related agreements. Revenue
from rentals of the Company’s medical instruments is recognized over the life of
the rental agreement. Immucor maintains allowances
for doubtful accounts for estimated losses resulting from the inability of its
customers to make required payments. The allowance is approximately 5.9% of the
accounts receivable balance. The Company continually monitors the collectibility
of its customer accounts and when indications arise that amounts are not likely
to be collected, the amount is charged to the allowance for doubtful accounts.
If the financial condition of Immucor’s customers were to deteriorate, resulting
in an impairment of their ability to make payments, additional allowances could
be required.
Inventories are stated at the
lower of first-in, first-out cost or market. Cost includes material, labor and
manufacturing overhead. The Company uses a standard cost system that applies
labor and manufacturing overhead factors to inventory based on budgeted
production levels, staffing levels and costs of operation. Actual costs and
production levels may vary from the standard and will be charged to the
consolidated statement of operations as a component of cost of sales.
In assessing the
recoverability of the Company’s goodwill and other long-lived assets the Company
must make assumptions regarding estimated future cash flows and other factors to
determine the fair value of the respective assets. If these estimates or their
related assumptions change in the future, the Company may be required to record
impairment charges for these assets not previously recorded. On June 1, 2002 the
Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142,
Goodwill and Other Intangible Assets, and is required to analyze its
goodwill and intangible assets for impairment on an annual basis or more
frequently if impairment indicators arise. In October 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.
The Statement supercedes SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of, however it
retains the fundamental provisions of that statement related to the recognition
and measurement of the impairment of long-lived assets to be “held and used.”
The Company adopted SFAS No. 144 effective June 1, 2002 without impact on its
financial position or results of operations. Our income tax policy records
the estimated future tax effects of temporary differences between the tax bases
of assets and liabilities and amounts reported in the accompanying consolidated
balance sheets, as well as operating loss and tax credit carry-forwards. We
follow very specific and detailed guidelines regarding the recoverability of any
tax assets recorded on the balance sheet and provide any allowances as required.
The Company believes that the value of the Company’s deferred tax assets assumes
that the Company will be able to generate sufficient future taxable income in
certain tax jurisdictions, based on estimates and assumptions. If these
estimates and related assumptions change in the future, the Company may be
required to record additional valuation allowances against its deferred tax
assets resulting in additional income tax expense in the Company’s consolidated
statements of operations. In assessing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income,
carry back opportunities, and tax planning strategies in making this assessment.
Management evaluates the realizability of the deferred tax assets and assesses
the need for additional valuation allowances quarterly.
As of November 30, 2002, the
Company’s cash and cash equivalents balance totaled $5.8 million, an improvement
of $0.3 million over the balance as of August 31, 2002 and $2.3 million over the
balance as of November 30, 2001. Net working capital as of November 30, 2002
increased to $35.2 million, an improvement of $2.7 million, from $32.5 million
as of August 31, 2002 and an improvement of $13.4 million from $21.8 million as
of November 30, 2001. The price increases implemented in fiscal 2002 have
significantly strengthened the Company’s financial position. In addition, sales
of the Company’s Galileo instrument to European distributors were stronger than
expected. This instrument is being marketed exclusively by Immucor to hospital
transfusion laboratories and blood donor centers for patient and donor blood
typing and antibody screening and identification. As a consequence of the
improved results, the Company experienced a rise in the value of its stock and,
as a result, option holders have exercised a large number of options bringing an
additional influx of cash. The effect of exchange rate changes increased cash at
November 30, 2002 by approximately $0.5 million from May 31, 2002. Net cash provided by operating
activities totaled approximately $1.6 million, $2.9 million, and $3.3 million
for the three-month periods ended November 30, 2002, August 31, 2002 and
November 30, 2001, respectively. Positive results from operations had a
favorable effect on net cash from operations. During the quarter ended November
30, 2002, the Company improved net income by $0.4 million over the quarter ended
August 31, 2002 and $1.2 million over the quarter ended November 30, 2001 that
included a one-time benefit of $0.4 million from the disgorgement of short-swing
trading profits by the Kairos Group. Revenues increased $0.5 million over the
quarter ended August 31, 2002 and were $2.8 million over the quarter ended
November 30, 2001, primarily as a result of reagent price increases in the
United States and increased instrument sales. Sales of the Galileo instrument to
distributors in Europe were much stronger than expected. Gross margin, as a
percentage of sales, was 57.7%, 57.5% and 56.5% for the three-month periods
ended November 30, 2002, August 31, 2002 and November 30, 2001, respectively.
The strong sales in the current quarter of the Galileo instrument, whose sales
margins are generally lower than reagent sales margins, impacted total gross
margin by approximately 1%. During the quarter ended
November 30, 2002, $1.1 million of cash was used in investing activities for
capital expenditures which included approximately $0.1 million for expansion of
the Company’s computer network capabilities, $0.4 million to refurbish the
German facility and update its computer network, $0.4 million for Galileo and
other reagent rental instruments installed in Europe and $0.2 million for
manufacturing and quality system improvements at its Norcross and Houston
facilities. Planned capital expenditures for fiscal 2003 total approximately
$4.1 million, and include approximately $0.3 million for U.S. clinical trial
Galileo instruments, approximately $1.3 million for Galileo reagent rental
instruments installed in Europe, $1.3 million for manufacturing and quality
system improvements at its domestic manufacturing facilities and $1.2 million
for expansion of its computer network capabilities. Net cash flow from financing
activities for the quarter provided $0.1 million. During the quarter, the
Company paid $1.2 million of long-term debt net of borrowings, borrowings under
lines-of-credit, debt issue costs and capital lease obligations . However, the
Company received $1.3 million in cash from the exercise of stock options. These
options were granted in prior fiscal years and provided for exercise prices
equal to the market value of the Company’s stock on the date granted. The
Company experienced a rise in the value of its stock during the recently
completed fiscal year and as a result option holders have exercised a large
number of options. For the six months, the Company paid $7.6 million of
long-term debt net of borrowings, borrowings under lines-of-credit, debt issue
costs and capital lease obligations and received $6.4 million in cash from the
exercise of stock options. Accounts receivable increased
by approximately $0.5 million from May 31, 2002 mainly due to slower collections
in Europe, primarily in Italy. The Company has entered into a contract to factor
certain Italian accounts receivable and is evaluating the possibility of
factoring additional Italian accounts receivable. Inventory increased $2.1
million for the period with the purchase of Galileo instruments for product
launch, increased finished product stock levels to minimize customer backorders,
and increased inventory carrying value as additional quality system improvements
are completed. In August 2002, Immucor placed an order, amounting to $3.3
million, for 50 additional ABS2000 instruments to be delivered starting no
earlier than February 2003. Income tax refund receivable decreased due to the
refund of tax overpayments in the German subsidiary. Prepaid and other assets
increased by $0.9 million due primarily to prepayments on the order for
additional ABS2000 instruments. Other long-term assets remained relatively
constant for the period. Deferred licensing costs declined due to normal
amortization and excess of cost over net tangible assets acquired increased due
to the exchange rate effect of the Euro on the Company’s European subsidiaries.
Accounts payable remained
relatively constant during the period. The current income tax liability
decreased due to estimated tax payments for 2003 and extension tax payments for
2002 made during the period and the tax benefit of $2.3 million related to the
stock option exercises. Accrued salaries and wages and other accrued liabilities
decreased by $1.7 million as the May 31, 2002 year-end accrual for executive,
management and supervisory bonuses and other accruals for legal, audit and
royalties fees were paid during the current period. Other long-term liabilities
increased by $0.4 million primarily due to the change in value of the interest
rate swap agreement and reclassification from other accrued liabilities of
deferred revenue on instrument contracts for which the cash has been received
and for which revenue is being recognized monthly due to contractual
restrictions.
Common stock and additional
paid-in capital increased by an aggregate of $8.1 million primarily due to the
exercise of stock options, described above, and the related tax benefit. Also,
common stock increased and retained earnings decreased by $0.4 million due to
the effect of the three-for-two stock split on September 13, 2002. Retained
earnings and (comprehensive loss) improved by $6.9 million due to the earnings
for the year and favorable changes in the net foreign exchange translation. The
financial statements of foreign subsidiaries have been translated into U.S.
dollars in accordance with FASB Statement No. 52, Foreign Currency
Translation. All balance sheet accounts have been translated using the
exchange rates in effect at the balance sheet dates. Income statement amounts
have been translated using the average exchange rates for each period. The gains
and losses resulting from the changes in exchange rates from year to year have
been reported separately as a component of comprehensive income (loss). The
effect of foreign currency transaction gains and losses has been recorded in the
accompanying statements of operations. In July, 2002, the Company and
its primary lender amended their loan agreement to extend the term of the
existing revolving lines of credit from February 28, 2003 to December 1, 2005.
Borrowings under the senior credit facility were re-priced according to a price
that varies based upon the Company’s ratio of Funded Debt to EBITDA, as defined
in the senior credit facility. The interest rate on the effective date of the
amendment was LIBOR plus a spread of 200 basis points on the revolving lines of
credit and Term Loan A and LIBOR plus a spread of 250 basis points on Term Loan
B. In December 2002, the Company
paid off the German line-of-credit with the primary lender in the amount of $2.8
million. Operating cash flows provided $1.8 million of the funds and $1.0
million was borrowed against the U.S. line-of-credit. The balance of the U.S.
line-of-credit at December 31, 2002 is $1.0 million. Management is focused on
reducing the leverage on the Company’s balance sheet and does not anticipate
that there will be a need for additional borrowings. Management expects that
cash and cash equivalents and internally generated funds will be sufficient to
support operations, scheduled debt repayments and planned capital expenditures.
For the quarter ended November
30, 2002 revenues totaled $23.7 million, a $2.8 million, or 13.2% increase over
the quarter ended November 30, 2001. For the six-month period ended November 30,
2002 revenues totaled $46.9 million, a $7.3 million, or 18.5% increase over the
six-month period ended November 30, 2001. The increase in revenues occurred
predominantly as a result of renewals of group contracts and reagent price
increases in the United States at substantially higher prices and increased
instrument sales. Income before income taxes reached $5.5 million for the
quarter and $10.1 million for the six-month period ended November 30, 2002
compared to income before income taxes of $2.8 million and $4.3 million for the
prior year quarter and six-month period, respectively. Net income increased to
$3.4 million and $6.4 million for the three-month and six-month periods ended
November 30, 2002, respectively, versus net income of $2.2 million and $3.5
million for the three-month and six-month periods ended November 30, 2001,
respectively. Diluted earnings per share were $0.26 on 13.3 million weighted
average shares outstanding for the quarter ended November 30, 2002 compared with
$0.20 on 11.0 million weighted average shares outstanding, adjusted for the
three-for-two stock split on September 13, 2002, for the same period last year.
Diluted earnings per share were $0.48 on 13.2 million weighted average shares
outstanding for the six-month period ended November 30, 2002 compared with $0.32
on 11.0 million weighted average shares outstanding, adjusted for the
three-for-two stock split on September 13, 2002, for the same period last year.
The rise in the Company’s stock price over the past year has increased the
dilutive effect of stock options and warrants by approximately 1.0 million
shares that are used to arrive at diluted earnings per share.
Net sales Operating
expenses Selling and marketing expenses
increased $0.2 million for the quarter as compared to the same quarter in the
prior year, primarily as a result of the change in the Euro exchange rate. For
the six-month period ended November 30, 2002, selling and marketing expenses
increased $0.7 million as compared to the prior year period, of which $0.4
million was a result of the change in the Euro exchange rate. Travel and
marketing expense increases associated with the sales effort in Europe to market
the Galileo accounted for the remainder of the increase for the year to date.
Distribution expenses for the
quarter ended November 30, 2002 were relatively constant with the same quarter
last year. Year to date distribution expenses increased by $0.1 million compared
to the prior year primarily due to additional shipping expenses related to new
customers and the implementation of a new shipping package configuration
designed to maintain acceptable environmental temperature and preserve product
quality during shipment. General and administrative
expenses for the period ended November 30, 2002 have risen approximately $0.1
million over the same quarter in the prior year and $0.4 million over the same
six-month period in the prior year. The increase in the quarter is due primarily
to the change in the Euro exchange rate. The increase for the six-month period
also included increased professional fees for computer software improvements as
the Company began its second year of improvement to its enterprise software
system.
Amortization expense declined
$0.3 million and $0.6 million for the quarter and six-month period ended
November 30, 2002 as compared with the prior period due to the adoption of SFAS
No.142, Goodwill and Other Intangible Assets, which requires goodwill and
indefinite lived intangible assets to be reviewed annually for impairment, or
more frequently if impairment factors arise, instead of amortized. The Company
tested goodwill for impairment as of June 1, 2002, as required by SFAS No. 142,
utilizing a combination of valuation techniques including the expected present
value of future cash flows and a market multiple approach. This analysis did not
result in an impairment at June 1, 2002. The Company expects amortization will
be approximately $1.2 million less in fiscal 2003 than in fiscal
2002. ITEM
3. Quantitative and Qualitative Disclosures On Market
Risk ITEM
4. Controls and Procedures. PART II ITEM
2. Changes in Securities and Use of Proceeds. ITEM
4. Submission of Matters to a Vote of Security Holders. The
Company held its Annual Meeting of Shareholders on November 15, 2002. Ralph A.
Eatz, Edward L. Gallup, Gioacchino De Chirico, Didier L. Lanson, Daniel T.
McKeithan, Joseph E. Rosen, Roswell S. Bowers and Dr. Mark Kishel, all incumbent
directors of the Company, were elected to serve as directors of the Company
until the next annual meeting of shareholders. (b) The
shareholders voted not to approve the Immucor, Inc. 2002 Stock Option Plan. The
number of shares cast for, votes cast against, abstentions and broker non-votes,
with respect to this matter, were as follows: ITEM 6. Exhibits and Reports
on Form 8-K. 3.1 Amended and Restated
Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Immucor,
Inc.’s quarterly report on Form 10-Q filed on January 16, 2001). 3.2 Amended and Restated
Bylaws (amended and restated as of February 12, 2002) (incorporated by reference
to Exhibit 3.2 to Immucor, Inc.’s quarterly report on Form 10-Q filed on April
11, 2002). 4.1 Amended and Restated
Shareholder Rights Agreement dated as of November 20, 2001 between Immucor, Inc.
and EquiServe Trust Company, N.A. as Rights Agent (incorporated by reference to
Exhibit 4.1 to Immucor, Inc.’s quarterly report on Form 10-Q filed on January
14, 2002). (b) The Company did not file any reports on
Form 8-K during the three months ended November 30, 2002. 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. Certification of Chief
Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18
U.S.C. Section 1350 Certification of Chief
Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18
U.S.C. Section 1350 EXHIBIT
INDEX 3.1 Amended and Restated
Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Immucor,
Inc.’s quarterly report on Form 10-Q filed on January 16, 2001). 3.2 Amended and Restated
Bylaws (amended and restated as of February 12, 2002) (incorporated by reference
to Exhibit 3.2 to Immucor, Inc.’s quarterly report on Form 10-Q filed on April
11, 2002). 4.1 Amended and Restated
Shareholder Rights Agreement dated as of November 20, 2001 between Immucor, Inc.
and EquiServe Trust Company, N.A. as Rights Agent (incorporated by reference to
Exhibit 4.1 to Immucor, Inc.’s quarterly report on Form 10-Q filed on January
14, 2002).
Income tax expense for the three-month and six-month periods ended
November 30, 2002 of approximately $2,063,000 and $3,726,000, respectively, was
greater as a percentage of pre-tax income than income tax expense of
approximately $592,000 and $816,000 as a percentage of pre-tax income for the
three-month and six-month periods ended November 30, 2001, respectively,
primarily due to net operating loss carry-forwards utilized during the prior
year.
On July 24, 2002, the Board of Directors approved a three-for-two
stock split, which was effected in the form of a 50% stock dividend. The date of
distribution was September 13, 2002 to the shareholders of record at the close
of business on August 26, 2002. The number of shares outstanding at the close of
business on August 26, 2002 was 8,257,277. The stock split added an additional
4,128,639 shares to outstanding shares. All share and per share amounts
disclosed in this document have been restated to reflect this stock split. The
total number of shares outstanding at the stock split pay date was 12,385,916.
In June 2001, the FASB issued SFAS No. 141,
Business Combinations, and SFAS No. 142, Goodwill and Other
Intangible Assets. Under the new rules, goodwill and indefinite lived
intangible assets are no longer amortized but are reviewed annually for
impairment, or more frequently if impairment indicators arise. The review
process entails assessing the fair value of the net assets underlying the
Company’s acquisition related goodwill on a business by business basis. If the
fair value is deemed less than the related carrying value, the Company is
required to reduce the amount of the goodwill. Separable intangible assets that
are not deemed to have an indefinite life continue to be amortized over their
useful lives. Three Months Ended Six Months Ended
November 30, November 30, November 30, November 30,
2002 2001 2002 2001
--------------- ---------------- -------------- ----------------
Net income as reported $3,401,147 $2,231,140 $6,395,625 $3,483,816
Add: Goodwill amortization, net of taxes - 253,532 - 504,253
--------------- ---------------- -------------- ----------------
Net income as adjusted for SFAS No. 142 $3,401,147 $2,484,672 $6,395,625 $3,988,069
Net income per basic share:
As reported $0.28 $0.20 $0.52 $0.32
As adjusted $0.28 $0.23 $0.52 $0.37
Net income per diluted share:
As reported $0.26 $0.20 $0.48 $0.32
As adjusted $0.26 $0.23 $0.48 $0.36
2003 $ 85,000
2004 85,000
2005 85,000
2006 85,000
2007 85,000
Thereafter 970,000
------------
$ 1,395,000
============
On July 18, 2002, the Company amended its loan agreement with
its primary lender. The amendment extended the term of the lines of credit from
February 28, 2003 to December 1, 2005. Borrowings under the senior credit
facility will be priced subject to a pricing grid that varies based upon the
Company’s Funded Debt to EBITDA, as defined in the senior credit facility. The
interest rate on the effective date of the amendment was LIBOR plus 200 basis
points on the revolving lines of credit and Term Loan A and LIBOR plus 250 basis
points on Term Loan B. Pricing under the amendment did not change from the
original loan agreement dated February 2001. At November 30, 2002 there was
approximately $21.4 million outstanding under the revolvers and Term Loan A and
approximately $6.0 million outstanding under Term Loan B. The Company paid off
the $2.8 million outstanding balance of the German revolving line of credit in
December 2002.
Certain statements that Immucor may make
from time to time, including statements contained in this report, constitute
“forward-looking statements” under the federal securities laws. Forward-looking
statements may be identified by words such as “plans,”
“expects,” “believes,” “anticipates,”
“estimates,” “projects,” “will” and other words of similar
meaning used in conjunction with, among other things, discussions of future
operations, financial performance, product development and new product launches,
market position, revenues and expenditures. Factors that could cause actual
results to differ materially from those expressed in any forward-looking
statement made by, or on behalf of, Immucor include the following, some of which
are described in greater detail below: the decision of customers to defer
capital spending, increased competition in the sale of instruments and reagents,
changes in interest rates and general economic conditions. In addition, the
strengthening of the dollar versus the Euro would adversely impact reported
European results. Investors are cautioned not to place undue reliance on any
forward-looking statements. Immucor cautions that historical results should not
be relied upon as indications of future performance. Immucor assumes no
obligation to update any forward-looking statements.
General We have identified the policies below as
critical to our business operations and the understanding of our results of
operations. The impact and any associated risks related to these policies on our
business operations is discussed throughout Management’s Discussion and Analysis
of Financial Condition and Results of Operations where such policies affect our
reported and expected financial results. For a detailed discussion on the
application of these and other accounting policies, see Note 1, Note 6 and Note
9 to the Consolidated Financial Statements of this Quarterly Report on Form
10-Q. Note that our preparation of this Form 10-Q requires us to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of our financial
statements, and the reported amounts of revenue and expenses during the
reporting period. There can be no assurance that actual results will not differ
from those estimates.
Revenue Recognition
Allowance for Doubtful Accounts
Goodwill and Other Long-lived Assets
Income
Taxes
Financial Condition
Results of Operations
Reagent
revenues grew to $22.1 million for the quarter and $44.1 million for the year to
date period ended November 30, 2002 compared to $20.2 million for the quarter
and $38.0 million for the year to date period ended November 30, 2001, a 9.4%
and 16.1% increase, respectively. The Company believes growth in reagent revenue
occurred as a result of price increases in North America partially offset by
declines in international sales, primarily in South American countries that are
experiencing financial difficulties, and the planned exit from the distribution
of certain low-margin third-party products. The Company will continue to
de-emphasize sales in South America until economic stability has been restored.
Sales of instruments during the quarter were slightly less than expected at $1.6
million as compared to $0.7 million in the previous year for a total year to
date of $2.8 million versus $1.5 million for the previous year. Instrument
revenue grew as a result of sales of the Galileo instrument to distributors in
Europe at higher levels than estimated and concentrated efforts to reduce the
backlog of instruments installed but not recorded as revenue due to
post-installation criteria. The instrument backlog currently stands at $0.9
million. The effect on revenues of the change in the Euro exchange rate was an
increase of $0.7 million and $1.4 million for the quarter and six-month period
ended November 30, 2002.
Cost of Sales
Cost of sales, as a
percentage of sales, totaled 42.3% versus 43.5% for the same quarter in the
prior year and 42.4% versus 46.7% for the six-month period ended November 30,
2002 and 2001, respectively. Cost of sales increased approximately $0.9 million
and $1.4 million for the quarter and six-month period ended November 30, 2002,
respectively, as compared to the prior year period. The effect on cost of sales
of the change in the Euro exchange rate accounted for approximately $0.4 million
and $0.7 million of the quarter and year to date increase, respectively. Galileo
sales in Europe added an additional $0.2 million to cost of sales due to reduced
margins related to the product line and the remainder of the increase of cost of
sales was the result of unfavorable manufacturing variances which are expected
to improve over the remainder of the fiscal year.
When compared to the prior year, research and development
costs for the quarter and six-month period ended November 30, 2002 declined
15.9% and 20.4%, respectively, from the prior year periods primarily related to
a reduction of instrument development initiatives with the initial launch of the
Galileo in the European market. The instrument is being marketed exclusively by
Immucor to hospital transfusion laboratories and blood donor centers for patient
and donor blood typing and antibody screening and identification.
Interest expense
When compared to the prior year,
interest expense decreased $0.9 million and $1.2 million in the quarter and
six-month period ended November 30, 2002. The decrease is primarily the result
of reduced borrowings on long-term debt and a more favorable interest rate that
became effective in May 2002 under the original loan agreement and continued
with the July 2002 amendment to the loan agreement. Also, lower amortization of
debt issue costs due to the reset of long-term debt maturity dates along with a
favorable swing in market valuation of the interest rate swap agreement further
reduced interest expense for the current period.
Other income
(expense)
Other income for the prior year quarter was favorably
affected by the November 2001 disgorgement of short-swing trading profits by the
Kairos Group in the amount of $0.4 million. In addition, other income for the
first quarter of fiscal 2002 was positively impacted by $1.0 million from the
settlement of the Becton, Dickinson arbitration. The current quarter and
year-to-date amounts primarily reflect foreign currency transaction gains that
exceeded foreign currency transaction losses.
Income
taxes
Income tax expense increased for the quarter and six-month
period ended November 30, 2002, as compared to the prior period, due to higher
income in the current period and utilization of net operating loss
carry-forwards in the prior period. During the fourth quarter of fiscal 2001,
the Company elected to record a valuation allowance in an amount equal to the
net deferred tax assets of the Company, amounting to $1.2 million. Effectively,
this non-cash allowance reflected the elimination of domestic deferred taxes as
a balance sheet asset and was subsequently used to reduce domestic taxes in
fiscal 2002. The net operating loss carry-forwards generated in fiscal 2001 also
reduced the fiscal 2002 United States tax provision and were fully utilized by
the quarter ended February 28, 2002.
There have been no material changes regarding the Company’s market
risk position from the information provided in its Annual Report on Form 10-K
for the fiscal year ended May 31, 2002. The quantitative and qualitative
disclosures about market risk are discussed in Item 7A-Quantitative and
Qualitative Disclosures About Market Risk, contained in the Company’s Annual
Report on Form 10-K.
Within the 90 days prior to
the date of this report, the Company carried out an evaluation, under the
supervision and with the participation of the Company’s management, including
the Company’s Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company’s disclosure controls
and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation,
the Chief Executive Officer and Chief Financial Officer concluded that the
Company’s disclosure controls and procedures are effective. There were no
significant changes in the Company’s internal controls or in other factors that
could significantly affect these controls subsequent to the date of their
evaluation.
OTHER
INFORMATION
On July
24, 2002, the Board of Directors approved a three-for-two stock split of the
Company’s common stock, which was effected by means of a 50% stock dividend. The
date of distribution was September 13, 2002 to the shareholders of record on
August 26, 2002. The number of shares outstanding at the close of business on
August 26, 2002 was 8,257,277. The stock split resulted in the issuance of an
additional 4,128,639 shares.
The following is a summary
of the matters voted on at that meeting.
(a) The
shareholders voted on the election of eight (8) directors, each to serve for a
one-year term. The number of shares cast for and the number of shares withheld,
with respect to each of these persons, were as follows: ------------------------------------- ------------------------ -----------------------------
Name Votes For Votes Withheld
------------------------------------- ------------------------ -----------------------------
Ralph A. Eatz 8,133,249 3,079,241
------------------------------------- ------------------------ -----------------------------
Edward L. Gallup 8,133,099 3,079,391
------------------------------------- ------------------------ -----------------------------
Gioacchino De Chirico 8,149,948 3,062,542
------------------------------------- ------------------------ -----------------------------
Didier L. Lanson 11,053,350 159,140
------------------------------------- ------------------------ -----------------------------
Daniel T. McKeithan 11,050,950 161,540
------------------------------------- ------------------------ -----------------------------
Joseph E. Rosen 11,183,033 29,457
------------------------------------- ------------------------ -----------------------------
Roswell S. Bowers 11,053,458 159,032
------------------------------------- ------------------------ -----------------------------
Dr. Mark Kishel 11,180,453 32,037
------------------------------------- ------------------------ -----------------------------
--------------------------------- -----------------------------
Votes For 2,792,554
--------------------------------- -----------------------------
Votes Against 4,491,046
--------------------------------- -----------------------------
Abstentions 70,836
--------------------------------- -----------------------------
Broker Non-votes 3,858,054
--------------------------------- -----------------------------
(a) The Company has filed the following exhibits with this
report.
IMMUCOR, INC.
(Registrant)
Date: January 14, 2003 By: /s/ Edward L. Gallup________
Edward L. Gallup, President and Chief Executive Officer
(on behalf of Registrant and as Principal Executive Officer)
/s/ Steven C. Ramsey________
Steven C. Ramsey, Senior Vice President - Finance
(Principal Accounting Officer)
CERTIFICATIONS
I, Edward L. Gallup, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Immucor, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and have identified for the registrant's auditors any
material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: January 14, 2003
/s/ Edward L. Gallup
Edward L. Gallup,
President (Principal Executive Officer)
I, Steven C. Ramsey, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Immucor, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and have identified for the registrant's auditors any
material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: January 14, 2003
/s/ Steven C. Ramsey
Steven C. Ramsey,
Senior Vice President - Finance (Principal Financial Officer)
In connection with the Quarterly Report of Immucor,
Inc. (the “Company”) on Form 10-Q for the period ended November 30, 2002 as
filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, Edward L. Gallup, President (Chief Executive Officer) of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to my
knowledge:
(1) The Report
fully complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934;
and
(2) The information
contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
/s/ Edward L.
Gallup
Edward L. Gallup
President (Chief Executive
Officer)
January 14, 2003
In connection with the Quarterly Report of Immucor,
Inc. (the“Company”) on Form 10-Q for the period ended November 30, 2002 as
filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, Steven C. Ramsey, Senior Vice President - Finance (Chief
Accounting Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to
my knowledge:
(1) The
Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934;
and
(2) The information
contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
/s/ Steven C.
Ramsey
Steven C. Ramsey
Senior Vice President - Finance (Chief
Financial Officer)
January 14, 2003
Number Description