UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| (X) |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended July 4, 2004
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 No. 0-15443
THERAGENICS
CORPORATION®
(Exact name of
registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) |
58-1528626 (I.R.S. Employer Identification Number) |
| 5203 Bristol Industrial Way Buford, Georgia (Address of principal executive offices) |
30518 (Zip Code) |
Registrant's telephone number, including area code: (770) 271-0233
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ___
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES X NO ___
As of July 23, 2004 the number of shares of $.01 par value common stock outstanding was 29,970,379.
THERAGENICS CORPORATION®
TABLE OF CONTENTS
| Page No. | |
| PART I. FINANCIAL INFORMATION: | |
| ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) | |
| Balance Sheets - July 4, 2004 and December 31, 2003 | 3 |
| Statements of Operations for the three and sixth months ended July 4, 2004 and July 6, 2003 | 5 |
| Statements of Cash Flows for the six months ended July 4, 2004 and July 6, 2003 | 7 |
| Statement of Shareholders' Equity for the six months ended July 4, 2004 | 8 |
| Notes to Financial Statements | 9 |
| ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
15 |
| ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
24 |
| ITEM 4. CONTROLS AND PROCEDURES | 24 |
| PART II. OTHER INFORMATION | 25 |
| ITEM 1. LEGAL PROCEEDINGS | 25 |
| ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | 25 |
| ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K | 25 |
| SIGNATURES | 26 |
-2-
THERAGENICS CORPORATION®
BALANCE SHEETS
(Amounts
in thousands, except per share data)
| ASSETS | ||||||||
| July 4, 2004 (unaudited) |
December 31, 2003 |
|||||||
| CURRENT ASSETS | ||||||||
| Cash and short-term investments | $ | 22,475 | $ | 45,104 | ||||
| Marketable Securities | 40,628 | 21,327 | ||||||
| Trade accounts receivable, less allowance of $153 in | ||||||||
| 2004 and $118 in 2003 | 4,996 | 3,831 | ||||||
| Inventories | 2,879 | 1,851 | ||||||
| Deferred income tax asset | 271 | 189 | ||||||
| Prepaid expenses and other current assets | 4,395 | 4,760 | ||||||
| TOTAL CURRENT ASSETS | 75,644 | 77,062 | ||||||
| PROPERTY AND EQUIPMENT | ||||||||
| Buildings and improvements | 43,599 | 42,344 | ||||||
| Machinery and equipment | 61,206 | 56,456 | ||||||
| Office furniture and equipment | 799 | 773 | ||||||
| 105,604 | 99,573 | |||||||
| Less accumulated depreciation and | ||||||||
| amortization | (37,785 | ) | (34,418 | ) | ||||
| 67,819 | 65,155 | |||||||
| Land | 822 | 822 | ||||||
| Construction in progress | 3,318 | 7,395 | ||||||
| TOTAL PROPERTY AND EQUIPMENT | 71,959 | 73,372 | ||||||
| OTHER ASSETS | 2,815 | 2,355 | ||||||
| TOTAL ASSETS | $ | 150,418 | $ | 152,789 | ||||
-3-
THERAGENICS CORPORATION®
BALANCE SHEETS – Continued
(Amounts in thousands, except per share data)
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||
| July 4, 2004 (unaudited) |
December 31, 2003 |
|||||||
| CURRENT LIABILITIES | ||||||||
| Trade accounts payable | $ | 1,149 | $ | 2,138 | ||||
| Accrued salaries, wages and payroll taxes | 697 | 577 | ||||||
| Other current liabilities | 671 | 338 | ||||||
| TOTAL CURRENT LIABILITIES | 2,517 | 3,053 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Deferred income taxes | 6,964 | 6,830 | ||||||
| Asset retirement obligation | 534 | 515 | ||||||
| Other liabilities | 64 | 65 | ||||||
| TOTAL LONG-TERM LIABILITIES | 7,562 | 7,410 | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Common stock, $.01 par value, 100,000 | ||||||||
| shares authorized; issued and outstanding, | ||||||||
| 29,970 in 2004 and 29,944 in 2003 | 300 | 299 | ||||||
| Additional paid-in capital | 61,845 | 61,778 | ||||||
| Retained earnings | 78,340 | 80,240 | ||||||
| Accumulated other comprehensive income/(loss) | (146 | ) | 9 | |||||
| TOTAL SHAREHOLDERS' EQUITY | 140,339 | 142,326 | ||||||
| TOTAL LIABILITIES AND | ||||||||
| SHAREHOLDERS' EQUITY | $ | 150,418 | $ | 152,789 | ||||
The accompanying notes are an integral part of these statements.
-4-
THERAGENICS CORPORATION®
STATEMENTS OF OPERATIONS
(UNAUDITED)
(Amounts in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 4, |
July 6, |
July 4, |
July 6, |
|||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||||
| REVENUE | ||||||||||||||
| Product sales | $ | 8,576 | $ | 8,898 | $ | 16,458 | $ | 19,957 | ||||||
| Licensing fees | 70 | 51 | 140 | 94 | ||||||||||
| Total revenue | 8,646 | 8,949 | 16,598 | 20,051 | ||||||||||
| COST OF SALES | 3,467 | 3,959 | 6,864 | 8,496 | ||||||||||
| GROSS PROFIT | 5,179 | 4,990 | 9,734 | 11,555 | ||||||||||
| OPERATING EXPENSES | ||||||||||||||
| Selling, general & administrative | 4,470 | 3,230 | 8,541 | 6,621 | ||||||||||
| Research & development | 2,308 | 1,612 | 4,587 | 3,113 | ||||||||||
| 6,778 | 4,842 | 13,128 | 9,734 | |||||||||||
| EARNINGS/(LOSS) FROM OPERATIONS | (1,599 | ) | 148 | (3,394 | ) | 1,821 | ||||||||
| OTHER INCOME/(EXPENSE) | ||||||||||||||
| Interest income | 273 | 255 | 525 | 527 | ||||||||||
| Interest and financing costs | (45 | ) | (32 | ) | (90 | ) | (76 | ) | ||||||
| Other | 29 | 2 | (4 | ) | 2 | |||||||||
| 257 | 225 | 431 | 453 | |||||||||||
| Earnings/(loss) before income tax and cumulative | ||||||||||||||
| effect of change in accounting | ||||||||||||||
| principle | (1,342 | ) | 373 | (2,963 | ) | 2,274 | ||||||||
| Income tax expense/(benefit) | (408 | ) | 107 | (1,063 | ) | 789 | ||||||||
| Earnings/(loss) before cumulative effect of change | ||||||||||||||
| in accounting principle | (934 | ) | 266 | (1,900 | ) | 1,485 | ||||||||
| Cumulative effect of change in accounting | ||||||||||||||
| principle (See Note F) | - | - | - | (222 | ) | |||||||||
| NET EARNINGS/(LOSS) | $ | (934 | ) | $ | 266 | $ | (1,900 | ) | $ | 1,263 | ||||
-5-
THERAGENICS CORPORATION®
STATEMENTS OF OPERATIONS-Continued
(UNAUDITED)
(Amounts in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| July 4, |
July 6, |
July 4, |
July 6, |
|||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||||
| NET EARNINGS/(LOSS) PER COMMON SHARE | ||||||||||||||
| Basic: | ||||||||||||||
| Earnings/(loss) before cumulative effect of | ||||||||||||||
| change in accounting principle | $ | (0.03 | ) | $ | 0.01 | $ | (0.06 | ) | $ | 0.05 | ||||
| Cumulative effect of change in accounting | ||||||||||||||
| principle | - | - | - | (0.01 | ) | |||||||||
| Net earnings/(loss) per common share | $ | (0.03 | ) | $ | 0.01 | $ | (0.06 | ) | $ | 0.04 | ||||
| Diluted: | ||||||||||||||
| Earnings/(loss) before cumulative effect of | ||||||||||||||
| change in accounting principle | $ | (0.03 | ) | $ | 0.01 | $ | (0.06 | ) | $ | 0.05 | ||||
| Cumulative effect of change in accounting | ||||||||||||||
| principle | - | - | - | (0.01 | ) | |||||||||
| Net earnings/(loss) per common share | $ | (0.03 | ) | $ | 0.01 | $ | (0.06 | ) | $ | 0.04 | ||||
| WEIGHTED AVERAGE SHARES: | ||||||||||||||
| Basic | 29,969 | 29,908 | 29,963 | 29,869 | ||||||||||
| Diluted | 29,969 | 29,996 | 29,963 | 29,962 | ||||||||||
| Comprehensive income/(loss): | ||||||||||||||
| Net earnings/(loss) | $ | (934 | ) | $ | 266 | $ | (1,900 | ) | $ | 1,263 | ||||
| Other comprehensive income/(loss) | ||||||||||||||
| Unrealized loss on securities | ||||||||||||||
| available for sale: | (158 | ) | (24 | ) | (155 | ) | (41 | ) | ||||||
| Total comprehensive income/(loss) | $ | (1,092 | ) | $ | 242 | $ | (2,055 | ) | $ | 1,222 | ||||
The accompanying notes are an integral part of these statements.
-6-
THERAGENICS CORPORATION®
STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Amounts in thousands)
| Six Months Ended | ||||||||||
| July 4, 2004 | July 6, 2003 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
| Net Earnings/(Loss) | $ | (1,900 | ) | $ | 1,263 | |||||
| Adjustments to reconcile net earnings/(loss) to | ||||||||||
| net cash provided by/(used by) operating activities: | ||||||||||
| Cumulative effect of change in accounting principle | - | 222 | ||||||||
| Deferred income taxes | 52 | 17 | ||||||||
| Depreciation & amortization | 3,460 | 3,255 | ||||||||
| Provision for allowances | 30 | 26 | ||||||||
| Stock based compensation | - | 21 | ||||||||
| Income tax benefit from options | - | 5 | ||||||||
| Loss on disposal of equipment | 4 | 3 | ||||||||
| Changes in assets and liabilities: | ||||||||||
| Accounts receivable | (1,200 | ) | 328 | |||||||
| Inventories | (1,023 | ) | (713 | ) | ||||||
| Prepaid expenses and other current assets | 365 | (227 | ) | |||||||
| Other assets | 58 | (25 | ) | |||||||
| Trade accounts payable | (989 | ) | (355 | ) | ||||||
| Accrued salaries, wages and payroll taxes | 120 | 332 | ||||||||
| Other current liabilities | 333 | (1 | ) | |||||||
| Other liabilities | (1 | ) | 146 | |||||||
| Net cash provided by/(used by) operating activities | (691 | ) | 4,297 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
| Purchases and construction of property and equipment | (1,551 | ) | (807 | ) | ||||||
| Cash paid for acquisition | (1,000 | ) | (2,242 | ) | ||||||
| Purchases of marketable securities | (25,446 | ) | (17,565 | ) | ||||||
| Maturities of marketable securities | 5,991 | 6,900 | ||||||||
| Net cash used by investing activities | (22,006 | ) | (13,714 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||