Back to GetFilings.com
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
X THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended MAY 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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 Identification No.)
incorporation or organization)
3130 GATEWAY DRIVE, 30091
P.O. BOX 5625 (Zip Code)
Norcross, Georgia
(Address of principal executive offices)
Registrant's telephone number, including area code, is (404) 441-2051
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.10 PAR VALUE
(Title of Class)
COMMON STOCK PURCHASE RIGHTS
(Title of Class)
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 a check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of August 1, 1995, the aggregate market value of the voting
stock held by non-affiliates of the registrant was $84,356,000.
As of August 1, 1995, there were 7,709,570 shares of common
stock outstanding.
PART I
Item 1.-Business
Founded in 1982, Immucor, Inc., a Georgia corporation
("Immucor" or the "Company"), develops, manufactures and sells a
complete line of reagents (over 60 products) and systems used
primarily by hospitals and blood banks in a number of tests
performed to detect and identify certain properties of the cell and
serum components of human blood prior to blood transfusion.
The Company is also developing an automated blood bank
instrument to perform blood compatibility tests currently done
manually by hospital blood bank technologists.
Industry
Immucor is part of the immunohematology industry, which
generally seeks to prevent or cure certain diseases or conditions
through the transfusion of blood and blood components. The Food
and Drug Administration (the "FDA") treats human blood as a drug
and as a biological product, and it treats the transfusion of blood
as the administration of a drug and of a biological product. The
FDA regulates all phases of the immunohematology industry,
including donor selection and the collection, classification,
storage, handling and transfusion of blood and blood components.
The FDA requires all facilities that manufacture products used for
any of those purposes, and the products themselves, to be
registered or licensed by the FDA. See "Regulation of Business."
The principal components of blood are plasma (the fluid
portion) and cells. Blood also contains antibodies and antigens.
Antibodies are proteins that are produced in response to the
introduction of foreign substances (antigens). Antigens are
substances that stimulate the production of antibodies. Red blood
cells, which transport oxygen from the lungs to other parts of the
body, and return the carbon dioxide to the lungs, are categorized
by four blood groups (A, B, AB and O) and two blood types (Rh
positive and Rh negative), based on the presence or absence of
certain antigens on the surface of the cells. It is crucial that
the health care provider correctly identify the antibodies and
antigens present in patient and donor blood. For example, if a
donor's red blood cells contain antigens that could react with the
corresponding antibody in the patient's plasma, the transfusion of
the red blood cells may result in the potentially life threatening
destruction of the red blood cells.
Because of the critical importance of matching patient and
donor blood, compatibility testing procedures are generally
performed manually by highly educated technologists in hospitals,
blood banks and laboratories. At present, with few exceptions,
these tests are performed using procedures which the Company
believes can be significantly improved using its solid phase
testing system to automate the testing procedures. See "Products -
Solid Phase Technology", and "Products Under Development."
The Company believes that the worldwide market for traditional
blood bank reagents is approximately $250 million, and that this
market is relatively mature given current technology. However,
because the industry is labor-intensive, the introduction of labor-
saving products may provide additional growth in the market. The
Company believes that its solid phase blood testing system improves
test results and reduces the time necessary to perform certain test
procedures, thereby offering a cost-effective alternative for its
customers. See "Products - Solid Phase Technology" and "Products
Under Development."
Products
Most of Immucor's current reagent products are used in tests
performed prior to blood transfusions to determine the blood group
and type of patients' and donors' blood, in the detection and
identification of blood group antibodies, in platelet antibody
detection, in paternity testing and in prenatal care. The FDA
requires the accurate testing of blood and blood components prior
to transfusions using only FDA licensed reagents such as those
manufactured and sold by the Company.
Products. The following table sets forth the products sold by
the Company, most of which are manufactured by the Company.
Product Group Principal Use
ABO Blood Grouping Detect and identify ABO antigens on red blood
cells in order to classify a specimen's blood
group as either A, B, AB or O.
Rh Blood Typing Detect Rh antigens in order to classify a
specimen as either Rh positive or Rh negative,
and to detect other Rh-hr antigens.
Anti-human Globulin Used with other products for routine cross
Serums (Coombs matching, and antibody detection and
Serums) identification; allows a reaction to occur by
bridging between antibodies that by themselves
could not cause a reaction.
Reagent Red Blood Detect and identify antibodies in patient or
Cells donor blood, confirm ABO blood grouping
results and validate the performance of anti-
human serum in the test system.
Rare Serums Detect the presence or absence of rare
antigens.
Antibody Increase the sensitivity of antigen-antibody
Potentiators tests.
Quality Control Daily evaluation of the reactivity of routine
System blood testing reagents.
Monoclonal Detect and identify ABO and other antigens on
(Hybridoma) red blood cells.
Antibody-based
Reagents
Rh (D) Immune Administered by injection once during and once
Globulin after pregnancy to an Rh negative woman who
(Human) delivers an Rh positive infant to prevent
hemolytic disease of the newborn.
Capture-P Used for the detection of platelet antibodies.
(registered
trademark)
Capture-R Used to detect and identify unexpected blood
(registered group antibodies.
trademark)
Capture-CMV Used for the detection of antibodies to
(registered cytomegalovirus.
trademark)
The following table includes additional products not manufactured
by the Company but sold by the Company through Immucor GmbH and/or
Immucor Italia:
Product Group Principal Use
HLA Serums Transplant typing and paternity testing.
DNA Probes Transplant typing, paternity testing, forensic
medicine, and genetic research.
Infectious Diseases Diagnosis of certain infectious diseases by
the methods of ELISA, Immunofluorescence and
Latex Slide Tests.
Clinical Chemistry Blood analysis and pathological testing.
Synelisa Diagnosis of autoimmune and nephrology
diseases.
Solid Phase Technology. In the Company's proprietary solid
phase blood test system, one of the reactants (either an antigen or
an antibody) is applied or bound to a solid support, such as a well
in a microtitration plate. During testing, the bound reactant
captures other reactants in a fluid state and binds those fluid
reactants to the solid phase (the bound reactant). The binding of
the fluid reactants into the solid phase occurs rapidly and results
in clearly defined test reactions that are easier to interpret than
the subjective results sometimes obtained from existing
agglutination technology. Based on results obtained with Capture-P
(registered trademark), Capture-R (registered trademark), Capture-
CMV (registered trademark) and the Company's ongoing research, the
Company believes that solid phase test results can generally be
obtained in substantially less time than by existing techniques.
In contrast, under current agglutination blood testing
techniques, serum is mixed with red blood cells in a test tube and
the technologist performs several procedures and then examines the
mixture to determine whether there has been an agglutination
reaction. A positive reaction will occur if the cells are drawn
together in clumps by the presence of corresponding antibodies and
antigens. The mixture remains in a fluid state and it is sometimes
difficult for the technologist to determine whether the positive
reaction has occurred.
Because of the critical importance of matching patient and
donor blood, testing procedures using agglutination techniques are
usually performed manually by highly educated technologists.
Depending on the technical proficiency of the person performing the
test, the process can take from 30 minutes to one hour, and if the
test results are ambiguous the entire process may be repeated.
Thus, a significant amount of expensive labor is involved in such
testing. Based on industry sources, the Company believes that labor
costs are the largest component of the total cost of operating a
hospital blood bank. The Company believes that its solid phase
blood testing system improves test results and reduces the time
necessary to perform certain blood testing procedures related to
the transfusion of blood and blood components.
Immucor has approved for sale three test systems using its
solid phase technology: a Platelet Antibody Detection System,
Capture-P (registered trademark); a Red Cell Antibody Detection
System, Capture-R (registered trademark); and an Infectious Disease
Test, Capture-CMV (registered trademark) (see below). In these
three test systems, antigens are applied and bound to the surface
of a small well in a plastic microtitration plate, and patient or
donor serum or plasma is placed in the well. After the addition of
special proprietary indicator cells manufactured by Immucor,
positive reactions indicating the presence of blood group
antibodies adhere to the well as a thin layer and negative
reactions do not adhere but settle to the bottom as a small cell
button.
Capture-P (registered trademark): Solid Phase Platelet
Antibody Detection System. A key component of plasma is platelets,
small cell-like entities that assist in the blood clotting process.
A shortage of platelets in the blood can significantly reduce the
ability of a patient's body to control bleeding. Certain multiply
transfused patients, such as those on chemotherapy, often develop
antibodies to random donor platelets. Several techniques have been
designed by others to identify compatible platelets from random
donors. Such techniques are time consuming and technically
difficult to perform, or require expensive equipment, all of which
limits their usefulness as routine test procedures. The Company
believes that its solid phase platelet antibody detection test
provides a simplified test with improved reliability over existing
techniques and thus will be suited for routine use in transfusion
services. The Company believes that the test provides a more
accurate method for matching donor and recipient platelets in order
to reduce the probability of an incompatible transfusion. Three
products are currently approved for sale in the Capture-P
(registered trademark) system. The latest product, Capture-P
(registered trademark) Ready-Screen (registered trademark), a solid
phase assay for the detection of platelet IgG antibodies,
incorporates Immucor's proprietary dried platelet technology.
Previous platelet antibody detection tests required a source of
freshly drawn platelet samples. Capture-P (registered trademark)
Ready-Screen (registered trademark) is supplied with specially
selected platelets dried onto the microtitration plate wells ready
for use.
Capture-R (registered trademark): Solid Phase Red Cell
Antibody Detection and Identification System. Unexpected blood
group antibodies are found in patients or donors who, through
pregnancy, previous transfusion or injection, have been exposed to
foreign red blood cell antigens. Prior to blood transfusions all
patient and donor sera is tested for the presence of these
unexpected antibodies. In this solid phase method, reagent red
blood cells having known blood group antigens are immobilized onto
microtitration plate wells. Patient's or donor's serum is added to
the wells. Following incubation, the wells are washed to remove
unbound immunoglobulins. Special indicator red blood cells are
added and the plates are centrifuged. Positive reactions adhere as
a thin layer while negative reactions do not adhere but settle to
the bottom as a small cell button. Three products are currently
approved for sale in the Capture-R (registered trademark) system.
The two latest products are Capture-R (registered trademark) Ready-
Screen (registered trademark), for the detection of unexpected IgG
red cell antibodies, and Capture-R (registered trademark) Ready-ID
(registered trademark), for the identification of unexpected IgG
red cell antibodies. These two products utilize Immucor's
proprietary dried red cell technology. Test kits include
microtitration plates containing specially selected dried red cells
supplied ready for use. This feature further reduces the time
necessary to perform these tests with improved test results.
Capture-CMV (registered trademark): Solid Phase Test for
Cytomegalovirus. Cytomegalovirus is a herpes virus which can be
transmitted by blood and cause severe problems in the transfusion
of newborn infants and organ transplant patients. The test
procedure combines patented cell drying technology with other
patented technology to produce a test system suitable for use in
large volume blood donor centers as well as testing the blood of
individual patients.
Equipment. Immucor also distributes laboratory equipment
designed to automate certain blood test procedures. The Company
markets, under its name, cell washers, which are used to remove
unwanted proteins, albumin and other substances from a diagnostic
test system and to bring the antibodies and antigens in the system
into close physical contact by centrifugation.
Products Under Development
Immucor continually seeks to improve its existing products and
to develop new ones in order to enhance its market share. Prior to
their sale, any new products will require licensing or premarket
approval by the FDA. The Company employs several persons whose
specific duties are to continue to improve existing products and
develop new products for the Company's existing and potential
customers. The Company also has established relationships with
other individuals and institutions who provide similar services and
the Company expects that it will continue to do so. The Company
intends to continue its product development efforts primarily in
the area of solid phase technology and in several other areas that
may also be useful in connection with the development of additional
solid phase products. For the fiscal years ended May 31, 1995,
1994 and 1993, the Company spent $1,129,600, $2,482,700, and
$1,711,400, respectively, for research and development. The
significant decrease in spending during fiscal 1995 was due to the
fact that the research phase of the Company's development project
for blood bank automation is nearing completion. See "Products
Under Development - Blood Bank Automation." The Company may in the
future acquire related technologies and product lines, or the
companies that own them, to improve the Company's ability to meet
the needs of its customers.
Blood Bank Automation . The Company believes that the blood
banking industry today is labor-intensive, and that a market exists
for further automation of blood compatibility tests currently being
performed manually by hospital blood bank technologists. Since
1992 the Company has worked with Bio-Tek Instruments, Inc., a
privately held Vermont corporation, to combine the reagent
manufacturing expertise of Immucor with the medical instrumentation
expertise of Bio-Tek, to develop a completely automated, "walk
away" blood bank testing system. Bio-Tek has been responsible for
engineering, software development and manufacturing. The
instrument uses Immucor's proprietary Capture (registered
trademark) product technology to perform blood bank patient
testing. Immucor plans to market the instrument worldwide. Through
May 31, 1995 instrument research and development costs related to
the contract totaled $3.2 million, of which $1.2 million was
incurred during fiscal 1993, $1.8 million was incurred during
fiscal 1994, and $0.2 million was incurred during fiscal 1995. The
Company incurred $0.4 million and $0.2 million in additional costs
related to the project in fiscal 1995 and 1994, respectively. See
"Management's Discussion and Analysis of Financial Condition,
Liquidity and Capital Resources." There is no assurance that the
instrument will be approved for sale by the FDA, or that it will
gain market acceptance even if approved. See "Regulation of
Business."
Additional Solid Phase Applications. The Company plans to
continue to develop and refine its patented, solid phase
technology. Currently, the Company is developing Capture-S, a
solid phase screening test for the detection of IgG and IgM
antibodies in the serum or plasma of blood donors with syphilis,
which is pending FDA review.
Monoclonal Antibodies. Monoclonal antibodies are derived by
fusing an antibody-producing cell with a tumor cell, resulting in a
hybridoma cell that manufactures the original antibody. The
Company is actively engaged in the development of additional
monoclonal antibodies for a variety of uses, including the
detection of blood group and infectious disease antigens, and for
use in the solid phase test systems. The Company believes
monoclonal antibody reagents will continue to be in strong demand
for two reasons. First, they are highly specific, which means that
their sensitivity allows them to detect and identify antigens with
greater efficiency than other reagents. Second, product quality
and consistency is maintained from production lot to production
lot. The Company has equipped a research laboratory for developing
monoclonal antibody-based reagents and has employed several persons
experienced in monoclonal antibody technology. Additionally, the
Company will pursue the development of such antibodies through
contracts with outside institutions.
Cell Drying Technology. Immucor has developed a proprietary
method to modify plastic or glass surfaces to immobilize platelets
and red cells. Additionally, the Company has developed a
proprietary method to dry platelets and red cells upon the modified
surfaces. This technique is currently utilized in several of the
CompanyOs Capture (registered trademark) products.
Marketing and Distribution
Immucor's potential U.S. customers are approximately 6,000
blood banks, hospitals and clinical laboratories. The Company
maintains an active client base of over 4,000 customers, and no one
customer purchases annually in excess of 6% of the Company's
current sales volume. The Company believes there is no seasonality
to its sales activity and there is no material backlog of orders.
The Company has sought to increase its market share through
the use of its experienced direct sales force and through the
expansion of its product line to offer customers a full range of
products for their reagent needs. The Company believes it can
increase its market share by marketing products based on its solid
phase technology.
The Company markets and sells its products to its customers
directly through 21 sales personnel employed by the Company in the
U.S., 16 in Germany, 1 in Portugal, and six direct employees with
an additional 10 sales agents in Italy. The Company has hired
personnel whom the Company considers to be highly experienced and
respected for their knowledge of the blood bank diagnostic
business. The Company believes that it can more effectively market
its products through persons who specialize in blood testing
reagents and related equipment, as opposed to persons who generally
sell a broader line of medical supplies but without any expertise
in blood testing products. Continuing technical support and
service is also provided to customers through the Company's
Consultation Laboratory, which assists the Company's customers in
identifying certain blood group antibodies which are rare or
difficult to detect. Each year Immucor sponsors workshops in the
U.S. and Europe to which customers are invited to hear the latest
developments in the field.
The Company also markets its products internationally through
distributors located throughout the world. For the fiscal years
ended May 31, 1995, 1994 and 1993, the Company had foreign net
sales, including net domestic export sales to unaffiliated
customers, of approximately $16,187,000, $16,356,000, and
$17,633,000, respectively, and these sales accounted for
approximately 56.0%, 55.3%, and 58.6% of the Company's total net
sales for the respective fiscal years. Most of the Company's
foreign sales occurred in Germany and in Italy where the Company
maintains subsidiaries. (See Note 11 to the Consolidated Financial
Statements.)
Suppliers
The Company obtains raw materials from numerous outside
suppliers. The Company is not dependent on any single supplier
other than the joint manufacturers of the Company's monoclonal
antibody-based products. The Company believes that its business
relationship with suppliers is excellent.
Certain of the Company's products are derived from blood
having particular or rare combinations of antibodies and antigens
which are found in a limited number of individuals. The Company to
date has not experienced any major difficulty in obtaining
sufficient quantities of such blood for use in manufacturing its
products, but there can be no assurance that the Company will
always have available to it a sufficient supply of such blood.
Regulation of Business
The manufacture and sale of blood banking products is a highly
regulated business and is subject to continuing compliance with
various federal and state statutes, rules and regulations
regarding, generally, licensing, product testing, facilities
compliance, product labeling, and consumer disclosure. See
"Industry" above. The Company operates under U.S. Government
Establishment License No. 886 granted by the FDA in December 1982.
An FDA license is issued for an indefinite period of time, subject
to the FDA's right to revoke the license. As part of its overview
responsibility, the FDA makes plant and facility inspections on an
unannounced basis. Further, a sample of each production lot of
many of the Company's products must be submitted to and approved by
the FDA prior to its sale or distribution.
In addition to its facilities license, the Company holds
several product licenses to manufacture blood grouping reagents.
To obtain a product license, the Company must submit the product
manufacturing methods to the FDA, perform a clinical trial of its
product and demonstrate to the satisfaction of the FDA that the
product meets certain efficacy and safety standards. The Company's
automated blood bank instrument currently under development will
require clearance from the FDA. There can be no assurance that any
future product licenses will be obtained by the Company .
To sell its products in Germany, Immucor GmbH must license its
products with the Paul-Ehrlich-Institute prior to product
introduction. In addition, an import license for products
purchased outside the European Economic Community is required. To
date, Immucor GmbH has been able to obtain licenses needed to
effectively promote its products in Germany and throughout Europe.
The Company has hired and retained several employees who are
highly experienced in FDA and other regulatory authority
compliance, and the Company believes that its manufacturing and on-
going quality control procedures conform to the required federal
and state rules and regulations. To date the Company has not
experienced any difficulty in complying with the various regulatory
requirements imposed on it.
Patents, Trademarks and Royalties
Since 1986, the U.S. Patent Office has issued to Immucor five
patents pertaining to its solid phase technology.
Immucor's solid phase technology, including patent rights, was
acquired from five researchers at the Community Blood Center of
Greater Kansas City pursuant to an agreement entered into on March
11, 1983, and amended in 1985 and 1987. In 1987, one of the
researchers joined the Company as Director of Research and
Development to continue to develop new products using the solid
phase technology. The agreement terminates on August 26, 2006, the
date on which the first patent issued on the technology expires.
The Company has agreed to pay the researchers royalties equal to 4%
of the net sales from products utilizing the solid phase
technology. For the fiscal years ended May 31, 1995, 1994 and
1993, the Company paid the researchers royalties of approximately
$278,300, $250,000, and $207,100 under this agreement.
Through its development activities involving its solid phase
technology, the Company has acquired expertise in such technology
which it considers trade secrets. While the Company will continue
to seek patent protection for its solid phase technology and new
applications thereof, the Company believes that its acquired
expertise and know-how, including the above mentioned trade
secrets, will provide more important protection from competition.
The Company has registered the trademark "Immucor" and several
product names, such as "ImmuAdd", "Capture", "Capture-P", "MCP",
"Capture-R", "Ready-Screen", "Ready-ID" and "Capture-CMV".
Competition
There are other competitors with licenses to manufacture blood
banking reagents in the United States. The Company's principal
U.S. competitors for blood bank reagents are Ortho Diagnostic
Systems, a division of Johnson & Johnson, Inc.; Organon-Teknika, a
Dutch company; and Gamma Biologicals Inc. Additional European
competitors for blood bank products include Biotest, a German
company; and Diamed, a Swiss company. All of these companies have
been established longer, some have larger market shares than the
Company, and some have substantially greater financial and other
resources than the Company. However, the Company believes that it
is properly positioned to compete favorably in the business
principally because of the quality and price of its products, the
sale of innovative products such as the Company's Capture
(registered trademark) products (see "Products"), the experience
and expertise of its sales personnel (see "Marketing and
Distribution"), the stability and experience of its management team
(see Item 10 "Directors and Executive Officers of the Registrant"),
and the expertise of its technical and customer support staff.
Employees
At August 1, 1995, the Company had 114 full time employees in
the U.S., of whom 23 were in sales and marketing, 72 were in
manufacturing, research, and distribution, and 19 were in general
and administration. The Company has experienced a low turnover
rate among its technical and sales staff, and none of the Company's
employees is represented by a union. The Company considers its
employee relations to be good.
At August 1, 1995, in Germany, Portugal and Italy, the Company
had 49 full-time employees, of whom 23 were in sales and marketing
and 26 were in distribution and administration.
Item 2.-Properties.
The Company leases its 38,000 square foot facility in
Norcross, Georgia, a suburb of Atlanta, as its executive offices,
laboratories and manufacturing facilities. Rent charges for the
fiscal year ended May 31, 1995, were $306,000. The term of the
lease is for a five-year period ending December 1997. In Germany,
the Company leases 1,566 square meters near Frankfurt. Rent
expense for the fiscal year ended May 31, 1995, totaled $355,100.
The term of the lease in Germany is through April 2009. In Italy
rent expense for the fiscal year ended May 31, 1995 totaled $58,900
for 465 square meters. The Company has two separate lease
agreements for the facility in Italy. The term of the first lease
is through September 1998 and the second lease is through April
2000. The Company believes all of its facilities and lease terms
are adequate and suitable for the Company's current and anticipated
business for the foreseeable future.
Item 3.-Legal Proceedings.
The Company is not currently a party to any pending legal
proceedings.
Item 4.-Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5.-Market for Registrant's Common Equity and Related
Stockholder Matters.
Immucor's Common Stock trades on The Nasdaq Stock Market under
the symbol BLUD. The following table sets forth the quarterly high
and low sale prices of the Common Stock for the fiscal periods
indicated. These prices represent inter-dealer quotations without
retail markups, markdowns or commissions and may not represent
actual transactions.
High Low
Fiscal Year Ended May 31, 1994
First Quarter . . . . . . . .. . . . . $6 3/4 $4 1/4
Second Quarter . . . . . . . . . . . . . 7 5
Third Quarter . . . . . . . . . . . . . 7 1/4 5 3/4
Fourth Quarter . . . . . . . . . . . . . 7 4 3/4
Fiscal Year Ended May 31, 1995
First Quarter . . . . . . . . . . . . . $6 1/4 $4 3/4
Second Quarter . . . . . . . . . . . . . 7 1/4 5
Third Quarter . . . . . . . . . . . . . 6 1/4 5
Fourth Quarter . . . . . . . . . . . . . 10 3/4 5 1/2
As of August 1, 1995, there were approximately 620 holders of
record of the Company's Common Stock. The last reported sales price
of the Common Stock on such date was $11 1/2.
Immucor has not declared any cash dividends with respect to
its Common Stock. The Company presently intends to continue to
retain all earnings in connection with its business.
Item 6.-Consolidated Selected Financial Data.
(All amounts are in thousands, except per share amounts*)
Year Ended May 31,
1995 1994 1993 1992(1) 1991(2)
Statement of Operations Data:
Net sales $28,892 $29,581 $30,070 $27,263 $20,618
Cost of sales 10,865 12,394 11,674 11,354 8,879
Gross profit 18,027 17,187 18,396 15,909 11,739
Operating expenses:
Selling, general, & admin. 12,575 12,179 13,302 10,991 7,492
Restructuring and other
non-recurring charges 625
Research and development:
Instrument 644 2,005 1,245
General 486 478 466 481 481
Total operating expenses 13,705 15,287 15,013 11,472 7,973
Income from operations 4,322 1,900 3,383 4,437 3,766
Other:
Investment income, net 297
Interest income 677 507 556 803 982
Interest expense (463) (579) (773) (631) (362)
Other (5) (110) (168) (40) (15)
Total other 209 (182) (385) 132 902
Income before income taxes 4,531 1,718 2,998 4,569 4,668
Income taxes 1,641 992 1,165 1,525 1,571
Net income $2,890 $726 $1,833 $3,044 $3,097
Income per common and
common equivalent share:* $ .37 $ .09 $ .25 $ .35 $ .38
Weighted average number of
common and common equivalent
shares outstanding 7,856 7,798 8,070 8,864 8,233
Balance Sheet Data:
Working capital $29,101 $21,219 $24,253 $24,203 $18,370
Total assets 43,979 41,311 40,421 41,509 32,685
Long-term debt, less 5,744 4,391 3,720
current portion
Retained earnings 15,256 12,367 11,641 9,809 6,765
Shareholders' equity 34,067 31,026 30,389 31,372 25,148
With respect to the 1993 and 1992 earnings per share calculations,
net income has been increased by approximately $178,200 and
$23,000, respectively, in accordance with the modified treasury
stock method.
*All share data have been adjusted to reflect a 3-for-2 stock split
effected as a 50% stock dividend on June 21, 1991, and a 5-for-4
stock split effected as a 25% stock dividend on July 6, 1990.
(1) Includes results of Immucor Italia since October 1, 1991.
(2) Includes results of Immucor GmbH since October 1, 1990.
Item 7.-Management's Discussion and Analysis of Financial Condition
and Results of Operations.
(a) Liquidity and Capital Resources
Net cash provided by operating activities totaled $2,740,000,
$2,309,000, and $2,871,000 for the fiscal years 1995, 1994 and 1993
respectively. As of May 31, 1995, the Company's cash balance
totaled $18.7 million.
During fiscal 1995, the Company experienced an increase in
accounts receivable of approximately $1,029,000 over the previous
year. Most of this increase can be attributed to a slow-down in
the collection process in Italy, due to the funding program
established by the Italian government for health care providers.
The Company expects shorter payment terms in the future as a result
of the Italian government's plan to reorganize the administration
of the Italian health sector. However, to date benefits have not
yet been realized.
During the fiscal year 1992 the Company authorized a program
to repurchase up to 500,000 shares of its common stock in the open
market. Through May 31, 1995, the Company repurchased
approximately 422,000 shares of its common stock for $2.8 million
under the program.
In April 1992, the Company invested $1.0 million in the common
stock of Bio-Tek Instruments, Inc. (Bio-Tek), a privately held
Vermont company that designs and manufactures medical
instrumentation. Since 1992, the Company has worked with Bio-Tek
to complete the development of a fully automated blood bank
instrument. Through May 31, 1995, $3.2 million was spent under
this contract.
The Company's Italian subsidiary had approximately $0.2
million in borrowings under an Italian lira line of credit as of
May 31, 1995, with an additional $1.0 million available, and the
CompanyOs German subsidiary had approximately $0.4 million in
unused Deutsche Mark lines of credit. At May 31, 1994, the Company
had notes payable totaling $5,955,289. Since the beginning of
fiscal 1995 and through March, 1995 the Company repaid $1,177,520
of this debt. In March, 1995 the Company refinanced its remaining
Deutsche Mark debt with the proceeds of a note payable, and entered
into an interest rate swap agreement, with a domestic bank (See
Note 3 to the Consolidated Financial Statements). At May 31, 1995,
the note payable with a principal amount of $5,744,238, and the
interest rate swap agreement with a notional principal of the same
amount, were outstanding.
The Company does not have any material capital commitments.
Management believes that the Company's current cash balance,
internally generated funds, and amounts available under the lines
of credit are sufficient to support operations for the foreseeable
future. Management also believes additional credit lines would be
available should the need arise.
(b) Results of Operations
Comparison of Fiscal Years Ended May 31, 1995 and May 31, 1994
Net sales for the fiscal year ended May 31, 1995, totaled
$28,892,000, a decrease of $689,000, or 2.3% over the previous
year. The decrease was caused by continuing pricing pressures on
the Company's traditional blood bank products and the Company's
decision to discontinue the sale of blood collection bags in
Germany. In fiscal 1994, net sales included $1,581,000 of blood
collection bags with no blood bag sales recorded in fiscal 1995.
The decline was partially offset by increased sales of the
Company's Capture product line.
As a percent of sales revenue, gross profit increased from
58.1% to 62.4% in fiscal 1995. The increase in gross margin
percentage is the result of the Company's decision to discontinue
the blood bag collection business and to concentrate marketing
efforts on the Company's own manufactured products which have a
more favorable gross margin, and favorable foreign currency
exchange values particularly in Germany.
Total operating expenses in fiscal 1995 decreased $1,583,000
compared to the previous year. Research and development expense
for the Company's blood bank instrument project decreased
$1,361,000 compared to fiscal 1994 as the Company's development
effort nears completion. The restructuring charge recorded in
fiscal 1994 to discontinue the Company's blood bag business and
reduce staffing levels did not recur in 1995.
Selling, general and administrative costs increased $396,000
compared to the same period last year. In May 1995, the Company
approved a management bonus, of which $111,000 was included in
operating expense, as the Company achieved its targeted operating
income goals for fiscal 1995.
Interest expense declined from $580,000 in fiscal 1994 to
$463,000 in fiscal 1995. This decrease was primarily due to
declining interest rates on borrowed funds and a reduction in short-
term borrowings in Europe.
Income tax expense increased $649,000 in fiscal 1995, when
compared to the prior year, principally due to higher levels of
taxable income in the U.S. and reduced research and development tax
credits available to offset taxable income.
Comparison of Fiscal Years Ended May 31, 1994 and May 31, 1993
During the fourth quarter of fiscal 1994, the Company approved
a plan to discontinue its blood bag collection business and reduce
staffing levels in Germany and in Italy. Restructuring charges
totaling approximately $625,000 consist of $349,000 associated with
the plan to discontinue the blood bag business and $276,000
associated with the staff reductions. The blood bags were sold
under a distribution agreement with a Japanese manufacturer. The
Company decided to discontinue this product line due to recent
innovations in blood bag technology by other manufacturers,
increased competition, and unfavorable foreign exchange rates which
reduced profit margins. The restructuring plan is designed to
reduce operating expenses while enabling the Company to focus on
its own manufactured products.
Net sales for the fiscal year ended May 31, 1994, totaled
$29,580,000, a decrease of $490,000, or 1.6% over the previous
year. The decrease was caused by a decline in the sales of blood
collection bags in Germany of $1,298,000 which was partially offset
by increased sales of the Company's Capture product line. See
discussion concerning restructuring charges above.
As a percent of sales revenue, gross profit declined to 58.1%
from 61.1% in fiscal 1993. The decline in gross margin percentage
is the result of pricing pressure on the Company's products both in
Europe and in the U.S. due to increased competition and the affects
of health-care cost containment pressures on suppliers, and
unfavorable foreign currency exchange values, particularly in
Italy.
Total operating expenses increased $274,000 in the 1994 period
over the prior year. Research and development expenses for the
Company's blood bank instrument project increased $771,000 compared
to fiscal 1993, as the Company continued its development effort
throughout the year.
Selling, general and administrative costs declined $1,123,000
compared to the same period last year. In July 1993 the Company
began to initiate steps to slow the growth of all expenses. These
steps included a temporary hiring freeze, a temporary salary freeze
at current levels, and an overall review of staffing needs.
Interest expense declined from $773,000 in fiscal 1993 to
$580,000 in fiscal 1994. This decrease was principally due to
declining interest rates on borrowed funds and a reduction in short-
term borrowings in Europe.
Although income taxes declined $173,000 in fiscal 1994, as
compared to last year, the effective tax rate on income
substantially increased. The rate increase was principally caused
by losses in Europe (including the restructuring charge of
$625,000) which could not be offset against U.S. income.
(c) Effects of Inflation on Operations
Since the rate of inflation has slowed during the past few
years, raw material prices for the Company's products have not
materially increased. The Company believes that any increase in
personnel-related expenses or material costs would be experienced
by others in the industry and can be reflected in increased selling
prices of the Company's products.
Item 8.-Financial Statements and Supplementary Data.
The following consolidated financial statements of the Company
are included under this item:
-Independent Auditors' Report
-Consolidated Balance Sheets, May 31, 1995, and 1994
-Consolidated Statements of Operations for the Years Ended
May 31, 1995, 1994 and 1993
-Consolidated Statements of Shareholders' Equity for the
Years Ended May 31, 1995, 1994 and 1993.
-Consolidated Statements of Cash Flows for the Years Ended
May 31, 1995, 1994 and 1993
-Notes to Consolidated Financial Statements
-Consolidated Financial Statement Schedule
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
of Immucor, Inc.:
We have audited the accompanying consolidated balance sheets of
Immucor, Inc. and its subsidiaries as of May 31, 1995 and 1994, and
the related consolidated statements of operations, shareholders'
equity, and cash flows for each of the three years in the period
ended May 31, 1995. Our audits also included the financial
statement schedule listed in the Index at Item 14. These financial
statements and financial statement schedule are the responsibility
of the Company's management. Our responsibility is to express an
opinion on the financial statements and financial statement
schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of
Immucor, Inc. and its subsidiaries as of May 31, 1995 and 1994 and
the results of their operations and their cash flows for each of
the three years in the period ended May 31, 1995 in conformity with
generally accepted accounting principles. Also, in our opinion,
such financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth
therein.
/s/ Deloitte & Touche LLP
Atlanta, Georgia
July 21, 1995
IMMUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
May 31,
ASSETS 1995 1994
CURRENT ASSETS:
Cash $18,741,681 $18,303,252
Accounts receivable (less an allowance for
doubtful accounts of approximately $233,197 in
1995 and $178,094 in 1994) 8,009,967 6,981,070
Inventories (Note 2) 5,469,966 5,158,120
Income tax receivable (Note 8) 76,455 137,944
Deferred income taxes (Note 8) 250,387 207,599
Other assets 720,592 715,726
Total current assets 33,269,048 31,503,711
LONG-TERM INVESTMENT (Note 1) 1,000,000 1,000,000
PROPERTY AND EQUIPMENT - Net (Note 2) 2,858,472 2,592,828
DEFERRED INCOME TAXES (Note 8) 23,551 6,773
OTHER ASSETS - Net 329,492 146,932
EXCESS OF COST OVER NET TANGIBLE ASSETS ACQUIRED 6,498,679 6,061,147
(Note 1)
TOTAL ASSETS $43,979,242 $41,311,391
MAY 31,
LIABILITIES AND SHAREHOLDERS' EQUITY 1995 1994
CURRENT LIABILITIES:
Borrowings under bank line of credit agreements $ 241,639 $ 549,272
(Note 3)
Notes payable (Note 3) 5,955,289
Accounts payable 2,425,510 2,548,653
Income taxes payable (Note 8) 519,708 345,638
Accrued salaries and wages 683,032 446,899
Accrued restructuring costs (Note 7) 105,198 246,489
Other accrued liabilities 192,903 192,752
Total current liabilities 4,167,990 10,284,992
LONG-TERM DEBT (Note 3) 5,744,238
SHAREHOLDERS' EQUITY (Notes 4 and 5):
Common stock - authorized 15,000,000 shares,
$.10 par value; issued 9,817,802 in 1995 and
9,804,209 in 1994 981,780 980,421
Additional paid-in capital 27,031,185 26,988,275
Retained earnings 15,256,375 12,366,588
Treasury stock, at cost (8,455,035) (8,455,035)
Foreign currency translation adjustment (747,291) (853,850)
Shareholders' equity, net 34,067,014 31,026,399
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $43,979,242 $41,311,391
See notes to consolidated financial statements.
IMMUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended May 31,
1995 1994 1993
NET SALES $28,891,538 $29,580,478 $30,070,367
COST OF SALES 10,865,349 12,393,673 11,673,962
GROSS PROFIT 18,026,189 17,186,805 18,396,405
OPERATING EXPENSES:
Selling, general and administrative 12,574,880 12,179,334 13,302,009
Restructuring and other non-
recurring charges (Note 7) 625,126
Research and development:
Instrument (Note 10) 643,839 2,004,842 1,245,199
General 485,799 477,812 466,240
13,704,518 15,287,114 15,013,448
INCOME FROM OPERATIONS 4,321,671 1,899,691 3,382,957
OTHER:
Interest income 677,186 507,239 555,863
Interest expense (462,803) (579,577) (773,309)
Other (5,392) (109,836) (167,783)
208,991 (182,174) (385,229)
INCOME BEFORE INCOME TAXES 4,530,662 1,717,517 2,997,728
INCOME TAXES (Note 8) 1,640,875 991,855 1,165,348
NET INCOME $2,889,787 $725,662 $1,832,380
INCOME PER COMMON AND COMMON
EQUIVALENT SHARE $ .37 $ .09 $ .25
See notes to consolidated financial statements.
IMMUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Additional
Common Stock Paid-In Retained Treasury Stock Translation Shareholders'
Shares Amount Capital Earnings Shares Amount Adjustment Equity
BALANCE, MAY 31, 1992 9,537,118 $ 953,712 $26,215,818 $ 9,808,546 1,690,207 $(5,617,493) $ 11,197 $31,371,780
Exercise of
stock options 66,072 6,607 93,237 99,844
Purchase of treasury stock 344,234 (2,403,026) (2,403,026)
Other (3,920) (3,920)
Foreign currency translation
adjustment (568,330) (568,330)
Tax benefits related to
stock options 60,722 60,722
Net income 1,832,380 1,832,380
BALANCE, MAY 31, 1993 9,603,190 960,319 26,365,857 11,640,926 2,034,441 (8,020,519) (557,133) 30,389,450
Exercise of
stock options 201,019 20,102 380,331 400,433
Purchase of treasury stock 77,959 (434,516) (434,516)
Foreign currency translation
adjustment (296,717) (296,717)
Tax benefits related to
stock options 242,087 242,087
Net income 725,662 725,662
BALANCE, MAY 31, 1994 9,804,209 980,421 26,988,275 12,366,588 2,112,400 (8,455,035) (853,850) 31,026,399
Exercise of
stock options 13,593 1,359 23,820 25,179
Foreign currency translation
adjustment 106,559 106,559
Tax benefits related to
stock options 19,090 19,090
Net income 2,889,787 2,889,787
BALANCE, MAY 31, 1995 9,817,802 $981,780 $27,031,185 $15,256,375 2,112,400 $(8,455,035) $(747,291) $34,067,014
See notes to consolidated financial statements.
IMMUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended May 31,
1995 1994 1993
OPERATING ACTIVITIES:
Net income $2,889,787 $ 725,662 $1,832,380
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 776,440 688,885 701,568
Amortization 299,024 293,632 324,312
Tax benefits related to stock options 19,090 242,087 60,722
Changes in assets and liabilities, net
of effects from purchased businesses:
Accounts receivable (1,028,898) (261,800) (41,817)
Income tax receivable 61,489 49,931 (128,899)
Inventories (311,846) 508,751 (145,289)
Other assets (110,739) (97,601) (214,097)
Accounts payable (123,143) (335,224) 637,500
Other current liabilities 269,062 494,805 (155,108)
Total adjustments (149,521) 1,583,466 1,038,892
Net cash provided by operating
activities 2,740,266 2,309,128 2,871,272
INVESTING ACTIVITIES:
Purchases of/deposits for property
and equipment (1,035,412) (553,941) (562,742)
Purchase of businesses, net of cash
acquired (425,000)
(Increase) decrease in other assets (15,000) 4,388 (33,399)
Net cash used in investing activities (1,050,412) (549,553) (1,021,141)
FINANCING ACTIVITIES:
Borrowings (repayments) under
line of credit agreements (307,633) 79,601 (1,618,081)
Proceeds from notes payable 5,744,238 453,343 922,585
Repayment of notes payable (6,921,758) (312,656)
Exercise of stock options 25,179 400,433 99,844
Purchase of treasury stock (434,516) (2,403,026)
Other (3,920)
Net cash provided by (used in)
financing activities (1,459,974) 186,205 (3,002,598)
EFFECT OF EXCHANGE RATE CHANGES ON
CASH 208,549 (186,934) (131,433)
NET INCREASE (DECREASE) IN CASH 438,429 1,758,846 (1,283,900)
CASH, BEGINNING OF YEAR 18,303,252 16,544,406 17,828,306
CASH, END OF YEAR $18,741,681 $18,303,252 $16,544,406
CASH PAID DURING THE YEAR FOR:
Interest $ 574,908 $ 632,257 $ 791,457
Income taxes 1,528,127 721,046 1,190,584
See notes to consolidated financial statements.
IMMUCOR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Nature of Business - The Company's principal business activities
are the development, manufacturing, and marketing of
immunological diagnostic medical products which constitute one
business segment.
Consolidation Policy - The consolidated financial statements
include the accounts of the Company and its wholly owned
subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.
Concentration of Credit Risk - At May 31, 1995 and 1994,
substantially all of the Company's cash balances were on deposit
with a high quality U.S. financial institution. At various
times during the year a significant portion of the Company's
cash balances are invested through investment companies in U.S.
Government securities and other "AAA" rated securities with
maturities typically 90 days or less.
Inventories - Inventories are stated at the lower of first-in,
first-out cost or market. Cost includes material, labor, and
manufacturing overhead for manufactured goods and material only
for goods purchased for resale.
Property and Equipment - Property and equipment is stated at
cost less accumulated depreciation. Depreciation is computed
using the straight-line method over the estimated lives of the
related assets.
Long-Term Investment - The long-term investment, representing a
3.4% common stock investment in Bio-Tek Instruments, Inc.,
acquired in April 1992, is accounted for using the cost method
of accounting (Note 10).
Excess of Cost Over Net Tangible Assets Acquired - Goodwill
comprises the cost of purchased businesses in excess of values
assigned to net tangible assets received, and is being amortized
using the straight-line method over 20 to 30 years. The Company
periodically assesses the recoverability of goodwill based on
judgments as to the future profitability of its operations.
Accumulated amortization at May 31, 1995 and 1994 was $1,251,419
and $855,971, respectively.
Income Per Common and Common Equivalent Share - Income per
common and common equivalent share is computed using the
weighted average number of common shares and common share
equivalents outstanding during the respective periods. Common
share and common share equivalents were 7,855,840 in 1995,
7,798,448 in 1994, and 8,069,787 in 1993. With respect to the
1993 calculation, net income has been increased by approximately
$178,000 in accordance with the modified treasury stock method.
There is no significant difference between primary and fully
diluted per share amounts.
Income Taxes - Effective June 1, 1993, the Company adopted
Statement of Financial Accounting Standards ("SFAS") No. 109
"Accounting for Income Taxes." Under this method, deferred tax
assets and liabilities are determined based on the difference
between financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse. Valuation
allowances are established when necessary to reduce deferred tax
assets to the amounts expected to be realized. The cumulative
effect of adopting SFAS No. 109 was not significant to results
of operations. Additionally, SFAS 109 had no effect on fiscal
1994 pre-tax income. Prior to June 1, 1993, the Company
accounted for income taxes under the provisions of Accounting
Principles Board Opinion No. 11 (Note 8).
Foreign Currency Translation - The functional currency of the
Company's non-U.S. subsidiaries is the local currency.
Translation gains and losses are not included in determining net
income but are accumulated as a separate component of
shareholdersO equity. Foreign currency transaction gains and
losses are included in determining net income.
Revenue Recognition - Revenue from the sale of the Company's
products is recognized upon shipment.
2.BALANCE SHEET DETAIL
1995 1994
Inventories:
Raw materials and supplies $1,551,354 $1,263,129
Work in process 819,296 413,226
Finished goods and goods
purchased for resale 3,099,316 3,481,765
$5,469,966 $5,158,120
Property and Equipment:
Machinery and equipment $4,163,325 $3,568,541
Leasehold improvements 529,245 504,931
Furniture and fixtures 530,405 271,236
5,222,975 4,344,708
Less accumulated depreciation (2,364,503) (1,751,880)
Property and equipment - net $ 2,858,472 $ 2,592,828
3.BANK CREDIT AGREEMENTS, NOTES PAYABLE, AND LONG-TERM DEBT
The Company's Italian subsidiary has $1,175,000 in line of
credit agreements denominated in Lira with two Italian banks
bearing interest between 11.375% and 14.625%. Outstanding
borrowings were $241,639 and $549,272 under these lines at May
31, 1995 and 1994, respectively, and were guaranteed by the
Company.
The Company's German subsidiary has a $376,966 line of credit
agreement, as amended, denominated in Deutsche Marks with a
German bank bearing interest at 8.875%. There were no
outstanding borrowings under this line at May 31, 1995 and 1994.
At May 31, 1994, notes payable include $1,526,997 to a U.S. bank
denominated in Deutsche Marks due in September 1994 with
interest of 6.44%, $152,700 to a German bank denominated in
Deutsche Marks due in October 1994 with interest of 6.95%,
$610,799 to a German bank denominated in Deutsche Marks due in
January 1995 with interest of 7.90%, and $3,664,793 to a German
bank denominated in Deutsche Marks due in March 1995 with
interest of 9.10%.
Since the beginning of fiscal 1995 and through March 1995, the
Company repaid $1,177,520 of this debt. On March 30, the
Company refinanced its remaining Deutsche Mark debt through the
issuance of a note payable to a U.S. bank in Deutsche Marks
which matures in September 1998 with interest of Libor plus
.375%. In conjunction with the issuance of the note payable,
the Company entered into an interest rate swap agreement with
the bank, maturing September 1998, which effectively converts
the note payable's floating rate to a fixed rate of 6.915% per
annum provided the Company makes scheduled periodic payments.
If these payments are not made, the interest rate on the
scheduled payment could vary. At May 31, 1995, the outstanding
balance of the note payable was $5,744,238, which corresponds to
the notional amount of the interest rate swap agreement.
The note payable requires the maintenance of certain income and
other financial ratios, and places certain limited restrictions
on the Company's ability to acquire other entities.
The note payable and interest rate swap agreement are guaranteed
by the U.S. parent company.
4.COMMON STOCK
At May 31, 1995, the following shares of common stock are
reserved for future issuance:
Common stock options - directors and employees 2,139,175
Common stock warrants - other 510,938
2,650,113
In connection with prior years' business acquisitions, the
Company issued to the sellers warrants to acquire, in whole or
in part, 150,000 and 375,000 shares of the Company's common
stock at $26.95 and $7.75 per share, respectively, subject to
adjustment to prevent dilution. The 150,000 warrants are
exercisable 20% per year commencing August 1993, and expire in
2001. The 375,000 warrants are currently exercisable and expire
in 2008. Through May 31, 1995, 14,062 of the 375,000 warrants
had been exercised.
During fiscal 1993, options to purchase 37,359 shares of common
stock at $1.71 per share, which had been granted to certain
inventors in 1983 in connection with the purchase of technology,
were exercised.
The Company has a shareholder rights plan under which one common
stock purchase right is presently attached to and trades with
each outstanding share of the Company's common stock. The
rights become exercisable and transferable apart from the common
stock ten days after a person or group, without the Company's
consent, acquires beneficial ownership of, or the right to
obtain beneficial ownership of, 20% or more of the Company's
common stock or announces or commences a tender offer or
exchange offer that could result in 20% ownership. Once
exercisable, each right entitles the holder to purchase one
share of the Company's common stock at an exercise price of $16,
subject to adjustment to prevent dilution. The rights have no
voting power and, until exercised, no dilutive effect on net
income per common share. The rights expire on April 20, 1999,
and are redeemable at the discretion of the Board of Directors
at $.01. All reservations of shares of common stock for
purposes other than the rights plan shall take precedence and be
superior to any reservation of shares in connection with or
under the rights plan.
If a person acquires 20% ownership, except in an offer approved
by the Company under the plan, then each right not owned by the
acquirer or related parties will entitle its holder to purchase,
at the right's exercise price, common stock or common stock
equivalents having a market value immediately prior to the
triggering of the right of twice that exercise price. In
addition, after an acquirer obtains 20% ownership, if the
Company is involved in certain mergers, business combinations,
or asset sales, each right not owned by the acquirer or related
persons will entitle its holder to purchase, at the right's
exercise price, shares of common stock of the other party to the
transaction having a market value immediately prior to the
triggering of the right of twice that exercise price.
5.STOCK OPTIONS
The Company is authorized to issue up to 2,139,175 shares of its
common stock under various employee and director stock option
arrangements. These arrangements include employee incentive
plans and various voluntary salary reduction plans. Options
granted under these plans become exercisable at various times
and unless exercised expire at various dates through 2005.
Transactions involving these stock option arrangements are
summarized as follows:
Option
Price Per
Shares Share
Outstanding at May 31, 1992 1,279,133 .10 - 16.50
Granted 33,750 7.00 - 10.00
Exercised (28,713) .10 - 5.40
Canceled (11,750) 15.38 - 16.50
Outstanding at May 31, 1993 1,272,420 .10 - 10.00
Granted 58,200 6.00 - 6.25
Exercised (201,019) .10 - 4.27
Canceled (7,172) 4.27 - 8.13
Expired (4,688) 1.07
Outstanding at May 31, 1994 1,117,741 .10 - 10.00
Granted 688,500 5.38 - 6.00
Exercised (13,594) .10 - 3.13
Canceled (17,381) 3.00 - 8.125
Outstanding at May 31, 1995 1,775,266 3.00 - 10.00
At May 31, 1995 and 1994, options for 1,064,266 and 1,041,791
shares of common stock, respectively, were exercisable, and
363,909 and 36,903 shares of common stock, respectively, were
available for future grants.
6.OPERATING LEASE COMMITMENTS
The Company leases domestic office and warehouse facilities
under an operating lease agreement expiring in 1997. The
Company leases foreign office and warehouse facilities and
automobiles under operating lease agreements expiring at various
dates through 2009. Total rental expense, principally for
office and warehouse space, was $720,040 in 1995, $566,463 in
1994, and $624,344 in 1993.
The following is a schedule of approximate future annual lease
payments under operating leases that have initial or remaining
noncancelable lease terms in excess of one year as of May 31,
1995:
Year Ending May 31:
1996 $608,754
1997 606,542
1998 465,789
1999 287,357
2000 284,542
Thereafter 2,460,580
The Company may, at its option, extend its office and warehouse
facilities lease terms through various dates.
7.RESTRUCTURING AND OTHER NON-RECURRING CHARGES
During the fourth quarter of fiscal 1994, the Company approved a
plan to discontinue its blood collection bag business and reduce
staffing levels in Europe which the Company completed in fiscal
1995. Restructuring charges totaled approximately $625,000
during fiscal 1994 and consisted of $349,000 associated with the
plan to discontinue the blood bag business and $276,000
associated with the staff reductions.
8.INCOME TAXES
Sources of income (loss) before income taxes are summarized
below:
Year Ended May 31,
1995 1994 1993
Domestic Operations $4,524,194 $3,264,848 $3,504,083
Foreign Operations 6,469 (1,547,331) (506,355)
Total $4,530,663 $1,717,517 $2,997,728
The provision for income taxes is summarized as follows:
Year Ended May 31,
1995 1994 1993
Current:
Federal $1,536,798 $854,351 $1,040,404
Foreign 271 35,969 49,444
State 163,372 114,161 84,196
1,700,441 1,004,481 1,174,044
Deferred:
Federal (53,295) 6,537 43,189
Foreign (511) (55,687)
State (6,271) (18,652) 3,802
(59,566) (12,626) (8,696)
Income taxes $1,640,875 $991,855 $1,165,348
Deferred income taxes reflect the net tax effects of (a)
temporary differences between the carrying amount of assets and
liabilities for financial reporting purposes and the amounts
used for income tax purposes, and (b) operating loss
carryforwards. Valuation allowances are established when
necessary to reduce deferred tax assets to the amounts expected
to be realized. The tax effects of significant items comprising
the Company's net deferred tax asset at May 31, 1995 and 1994
are as follows:
Year Ended May 31,
1995 1994
Deferred tax liabilities:
Amortization $(1,728,801) $(1,210,118)
Depreciation (25,414)
Deferred tax assets:
Depreciation 2,573
Reserves not currently deductible 7,600 25,739
Foreign operating loss caryforwards 2,565,876 2,088,814
Uniform capitalization 206,383 176,881
1,025,644 1,083,889
Valuation allowance (751,706) (869,517)
Net deferred tax asset $ 273,938 $ 214,372
The Company's effective tax rate differs from the federal
statutory rate as follows:
Year Ended May 31,
1995 1994 1993
Federal statutory tax rate 34% 34% 34%
State income taxes, net of federal
tax benefit 2 2 2
Interest on U.S. Government
obligations (2) (1) (1)
Effect of foreign tax losses and
rates 29 5
Research and development tax
credits (1) (6)
Other 3 (1)
36% 58% 39%
As a result of utilizing compensation cost deductions arising
from the exercise of nonqualified employee stock options for
federal and state income tax purposes, the Company realized
income tax benefits of $19,090, $242,087, and $60,722 in fiscal
1995, 1994, and 1993, respectively. The income tax benefits
were recognized in the accompanying financial statements as
additions to additional paid-in capital rather than as
reductions of the respective income tax provisions because the
compensation deductions were appropriately not recognized as
compensation expense during the exercise periods.
At May 31, 1995, the Company's German subsidiary had net
operating loss carryforwards for income tax purposes of
approximately $3,655,149 which do not expire. The net operating
loss carryforwards result primarily due to differences in the
timing of amortization deductions. At May 31, 1995, the
Company's Italian subsidiary had net operating loss
carryforwards for income tax purposes of approximately
$1,135,077 which expire in 1999 and 2000.
The Omnibus Budget Reconciliation Act of 1993 was enacted on
August 10, 1993. As a result of this enactment, the Company
recognized approximately $95,000 of retroactive research and
development credits in August 1993.
9. TECHNOLOGY RIGHTS
In March 1983, the Company acquired rights to technology to be
used in developing diagnostic testing products. In connection
with this acquisition, the Company has agreed to pay to the
inventors royalties equal to 4% of the net sales from products
utilizing the technology. Royalties under this agreement
amounted to approximately $278,300, $250,000, and $207,100 in
fiscal 1995, 1994, and 1993, respectively.
10.INSTRUMENT DEVELOPMENT AND MANUFACTURING AGREEMENT
The Company has contracted with Bio-Tek Instruments, Inc. (Note
1) for the development of a fully automated blood bank
instrument utilizing the Company's patented Capture products
technology. Instrument development costs under this contract
for the fiscal years ended May 31, 1995, 1994 and 1993 were
$200,142, $1,765,698, and $1,245,199, respectively. In fiscal
1995 and 1994, the Company incurred $443,697 and $239,144,
respectively, in additional costs related to the project.
11.DOMESTIC AND FOREIGN OPERATIONS
Information concerning the Company's domestic and foreign
operations is summarized below:
Year Ended May 31, 1995
United Europe Eliminations Consolidated
States
Net Revenues:
Unaffiliated
Customers $15,224,035 $13,667,503 $28,891,538
Affiliates 3,292,370 145,294 $(3,437,664)
Total 18,516,405 13,812,797 (3,437,664) 28,891,538
Income from
operations 3,872,959 (443,142) (5,570) 4,321,671
Identifiable assets 27,557,450 18,346,520 (1,924,728) 43,979,242
Year Ended May 31, 1994
United Europe Eliminations Consolidated
States
Net Revenues:
Unaffiliated
customers $15,823,791 $13,756,687 $29,580,478
Affiliates 2,970,566 149,445 $(3,120,011)
Total 18,794,357 13,906,132 (3,120,011) 29,580,478
Income from
operations 2,524,684 (605,966) (19,027) 1,899,691
Identifiable assets 26,972,583 15,197,590 (858,782) 41,311,391
Year Ended May 31, 1993
United Europe Eliminations Consolidated
States
Net Revenues:
Unaffiliated
customers $14,939,782 $15,130,585 $30,070,367
Affiliates 2,572,686 162,708 $(2,735,394)
Total 17,512,468 15,293,293 (2,735,394) 30,070,367
Income from
operations 2,776,657 581,688 24,612 3,382,957
Identifiable assets 26,531,138 15,071,692 (1,181,661) 40,421,169
Product sales to affiliates are valued at market prices.
During the years ended May 31, 1995, 1994, and 1993, the Company
had net domestic export sales to unaffiliated customers of
approximately $2,519,000, $2,600,000, and $2,503,000,
respectively.
12.RETIREMENT PLAN
The Company maintains a 401(k) retirement plan covering its
domestic employees who meet certain age and length of service
requirements, as defined. The Company matches a portion of
employee contributions to the plan. During the years ended May
31, 1995, 1994, and 1993, the Company's matching contributions
to the plan were $84,300, $84,300, and $68,600. Vesting in the
Company's matching contributions is based on years of
continuous service.
IMMUCOR, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MAY 31, 1993, 1994, AND 1995
Balance at Charged at Balance
Beginning Costs and Deductions at End
of Period Expense (Note 1) of Period
1993:
Accounts receivable -
Allowance for doubtful
accounts $129,932 $29,235 $ (1,832) $157,335
1994:
Accounts receivable -
Allowance for doubtful
accounts $157,335 $35,668 $(14,909) $178,094
1995:
Accounts receivable -
Allowance for doubtful
accounts $178,094 $61,092 $ (5,989) $233,197
Note 1: "Deductions" represent accounts written off during the
period less recoveries of accounts previously written off.
Item 9.-Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
None.
PART III
Item 10.-Directors and Executive Officers of the Registrant.
The following table sets forth certain information concerning
the directors and executive officers of the Company.
Name Age Position with Company
Edward L. Gallup 56 Chairman of the Board of Directors,
President and Chief Executive Officer
Ralph A. Eatz 51 Director and Senior Vice President-Operations
Richard J. Still 46 Director, Senior Vice President-Finance,
Treasurer and Secretary
Daniel T. McKeithan 71 Director
Didier L. Lanson 45 Director
Dr. Gioacchino De Chirico 42 Director, President of Immucor Italia S.r.l.
Josef Wilms 58 Director, President of Immucor GmbH
All members of the Board of Directors hold office until the
next annual meeting of shareholders or until their successors are
duly elected and have qualified. All executive officers serve at
the pleasure of the Board of Directors.
Three of the Company's executive officers founded Immucor in
1982, and have from 23 to 31 years experience in the blood banking
diagnostic reagent industry. In addition, such officers worked
together for approximately six years at Biological Corporation of
America ("BCA"), now the blood banking reagents division of Organon-
Teknika, a Dutch health care products company. Including the time
they worked together as officers of BCA and Immucor, Messrs.
Gallup, Eatz and Still now have worked together as a management
team for over 20 years in the blood banking diagnostic reagent
business.
Edward L. Gallup has been Chairman of the Board of Directors,
President and Chief Executive Officer of the Company since its
founding. Mr. Gallup has worked in the blood banking business for
over 31 years.
Ralph A. Eatz, who has been working in the blood banking
reagent field for over 27 years, has been a director and Vice
President - Operations of the Company since its founding, and
Senior Vice President - Operations since December 1988.
Richard J. Still has been a director of the Company since
August 1982, Vice President - Finance (August 1982 to November
1988) and now Senior Vice President - Finance (since December
1988), and Secretary and Treasurer since February 1983. He has
worked in the blood banking reagent business for over 23 years.
Daniel T. McKeithan has been a director of the Company since
February 28, 1983. Since 1986, he has served as a consultant to
health care companies. From April 1979 until March 1986 he was
employed by Blood Systems, Inc., a supplier of blood and blood
products, as a general manager and as Executive Vice President of
Operations. Mr. McKeithan also has 29 years experience in
pharmaceutical and diagnostic products with Johnson and Johnson,
Inc., including Vice President - Manufacturing of the Ortho
Diagnostic Systems division.
Didier L. Lanson has been a director of the Company since
October 24, 1989. Since September 1992, he has served as Vice
President, Europe, of SyStemix International, subsidiary of
SyStemix, Inc., a publicly traded biotechnology company primarily
engaged in the development of cellular processes and cellular
products. He was an Administrator and the President and CEO of
Diagnostics Transfusion ("DT"), a French corporation which
manufactures and distributes reagent products, and President and
CEO of ESPACE VIE, a French corporation which develops and markets
pharmaceutical blood based products and biotech products, from 1987
until December 1991.
Dr. Gioacchino De Chirico has been President of Immucor Italia
S.r.l. since February 1994. From 1989 until 1994, he was employed
in the United States by Ortho Diagnostic Systems, Inc., a Johnson
and Johnson Company, as General Manager, Immunocytometry, with
worldwide responsibility. From 1979 until 1989, he was with Ortho
Diagnostic Systems, Inc., in Italy, where he began as a sales
representative and held several management positions, including
Product Manager and European Marketing Manager for Immunology and
Infectious Disease products. Immucor Italia S.r.l. was acquired by
the Company on September 30, 1991.
Josef Wilms is the founder and has been President since 1984
of Immucor GmbH, a German distributor of HLA products, DNA probes
and the Company's blood bank products. Immucor GmbH was acquired
by the Company on September 28, 1990.
Life-Aid Services, Inc. ("Life-Aid") has the right to be
represented on the Company's Board of Directors, but to date has
not requested such representation. Life-Aid, the holder of 937,500
shares of Common Stock, has agreed to vote such shares for the
Company's nominees as directors.
The Company anticipates that it may add additional outside
directors in the future.
There are no family relationships among any of the directors
or executive officers of the Company.
Compliance with Section 16(a) of the Securities Exchange Act
of 1934. Section 16(a) of the Securities Exchange Act of 1934 and
regulations of the Securities and Exchange Commission thereunder
require the Company's executive officers and directors and persons
who own more than ten percent of the Company's Common Stock, as
well as certain affiliates of such persons, to file initial reports
of ownership and changes in ownership with the Securities and
Exchange Commission and the National Association of Securities
Dealers. Executive officers, directors and persons owning more
than ten percent of the Company's Common Stock are required by
Securities and Exchange Commission regulation to furnish the
Company with copies of all Section 16(a) forms they file. During
the fiscal year ended May 31, 1995, the following executive
officers and directors inadvertently failed to file on a timely
basis Form 4, Statement of Changes in Beneficial Ownership, to
report the grant of options to buy the Company's Common Stock under
the 1995 Stock Option Plan: Edward L. Gallup, Richard J. Still,
Ralph A. Eatz, Daniel T. McKeithan, Didier L. Lanson, Dr.
Gioacchino De Chirico, and Josef Wilms. Form 5, Annual Statement
of Changes in Beneficial Ownership, was filed for each of these
individuals to report the grant of options.
Item 11.-Executive Compensation
The following table sets forth the compensation earned by the
Company's Chief Executive Officer and all of the Company's other
executive officers for services rendered in all capacities to the
Company for the last three fiscal years.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Compensation Awards
Securities All Other
Name and Other Annual Underlying Compensa-
Principal Position Year Salary Bonus (1) Compensation(2) Options (3) tion (4)
Edward L. Gallup 1995 $170,180 $10,000 $28,778 60,000 $4,906
Chairman of the Board, 1994 $165,220 $ - $26,931 - $4,617
President and Chief 1993 $161,406 $ - $25,131 - $2,949
Executive Officer
Ralph A. Eatz 1995 $164,780 $10,000 $24,586 60,000 $4,911
Director and Senior Vice 1994 $159,820 $ - $23,215 - $4,619
President - Operations 1993 $156,056 $ - $21,848 - $2,931
Richard J. Still 1995 $164,780 $10,000 $21,816 60,000 $4,808
Director, Senior Vice 1994 $153,700 $ - $20,684 - $4,498
President-Finance, 1993 $156,056 $ - $19,560 - $2,874
Treasurer and Secretary
Josef Wilms 1995 $192,714 $10,000 $18,709 60,000 -
President, Immucor GmbH 1994 $166,180 $ - $20,526 - -
and Director 1993 $174,377 $ - $24,069 - -
Dr. Gioacchino De Chirico 1995 $163,336 $10,000 $11,350 60,000 -
(5) President, Immucor
Italia, S.r.l. and Director
(1) Represents for 1995 a bonus which was accrued for the year
ended May 31, 1995, and will be paid in August 1995.
(2) Includes the value of life insurance premiums and an allowance
for automobile expenditures for each of the above named
executive officers as follows: For 1995 - for Mr. Gallup,
Eatz, Still, Wilms, and De Chirico, life insurance premiums of
$19,178, $14,986, $12,216, $2,009, and $1,750, respectively,
and an allowance for automobile expenditures for Mr. Gallup,
Eatz and Still of $9,600 each, for Mr. Wilms $16,700, and for
Dr. De Chirico $9,600. For 1994 - for Mr. Gallup, Eatz, Still
and Wilms, life insurance premiums of $17,331, $13,615,
$11,084, and $1,782, respectively, and an allowance for
automobile expenditures for Mr. Gallup, Eatz and Still of
$9,600 each, and for Mr. Wilms $18,744. For 1993 - for Mr.
Gallup, Eatz, Still and Wilms, life insurance premiums of
$15,531, $12,248, $9,960, and $1,816, respectively, and an
allowance for automobile expenditures for Mr. Gallup, Eatz and
Still of $9,600 each, and for Mr. Wilms $22,253.
(3) Represents options granted under the 1995 Stock Option Plan to
purchase shares of the Company's Common Stock at an exercise
price of $6.00. 50% of the options are exercisable beginning
January 2, 1997, and 25% per year thereafter.
(4) Represents amounts the Company contributed to the 401(k)
retirement plan on behalf of the named executive officers.
(5) Dr. De Chirico became an executive officer and director of the
Company on December 1, 1994.
Stock Options.
Options Granted. During the fiscal year ended May 31, 1995,
stock options were granted to the Company's directors and executive
officers under the 1995 Stock Option Plan. No options were granted
during the fiscal years ended May 31, 1994 and 1993.
The table below sets forth the options granted during the fiscal
year ended May 31, 1995, to the executive officers listed in the
Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
Number of % of Total Potential Realizable Value at
Securities Options Assumed Annual Rates of
Underlying Granted to Exercise or Stock Price Appreciation
Options Employees Base Price Expiration For Option Term
Name Granted (#) in Fiscal Year ($/share) Date 5% 10%
Edward L. Gallup 60,000 8.9% $6.00 1/1/05 $226,400 $573,750
Ralph A. Eatz 60,000 8.9% $6.00 1/1/05 $226,400 $573,750
Richard J. Still 60,000 8.9% $6.00 1/1/05 $226,400 $573,750
Dr. Gioacchino
De Chirico 60,000 8.9% $6.00 1/1/05 $226,400 $573,750
Josef Wilms 60,000 8.9% $6.00 1/1/05 $226,400 $573,750
Option Holdings
The table below sets forth information concerning unexercised
options held as of the end of the fiscal year by each of the
Company's executive officers. No options were exercised by any of
the executive officers during the fiscal year.
FISCAL YEAR-END OPTION VALUES
Number of Securities Value of
Underlying Unexercised Unexercised In-the-Money
Options at May 31, 1995 Options at May 31, 1995 (1)
Name Exercisable Unexercisable Exercisable Unexercisable
Edward L. Gallup 118,312 60,000 $142,005 $187,500
Ralph A. Eatz 118,312 60,000 142,005 187,500
Richard J. Still 104,250 60,000 55,875 187,500
Dr. Gioacchino De Chirico 7,500 82,500 23,438 257,812
Josef Wilms 408,000 60,000 996,094 187,500
(1) Based on the difference between the exercise price and
the closing price for the Common Stock on May 31, 1995,
of $9.125 as reported by NASDAQ.
Compensation Committee Interlocks and Insider Participation
Ralph A. Eatz has been a director and Vice President -
Operations of the Company since its founding, and Senior Vice
President - Operations since December 1988 and participates in
decisions on executive compensation. Neither Mr. McKeithan nor Mr.
Lanson are, nor have they ever been, officers or employees of the
Company.
Compensation of Directors
Members of the Board of Directors, who are not also executive
officers of the Company, receive $500.00 per meeting and are
reimbursed for all travel expenses to and from meetings of the
Board. During the year ended May 31, 1995, the members of the
Board of Directors were granted options to purchase the Company's
Common Stock under the 1995 Stock Option Plan.
Employment Contracts, Termination of Employment and Change of
Control Arrangements
The Company has in effect employment agreements (the
"Agreements") with three of its executive officers: Edward L.
Gallup, Ralph A. Eatz and Richard J. Still (individually, "the
Employee") entered into on January 1, 1986. Each of the Agreements
renews for a period of five years from each anniversary date unless
sooner terminated. If the Company terminates the employment of the
Employee "without cause", the Employee would receive his base
annual salary for the remainder of the five year period as renewed
in a single lump sum payment upon such termination. "Without
cause" is defined in the Agreements to include (i) the sale,
exchange, or other disposition, in one transaction, or in a series
of related transactions, of 20% of the Company's outstanding shares
of capital stock (but not including a purchase and sale of the
Company's Common Stock by an underwriter in a public offering),
(ii) the sale of substantially all of the Company's assets to a
purchaser or a group of associated purchasers, whether in a single
transaction or a series of related transactions, (iii) under
certain circumstances, the merger or consolidation of the Company,
or (iv) the occurrence of any change in control of the Company
within the meaning of the federal securities law. "Without cause"
also includes the relocation of the Employee without the Employee's
consent.
Immucor GmbH has in effect an employment agreement with Josef
Wilms effective for an indefinite period and subject to termination
by either party at the end of each calendar half year upon six
months prior notice. A termination by Immucor GmbH requires a
decision by the Company as its sole shareholder. Mr. Wilms has
agreed to refrain from competition with Immucor GmbH for a period
of two years following the termination of the agreement, and
Immucor GmbH must pay Mr. Wilms monthly installments of 1/16 of his
annual compensation for such forbearance. Immucor GmbH has the
right to release Mr. Wilms from his noncompetition obligations, in
which case Mr. Wilms would not be paid.
The Company has in effect employment agreements (the
"Agreement") with Dr. Gioacchino De Chirico entered into on
December 31, 1993. The Agreement renews for a period of five years
from each anniversary date unless sooner terminated based upon
sales performance of Immucor Italia. The Company may only
terminate the employment agreement "for cause", as defined in the
agreement. If the Company terminates the employment of the
Employee "without cause", the Employee would receive his base
annual salary for the remainder of the five year period as renewed
upon such termination. Dr. De Chirico has agreed to refrain from
competition with Immucor Italia, S.r.l. following the termination
of the agreement for a period of two years if he is terminated
without cause, and for a period of four years if he is terminated
for cause or if he voluntarily terminates the agreement.
Item 12.-Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth as of August 1, 1995, the
number of shares of Common Stock of Immucor beneficially owned by
each director of the Company, and by each person known to the
Company to own more than 5% of the outstanding shares of Common
Stock, and by all of the executive officers and directors of the
Company as a group.
Name of Beneficial Owner
(and address for those Shares Percent
owning more than five percent Owned(1) of Class(1)
Edward L. Gallup 217,919(2) 2.8%
Ralph A. Eatz 306,588(2) 3.9%
Richard J. Still 144,250(2) 1.9%
Dr. Gioacchino De Chirico 7,500(3) *
Josef Wilms
Immucor GmbH
D-6074 RUdermark
Adam-Opel Str. 26
Germany 408,000(4) 5.0%
Didier L. Lanson 3,750(5) *
Daniel T. McKeithan 49,687(6) *
Life-Aid Services, Inc.
5 W. 8th Street
Wilmington, Delaware 19801 937,500(7) 12.2%
Dart Financial Corporation
500 Hogsback Road
Mason, Michigan 48854 472,675 6.1%
All directors and executive officers
as a group (seven persons) 1,137,694 14.2%
* less than 1%.
(1) Unless otherwise indicated, the Company believes the
beneficial owner has sole voting and investment power over
such shares. The percentage of shares of Common Stock is
calculated assuming that the beneficial owner has exercised
any options held by such beneficial owner that are currently
exercisable, or exercisable within 60 days of August 1, 1995,
and that no other options have been exercised by anyone else.
(2) Includes for each person an option to acquire 89,250 shares at
an exercise price of $9.33 (see 1990 Stock Option Plan) and an
option to acquire 15,000 shares at $5.40 per share. Includes
for Mr. Gallup and Mr. Eatz a currently exercisable option to
acquire 14,062 shares at $3.00 per share.
(3) Includes the currently exercisable amount of an option to
purchase 30,000 shares of Common Stock at an exercise price of
$6.00 exercisable 25% per year beginning on January 6, 1995.
(4) Includes warrants to purchase 318,750 shares of Common Stock
exercisable 25% per year beginning September 28, 1991, at an
exercise price of $7.75, issued in connection with the
acquisition of Immucor GmbH. Also includes options to
purchase 89,250 shares of Common Stock at an exercise price of
$9.33.
(5) Includes a currently exercisable option to acquire 3,750
shares at $5.40 per share.
(6) Includes currently exercisable options to acquire 3,750 shares
at $3.00 per share, 3,750 shares at $5.40 per share.
(7) The Company is informed that Life-Aid Services, Inc. ("Life-
Aid") is a wholly-owned subsidiary of Rite Aid Corporation,
Harrisburg, Pennsylvania. Life-Aid has a right of first
refusal to purchase any additional Immucor securities proposed
to be issued. Life-Aid also has the right to be represented
on the Company's Board of Directors but has not requested such
representation.
Item 13.-Certain Relationships and Related Transactions.
In Germany, the Company leases approximately 1,566 square
meters of space from Doris Wilms, the wife of Josef Wilms, a
director of the Company and President of Immucor GmbH. Rental
payments for the 1995 fiscal year totaled $355,136, and the lease
term extends through April 2009.
PART IV
Item 14.-Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) Documents filed as part of this report:
1. Consolidated Financial Statements
The Consolidated Financial Statements, Notes thereto, and
Independent Auditors' Report thereon are included in Part II,
Item 8 of this report.
2. Consolidated Financial Statement Schedule Included in
Part II, Item 8 of this report
Schedule II - Valuation and Qualifying Accounts
Other financial statement schedules are omitted as they are
not required or not applicable or the required information is shown
in the applicable financial statements or notes thereto.
3. Exhibits
3.1 Articles of Incorporation (composite as of December 22,
1989) (incorporated by reference to Exhibit 3.1 to
Immucor, Inc.'s Quarterly Report on Form 10-Q for the
fiscal quarter ended November 30, 1989).
3.2 Bylaws (amended and restated as of August 28, 1991)
(incorporated by reference to Exhibit 19 to Immucor,
Inc.'s Quarterly Report on Form 10-Q for the fiscal
quarter ended August 31, 1991).
4.1 Immucor, Inc. Shareholder Rights Plan, adopted April 7,
1989 (incorporated by reference to Exhibit 4.1 to
Immucor, Inc.'s Current Report on Form 8-K dated April
7, 1989).
10.1 Standard Industrial Lease, dated July 21, 1982, between
the Company and Colony Center, Ltd. (incorporated by
reference to Exhibit 10.2 to Immucor, Inc.'s Annual
Report on Form 10-K for the fiscal year ended May 31,
1985).
10.1-1 Lease Amendment dated June 28, 1989, between the
Company and Colony Center, Ltd. (incorporated by
reference to Exhibit 10.1-1 to Immucor's Annual Report
on Form 10-K for the fiscal year ended May 31, 1989).
10.1-2 Lease Amendment dated November 8, 1991, between the
Company and Colony Center, Ltd. (incorporated by
reference to Exhibit 10.1-1 to Immucor's Annual Report
on Form 10-K for the fiscal year ended May 31, 1992).
10.2 Agreement, dated March 11, 1983, between the Company
and The Kansas City Group, as amended through January
21, 1985 (incorporated by reference to Exhibit 10.2 to
Registration Statement No. 33-16275 on Form S-1).
10.3 Agreement dated August 27, 1987, between the Company
and the Kansas City Group amending Exhibit 10.2
(incorporated by reference to Exhibit 10.3 to Immucor's
Annual Report on Form 10-K for the fiscal year ended
May 31, 1989).
10.4 United States Department of Health and Human Services
Establishment License dated December 28, 1982, for the
manufacture of biological products (incorporated by
reference to Exhibit 10.12 to Registration Statement
No. 33-966 on Form S-1).
10.5 United States Department of Health and Human Services
Product License dated December 28, 1982, for the
manufacture and sale of reagent red blood cells
(incorporated by reference to Exhibit 10.13 to
Registration Statement No. 33-966 on Form S-1).
10.6 United States Department of Health and Human Services
Product License dated MayE20, 1983, for the manufacture
and sale of blood grouping sera (incorporated by
reference to Exhibit 10.14 to Registration Statement
No. 33-966 on Form S-1).
10.7 United States Department of Health and Human Services
Product License date November 18, 1983, for the
manufacture and sale of anti-human serum (incorporated
by reference to Exhibit 10.15 to Registration Statement
No. 33-966 on Form S-1).
10.8* Employment Agreement, dated January 1, 1986, between
the Company and Edward L. Gallup (incorporated by
reference to Exhibit 10.15 to Immucor, Inc. Annual
Report on Form 10-K for the fiscal year ended May 31,
1986).
10.8-1* Amendment to Employment Agreement dated April 7,
1989, between the Company and Edward L. Gallup
(incorporated by reference to Exhibit 10.12-1 to
Immucor's Annual Report on Form 10-K for the fiscal
year ended May 31, 1989).
10.9* Employment Agreement, dated January 1, 1986, between
the Company and Ralph A. Eatz (incorporated by
reference to Exhibit 10.16 to Immucor, Inc. Annual
Report on Form 10-K for the fiscal year ended May 31,
1986).
10.9-1* Amendment to Employment Agreement dated April 7,
1989, between the Company and Ralph A. Eatz
(incorporated by reference to Exhibit 10.13-1 to
Immucor's Annual Report on Form 10-K for the fiscal
year ended May 31, 1989).
10.10* Employment Agreement, dated January 1, 1986, between
the Company and Richard J. Still (incorporated by
reference to Exhibit 10.17 to Immucor, Inc. Annual
Report on Form 10-K for the fiscal year ended May 31,
1986).
10.10-1* Amendment to Employment Agreement dated April 7,
1989, between the Company and Richard J. Still
(incorporated by reference to Exhibit 10.14-1 to
Immucor's Annual Report on Form 10-K for the fiscal
year ended May 31, 1989).
10.11* Employment Agreement dated September 12, 1990, between
Immucor GmbH and Josef Wilms (incorporated by reference
to Exhibit 10.11 to Immucor, Inc. Annual Report on Form
10-K for the fiscal year ended May 31, 1991).
10.12* Agreement dated December 31, 1993, between Immucor
Italia, S.r.l. and Dr. Gioacchino De Chirico.
10.13* Agreement dated December 31, 1993, between Immucor
Italia, S.r.l. and Dr. Gioacchino De Chirico.
10.14* 1995 Stock Option Plan, including form of Stock Option
Agreement used thereunder.
10.15* 1990 Stock Option Plan, including form of Stock Option
Agreement used thereunder.
10.16* Description of 1983 and 1984 Salary Reduction Plans
(incorporated by reference to Exhibit 10.9 to Immucor,
Inc.'s Annual Report on Form 10-K for the fiscal year
ending May 31, 1985).
10.17* Description of 1983 Stock Option Plan (incorporated by
reference to Exhibit 10.10 to Immucor, Inc.'s Annual
Report on Form 10-K for the fiscal year ending May 31,
1985).
10.18* 1986 Incentive Stock Option Plan, amended July 29,
1987, including form of Stock Option Agreement used
thereunder (incorporated by reference to Exhibit 10.9
to Registration Statement No. 33-16275 on Form S-1).
11.1 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant.
23.1 Consent of Deloitte & Touche LLP.
27 Financial Data Schedule.
*Denotes a management contract or compensatory plan or
arrangement.
(b) Reports on Form 8-K
The Company did not file a Current Report on Form 8-K during
the quarter ended May 31, 1995.
(c) Exhibits
The exhibits required to be filed with this Annual Report on
Form 10-K pursuant to Item 601, of Regulation S-K are listed under
"Exhibits" in Part IV, Item 14(a)(3) of this Annual Report on Form
10-K, and are incorporated herein by reference.
(d) Financial Statement Schedule
The Financial Statement Schedule required to be filed with
this Annual Report on Form 10-K is listed under "Financial
Statement Schedule" in Part IV, Item 14(a)(2) of this Annual Report
on Form 10-K, and is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
IMMUCOR, INC.
By: /s/ EDWARD L. GALLUP
Edward L. Gallup, Chairman of the Board of Directors,
President and Chief Executive Officer
August 11, 1995
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
/s/ EDWARD L. GALLUP
Edward L. Gallup, Director, Chairman of the Board of
Directors, President and Chief Executive Officer (Principal
Executive Officer)
August 11, 1995
/s/ RICHARD J. STILL
Richard J. Still, Senior Vice President-Finance, Secretary,
Treasurer, and Director (Principal Financial and
Accounting Officer)
August 11, 1995
/s/RALPH A. EATZ
Ralph A. Eatz, Director
August 11, 1995
/s/DANIEL T. MCKEITHAN
Daniel T. McKeithan, Director
August 11, 1995
Didier L. Lanson, Director
Dr. Gioacchino De Chirico, Director
Josef Wilms, Director
EXHIBIT INDEX
Sequential
Number Description Page Number
3.1 Articles of Incorporation (composite as of
December 22, 1989) (incorporated by reference to
Exhibit 3.1 to Immucor, Inc.'s Quarterly Report
on Form 10-Q for the fiscal quarter ended
November 30, 1989).
3.2 Bylaws (amended and restated as of August 28,
1991) (incorporated by reference to Exhibit 19
to Immucor, Inc.'s Quarterly Report on Form 10-Q
for the fiscal quarter ended August 31, 1991).
4.1 Immucor, Inc. Shareholder Rights Plan, adopted
April 7, 1989 (incorporated by reference to
Exhibit 4.1 to Immucor, Inc.'s Current Report on
Form 8-K dated April 7, 1989).
10.1 Standard Industrial Lease, dated July 21, 1982,
between the Company and Colony Center, Ltd.
(incorporated by reference to Exhibit 10.2 to
Immucor, Inc.'s Annual Report on Form 10-K for
the fiscal year ended May 31, 1985).
10.1-1 Lease Amendment dated June 28, 1989, between the
Company and Colony Center, Ltd. (incorporated by
reference to Exhibit 10.1-1 to Immucor's Annual
Report on Form 10-K for the fiscal year ended
May 31, 1989).
10.1-2 Lease Amendment dated November 8, 1991, between
the Company and Colony Center, Ltd.
(incorporated by reference to Exhibit 10.1-1 to
Immucor's Annual Report on Form 10-K for the
fiscal year ended May 31, 1992).
10.2 Agreement, dated March 11, 1983, between the
Company and The Kansas City Group, as amended
through January 21, 1985 (incorporated by
reference to Exhibit 10.2 to Registration
Statement No. 33-16275 on Form S-1).
10.3 Agreement dated August 27, 1987, between the
Company and the Kansas City Group amending
Exhibit 10.2 (incorporated by reference to
Exhibit 10.3 to Immucor's Annual Report on Form
10-K for the fiscal year ended May 31, 1989).
10.4 United States Department of Health and Human
Services Establishment License dated December
28, 1982, for the manufacture of biological
products (incorporated by reference to Exhibit
10.12 to Registration Statement No. 33-966 on
Form S-1).
10.5 United States Department of Health and Human
Services Product License dated December 28,
1982, for the manufacture and sale of reagent
red blood cells (incorporated by reference to
Exhibit 10.13 to Registration Statement No. 33-
966 on Form S-1).
10.6 United States Department of Health and Human
Services Product License dated May 20, 1983, for
the manufacture and sale of blood grouping sera
(incorporated by reference to Exhibit 10.14 to
Registration Statement No. 33-966 on Form S-1).
10.7 United States Department of Health and Human
Services Product License date November 18, 1983,
for the manufacture and sale of anti-human serum
(incorporated by reference to Exhibit 10.15 to
Registration Statement No. 33-966 on Form S-1).
10.8* Employment Agreement, dated January 1, 1986,
between the Company and Edward L. Gallup
(incorporated by reference to Exhibit 10.15 to
Immucor, Inc. Annual Report on Form 10-K for the
fiscal year ended May 31, 1986).
10.8-1* Amendment to Employment Agreement dated
April 7, 1989, between the Company and Edward L.
Gallup (incorporated by reference to Exhibit
10.12-1 to Immucor's Annual Report on Form 10-K
for the fiscal year ended May 31, 1989).
10.9* Employment Agreement, dated January 1, 1986,
between the Company and Ralph A. Eatz
(incorporated by reference to Exhibit 10.16 to
Immucor, Inc. Annual Report on Form 10-K for the
fiscal year ended May 31, 1986).
10.9-1* Amendment to Employment Agreement dated
April 7, 1989, between the Company and Ralph A.
Eatz (incorporated by reference to Exhibit 10.13-
1 to Immucor's Annual Report on Form 10-K for
the fiscal year ended May 31, 1989).
10.10* Employment Agreement, dated January 1, 1986,
between the Company and Richard J. Still
(incorporated by reference to Exhibit 10.17 to
Immucor, Inc. Annual Report on Form 10-K for the
fiscal year ended May 31, 1986).
10.10-1* Amendment to Employment Agreement dated
April 7, 1989, between the Company and Richard
J. Still (incorporated by reference to Exhibit
10.14-1 to Immucor's Annual Report on Form 10-K
for the fiscal year ended May 31, 1989).
10.11* Employment Agreement dated September 12, 1990,
between Immucor GmbH and Josef Wilms
(incorporated by reference to Exhibit 10.11 to
Immucor, Inc. Annual Report on Form 10-K for the
fiscal year ended May 31, 1991).
10.12* Agreement dated December 31, 1993, between
Immucor Italia, S.r.l. and Dr. Gioacchino De
Chirico.
10.13* Agreement dated December 31, 1993, between
Immucor Italia, S.r.l. and Dr. Gioacchino De
Chirico.
10.14* 1995 Stock Option Plan, including form of Stock
Option Agreement used thereunder.
10.15* 1990 Stock Option Plan, including form of Stock
Option Agreement used thereunder.
10.16* Description of 1983 and 1984 Salary Reduction
Plans (incorporated by reference to Exhibit 10.9
to Immucor, Inc.'s Annual Report on Form 10-K
for the fiscal year ending May 31, 1985).
10.17* Description of 1983 Stock Option Plan
(incorporated by reference to Exhibit 10.10 to
Immucor, Inc.'s Annual Report on Form 10-K for
the fiscal year ending May 31, 1985).
10.18* 1986 Incentive Stock Option Plan, amended July
29, 1987, including form of Stock Option
Agreement used thereunder (incorporated by
reference to Exhibit 10.9 to Registration
Statement No. 33-16275 on Form S-1).
11.1 Statement re computation of per share earnings.
21 Subsidiaries of the Registrant.
23.1 Consent of Deloitte & Touche LLP.
27 Financial Data Schedule.
*Denotes a management contract or compensatory
plan or arrangement.