UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended June 30, 2003 |
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OR |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
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Commission file number 001-16217 |
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SPECIALTY LABORATORIES, INC. |
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(Exact Name of Registrant as Specified in Its Charter) |
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California |
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95-2961036 |
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(State or Other Jurisdiction |
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(IRS Employer Identification No.) |
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2211 Michigan Avenue |
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(Address of principal executive offices, including zip code) |
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Registrant’s Telephone Number, Including Area Code: (310) 828-6543 |
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Not Applicable |
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(Former name, former address and former fiscal year, if changed since last report) |
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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 ý No o
As of July 31, 2003, there were approximately 22,320,335 shares of Common Stock outstanding, no par value.
SPECIALTY
LABORATORIES, INC.
FORM 10-Q QUARTERLY REPORT
TABLE OF CONTENTS
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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2
Specialty Laboratories, Inc.
Consolidated Balance Sheets
(Dollar amounts in thousands)
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December
31, |
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June 30, |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
22,405 |
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$ |
13,646 |
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Short-term investments |
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9,247 |
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12,184 |
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Accounts receivable, less allowance for doubtful accounts of $2,922 as of December 31, 2002 and $2,805 as of June 30, 2003 |
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22,597 |
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22,752 |
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Refundable income taxes |
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8,491 |
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9,631 |
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Deferred income taxes |
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1,870 |
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1,728 |
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Inventory |
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1,893 |
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1,683 |
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Prepaid expenses and other assets |
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2,410 |
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1,328 |
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Total current assets |
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68,913 |
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62,952 |
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Property and equipment, net |
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55,152 |
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61,757 |
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Long-term investments |
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9,222 |
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6,118 |
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Deferred income taxes |
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168 |
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1,885 |
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Goodwill, net |
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5,655 |
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5,655 |
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Other assets |
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4,197 |
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4,240 |
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$ |
143,307 |
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$ |
142,607 |
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Liabilities and shareholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
8,052 |
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$ |
10,313 |
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Accrued liabilities |
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9,313 |
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9,066 |
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Total current liabilities |
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17,365 |
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19,379 |
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Long-term liabilities |
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2,208 |
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1,692 |
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Commitments and contingencies |
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Shareholders’ equity: |
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Preferred stock, no par value: |
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— |
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— |
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Common stock, no par value: June 30, 2003 |
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99,790 |
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100,939 |
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Retained earnings |
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23,797 |
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20,465 |
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Deferred stock-based compensation |
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(94 |
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(43 |
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Accumulated other comprehensive income |
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241 |
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175 |
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Total shareholders’ equity |
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123,734 |
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121,536 |
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$ |
143,307 |
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$ |
142,607 |
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See accompanying notes.
3
Specialty Laboratories, Inc.
Consolidated Statements of Operations
(Unaudited)
(Dollar amounts in thousands except per share data)
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Three
Months Ended |
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Six Months
Ended |
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2002 |
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2003 |
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2002 |
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2003 |
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Net revenue |
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$ |
34,146 |
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$ |
29,036 |
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$ |
77,760 |
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$ |
59,336 |
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Costs and expenses: |
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Costs of services |
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28,487 |
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21,370 |
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55,316 |
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43,155 |
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Selling, general and administrative (exclusive of stock-based compensation charges) |
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14,449 |
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10,638 |
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28,209 |
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21,552 |
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Stock-based compensation charges |
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(199 |
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(58 |
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35 |
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Restructuring charge |
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3,598 |
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— |
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3,598 |
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— |
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Charge related to regulatory matters |
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612 |
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1,853 |
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— |
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Total costs and expenses |
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46,947 |
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32,019 |
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88,918 |
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64,742 |
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Operating loss |
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(12,801 |
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(2,983 |
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(11,158 |
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(5,406 |
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Interest income |
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(505 |
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(182 |
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(999 |
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(393 |
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Interest expense |
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106 |
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1 |
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139 |
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35 |
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Loss before income taxes (benefits) |
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(12,402 |
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