Back to GetFilings.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
( x ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
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 0-11997
CARRINGTON LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
Texas 75-1435663
------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2001 Walnut Hill Lane, Irving, Texas 75038
-----------------------------------------------------
(Address of principal executive offices and Zip Code)
972-518-1300
-----------------------------------------------------
(Registrant's telephone number, including area code)
----------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date. 9,871,695 shares of Common
Stock, $.01 par value, were outstanding at August 9, 2002.
INDEX
Page
----
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
at June 30, 2002 (unaudited) and
December 31, 2001 3
Condensed Consolidated Statements of
Operations for the three and six
months ended June 30, 2002 (unaudited)
and 2001 4-5
Condensed Consolidated Statements
of Cash Flows for the six months ended
June 30, 2002 (unaudited) and 2001 6
Notes to Condensed Consolidated Financial
Statements (unaudited) 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-13
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 13
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of 13-14
Security Holders
Item 6. Exhibits & Reports on Form 8-K. 14
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Condensed Consolidated Balance Sheets
(Dollar amounts in 000's)
December 31, June 30,
2001 2002
------ ------
(unaudited)
Assets
Cash and cash equivalents $ 3,454 $ 2,008
Accounts receivable, net 1,622 2,047
Inventories 5,338 4,548
Prepaid expenses 189 492
------ ------
Total current assets 10,603 9,095
Property, plant and equipment, net 10,404 10,162
Other assets 210 170
------ ------
Total assets $21,217 $19,427
====== ======
Liabilities and Shareholders' Investment
Notes payable $ 763 $ 763
Accounts payable 1,099 661
Accrued liabilities 884 962
Deferred revenue 417 417
------ ------
Total current liabilities 3,163 2,803
Capital lease obligation - 146
Deferred revenue, long-term 1,125 1,375
Shareholders' investment:
Common stock 98 99
Capital in excess of par 52,429 52,501
Deficit (35,598) (37,497)
------ ------
Total shareholders' investment 16,929 15,103
------ ------
Total liabilities and
shareholders' investment $21,217 $19,427
====== ======
The accompanying notes are an integral part of these statements.
Condensed Consolidated Statements of Operations (unaudited)
(Dollar amounts and shares in 000's, except per share amounts)
Three Months Ended
June 30,
2001 2002
----- -----
Revenues:
Net product sales $3,702 $ 3,729
Royalty income 628 617
----- -----
Total revenues 4,330 4,346
Costs and expenses:
Cost of sales 2,464 2,874
Selling, general and administrative 1,204 1,454
Research and development - basic 614 462
Research and development - DelSite - 383
Other Income (7) 21
Interest, net (5) 10
----- -----
Income (loss) from operations before
income taxes 60 (858)
Income taxes - -
----- -----
Net income (loss) $ 60 $ (858)
===== =====
Net income (loss) per share-
basic and diluted $ 0.01 $(0.09)
===== =====
The accompanying notes are an integral part of these statements.
Condensed Consolidated Statements of Operations (unaudited)
(Dollar amounts and shares in 000's, except per share amounts)
Six Months Ended
June 30,
2001 2002
------- -------
Revenues:
Net product sales $ 7,728 $ 6,847
Royalty income 1,259 1,235
------- -------
Total revenue 8,987 8,082
Costs and expenses:
Cost of sales 5,121 5,465
Selling, general and administrative 2,434 2,952
Research and development - basic 1,188 849
Research and development - DelSite - 679
Other income (26) 21
Interest, net (16) 17
------- -------
Income (loss) from operations before
income taxes 286 (1,901)
Income taxes - -
------- -------
Net income (loss) $ 286 $ (1,901)
======= =======
Net income (loss) per share
basic and diluted $ 0.03 $ (0.19)
======= =======
The accompanying notes are an integral part of these statements.
Condensed Consolidated Statements of Cash Flows (unaudited)
(Dollar amounts in 000's)
Six Months Ended
June 30,
2001 2002
------- -------
Cash flows from operating activities
Net income (loss) $ 286 $ (1,901)
Adjustments to reconcile net loss to
net cash provided (used) by
operating activities:
Depreciation and amortization 506 564
Provision for inventory obsolescence 75 -
Changes in assets and liabilities:
Receivables, net 1,026 (425)
Inventories (935) 789
Prepaid expenses (498) (303)
Other assets 10 40
Accounts payable and accrued liabilities (643) (395)
Deferred revenue 500 250
------- -------
Net cash provided by (used) in operating
activities 327 (1,381)
Cash flows from investing activities:
Purchases of property, plant
and equipment (374) (139)
------- -------
Net cash used by investing activities (374) (139)
Cash flows from financing activities:
Issuances of common stock 47 74
Debt payments - -
------- -------
Net cash provided by financing activities 47 74
------- -------
Net decrease in cash and cash equivalents - (1,446)
Cash and cash equivalents, beginning
of period 3,200 3,454
------- -------
Cash and cash equivalents, end
of period $ 3,200 $ 2,008
------- -------
Supplemental disclosure of cash flow
information
Property purchased through
capital lease $ - $ 182
Cash paid during the period for
interest 33 31
Cash paid during the period for
federal, state and local income taxes 18 39
The accompanying notes are an integral part of these statements.
Notes to Condensed Consolidated Financial Statements (unaudited)
(1) Condensed Consolidated Financial Statements:
The condensed consolidated balance sheet as of June 30, 2002, and the
condensed consolidated statements of operations and cash flows for the six
month periods ended June 30, 2001 and 2002, have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include all normal recurring adjustments) necessary to present fairly the
consolidated financial position, results of operations and cash flows at
June 30, 2002 and for all periods presented have been made. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These condensed consolidated
financial statements should be read in conjunction with the audited
financial statements and notes thereto included in the Company's annual
report to shareholders on Form 10-K for the year ended December 31, 2001.
In June 2001, the Financial Accounting Standards Board issued FAS 142,
Goodwill and Intangible Assets ("FAS 142"). Under FAS 142, goodwill and
intangible assets are no longer amortized, but are reviewed at least
annually for impairment. The Company adopted the provisions of FAS 142
effective January 1, 2002. There were no effects on the financial
statements at June 30, 2002 or for the six months then ended.
(2) Net Income (Loss) Per Share:
Basic net income (loss) available to common shareholders per share was
computed by dividing net income (loss) by the weighted average number of
common shares outstanding of 9,734,087 and 9,848,992 at June 30, 2001 and
2002, respectively.
In calculating the diluted net income (loss) available to common
shareholders per share for 2001 and 2002, no effect was given to options or
warrants because the effect of including these securities would have been
antidilutive.
(3) Reportable Segments:
The Company operates in two reportable segments: its Medical Services
Division, which sells human and veterinary products, and Caraloe, Inc., a
consumer products subsidiary, which sells bulk raw materials, consumer
beverages, and nutritional and skin care products, and also provides
services for the development and manufacture of nutritional, cosmetic and
medical products on a contract basis through its contract manufacturing
group.
The Company evaluates performance and allocates resources based on profit or
loss from operations before income taxes.
Corporate Income (Loss) Before Income Taxes set forth in the following table
includes research and development expenses which were related to the
development of pharmaceutical products not associated with the reporting
segments. Assets which are used in more than one segment are reported in
the segment where the predominant use occurs. The Company's production
facility in Costa Rica, which provides bulk ingredients for all segments,
and total cash for the Company are included in the Corporate Assets figure.
Reportable Segments (in thousands):
Medical Caraloe,
Services Inc. Corporate Total
----------------------------------------------------------------------------
Quarter Ended
June 30, 2001
----------------------------------------------------------------------------
Revenues from unaffiliated
customers $ 2,655 $ 1,675 $ - $ 4,330
Income (loss) before income
taxes 357 72 (369) 60
Identifiable assets 11,490 1,566 7,836 20,892
Capital expenditures - - 252 252
Depreciation and amortization 144 - 112 256
----------------------------------------------------------------------------
Quarter Ended
June 30, 2002
----------------------------------------------------------------------------
Revenues from unaffiliated
customers $ 2,193 $ 2,153 $ - $ 4,346
Income (loss) before income
taxes (22) (382) (454) (858)
Identifiable assets 10,175 2,915 6,337 19,427
Capital expenditures - - 34 34
Depreciation and amortization 158 - 122 280
----------------------------------------------------------------------------
Six Months Ended
June 30, 2001
----------------------------------------------------------------------------
Revenues from unaffiliated
customers $ 5,085 $ 3,902 $ - $ 8,987
Income (loss) before income
taxes 491 805 (1,010) 286
Capital expenditures - - 374 374
Depreciation and amortization 285 - 221 506
----------------------------------------------------------------------------
Six Months Ended
June 30, 2002
----------------------------------------------------------------------------
Revenues from unaffiliated
customers $ 4,528 $ 3,554 $ - $ 8,082
Income (loss) before income
taxes (229) (593) (1,079) (1,901)
Capital expenditures - - 139 139
Depreciation and amortization 318 - 246 564
----------------------------------------------------------------------------
(4) Income Taxes:
The tax effects of temporary differences have given rise to deferred tax
assets. At December 31, 2001 and June 30, 2002, the Company provided a
valuation allowance against the entire deferred tax asset due to the
uncertainty as to the realization of the asset. At December 31, 2001, the
Company had net operating loss carryforwards of approximately $38,700,000
for federal income tax purposes, which began expiring in 2002, and research
and development tax credit carryforwards of approximately $478,000, which
began expiring in 2002, all of which are available to offset federal income
taxes due in future periods. The provision for the second quarter of 2002
was entirely offset by the utilization of NOL carryforwards.
(5) Contingencies:
From time to time in the normal course of business, the Company is party
to various matters involving claims or possible litigation. Management
believes the ultimate resolution of these matters will not have a material
adverse effect on the Company's financial position or results of operations.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Background
The Company is a research-based biopharmaceutical, medical device, raw
materials and nutraceutical company engaged in the development,
manufacturing and marketing of naturally-derived complex carbohydrates and
other natural product therapeutics for the treatment of major illnesses, the
dressing and management of wounds and nutritional supplements. The Company
is comprised of two business segments. See Note (3) to the unaudited
condensed consolidated financial statements for financial information
about these business segments. The Company sells, using a network of
distributors, prescription and nonprescription human and veterinary products
through its Medical Services Division, and consumer and bulk raw material
products and product development and manufacturing services through its
subsidiary, Caraloe, Inc. The Company's research and product portfolio are
based primarily on complex carbohydrates isolated from the Aloe vera L.
plant. The Company is advancing its research and development program for
its proprietary Gelsite[TM] technology through its subsidiary DelSite
Biotechnologies, Inc.
Liquidity and Capital Resources
At December 31, 2001 and June 30, 2002, the Company held cash and cash
equivalents of $3,454,000 and $2,008,000, respectively. The decrease in
cash of $1,446,000 is primarily due to operating losses, reductions in
accounts payable, and increases in accounts receivable which were partially
offset by lower inventory balances.
The Company has invested in inventory to support sales of bulk products to a
single customer. Receivables from this customer totaled $517,500 as of June
30, 2002. As of July 25, 2002, all of this balance had been collected.
Pursuant to the Distributor and License Agreement with Medline Industries,
Inc., ("Medline") the Company is to receive $12,500,000 in base royalties
over a five-year period ending November 30, 2005. The Company is
recognizing royalty income under this agreement on a straight-line basis.
At June 30, 2002, the Company had received $1,792,000 more in royalties than
it had recognized in income.
As of June 30, 2002, the Company had no material capital commitments.
In November 1997, the Company entered into an agreement with Comerica Bank-
Texas for a $3,000,000 line of credit, secured by accounts receivable and
inventory. As of June 30, 2002, there was $763,000 outstanding under this
credit facility. This credit facility is also used to secure an $800,000
letter of credit to guarantee rental payments on a lease signed in January
2001, and a $100,000 letter of credit to secure payment under a lease for
machinery.
As a result of the current level of sales of raw materials produced at the
Company's processing facility in Costa Rica, the Company's demand for Aloe
vera L. leaves has exceeded and continues to exceed both the current and the
normal production capacity of its farm. It has therefore been necessary for
the Company to purchase Aloe vera L. leaves from other sources within Costa
Rica.
Since March 1998, the Company has been a minority investor in Aloe and Herbs
International, Inc., a Panamanian corporation ("Aloe & Herbs"), the owner of
Rancho Aloe (C.R.), S.A., a Costa Rican corporation, which produces Aloe
vera L. leaves and sells them to the Company at competitive, local market
rates.
On October 22, 2001, the Company incorporated in Delaware, a new wholly-
owned subsidiary named DelSite Biotechnologies, Inc. ("DelSite"). DelSite
operates independently from the Company's research and development program
and is responsible for the research, development and marketing of the
Company's proprietary GelSite[TM] technology for controlled release and
delivery of bioactive pharmaceutical ingredients.
The Company believes that its available cash resources and expected cash
flows from operations will provide the funds necessary to finance its
current operations. However, the Company does not expect that its current
cash resources will be sufficient to finance clinical studies and costs of
filing new drug applications necessary to develop its products to their full
commercial potential. Additional funds, therefore, may have to be raised
through equity offerings, borrowings, licensing arrangements or other means,
and there is no assurance that the Company will be able to obtain such funds
on satisfactory terms when they are needed.
In March 2001, the Board of Directors authorized the Company to repurchase
up to one million shares of its outstanding Common Stock. As of June 30,
2002, the Company has not repurchased any shares pursuant to this
authorization. The Company believes it has the financial resources
necessary to repurchase shares from time to time pursuant to the Board's
repurchase authorization.
Regulation
The Company is subject to regulation by numerous governmental authorities in
the United States and other countries. Certain of the Company's proposed
products will require governmental approval prior to commercial use. The
approval process applicable to prescription pharmaceutical products usually
takes several years and typically requires substantial expenditures. The
Company and any licensees may encounter significant delays or excessive
costs in their respective efforts to secure necessary approvals. Future
United States or foreign legislative or administrative acts could also
prevent or delay regulatory approval of the Company's or any licensees'
products. Failure to obtain requisite governmental approvals or failure to
obtain approvals of the scope requested could delay or preclude the Company
or any licensees from marketing their products, or could limit the
commercial use of the products, and thereby have a material adverse effect
on the Company's liquidity and financial condition.
Impact of Inflation
The Company does not believe that inflation has had a material impact on its
results of operations.
Second Quarter of 2002 Compared With Second Quarter of 2001
Total revenues were $4,346,000 in the second quarter of 2002, an increase of
$16,000, or 0.4%, compared with $4,330,000 in the second quarter of 2001.
Net sales for Caraloe, Inc., the Company's consumer products subsidiary,
increased from $1,675,000 to $2,153,000 due to a 7.2% increase in raw
material sales and a 154% increase in contract manufacturing business.
Caraloe sales to a single customer, which were primarily Manapol[R] powder,
decreased from $1,206,000 in the second quarter of 2001 to $1,130,000 in the
second quarter of 2002. Revenues of the Company's wound and skin care
products decreased 17.4%, due primarily to softness in order demand from the
Company's exclusive distributor.
Cost of sales increased from $2,464,000 to $2,874,000, or 16.6%. As a
percentage of revenues, cost of sales increased from 56.9% in the second
quarter of 2001 to 66.1% in the second quarter of 2002. This was due
primarily to variances incurred at both the Costa Rica and American
manufacturing plants because of lower production volumes and to the mix of
products sold.
Selling, general and administrative expenses increased from $1,204,000 in
the second quarter of 2001 to $1,454,000 in 2002. This increase was caused
primarily by the addition of new personnel, including the President of
Caraloe in July 2001, and expanded distribution facilities in anticipation
of obtaining new contract manufacturing business, as well as additional
business development expenses.
Basic research and development expenses in support of operations decreased
to $462,000 from $614,000, or 24.8%, as efforts were focused on product
development in support of contract manufacturing. DelSite research expenses
were $383,000 as efforts were primarily focused on development of the
manufacturing process of its product Gelsite[TM] and on development of the
use of Gelsite[TM] for delivery of proteins and peptides.
Net interest expense was $10,000 in the second quarter of 2002 as compared
to net interest income of $5,000 in the second quarter of 2001.
The resulting net loss for the second quarter of 2002 was $858,000, compared
with net income of $60,000 during the second quarter of 2001. Assuming
dilution, the net loss for the second quarter of 2002 was $(0.09) per share,
compared to net income of $0.01 per share for the same quarter of 2001.
First Six Months of 2002 Compared With First Six Months of 2001
Net sales were $8,082,000 in the first six months of 2002, compared with
$8,987,000 in the first six months of 2001. This decrease of $905,000, or
10.1%, resulted from a decrease of $348,000 in sales of Caraloe, Inc., the
Company's consumer products subsidiary, and a decrease in wound care sales
of $557,000. Caraloe's sales to a single customer, which were primarily
Manapol[R] powder, decreased from $3,055,000 in 2001 to $2,264,000 in 2002.
The decrease was offset in part by growth of $502,000 in contract
manufacturing sales.
Revenues of the Company's wound care products decreased from $5,085,000 in
2001 to $4,528,000 in 2002 or 11% due to the impact of stocking orders by
Medline in the first quarter of 2001 and softness in order demand from
Medline in the second quarter of 2002.
Cost of sales increased from $5,121,000 in 2001 to $5,465,000 in 2002, or
6.7%. As a percentage of sales, cost of sales increased from 56.9% in the
first six months of 2001 to 67.6% in the first six months of 2002. This was
due primarily to variances incurred at both the Costa Rica and American
manufacturing plants because of lower production volumes and to the mix of
products sold.
Selling, general and administrative expenses increased to $2,952,000 in 2002
from $2,434,000 in 2001. The increase was primarily caused by the addition
of new personnel, including the President of Caraloe in July 2001, expenses
for expanded distribution facilities in anticipation of obtaining new
contract manufacturing business, expenses for the creation of DelSite and
additional business development expenses.
Basic research and development expenses in support of operations decreased
to $849,000 in 2002 from $1,188,000 in 2001, or 28.5% as efforts were
focused on product development in support of contract manufacturing.
DelSite research expenses were $679,000 as efforts were primarily focused on
development of the manufacturing process of its Gelsite[TM] product and on
development of the use of Gelsite[TM] for delivery of proteins and peptides.
Net interest income of $16,000 was realized in the first six months of 2001,
versus net interest expense of $17,000 in the first six months of 2002.
The resulting net loss for the first six months of 2002 was $1,901,000,
compared with a net income of $286,000 for the first six months of 2001.
Assuming dilution, the net loss for the first six months of 2002 was $(0.19)
per share, compared to a net income of $0.03 per share for the same period
in 2001.
Forward Looking Statements
All statements other than statements of historical fact contained in this
report, including but not limited to statements in this Management's
Discussion and Analysis of Financial Condition and Results of Operations
(and similar statements contained in the Notes to Condensed Consolidated
Financial Statements) concerning the Company's financial position,
liquidity, capital resources and results of operations, its prospects for
the future and other matters, and also including statements made in Part II
of this report, are forward-looking statements. Forward-looking statements
in this report generally include or are accompanied by words such as
"anticipate", "believe", "estimate", "expect", "intend", "will", "would",
"should" or words of similar import. Such forward-looking statements
include, but are not limited to, statements regarding the ability of the
Company and/or DelSite to obtain sufficient funds to finance DelSite's
proposed activities; the ability of DelSite to successfully exploit the
Company's new drug delivery technology; the adequacy of the Company's cash
resources and cash flow from operations to finance its current operations;
and the Company's intention, plan or ability to repurchase shares of its
outstanding Common Stock.
Although the Company believes that the expectations reflected in its
forward-looking statements are reasonable, no assurance can be given that
such expectations will prove correct. Factors that could cause the
Company's results to differ materially from the results indicated by such
forward-looking statements include but are not limited to the possibilities
that the Company may be unable to obtain the quantity or quality of Aloe
vera L. leaves it needs from Rancho Aloe, that the claims of parties with
whom the Company is involved in litigation may not be without merit and the
Company may be unable to resolve its disputes with third parties in a
satisfactory manner, that the Company's cash resources and cash flow from
operations may not be adequate to finance its current operations, that the
Company and or DelSite may be unable to obtain the funds needed to carry out
large scale clinical trials and other research and development projects,
that the results of the Company's clinical trials may not be sufficiently
positive to warrant continued development and marketing of the products
tested, that new products may not receive required approvals by the
appropriate government agencies or may not meet with adequate customer
acceptance, that the Company and or DelSite may not be able to obtain
financing when needed, that the Company and or DelSite may not be able to
obtain appropriate licensing agreements for products that it wishes to
market or products that it needs assistance in developing, that the Company
may not be able to fund its operating costs from revenues and available cash
resources, that one or more of the customers that the Company expects to
purchase significant quantities of products from the Company or Caraloe may
fail to do so, that competitive pressures may require the Company to lower
the prices of or increase the discounts on its products, that other parties
who owe the Company substantial amounts of money may be unable to pay what
they owe the Company, that the Company's patents may not provide the Company
with adequate protection, that the Company's manufacturing facilities may be
inadequate to meet demand, that the Company's distributors may be unable to
market the Company's products successfully, that the Company may be unable
to reach satisfactory agreements with its important suppliers, that the
Company may not be able to use its tax loss carryforwards before they
expire, that the Company may not have sufficient financial resources
necessary to repurchase shares of its outstanding Common Stock when it is
desirable to do so, or that the Company may be unable to produce or obtain,
or may have to pay excessive prices for, the raw materials or products it
needs.
All forward-looking statements in this report are expressly qualified in
their entirety by the cautionary statements in the two immediately preceding
paragraphs.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company's exposure to market risk from changes in foreign currency
exchange rates and the supply and prices of Aloe vera L. leaves has not
changed materially from its exposure at December 31, 2001, as described in
the Company's Annual Report on Form 10-K for the year then ended.
Part II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
At the 2002 Annual Meeting of Shareholders held on May 16, 2002, R. Dale
Bowerman was re-elected to serve as a director of the Company for a term
expiring at the 2005 annual meeting, with the holders of 7,896,156 shares
voting for his re-election and the holders of 147,506 shares abstaining.
The other directors whose terms of office continued after the meeting are
George DeMott and Carlton E. Turner, Ph.D.,D.Sc. whose terms expires at the
2003 annual meeting, and Thomas J. Marquez and Selvi Vescovi, whose terms
expire at the 2004 annual meeting.
The proposal to adopt a resolution to amend the first sentence of Section
1.03 of the Company's 1995 Stock Option Plan to read in its entirety as
follows: "Options may be granted by the Company from time to time under the
Plan to purchase an aggregate of [ 1,500,000 ] 2,250,000 shares of the
authorized Common Stock", was approved by the holders of 3,096,972 shares,
with the holders of 902,832 shares voting against approval and the holders
of 61,114 shares abstaining.
The proposal to ratify the appointment of Ernst & Young LLP as independent
public accountants for the Company for the fiscal year ending December 31,
2002 was approved by the holders of 7,977,525 shares, with the holders of
64,215 shares voting against approval and the holders of 7,472 shares
abstaining.
No vote was taken on a shareholder proposal to request the Board of
Directors to take action to declassify the Board of Directors and cause all
directors to be elected annually, because the shareholder who had requested
the inclusion of the proposal in the Company's proxy statement failed to
appear at the annual meeting and submit the proposal for a vote.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
Exhibit
No. Description
99.1 CEO Certification of SEC Reports Under Section 906
99.2 CFO Certification of SEC Reports Under Section 906.
(b) Reports on Form 8-K:
The Registrant did not file any reports on Form 8-K during the
quarter ended June 30, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARRINGTON LABORATORIES, INC.
(Registrant)
Date: August 14, 2002 By: /s/ Carlton E. Turner
----------------------------
Carlton E. Turner,
President and C.E.O.
(principal executive
officer)
Date: August 14, 2002 By: /s/ Robert W. Schnitzius
----------------------------
Robert W. Schnitzius,
Chief Financial Officer
(principal financial and
accounting officer)
INDEX TO EXHIBITS
Item Description
No.
99.1 CEO Certification of SEC Reports Under Section 906
99.2 CFO Certification of SEC Reports Under Section 906.