Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Form 10K 5/31/00 68± 337K
2: EX-10.25 Ex 10.25 Second Modification of Loan Agreement 3 22K
3: EX-10.26 EX-10.26 Third Modification of Loan 8± 34K
4: EX-10.27 EX-10.27 Fourth Modification of Loan 6± 28K
5: EX-21 Subsidiaries of Registrant 1 5K
6: EX-23 Consent 1 7K
7: EX-27 FDS--FY 2000 1 7K
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, 2000
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 (I.R.S. Employer Identification No.)
of 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 (770) 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.
[ X ]
As of July 31, 2000, the aggregate market value of the voting stock
held by non-affiliates of the registrant was $29,125,437.
As of July 31, 2000, there were 7,277,617 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 and
automated systems used primarily by hospitals, clinical laboratories 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.
During fiscal 1999 the Company implemented its strategic plans to
consolidate the U.S. blood bank market, leaving Immucor and Ortho Clinical
Diagnostics as the only two companies offering a complete line of blood banking
reagents in the U.S., and to strengthen Immucor's direct presence in Europe and
Canada. The Company executed its plans through a series of acquisitions, which
are listed below:
Acquisition of Canadian Distribution Rights. On September 1, 1998 the
Company acquired the Canadian distribution rights for the Company's complete
line of reagents from its Canadian distributor for a total transaction value of
approximately $2.1 million. Immucor's wholly owned Canadian subsidiary, Dominion
Biologicals, Ltd. ("Dominion"), took over distribution of the entire range of
products. Dominion is currently the leader in the market for conventional
reagents in Canada. See - Liquidity and Capital Resources.
Acquisition of Gamma Biologicals, Inc. On October 27, 1998, the Company
completed the acquisition of Gamma Biologicals, Inc. ("Gamma") for a total
transaction value of approximately $27.8 million (see - Note 3 to the
Consolidated Financial Statements). Located in Houston, Texas, Gamma
manufactures and distributes a wide variety of in-vitro diagnostic reagents to
blood donation centers, transfusion departments of hospitals, medical
laboratories and research institutions in the U.S. and internationally. Gamma
was the third largest domestic blood bank serology company before the
acquisition. This acquisition significantly strengthened the Company's
competitive position in the U.S. market and added to its customer base and
product offerings, thereby extending the Company's global marketing reach.
Combining Immucor's Automated Product Family and Capture(R) with Gamma's line of
monoclonal reagents, red cell products and ReACT-(TM) ("ReACT") products
represents a natural fit and creates an enhanced selection of products for our
customers worldwide (see - Products).
Acquisition of French and Belgian Distributor's Rights. On March 15,
1999, the Company acquired its former distributors in France (Immunochim
s.a.r.l.) and Belgium (Medichim S.A.), for a combination of cash, Immucor stock
options and an incentive earn out, representing a total transaction value of
approximately $1.8 million (see - Note 3 to the Consolidated Financial
Statements). The Company's direct presence will allow it to take advantage of
the large potential for blood bank automation installations in the French
market, which the Company believes is the second largest market in Europe.
Acquisition of the BCA blood bank division assets of Biopool
International, Inc. On April 30, 1999 the Company purchased certain assets of
the BCA blood bank division of Biopool International, Inc. for approximately
$4.5 million (see - Note 3 to the Consolidated Financial Statements). This
acquisition added three well-accepted products to the Company's reagent
portfolio.
As a result of the above acquisitions, Immucor became the North
American market leader in terms of sales and strengthened its market position
worldwide. See - Competition and Marketing and Distribution. The Company
financed the acquisitions with cash reserves and the proceeds of a loan from its
primary U.S. bank. See- Liquidity and Capital Resources and Note 3 to the
Consolidated Financial Statements.
Since 1992 the Company has worked with the medical instrument
manufacturer Bio-Tek Instruments, Inc., a wholly owned subsidiary of Lionheart
Technologies, Inc., to develop an automated, "walk-away", blood bank analyzer
called the ABS2000, using Immucor's proprietary Capture(R) technology. In March
1996, the Company filed a 510(k) application with the U.S. Food and Drug
Administration (the "FDA") for market clearance. On July 6, 1998, the Company
announced that the FDA cleared the ABS2000 for marketing in the U.S. The
instrument is designed for patient testing in hospital transfusion laboratories
and is the first blood bank system that fully automates blood compatibility
tests currently performed manually by blood bank technologists. The Company
introduced the ABS2000 in the U.S. market during the second quarter of fiscal
1999.
In March 1998, Immucor signed an exclusive distribution agreement with
IBG Systems Limited ("IBG") headquartered in England whereby Immucor assumed the
sale, marketing and service of all current and future IBG products in North
America. IBG presently has the only semi-automated microtitration plate reader
available for sale in the U.S., which interprets Immucor's proprietary solid
phase Capture(R) assays. With this agreement Immucor also obtained the North
American distribution rights for blood bank applications of the ROSYS Plato
system manufactured by ROSYS Anthos Ag of Switzerland. The system provides
medium sized donor centers and large hospital transfusion laboratories with
automated liquid and sample handling for processing microtitration plates and
also uses Immucor's proprietary solid phase Capture(R) assays. The Company
introduced the system in the U.S. and European markets during fiscal 1999. In
July 1999 the Company purchased the exclusive distribution rights of the ROSYS
Plato from IBG for approximately $250,000 in cash. The Company has entered into
a distribution agreement directly with ROSYS Anthos Ag for the distribution of
the ROSYS Plato (marketed as ABS Precis in Europe) in North America and Europe.
In 1998, the Company began marketing an automated medical instrument,
previously referred to as the ABSHV, utilizing DYNEX Technologies, Inc.'s 510(k)
clearance for its product called the DIAS PLUS. The instrument, marketed as
ABSHV in Europe, provides large blood donor centers and clinical reference
laboratories automated batch processing and positive sample identification of
routine blood donor tests, and uses the Company's solid phase Capture(R) assays.
On September 1, 1999, the Company entered into a manufacturing and
development agreement with Stratec Biomedical AG ("Stratec") with headquarters
in Germany. Under the terms of the agreement, Stratec will manufacture and
develop a fully automated analyzer known as the Galileo and will be initially
targeted to the European community utilizing the Company's Capture(R) and ReACT
technologies. The instrument will be marketed exclusively by Immucor to hospital
transfusion laboratories and blood donor centers for patient and donor blood
typing and antibody screening and identification. In order to maintain exclusive
European distribution rights the Company must purchase 250 instruments over the
five year initial term of the agreement. If the Company purchases less than 250
instruments over the period it will be allowed to negotiate a good faith
extension.
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. In the U.S., the FDA regulates human blood as a drug
and as a biological product, and it regulates 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 naturally produced by the human body 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 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 patient's red blood cells.
Because of the critical importance of matching patient and donor blood,
compatibility testing procedures are generally performed by highly educated
technologists in hospitals, blood banks and laboratories. At present, with few
exceptions, these tests are performed manually using procedures which the
Company believes can be significantly improved using its instrumentation and
solid phase and ReACT testing systems to automate the testing procedures. See
Products -- Blood Bank Automation and Solid Phase and Microcolumn Technology.
The Company believes that the worldwide market for traditional blood
bank reagents is approximately $320 million, and that this market is relatively
mature given current technology. The industry is labor-intensive and the Company
estimates worldwide industry labor costs approach $1 billion. Therefore, the
introduction of labor-saving products will provide additional growth in the
market. The Company believes that its blood bank automation, solid phase and
ReACT blood testing systems improve test results and reduce the time necessary
to perform certain test procedures, thereby offering a cost-effective
alternative for its customers. See Products -- Blood Bank Automation and Solid
Phase and Microcolumn Technology. The Company anticipates that automation will
increase the available market for traditional and automated reagents to $425
million while decreasing the overall cost of blood testing by reducing the labor
component by approximately $400 million.
Immucor Strategy
The Company's strategy is to further strengthen its competitive
position in the blood bank testing market by restructuring the market through
automation of the transfusion laboratory and to firmly establish Immucor as the
world leader in blood bank automation. In order to implement this strategy, the
Company intends to:
Maximize Instrument Placements. The Company's market research has been
unable to find another company that has filed an application for FDA clearance
of an automated blood bank device. Management estimates that Immucor should have
a two-to-three year window of opportunity to establish itself as the leading
blood bank device company in the United States. The Company's strategy is to
strengthen its leadership position in the automation of blood bank testing by
establishing a large base of installed instruments that future market entrants
must overcome. To facilitate instrument placements, the Company offers customers
a selection of automated analyzers, which address the various needs of low-,
medium-, and high-volume testing facilities. In order to satisfy the broad
spectrum of customers' operational and financial criteria, the Company intends
to continue to offer several instrument procurement options, including
third-party financing leases, direct sales and reagent rentals and to expand the
range and price points of its instrument offerings.
Maximize Revenue Stream Per Placement. Each instrument placed typically
provides the Company with a recurring revenue stream through the sale of
reagents and supplies. Immucor's family of blood bank testing systems operates
exclusively with the Company's proprietary reagent lines, Capture(R) and ReACT.
Because these reagents have been developed for automated technology, they
command a premium price over traditional products. The average annual revenue
per placement is $18,000 to $100,000, depending on facility testing volume. The
Company also continues to develop new reagent applications and upgrade system
software and hardware in order to expand instrument test menus, thereby
increasing consumable usage per placement.
Develop New and Enhanced Products. Immucor continually seeks to improve
existing products and develop new ones to enhance its market share. The Company
has successfully introduced and commercialized the ABS2000, the ROSYS Plato and
the DIAS PLUS automated analyzers, all of which operate with Immucor's
proprietary solid phase Capture(R) assays. The Company also developed the I-TRAC
Plus System, a comprehensive transfusion management system that interfaces with
the Company's automated analyzers. In fiscal 2000, Immucor began offering its
customers located in Europe online assistance with antibody identification
through the website www.ready-id.com, which the Company developed jointly with
Sanguin International Limited. The website also provides customers access to
continuing education and online consultation services. The Company has launched
the service in Europe during fiscal 2000 and is currently awaiting a marketing
clearance from the United States Food and Drug Administration to begin marketing
the service in the United States.
Expand Intellectual Property Position. The Company seeks to expand its
intellectual property position by entering into strategic alliances, acquiring
rights of first refusal on future commercial developments and licensing existing
technologies.
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.
The following table sets forth the products sold by or exclusively for
the Company, most of which are manufactured by or exclusively for 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
Serums (Coombs Serums) crossmatching, and antibody detection and
identification; allows a reaction to occur
by bridging between antibodies that by
themselves could not cause a reaction.
Reagent Red Blood Cells Detect and identify antibodies in patient
or 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 Potentiators Increase the sensitivity of
antigen-antibody tests.
Quality Control Systems Daily evaluation of the reactivity of
routine blood testing reagents.
Monoclonal (Hybridoma) Detect and identify ABO and other antigens
Antibody-based Reagents on red blood cells.
Technical Proficiency Systems Reagent tests used to determine technical
proficiency and provide continuing
education for technical staff.
Fetal Bleed Screen Kit Used to detect excessive fetal-maternal
hemorrhage in Rh-negative women.
Capture-P(R) Used for the detection of platelet
antibodies.
Capture-R(R) Used to detect and identify unexpected
blood group antibodies.
Capture-CMV(R) Used for the detection of antibodies to
cytomegalovirus.
Capture(R)-S Used for the detection of antilipid
antibodies for syphilis screening.
ReACT-(TM)-Test System Microcolumn technology used to
detect and identify unexpected blood group
antibodies.
SegmentSampler-(TM) Disposable blood handling safety device.
ABS2000 Fully automated blood bank system used for
patient ABO/Rh grouping, antibody
screening, donor ABO/Rh confirmation
testing and crossmatching.
The following table includes additional products not manufactured by the Company
but sold by the Company:
Product Group Principal Use
Rh(D) Immune Globulin Administered by injection once during and
(Human) once after pregnancy to an Rh negative
woman who delivers an Rh positive infant
to prevent hemolytic disease of the
newborn.
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.
Immunofluorescent Monoclonal Used in clinical research to identify
Antibodies rare cell surface antigens.
Automated Microtitration Plate Instruments providing laboratories
Processors and Liquid Handlers automated batch processing and positive
sample identification of routine blood
donor tests.
Microtitration Plate Reader Instrument that reads and
interprets test results of Immucor's
proprietary Capture(R) products.
I-TRAC Plus Transfusion management system used
to verify the correct patient has been
selected to receive a blood component
before administration.
Microvolume Fluorimetry Automated cell enumeration
and characterization for patients
undergoing transfusion therapy.
Systems
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 and donor
center blood bank technologists. Based on the results of independent workflow
studies, the Company believes that its Blood Bank Automation products
significantly reduce the amount of blood bank technologist time required to
perform routine blood compatibility tests.
ABS2000: Fully Automated Blood Bank System. On July 6, 1998, the
Company announced it received FDA clearance to market the ABS2000 in the U.S.
This automated, "walk-away", blood bank analyzer uses Immucor's proprietary
Capture(R) reagent product technology to perform blood bank patient testing and
is manufactured exclusively for Immucor by Bio-Tek Instruments, Inc., a wholly
owned subsidiary of Lionheart Technologies, Inc. During fiscal 1999, the Company
began to implement its marketing plan for domestic sale of the product.
ROSYS Plato: Microplate Liquid Handler and Sample Processor. The system
provides medium sized donor centers, clinical reference laboratories and large
hospital transfusion laboratories with automated liquid and sample handling for
processing of microtitration plates and also uses Immucor's proprietary solid
phase Capture(R) assays.
DIAS PLUS: High Volume Microplate Processor. The instrument provides
large blood donor centers and clinical reference laboratories with automated
batch processing and positive sample identification of routine blood donor
tests, and uses the Company's Capture-R(R), Capture-CMV(R) and Capture(R)-S
products.
Multireader Plus: Microplate Reader. Semi-automated spectraphotometric
microtitration plate reader that reads and interprets test results of Immucor's
proprietary Capture(R) products. Together with the ROSYS Plato or the DIAS PLUS,
the Multireader Plus completes a semi-automated blood bank system ideally suited
for blood donor centers, large hospital transfusion laboratories and large
reference laboratories.
I-TRAC Plus: I-TRAC Plus is a comprehensive transfusion management
system that documents and verifies information electronically, giving health
care professionals the tools to ensure that the right blood is administered to
the right patient. In an environment that demands accuracy, Immucor recognized
the need for a system that could verify information and catch potential mistakes
before they are made. In response to this need the Company developed the I-TRAC
Plus system, which provides a closed-loop process of information management.
This electronic tracking system incorporates portable data terminals, automated
blood banking systems, and lab information management. The system identifies
each patient using barcoded wristbands, and uniquely identifies each specimen
drawn from a patient using barcoded labels produced at the bedside. I-TRAC Plus
verifies the correct patient has been selected to receive a blood component
before administration, and prints a transfusion report at the bedside.
Laboratory Equipment. Immucor also distributes laboratory equipment
designed to automate certain blood testing procedures and used in conjunction
with the Company's Capture(R) and ReACT products.
Microvolume Fluorimetry. Microvolume fluorimetry is a laser-based
imaging system, which detects fluorescently-tagged cells held in stasis in a
defined volume, enabling an automated cellular assay delivery system.
Proprietary Technology
Under current agglutination blood testing techniques, the technologist
mixes serum with red blood cells in a test tube, performs several additional
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.
However, when the mixture remains in a fluid state, it is sometimes difficult
for the technologist to determine whether a 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 need to be
repeated. Thus, a significant amount of expensive labor is involved in manual
agglutination 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 and ReACT blood testing
systems improve test results and reduce the time necessary to perform certain
blood testing procedures related to the transfusion of blood and blood
components.
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 often easier to interpret than the subjective
results sometimes obtained from existing agglutination technology. Based on
results obtained with Capture-P(R), Capture-R(R), Capture-CMV(R), Capture(R)-S
and the Company's ongoing research, the Company believes that solid phase test
results, in batch test mode, can generally be obtained in substantially less
time than by existing techniques.
Immucor has obtained FDA clearance for sale of four test systems using
its solid phase technology: a Platelet Antibody Detection System, Capture-P(R);
a Red Cell Antibody Detection System, Capture-R(R); and two Infectious Disease
Tests, Capture-CMV(R) and Capture(R)-S. In these four 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.
Microcolumn Technology (ReACT-(TM)- Test System). Gamma Biologicals,
Inc., the Company's wholly owned subsidiary, developed a patented microcolumn
technology to be used for red cell affinity testing. Products based on this
technology should help Immucor compete with other microcolumn tests marketed
very successfully in Europe since 1988 and recently introduced in the United
States. The acronym ReACT (Red Cell Adherence Technology) was chosen as a
commercial trade name for the product line. The principle of ReACT is based on
the affinity adherence of red cells to an immunologically active matrix. The
matrix consists of specially treated agarose beads. In September 1997, Gamma
received FDA clearance to market the first ReACT products for antibody detection
and identification in the United States. Since the purchase of Gamma in October
1998, the Company has modified the marketing strategy for ReACT and has
re-launched the product both internationally and domestically. See "Item 3. -
Legal Proceedings" regarding a claim of patent infringement against the Company.
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 improving existing
products and developing new products for the Company's existing and potential
customers. The Company also has established relationships with other individuals
and institutions that provide similar services and the Company expects that it
will continue to form and maintain such relationships. The Company intends to
continue focusing its product development efforts primarily in the areas of
blood bank automation, microcolumn and solid phase technology and in several
other areas that may also be useful in connection with the development of these
products. For the fiscal years ended May 31, 2000, 1999 and 1998, the Company
spent $2,002,600, $1,293,600 and $970,900, respectively, for research and
development. 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. For the eight-year period ending May 31,
2000 the Company has invested $5.9 million in instrument research and
development principally under research contracts with Bio-Tek, Stratec and
DYNEX.
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 and donor center blood bank technologists.
Since 1992 the Company has worked with Bio-Tek Instruments, Inc., a
wholly owned subsidiary of Lionheart Technologies, Inc., combining Immucor's
reagent manufacturing expertise with Bio-Tek's medical instrumentation expertise
to develop an automated, "walk-away", blood bank analyzer, the ABS2000. Bio-Tek
has been responsible for engineering, software development and manufacturing.
The Company announced clearance to market the ABS2000 in the U.S. from the FDA
on July 6, 1998 and continues to develop system software/hardware upgrades to
add additional tests to its menu, increase ease of use, improve throughput and
add stat testing capabilities. Second generation ABS2000 software is currently
under review by the FDA. Since the close of the fiscal year, isolated
performance issues have been experienced by certain ABS2000 installations. The
Company has issued a safety notification requesting customers to confirm ABS2000
results until the cause of the difficulty is identified and corrected. We
believe we have identified the factors which caused the performance issues and
are in the process of submitting this information to the FDA. If the FDA
concurs, we will suspend our safety notification and expect that our customers
may again use the ABS2000 without separate verification. We cannot predict how
long it will take to resolve these issues with the FDA. See also, Management's
Discussion and Analysis--Liquidity and Capital Resources.
The Company is working with ROSYS Anthos AG of Switzerland to automate
Immucor's microcolumn applications on the ROSYS Plato, known as the ABS Precis
in Europe. The Company expects this application to be ready for European market
introduction during fiscal 2000. See Note 12.
On September 1, 1999, the Company entered into a manufacturing and
development agreement with Stratec Biomedical AG ("Stratec") with headquarters
in Germany. Under the terms of the agreement, Stratec will manufacture and
develop an fully automated analyzer known as the Galileo which will be initially
targeted to the European community utilizing the Company's Capture(R) and ReACT
technologies. The instrument will be marketed exclusively by Immucor to hospital
transfusion laboratories and blood donor centers for patient and donor blood
typing and antibody screening and identification. In order to maintain exclusive
European distribution rights the Company must purchase 250 instruments over the
five year initial term of the agreement. If the Company purchases less than 250
instruments over the period it will be allowed to negotiate a good faith
extension.
Antibody Identification Website. During fiscal 1999 the Company,
together with Sanguin International Limited, headquartered in England, began to
develop the industry's first dedicated Internet website for online assistance
with the identification of unexpected red cell antibodies, called
www.ready-id.com. Additionally, www.ready-id.com will provide customers access
to continuing education, guidance on serological techniques, industry related
topic searches and online consultation services. The Company believes that the
demand for this service will increase in the future as more customers acquire
automated test systems and the number of laboratory workers with a high level of
technical knowledge in the blood bank industry begins to decline. The Company
has launched the service in Europe during fiscal 2000 and is currently awaiting
a marketing clearance from the United States Food and Drug Administration to
begin marketing the service in the United States.
Additional Solid Phase Applications. The Company plans to continue to
develop and refine its patented solid phase technology. Currently, the Company
is developing a screening test for the detection of weak D antigens on donor red
cells.
Additional Microcolumn Applications. Products to be used for red
cell antigen typing in the ReACT-(TM)-Test System are currently under
development.
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 its
solid phase test systems. Monoclonal antibodies are highly specific, a trait
which allows them to detect and identify antigens with greater efficiency than
other reagents. Product quality and consistency is maintained from production
lot to production lot. The Company continues to pursue the development of such
antibodies principally through Gamma and Dominion, the Company's Canadian
subsidiary.
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 5,500 customers worldwide, and no one customer purchases in excess of 5%
of the Company's current annual sales volume. The Company believes there is
little seasonality to its sales activity and there is no material backlog of
orders.
During fiscal 1999, the Company increased its market share through the
successful implementation of its acquisition strategy (see Item 1. Business).
The Company believes it is now the market leader in North America. In addition,
the Company seeks to continue to increase its worldwide 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 blood bank automation strategy, solid phase and ReACT
technologies.
The Company markets and sells its products to its customers directly
through 125 sales, marketing and support personnel employed by the Company in
the U.S., Canada, Germany, Portugal, Italy, Spain, France, Belgium and the
Netherlands. In addition, the Company utilizes 16 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 and/or
individuals with previous success in laboratory instrument reagent sales. To
effect the smooth transition to a systems company, the Company conducted
extensive capital sales training of its existing sales force and added
specialized capital sales representatives to the organization. Continuing
technical support and service is also provided to customers through the
Company's Consultation Laboratory, which was significantly strengthened with the
acquisition of Gamma in October 1998. The Consultation Laboratory assists the
Company's customers in identifying certain blood group antibodies that are rare
or difficult to detect. Immucor also sponsors workshops in the U.S., Europe,
Latin America and Asia 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,
2000, 1999 and 1998, the Company had foreign net sales, including net domestic
export sales to unaffiliated customers, of approximately $35,147,000,
$30,241,000, $24,101,000, respectively. These sales accounted for approximately
46%, 51%, and 61% of the Company's total net sales for the respective fiscal
years. See Note 13 to the Consolidated Financial Statements. Most of the
Company's foreign sales occurred in Europe and Canada where the Company
maintains subsidiaries. Please refer to Note 14 to our audited financial
statements for revenue and profit information for each of our last three fiscal
years attributable to the different geographic areas in which we do business
Suppliers
The Company obtains raw materials from numerous outside suppliers. The
Company is not dependent on any single supplier except for certain manufacturers
of instrumentation, including Lionheart Technologies Inc. for the ABS2000, Dynex
Technologies Inc. for the DIAS Plus, and ROSYS Anthos AG for the ROSYS Plato
(see Note 12 to the Consolidated Financial Statements), and the joint
manufacturer of some of the Company's monoclonal antibody-based products. The
Company believes that its business relationship with suppliers is excellent.
Management believes that if the supply of instrumentation were interrupted,
alternate suppliers could be found, but the commencement of supply could take
one to two years.
Certain of the Company's products are derived from blood having
particular or rare combinations of antibodies or 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 a sufficient
supply of such blood will always be available to the Company.
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 that generally include licensing,
product testing, facilities compliance, product labeling, and consumer
disclosure (see Industry). 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. The Company operates under U.S. Government Establishment License
No. 886 granted by the FDA in December 1982 to the Company and U.S. Government
Establishment License No. 435, granted by the National Institutes of Health in
1971 to Gamma Biologicals, Inc.
On March 9, 2000 Dominion Biologicals Limited received a letter from
the FDA detailing deficiencies found in the most recent inspection and providing
notice that unless the company demonstrated or achieved compliance with
applicable regulations the FDA would begin action to revoke the Establishment
License. In reviewing the cost of bringing the facility to current standard and
in view that the licensed product generated less than $200,000 in annual
revenues the company, on March 20, 2000 voluntarily surrendered its U.S.
Government Establishment License No. 1151 granted by the FDA in May 1992. On
June 20, 2000 the FDA revoked said license.
On April 13, 2000 Gamma Biologicals, Inc received a letter from the FDA
detailing deficiencies found in the most recent inspection and providing notice
that unless the company demonstrated or achieved compliance with applicable
regulations the FDA would begin action to revoke the Establishment License. The
Company responded to the FDA on May 15, 2000 with a detailed plan to bring the
Houston facility to current standard. The FDA advised the Company, on July 14,
2000 that its proposed corrective action plan was satisfactory.
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 the product, and demonstrate to the satisfaction of
the FDA that the product meets certain efficacy and safety standards. 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.
In North America, 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.
Patents, Trademarks and Royalties
Since 1986, the U.S. Patent Office has issued to Immucor six 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
("Blood Center") 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 Blood Center royalties equal to 4% of the net sales from
products utilizing the solid phase technology. For the fiscal years ended May
31, 2000, 1999 and 1998 the Company paid the Blood Center royalties of
approximately $409,300, $411,100, and $389,900 under this agreement. (See - Note
11)
In May 1994, Gamma applied for United States and international patents
covering a new antigen/antibody detection procedure using an affinity adherence
technology (see Products). The U.S. patent was issued in September 1997. Gamma
obtained non-exclusive rights to sell products utilizing the technology, called
ReACT, in certain European countries by entering into a license agreement with
Pasteur Sanofi Diagnostics ("Sanofi"), a company with headquarters in France.
Under the terms of the agreement the Company will pay Sanofi royalties equal to
12% of the net sales from the ReACT products in six countries in Europe. The
agreement expires on the expiration of the patent of the technology. To date the
Company has made no significant payments to Sanofi as the product is in the
initial stages of its market launch. However, the Company expects royalty
payments to increase significantly as sales of the product increase in fiscal
2001. In addition Gamma has five royalty agreements on various reagent products
with royalties being paid at rates between 2% and 5%. During fiscal 2000
approximately $90,900 was paid under these royalty agreements. See- Products-
ReACT-TM- Test System and Item 3. - Legal Proceedings, regarding a claim of
patent infringement by the Company. An additional patent application has been
submitted covering the ReACT technology.
Through its development activities involving its solid phase and ReACT
technology, the Company has acquired expertise in such technology that it
considers trade secrets. While the Company will continue to seek patent
protection for its solid phase and ReACT 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 "ABS2000", "ImmuAdd", "Capture(R)", "Capture-P(R)", "MCP",
"Capture-R(R)", "Ready-Screen", "Ready-ID", "Capture-CMV(R)" and "I-TRAC Plus".
Dominion Biologicals, Limited has registered the trademark "NOVACLONE". Gamma
Biologicals, Inc. has registered the trademark "Gamma" and several product names
including "ReACT", "RQC", "ELU-Kit", "Quin", "EGA-Kit", "RiSE", "Tech-Chek", and
"SegmentSampler".
Through the acquisition of the BCA blood bank division of Biopool
International, Inc., the Company acquired several registered trademarks but
plans to continue production of only one of the products with the registered
trademark "RESt".
Competition
With the Company's fiscal 1999 purchases of Gamma and the assets of the
BCA blood bank division of Biopool International, Inc., the Company believes
that Ortho-Clinical Diagnostics, a Johnson & Johnson company, is now its sole
competitor with licenses to manufacture a complete line of blood banking
reagents in the United States. The Company believes that it became the North
American market leader in terms of sales during fiscal 1999.
Additional European competitors for blood bank products include
Biotest, a German company; and Diamed, a Swiss company. Both of these companies
have been established longer and may have greater financial and other resources
than the Company; Diamed has a larger global market share than the Company.
However, the Company believes that it is well positioned to compete favorably in
the business principally because of the quality and price of its products, the
sale of innovative products such as blood bank automation, the Company's
Capture(R) and ReACT products (see Products), continuing research efforts in the
area of blood bank automation (see Products Under Development), the experience
and expertise of its sales personnel (see Marketing and Distribution) and the
expertise of its technical and customer support staff.
Employees
At July 31, 2000, the Company and its subsidiaries had a total of 424
employees.
At July 31, 2000, the Company had 283 full time employees in the U.S.,
of whom 59 were in sales and marketing, 195 were in manufacturing, research and
distribution, and 29 were in administration.
At July 31, 2000, in Germany, Portugal, Italy, Spain, Canada, France,
Belgium, and the Netherlands, the Company had 141 full-time employees, of whom
66 were in sales and marketing, 47 were in research, distribution and
administration and 28 were in manufacturing.
The Company has experienced a low turnover rate among its technical and
sales staff and none of the Company's employees are represented by a union. The
Company considers its employee relations to be good.
Item 2.--Properties.
The Company leases approximately 81,000 square feet in Norcross,
Georgia, a suburb of Atlanta, as its executive offices, laboratories and
manufacturing facilities. Rent charges for the fiscal year ended May 31, 2000
were $560,500. The term of the lease is for a six-year period ending August 2005
with a right to renew for an additional five years. The Company owns a 41,000
square foot building on a three-acre tract of land in northwest Houston, which
is used primarily for manufacturing and shipping. The land and building are
subject to a first lien mortgage.
In Germany, the Company leases 1,566 square meters near Frankfurt. Rent
expense for the fiscal year ended May 31, 2000 totaled $172,100. The term of the
lease in Germany is through April 2009. In Italy rent expense for the fiscal
year ended May 31, 2000 totaled $79,700 for 850 square meters. The Company has
four separate lease agreements for the facility in Italy with terms expiring in
April 2000, October 2000, September 2002 and October 2003, respectively. In
Portugal, the Company leases 120 square meters of office space and rent expense
for the fiscal year ended May 31, 2000 was $12,500. In Spain, the Company leases
165 square meters of office space and rent expense for the fiscal year ended May
31, 2000 was $23,400. In the Netherlands, the Company leases 232 square meters
of office and warehouse space near Amsterdam. Rent expense for the fiscal year
ended May 31, 2000 totaled $21,300. In France, the Company leases 60 square
meters and the term of the lease is through October 2007. Rent expense for the
fiscal year ended May 31, 2000 totaled $36,500. In Belgium, the Company owns
land and a 575 square meter building subject to a first lien mortgage. In
Canada, the Company owns the facility. 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.
When the Company acquired Gamma in October 1998, Gamma was a party to
existing legal proceedings. On May 12, 1998, Gamma received notice that a claim
of patent infringement had been filed on that date in U.S. District Court,
Southern District of Florida, Miami Division, by Micro Typing Systems, Inc. and
Stiftung fur Diagnostiche Forschung (the Foundation). Subsequently, in February
1999 the Company received notice that a second claim was filed in the U.S.
District Court for the Northern District of Georgia, against the Company and
Gamma for patent infringement on the first patent described above and a second
patent recently granted to the Foundation. The claim alleges that the recently
introduced Gamma ReACT Test System (See - Products - ReACT-TM- Test System")
infringes U.S. patent No. 5,512,432 granted to the Foundation April 30, 1996 and
U.S. patent No. 5,863,802 granted to the foundation on January 26, 1999. The
plaintiffs seek a preliminary and permanent injunction against the continued
alleged infringement by Gamma and Immucor, an award of treble damages, with
interest and costs and reasonable attorney's fees. The Company filed, on May 9,
2000, a motion for summary judgement based on the belief that said patent was
not timely filed. Management believes that the ReACT technology does not
infringe any claims made in either of the Foundation's patents; however, an
unfavorable outcome in this action could have a material adverse effect upon the
business and the results of operations in a given reporting period. Since this
matter is in the earliest stage of proceedings and due to uncertainties involved
in litigation, management cannot predict the likelihood of a particular outcome.
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 National Market System of
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
---------------- ----------------
Period June 1 through July 31, 2000 $ 8.313 $ 3.625
Fiscal Year Ended May 31, 2000
First Quarter $18.875 $11.500
Second Quarter 16.875 11.000
Third Quarter 15.313 11.250
Fourth Quarter 15.000 7.500
Fiscal Year Ended May 31, 1999
First Quarter $11.188 $ 8.000
Second Quarter 10.250 7.375
Third Quarter 10.000 7.750
Fourth Quarter 14.375 7.750
As of July 31, 2000, there were 387 holders of record of the Company's
Common Stock. The last reported sales price of the Common Stock on such date was
$4.250.
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)
[Enlarge/Download Table]
Year Ended May 31,
---------------------------------------------------------------------------------
2000 1999 (2) 1998 1997 (1) 1996
--------------- -------------- -------------- --------------- --------------
Statement of Income Data:
Net sales $76,541 $59,525 $39,790 $35,653 $30,964
Cost of sales 36,408 27,551 18,168 15,055 12,005
--------------- -------------- -------------- --------------- --------------
--------------- -------------- -------------- --------------- --------------
Gross profit 40,133 31,974 21,622 20,598 18,959
--------------- -------------- -------------- --------------- --------------
--------------- -------------- -------------- --------------- --------------
Operating expenses:
Research and development 2,003 1,294 971 907 998
Selling, general, and administrative 30,771 23,812 16,918 16,647 14,318
Merger-related expenses - 559 - - -
--------------- -------------- -------------- --------------- --------------
Total operating expenses 32,774 25,665 17,889 17,554 15,316
--------------- -------------- -------------- --------------- --------------
--------------- -------------- -------------- --------------- --------------
Income from operations 7,359 6,309 3,733 3,044 3,643
--------------- -------------- -------------- --------------- --------------
--------------- -------------- -------------- --------------- --------------
Other:
Interest income 31 313 789 848 868
Interest expense (2,911) (1,416) (616) (486) (388)
Other 231 202 (27) (264) 53
--------------- -------------- -------------- --------------- --------------
--------------- -------------- -------------- --------------- --------------
Total other (2,649) (901) 146 98 533
--------------- -------------- -------------- --------------- --------------
--------------- -------------- -------------- --------------- --------------
Income before income taxes 4,710 5,408 3,879 3,142 4,176
Income taxes 1,898 1,847 1,810 1,302 1,403
--------------- -------------- -------------- --------------- --------------
--------------- -------------- -------------- --------------- --------------
Net income $2,812 $ 3,561 $ 2,069 $ 1,840 $ 2,773
=============== ============== ============== =============== ==============
=============== ============== ============== =============== ==============
Earnings per share:
Basic $ .36 $ .47 $ .26 $ .23 $ .35
=============== ============== ============== =============== ==============
Diluted $ .33 $ .45 $ .25 $ .22 $ .32
=============== ============== ============== =============== ==============
=============== ============== ============== =============== ==============
Weighted average shares outstanding
Basic 7,713 7,646 8,095 8,066 7,867
=============== ============== ============== =============== ==============
Diluted 8,520 7,959 8,443 8,535 8,653
=============== ============== ============== =============== ==============
=============== ============== ============== =============== ==============
Balance Sheet Data:
Working capital $ 21,868 $ 21,141 $ 32,948 $ 31,868 $ 32,524
Total assets 102,775 99,734 57,544 57,726 47,207
Long-term debt, less current portion 34,815 31,548 8,912 10,666 3,909
Retained earnings 28,311 25,499 21,938 19,869 18,029
Shareholders' equity 40,919 40,053 42,433 41,221 39,345
<FN>
(1) Includes results of Dominion Biologicals Limited since December 11, 1996.
(2) Includes results of Gamma Biologicals, Inc. since October 27, 1998,
Medichim and Immunochim since March 15, 1999 and BCA, a division of
Biopool, since April 30, 1999.
</FN>
Item 7.--Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Any statements contained herein that are not historical fact are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, and involve risks and uncertainties. All
forward-looking statements included in this document are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward-looking statements. Further risks are
detailed in the Company's filings with the Securities and Exchange Commission,
including those set forth in this Form 10-K and Quarterly Reports on Form 10-Q.
(a) Liquidity and Capital Resources
Net cash provided by operating activities totaled $6,024,100,
$5,985,100, and $3,783,000 for the fiscal years 2000, 1999 and 1998,
respectively. As of May 31, 2000, the Company's cash and cash equivalents
balance totaled $3.5 million.
During fiscal 2000, the Company experienced an increase in trade
accounts receivable of $152,000 over the previous year principally due to higher
sales levels in the U.S. and Europe. Accounts receivable from a former officer
and director decreased $141,000 primarily as a result of this former director
repaying loans payable to the Company. See Note 6 to the Consolidated Financial
Statements and Item 13 - Certain Relationships and Related Transactions.
Since the close of the fiscal year, isolated performance issues have
been experienced with certain ABS2000 installations. The Company has issued a
safety notification requesting customers to confirm ABS2000 results until the
cause of the difficulty is identified and corrected. The Company believes it has
identified the factors which caused the performance issues and is in the process
of submitting this information to the FDA. If the FDA concurs, the Company will
suspend the safety notification and expects that customers may again use the
ABS2000 without separate verification. The Company cannot predict how long it
will take to resolve these issues with the FDA. These performance issues may
result in delays in customers accepting instruments, and may affect sales of
reagents used in the instruments, and both of these factors may adversely impact
sales and earnings. In addition, the Company may receive requests for refunds on
machines already placed in service or requests for financial concessions
attributable to inconveniences associated with these performance issues,
although it has not yet received any such requests. A private label leasing
company that finances our customers' purchases of ABS2000 machines has advised
the Company that it is not willing to provide financing for additional sales of
this machine until the performance issues related to the ABS2000 are resolved to
the satisfaction of the FDA.
In fiscal 1998, the Company authorized a program to repurchase up to
10% of its common stock in the open market. During fiscal 2000 and 1999, the
Company repurchased 415,500 and 822,800 shares of its common stock for
approximately $3.5 and $7.4 million, respectively. The Company intends to
repurchase additional shares as working capital permits.
On September 1, 1998 the Company acquired the Canadian distribution
rights for the Company's complete line of reagents from its Canadian distributor
for a total transaction value of approximately $2 million.
On October 27, 1998, the Company acquired Gamma Biologicals, Inc. for a
cash tender offer of $5.40 per share and certain transaction costs for a total
value of $27,859,500. In addition, as of May 31, 2000, the Company has made
severance payments related to the acquisition in the amount of $2,473,000.
On March 15, 1999, the Company acquired the distribution rights to
market its products in France and Belgium through the purchase of its former
distributors, Immunochim s.a.r.l. (France) and Medichim S.A. (Belgium), for a
combination of cash and Immucor stock options for a total transaction value of
approximately $1.8 million. The purchase price also contains an incentive
earnout (see Note 3 to the Consolidated Financial Statements).
On April 30, 1999 the Company purchased certain assets of the BCA
blood bank division of Biopool International, Inc. for approximately $4.5
million.
In connection with the acquisition of Gamma in October 1998, and the
subsequent acquisitions of Medichim S.A., Immunochim s.a.r.l., and the BCA
division assets of Biopool International, Inc., the Company obtained an
acquisition term note of $20,000,000 maturing in December 2005, an additional
term loan of $4,500,000 maturing in March 2004, and a line of credit of
$2,000,000 maturing in October 2001. On November 4, 1998, the Company entered
into an interest rate swap agreement with an effective date of December 1, 1998,
for a notional amount of $15,000,000, also maturing December 2005. This
transaction effectively converts the acquisition term loan's floating rate to a
fixed rate of 5.33% on the principal balance of $15,000,000. On April 30, 1999
the line of credit for $2,000,000 was canceled and a new line of credit was
executed for $5,000,000. These borrowings, other than the interest rate swap
notional amount, bear interest rates at LIBOR plus additional percentage points
based on certain calculations. The interest rates have ranged from 6% to 8% on
the Company borrowings. At May 31, 2000, the outstanding balance of the
acquisition term note was $18,125,000, the additional term loan was $4,250,000
and the line of credit was $5,000,000. The fair value of the interest rate swap
agreement of $768,000 at May 31, 2000 is not recognized in the financial
statements.
In connection with the acquisition of Dominion Biologicals Limited in
December 1996, the Company entered into a $4,566,200 long-term revolving line of
credit facility with the Company's primary U.S. bank maturing December 2001 and
bearing interest at LIBOR plus .4375%. At the same time, the Company entered
into an interest rate swap agreement with a notional amount of $2,374,600 also
maturing December 2001. This transaction effectively converts the revolving line
of credit's floating rate to a fixed rate on the principal balance of
$2,374,600. The interest rate on the remaining principal of $678,400 is adjusted
every 90 days. The balance of the acquisition of Dominion was financed from the
issuance to Dominion's former shareholders of subordinated promissory notes
totaling $3,894,800 due December 1999 and from the issuance of warrants (see
Note 4 to the Consolidated Financial Statements). On December 17, 1999 the
Company entered into an additional term loan of $3,884,800 ($5,741,000 CDN$) to
retire the Canadian subordinated promissory notes. Principal and interest
payments are due quarterly commencing March 1, 2000 and continuing through
September 1, 2002. During fiscal 2000 the Company repaid $69,000 under the
long-term revolving line of credit facility leaving a remaining principal
balance at May 31, 2000 of $3,053,500.
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 U.S. bank (see Note 4 to the Consolidated Financial
Statements). The note, which initially matured September 1998, has been extended
to September 2000 while the interest rate swap agreement expired September 1998.
At May 31, 2000, the outstanding balance of the note payable was $719,200.
During fiscal 2000 and 1999, the Company repaid $0 and $603,500, respectively.
The Company's Italian and Spanish subsidiaries had approximately
$1,683,000 in borrowings under lines of credit as of May 31, 2000 with an
additional $916,380 available.
On August 11, 1999, the Company signed an amendment to its lease for
the expansion of the facilities in the U.S. that provided an additional 13,500
square feet of office and warehouse space. In fiscal 2000, the Company spent
approximately $250,000 related to the expansion. During fiscal 1999, the Company
spent approximately $750,000 to complete the expansion into an additional 6,000
square feet of laboratory, training facilities and office space and renovate its
Norcross manufacturing facility. Also, during fiscal 1999 and 2000 the Company
entered into capital leases related to the purchase and implementation of an
enterprise-wide software system with a cost of $1,324,000 (see Note 5 to the
Consolidated Financial Statements).
On April 20, 2000 the Company entered into an additional term loan of
$5,000,000 to finance the repurchase of common stock. Principal and interest
payments are due quarterly commencing September 1, 2001 and continuing through
June 1, 2006. The principal balance as of May 31, 2000 was $3,200,000.
Management believes that the Company's current cash and cash
equivalents balance, internally generated funds, and amounts available under
lines of credit should be more than sufficient to support operations, planned
product introduction and continued improvement and development of products
during the next 12 months. Management also believes additional credit lines
would be available should the need arise for capital improvements, acquisitions
or other corporate purposes.
(b) Results of Operations
Comparison of Years Ended May 31, 2000 and May 31, 1999
Net Sales
Net sales realized a 29% increase from $59,525,000 in fiscal 1999 to
$76,541,000 in fiscal 2000. Net sales from the operations of companies acquired
during fiscal 1999 accounted for $10,091,000, or 59%, of the sales increase
($8,041,000 from Gamma, and $2,051,000 from Medichim, Immunochim, and BCA). (See
Liquidity and Capital Resources). Gamma product sales, on a proforma basis,
realized a 9% increase, or $1,300,000. Blood bank automation products and
reagent products used with automation had a 61% increase of approximately
$4,000,000 reinforcing the Company's strategy to differentiate itself in the
marketplace via instrumentation. The remaining increase in sales of
approximately $13,000,000 in traditional reagents represents a 25% increase over
fiscal 1999. The Company's European operations increased sales by $2,926,000, of
which $1,581,000 was a result of the Company's acquisitions. Revenues of the
Company's European affiliates were adversely affected by the strength of the US
Dollar versus the Euro which caused a decrease in reported sales of
approximately $2,400,000.
Gross profit
As a percent of sales revenue, the gross profit margin decreased from
54% to 52%. The decrease was related to the $6,400,000 increase in sales of
instruments and the $10,091,000 sales increase related to fiscal 1999
acquisitions. Such sales carry lower gross margins than sales of other
proprietary products marketed by the Company. Additionally, the strength of the
US Dollar versus the Euro reduced European Gross margins by approximately
$1,102,400.
Operating expenses
When compared to the prior year, research and development costs
increased $709,000. This increase is due to development work the company has
undertaken with Stratec Biomedical Systems AG to develop a fully automated
instrument designed to allow the Company to effectively compete in the European
market.
Selling and marketing expenses for the year increased $1,779,000 as
compared to last fiscal year. Part of the increase was due to fiscal 1999
acquisitions, with Medichim and Immunochim accounting for $534,000. The
remainder of the increase is primarily due to higher payroll expense for
additional personnel required for the Company's instrumentation strategy, the
reorganization of the marketing organization of the German affiliate and
increased expenses for the expansion of the Company's Spanish operations.
Distribution expenses increased $2,318,000 when compared to last fiscal
year of which Gamma accounts for $1,047,000, and Medichim and Immunochim account
for $213,000. The remaining increase relates to increased shipping activity.
General and administrative expenses increased $2,073,000 over the
previous year, with additional personnel expenses to support the growth of the
Company through acquisitions and implementation of the new enterprise wide
resource planning (ERP) system to give management more timely and extensive
information on sales and operations. The Company also experienced increases in
operating costs such as rent, utilities and depreciation in connection with the
Company's expansion at its U.S. headquarters.
Amortization Expense
Amortization expense increased $788,000 due to the Company's
acquisition of Gamma, BCA, Medichim, Immunochim, and the Canadian distribution
rights during fiscal 1999.
Interest Income
Interest income decreased $282,000 for the year due to lower cash
balances as compared to last year caused by the fiscal 1999 acquisitions of
Gamma, Medichim and Immunochim, and BCA which were partially funded with the
Company's cash. (See Liquidity and Capital Resources).
Interest Expense
Interest expense increased from $1,416,000 in fiscal 1999 to $2,911,000
in fiscal 2000 as a result of financing the acquisitions of Gamma, Medichim and
Immunochim, and BCA. (See Liquidity and Capital Resources).
Other income(expense)
The increase in other income of $29,000 as compared to last year was
caused by reduced foreign currency transaction losses recorded in Europe.
Income Taxes
As a percent of pretax income, the provision for income taxes increased
in fiscal 2000 from 34% to 40%. The increase is the result of minimum tax
charges in Europe. These minimums became relevant during the year as the
strength of the US Dollar compared to the Euro caused local operating profits to
decline.
Comparison of Years Ended May 31, 1999 and May 31, 1998
Net Sales
Net sales increased from $39,790,000 in fiscal 1998 to $59,525,000 in
fiscal 1999. Net sales from the operations of companies acquired during the year
accounted for $13,267,000 of the sales increase (Gamma acquired October 1998 of
$11,425,000, Medichim and Immunochim acquired March 15, 1999 of $1,359,000, and
BCA, a division of Biopool, acquired in April 1999 of $483,000). (See Liquidity
and Capital Resources). The remaining sales increase was caused by higher sales
in the U.S. of the Company's blood bank automation products and reagent products
used with automation. The Company's European operations increased sales by
$4,171,000, of which $2,536,000 was a result of the Company's acquisitions. The
increase was primarily due to reagents used with blood bank automation.
Gross profit
As a percent of sales revenue, the gross profit margin remained
constant at 54%. Instrumentation sales of approximately $6,400,000 at lower
gross profit margins were offset by increased reagent sales at higher gross
profit margins.
Operating expenses
When compared to the prior year, research and development costs
increased $323,000 with $308,000 year-to-date additional research expense
resulting from the acquisition of Gamma (see Liquidity and Capital Resources).
Selling and marketing expenses for the year increased $3,357,000 as
compared to the prior fiscal year. Part of the increase was due to acquisitions:
Gamma had $1,391,000 and Medichim and Immunochim had $152,000. The remainder of
the increase is primarily due to the effect of higher payroll expense due to
additional personnel required for the Company's instrumentation strategy,
increased expenses for the launch of the ABS2000, and expansion of the Company's
Spanish operations.
Distribution expenses increased $1,285,000 when compared to fiscal 1998
of which Gamma accounts for $741,000. The remaining increase related to
increased shipping activity.
General and administrative expenses increased $1,750,000 over the
previous year, with additional expenses of $674,000 resulting from the purchase
of Gamma and the remainder due to higher expenses as the Company expanded
operations worldwide.
Merger-related expenses were one-time expenses related to the Gamma and
BCA acquisitions.
Amortization Expense
Amortization expense increased $503,000 due to the Company's
acquisition of Gamma, BCA, Medichim, Immunochim, and the Canadian distribution
rights.
Interest Income
Interest income decreased $476,000 for the year due to lower cash
balances as compared to fiscal 1998 caused by the Company's stock repurchases
and acquisitions of Gamma, Medichim and Immunochim, and BCA which were partially
funded by the use of the Company's cash. (See Liquidity and Capital Resources).
Interest Expense
Interest expense increased from $616,000 in fiscal 1998 to $1,416,000
in fiscal 1999 as a result of the financing of the acquisitions of Gamma,
Medichim and Immunochim, and BCA. The increase was partially offset by the
Company reducing its outstanding principal loan balance in Germany and Canada.
(See Liquidity and Capital Resources).
Other income (expense)
The increase in other income of $229,000 as compared to fiscal 1998 was
caused by reduced foreign currency transaction losses recorded in Europe.
Income Taxes
As a percent of pretax income, the provision for income taxes decreased
in fiscal 1999 from 47% to 34%. Lower taxes were provided in Germany as compared
to the prior year as a result of the Company's ongoing implementation of tax
planning strategies. Additionally, the Company reduced its deferred tax
valuation allowance due to the increased viability of anticipated future taxable
income in Italy combined with certain tax planning strategies.
(c) Impact of Year 2000
The Company and its subsidiaries have not experienced any material
problems with network infrastructure, software, hardware or computer systems due
to the inability to recognize appropriate dates related to the year 2000. The
Company and its subsidiaries do not anticipate incurring material expenses or
experiencing any material operational disruptions as a result of any year 2000
issues.
(d) Impact of Recently Issued Accounting Standards
In June 1998, the FASB issued Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities. Statement 133 establishes
accounting and reporting standards for derivative instruments and for hedging
activities. Statement 133, as amended by Statement 137, is effective for fiscal
quarters of fiscal years beginning after June 15, 2000. The adoption of
Statement 133, as amended by Statement 137, will not have a significant impact
on the Company's consolidated financial statements.
In December 1999, the SEC staff issued Staff Accounting Bulletin (SAB) No. 101,
Revenue Recognition in Financial Statements. SAB 101 summaries the SEC staff's
views regarding the recognition and reporting of revenues in certain
transactions. The effective date of this pronouncement is the fourth quarter of
the fiscal year beginning after December 15, 1999. The company is evaluating SAB
101 and the effect it will have on the financial statements and its current
revenue recognition policy. At this time, it is not possible to estimate the
impact of this change.
(e) 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 also be experienced by others in the industry.
Item 7A.--Quantitative and Qualitative Disclosures About Market Risk
Market Risk. The Company is exposed to various market risks, including
changes in foreign currency exchange rates and interest rates which could
adversely impact its results of operations and financial condition. To manage
the volatility relating to these typical business exposures, the Company may
enter into various derivative transactions when appropriate. The Company does
not hold or issue derivative instruments for trading or other speculative
purposes.
Interest Rate Risk. Interest rate swap agreements are entered into with
the objective of managing exposure to interest rate changes. The Company has
entered into interest rate swaps to effectively convert a portion of variable
rate bank debt into fixed rates. At May 31, 2000 and May 31, 1999, the Company
had an interest rate swap agreement in the Company's functional currency,
maturing in 2005 with an aggregate notional principal amount of $15 million. At
May 31, 2000 and May 31, 1999, the Company had an interest rate swap agreement
in Canadian dollars, maturing in 2001 with an aggregate notional principal
amount of $2.4 million. The fair value of the interest rate swap agreements
represent the estimated receipts or payments that would be made to terminate the
agreements. At May 31, 2000 and May 31, 1999, the Company would have received
$767,700 and $328,000, respectively, to terminate the agreement in the Company's
functional currency. At May 31, 2000 and May 31, 1999, the Company would have
received $600 and $278,500, respectively, to terminate the Canadian dollars
agreement. See - Note 4 to the Company's Consolidated Financial Statements.
Foreign Currency. Operating income generated outside the United States
was 44% in 2000, 54% in 1999 and 79% in 1998. Fluctuations in foreign exchange
rates could impact operating results when translations of the Company's
subsidiaries' financial statements are made in accordance with current
accounting guidelines. It has not been the Company's practice to actively hedge
its foreign subsidiaries' assets or liabilities denominated in local currency
except for the occasional purchase of forward exchange contracts. Most of the
foreign currency exposures are managed locally by the Company's foreign
subsidiaries through the hedging of purchase commitments with the advance
purchase of the required non-functional currencies. However, the Company
believes that over time weaknesses in one particular currency are offset by
strengths in others. In 2000, 1999, and 1998 the Company recorded foreign
currency transaction gains (losses) of approximately $152,000, $202,000, and
$(27,400), respectively.
Item 8.--Financial Statements and Supplementary Data.
The following consolidated financial statements of the Company are
included under this item:
-Report of Independent Auditors
-Consolidated Balance Sheets, May 31, 2000 and 1999
-Consolidated Statements of Income for the Years Ended May 31, 2000, 1999
and 1998
-Consolidated Statements of Shareholders' Equity for the Years Ended May
31, 2000, 1999 and 1998
-Consolidated Statements of Cash Flows for the Years Ended May 31, 2000,
1999 and 1998
-Notes to Consolidated Financial Statements
-Consolidated Financial Statement Schedule
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders
of Immucor, Inc.:
We have audited the accompanying consolidated balance sheets of Immucor, Inc. as
of May 31, 2000 and 1999 and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended May 31, 2000. Our audits also included the financial statement schedule
listed in the Index at Item 14(a). These financial statements and schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits 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, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Immucor, Inc. at May 31, 2000 and 1999, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
May 31, 2000, in conformity with accounting principles generally accepted in the
United States. Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
/s/ Ernst & Young LLP
Atlanta, Georgia
August 22, 2000, except for paragraph 8
of Note 4 as to which the date is
August 29, 2000
IMMUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
[Enlarge/Download Table]
May 31,
------------------------------------------
2000 1999
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,505,926 $ 2,793,592
Accounts receivable, trade (less allowance for doubtful accounts of
$1,164,582 in 2000 and $804,470 in 1999) 21,726,062 21,573,846
Accounts receivable from former officer and director - 140,946
Inventories 16,813,239 16,065,190
Income taxes receivable 752,470 553,451
Deferred income taxes 902,409 907,530
Prepaid expenses and other 1,321,363 1,587,817
-------------------- --------------------
-------------------- --------------------
Total current assets 45,021,469 43,622,372
LONG-TERM INVESTMENT - At cost 1,000,000 1,000,000
PROPERTY, PLANT AND EQUIPMENT - Net 17,475,882 15,697,328
DEFERRED INCOME TAXES 1,120,238 1,108,279
OTHER ASSETS - Net 2,251,293 2,363,243
DEFERRED LICENSING COSTS - Net 2,044,850 2,307,837
EXCESS OF COST OVER NET TANGIBLE ASSETS ACQUIRED - Net 33,861,147 33,634,458
-------------------- --------------------
-------------------- --------------------
$102,774,879 $ 99,733,517
==================== ====================
==================== ====================
See notes to consolidated financial statements.
IMMUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(continued)
[Enlarge/Download Table]
May 31,
-------------------------------------------
2000 1999
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of borrowings under bank line of credit agreements $ 2,952,307 $ 1,619,312
Current portion of long-term debt 4,277,598 5,000,062
Note payable to related party - 1,637,495
Current portion of capital lease obligations 618,240 194,476
Accounts payable 9,442,977 10,039,489
Income taxes payable 74,715 27,739
Accrued salaries and wages 1,346,874 1,125,216
Deferred income taxes 164,243 118,280
Other accrued liabilities 4,276,554 2,719,496
--------------------- --------------------
Total current liabilities 23,153,508 22,481,565
BORROWINGS UNDER BANK LINE OF CREDIT AGREEMENTS 8,006,213 8,052,917
LONG-TERM DEBT 25,144,272 22,694,938
CAPITAL LEASE OBLIGATIONS 1,664,165 800,117
DEFERRED INCOME TAXES 3,062,331 3,024,550
OTHER LIABILITIES 825,592 2,626,763
SHAREHOLDERS' EQUITY:
Common stock - authorized 30,000,000 shares, $.10 par value; issued and 746,212
outstanding 7,462,118 in 2000 and 7,488,411 in 1999 748,841
Additional paid-in capital 16,848,804 16,945,885
Retained earnings 28,310,741 25,498,721
Accumulated other comprehensive loss (4,986,959) (3,140,780)
--------------------- --------------------
--------------------- --------------------
Total shareholders' equity 40,918,798 40,052,667
--------------------- --------------------
--------------------
$ 102,774,879 $ 99,733,517
===================== ====================
See notes to consolidated financial statements.
IMMUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
[Enlarge/Download Table]
Year Ended May 31,
-----------------------------------------------------------------
2000 1999 1998
NET SALES $ 76,540,476 $ 59,524,539 $ 39,790,434
COST OF SALES 36,407,764 27,550,548 18,167,840
-------------------- -------------------- ---------------------
-------------------- -------------------- ---------------------
GROSS PROFIT 40,132,712 31,973,991 21,622,594
OPERATING EXPENSES:
Research and development 2,002,597 1,293,576 970,924
Selling and marketing 12,391,837 10,612,516 7,255,579
Distribution 5,966,178 3,648,456 2,363,293
General and administrative 10,533,826 8,460,525 6,710,838
Merger-related expenses - 558,973 -
Amortization expense 1,879,049 1,091,278 588,555
-------------------- -------------------- ---------------------
-------------------- -------------------- ---------------------
32,773,487 25,665,324 17,889,189
-------------------- -------------------- ---------------------
-------------------- -------------------- ---------------------
INCOME FROM OPERATIONS 7,359,225 6,308,667 3,733,405
OTHER:
Interest income 30,801 313,219 788,870
Interest expense (2,911,029) (1,416,179) (615,705)
Other, net 230,658 202,093 (27,381)
-------------------- -------------------- ---------------------
-------------------- -------------------- ---------------------
(2,649,570) (900,867) 145,784
-------------------- -------------------- ---------------------
-------------------- -------------------- ---------------------
INCOME BEFORE INCOME TAXES 4,709,655 5,407,800 3,879,189
INCOME TAXES 1,897,635 1,846,776 1,810,416
-------------------- -------------------- ---------------------
-------------------- -------------------- ---------------------
NET INCOME $ 2,812,020 $ 3,561,024 $ 2,068,773
==================== ==================== =====================
==================== ==================== =====================
INCOME PER SHARE
Basic $ .36 $ .47 $ .26
==================== ==================== =====================
Diluted $ .33 $ .45 $ .25
=================== ==================== =====================
See notes to consolidated financial statements.
IMMUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
[Enlarge/Download Table]
Accumulated
Additional Other Total
Common Stock Paid-In Retained Comprehensive Shareholders'
--------------------------
Shares Amount Capital Earnings Loss Equity
----------- ------------- -------------- ------------- -------------- --------------
----------- ------------- -------------- ------------- -------------- --------------
BALANCE, JUNE 1, 1997 8,078,737 $ 807,873 $ 22,502,930 $19,868,924 $(1,958,859) $41,220,868
Exercise of stock options 119,774 11,978 602,419 - - 614,397
Tax benefits related to stock options 177,551 - - 177,551
Exchange of stock for cancellation of
non-compete agreement (16,500) (1,650) (336,369) - - (338,019)
Stock repurchase (103,200) (10,320) (867,063) - - (877,383)
Comprehensive income:
Foreign currency translation
adjustment - - - (433,637) (433,637)
Net income - - - 2,068,773 - 2,068,773
----------- ---- ------- ------------- ------------- --------------- -------------
Total comprehensive income - - - 2,068,773 (433,637) 1,635,136
------------ ------------ -------------- ------------- ---------------- ------------
BALANCE, MAY 31, 1998 8,078,811 807,881 22,079,468 21,937,697 (2,392,496) 42,432,550
Exercise of stock options and warrants 232,400 23,240 1,661,232 - - 1,684,472
Tax benefits related to stock options 188,855 - - 188,855
Issuance of warrants 310,000 - - 310,000
Stock repurchase (822,800) (82,280) (7,293,670) - - (7,375,950)
Comprehensive income:
Foreign currency translation
adjustment - - - - (748,284) (748,284)
Net income - - - 3,561,024 - 3,561,024
------------- ------------- ------------ ------------- --------------- -------------
Total comprehensive income - - - 3,561,024 (748,284) 2,812,740
------------- ------------- -------------- ------------- ------------ ------------
BALANCE, MAY 31, 1999 7,488,411 748,841 16,945,885 25,498,721 (3,140,780) 40,052,667
Exercise of stock options and warrants 389,207 38,921 2,947,602 - -
2,986,523
Tax benefits related to stock options - -
377,375 377,375
Stock repurchase (415,500) (41,550) - -
(3,422,058) (3,463,608)
Comprehensive income:
Foreign currency translation
adjustment - - - - (1,846,179) (1,846,179)
Net income - - - 2,812,020 -
2,812,020
----------- ----------- -------------- ------------ ------------- ---------------
Total comprehensive income - - - 2,812,020 (1,846,179) 965,841
------------- ------------- ------------ ------------ -------------- ---------------
BALANCE, MAY 31, 2000 7,462,118 $ 746,212 $16,848,804 $28,310,741 $(4,986,959) $40,918,798
============= =========== ============ ============ ============== ==============
IMMUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
[Enlarge/Download Table]
Year Ended May 31,
-----------------------------------------------------
2000 1999 1998
OPERATING ACTIVITIES:
Net income $2,812,020 $3,561,024 $2,068,773
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization of property and equipment 2,936,615 2,215,848 1,392,534
Amortization of other assets and excess of cost over net
tangible assets acquired 1,879,049 1,091,278 588,555
Deferred tax provision 377,375 225,045 481,340
Changes in operating assets and liabilities, net of effects of
business acquisitions:
Accounts receivable, trade (227,173) (2,382,232) (1,147,751)
Accounts receivable from former officer and director 140,946 554,484 913,570
Income taxes 71,957 (34,608) 88,433
Inventories (1,228,317) (2,749,627) (800,086)
Other current assets (228,527) (767,083) 146,934
Accounts payable (675,764) 2,383,200 (66,145)
Other current liabilities 165,920 1,887,806 117,154
---------------- ----------------- ----------------
---------------- ----------------- ----------------
Total adjustments 3,212,081 2,424,111 1,714,538
---------------- ----------------- ----------------
---------------- ----------------- ----------------
Cash provided by operating activities 6,024,101 5,985,135 3,783,311
INVESTING ACTIVITIES:
Purchases of / deposits on property and equipment (5,063,167) (3,564,804) (1,506,005)
Cash paid for acquisition, net of cash acquired (523,682) (32,571,040) -
Acquisition-related severance (85,960) (2,387,449) -
Increase in other assets (258,972) (2,709,599) (35,014)
---------------- ----------------- ----------------
---------------- ----------------- ----------------
Cash used in investing activities $(5,931,781) $(41,232,892) $(1,541,019)
See notes to consolidated financial statements.
IMMUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
[Enlarge/Download Table]
Year Ended May 31,
-------------------------------------------------------------
2000 1999 1998
FINANCING ACTIVITIES:
Borrowings (repayments) under line of credit agreements $ 555,068 $ 5,379,103 $ (86,363)
Proceeds from issuance of long term debt and capital lease 9,118,933 24,566,514 -
obligations
Repayment of long-term debt and capital lease obligations (5,362,814) (1,737,409) (1,246,185)
Repayment of long-term debt to related party (1,633,947) - -
Exercise of stock options 2,986,523 1,684,472 614,397
Stock repurchases (3,463,608) (7,375,950) (877,383)
------------------- ------------------- -------------------
------------------- ------------------- -------------------
Cash provided by (used in) financing activities 2,200,155 22,516,730 (1,595,534)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (1,580,141) (291,598) (548,775)
------------------- ------------------- -------------------
------------------- ------------------- -------------------
INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS 712,334 (13,022,625) 97,983
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 2,793,592 15,816,217 15,718,234
------------------- ------------------- -------------------
------------------- ------------------- -------------------
CASH AND CASH EQUIVALENTS
AT END OF YEAR $3,505,926 $2,793,592 $15,816,217
=================== =================== ===================
=================== =================== ===================
Noncash investing and financing activities:
Exchange of stock for cancellation of non-compete agreement $ $ $ 338,019
- -
Transfer of equipment deposit to property and equipment - - 562,361
Capital lease obligations 1,644,737 435,400 -
Fair value of assets acquired (1,019,453) 25,463,127 -
Cost in excess of assets acquired 1,576,920 23,207,232 -
Liabilities assumed (33,785) (15,789,319) -
Notes and warrants / options issued for assets acquired - (310,000) -
------------------- ------------------- -------------------
Net cash paid for acquisition, net of cash acquired $ 523,682 $ 32,571,040 $
-
=================== =================== ===================
CASH PAID DURING THE YEAR FOR:
Interest $ 2,886,256 $ 1,270,147 $ 662,185
Income taxes 1,225,635 1,459,500 1,143,802
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, manufacture and marketing of immunological diagnostic medical
products. The Company operates facilities in North America and Europe.
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.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Reclassifications - Certain prior year balances have been reclassified to
conform to the current year presentation.
Concentration of Credit Risk - At May 31, 2000 and 1999 the Company's
entire cash balance of $3,505,926 and $2,793,592, respectively, was on
deposit with high quality U.S. financial institutions.
The Company obtains raw materials from numerous outside suppliers. The
Company is not dependent on any single supplier other than certain
instrumentation manufacturers (see Note 13) and the joint manufacturer of
some 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 or 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.
The Company generally does not require collateral from its customers.
Cash and Cash Equivalents - The Company considers all highly liquid
investments with an original maturity of three months or less when
purchased to be cash and cash equivalents.
Inventories - Inventories are stated at the lower of first-in, first-out
cost or market. Cost includes material, labor and manufacturing overhead.
Long-Term Investment - The long-term investment, representing a 3.4% Common
Stock investment in Lionheart Technologies, Inc., acquired in April 1992,
is accounted for using the cost method of accounting. Bio-Tek Instruments,
Inc. (see Note 13) is a wholly owned subsidiary of Lionheart Technologies,
Inc.
Property, Plant and Equipment - Property, plant and equipment are stated at
cost less accumulated depreciation. Depreciation is computed using the
straight-line method over the estimated lives of the related assets ranging
from three to 30 years.
Interest Rate Swap - The Company uses interest rate swaps to hedge interest
rate risk associated with its borrowings. Any differences paid or received
on interest rate swap agreements are recognized as adjustments to interest
expense over the life of each swap, thereby adjusting the effective
interest rate on the underlying obligation. The Company has established
strict counterparty credit guidelines and only enters into transactions
with financial institutions of investment grade or better. As a result, the
Company estimates the risk of counterparty default to be minimal.
Fair Value of Financial Instruments - The carrying amounts reported in the
consolidated balance sheets for cash and cash equivalents, accounts
receivable, long-term investment and accounts payable approximate their
fair values. The fair values of the Company's long-term debt approximate
the reported amounts in the accompanying consolidated balance sheets as
their interest rates approximate the May 31, 2000 and 1999 market rates for
similar debt instruments.
Intangible Assets
Deferred Licensing Costs - Deferred licensing costs primarily consist of
distribution rights for the Company's complete line of reagents purchased
from its Canadian distributor, Immucor Canada, Inc., on September 1, 1998,
which are being amortized using the straight-line method over ten years.
The remaining balance is attributed to license fees acquired in the
purchase of Gamma Biologicals, Inc. Once a product is developed, the
related license fee is amortized over the term of the respective agreement,
generally five years. Accumulated amortization related to deferred
licensing costs at May 31, 2000 and 1999 was $445,600 and $159,400,
respectively.
Excess of Cost Over Net Assets Acquired - Excess of cost over net assets
acquired 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. Accumulated amortization at May
31, 2000 and 1999 was $4,471,300 and $2,937,600 respectively.
The Company evaluates long-lived assets for impairment when events and
circumstances indicate that the assets might be impaired and records an
impairment loss if the undiscounted cash flows estimated to be generated by
those assets are less than the carrying amount of those assets. The
impairment loss recognized is equal to the difference between the
discounted cash flows and the carrying amount of the assets. The Company
believes that the carrying value of recorded long-lived assets is not
impaired.
Foreign Currency Translation - The financial statements of foreign
subsidiaries have been translated into U.S. dollars in accordance with FASB
Statement No. 52, Foreign Currency Translation. All balance sheet accounts
have been translated using the exchange rates in effect at the balance
sheet dates. Income statement amounts have been translated using the
average exchange rates for each year. The gains and losses resulting from
the changes in exchange rates from year to year have been reported
separately as a component of comprehensive income. The effect of foreign
currency transaction gains and losses has been recorded in the accompanying
statements of income.
Revenue Recognition - Revenue from the sale of the Company's reagents is
recognized upon shipment, and revenue from the sale of the Company's
medical instruments is recognized based on the terms of the related
agreement (i.e. F.O.B. shipping point or installation and customer
acceptance).
Stock Based Compensation - The Company grants stock options for a fixed
number of shares to employees with an exercise price equal to the fair
value of the shares at the date of the grant. The Company accounts for
stock option grants in accordance with APB Opinion No. 25, Accounting for
Stock Issued to Employees, and accordingly does not recognize compensation
expense for the stock option grants. As required by FASB Statement No. 123,
Accounting for Stock-Based Compensation, the Company presents supplemental
information disclosing pro forma net income and net income per common share
as if the Company had recognized compensation expense on stock options
granted subsequent to May 31, 1995 under the fair value method of that
statement (see Note 8 of Notes to Consolidated Financial Statements).
Impact of Recently Issued Accounting Standards - In June 1998, the FASB
issued Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities. Statement 133 establishes accounting and reporting standards
for derivative instruments and for hedging activities. Statement 133 is
effective for fiscal quarters of fiscal years beginning after June 15,
2000. The adoption of Statement 133, as amended by Statement 137, is not
expected to have a significant impact on the Company's consolidated
financial statements.
In December 1999, the SEC staff issued Staff Accounting Bulletin (SAB) No.
101, Revenue Recognition in Financial Statements. SAB 101 summaries the SEC
staff's views regarding the recognition and reporting of revenues in
certain transactions. The effective date of this pronouncement is the
fourth quarter of the fiscal year beginning after December 15, 1999. The
Company is evaluating SAB 101 and the effect it will have on the financial
statements and its current revenue recognition policy. At this time, it is
not possible to estimate the impact of this change.
2. BALANCE SHEET DETAIL
May 31,
-------------------------------
2000 1999
Inventories:
Raw materials and supplies $ 4,983,303 $ 3,856,309
Work in process 1,603,117 967,889
Finished goods and goods
purchased for resale 10,226,819 11,240,992
-------------- --------------
$ 16,813,239 $ 16,065,190
=============== ================
Property, Plant and Equipment:
Land $ 347,579 $ 351,111
Buildings and improvements 5,822,161 6,016,144
Leasehold improvements 951,420 749,738
Furniture and fixtures 1,453,071 1,407,133
Machinery and equipment 16,622,631 12,242,198
---------------- ----------------
25,196,862 20,766,324
Less accumulated depreciation (7,720,980) (5,068,996)
---------------- ----------------
Property and equipment - net $ 17,475,882 $ 15,697,328
================ ================
3. ACQUISITIONS
Gamma Biologicals, Inc.
Pursuant to a definitive merger agreement dated September 21, 1998, the
Company, through a newly formed subsidiary ("Gamma Acquisition
Corporation"), acquired on October 27, 1998 94.27% of the issued and
outstanding shares of Gamma Biologicals, Inc. ("Gamma"). The Company
purchased the shares from Gamma shareholders ("Shareholders") for a cash
tender offer of $5.40 per share for a total transaction value of
$24,831,841 plus acquisition costs of $3,027,615 for an aggregate of
$27,859,456 ("Purchase Price"). According to the depository for the offer,
4,361,110 shares were tendered pursuant to the offer and Immucor purchased
all shares tendered. On October 30, 1998 all remaining shares were acquired
by merging Gamma Acquisition Corporation with and into Gamma which became a
majority owned subsidiary of Immucor. As a result of the merger, the 5.73%
of the shares that had not been tendered were cancelled and converted into
a right to receive $5.40 per share. As of May 31, 1999 Immucor had
purchased or satisfied its obligation to pay $5.40 per share with respect
to a total of 4,598,489 (99.4%) of the issued and outstanding shares of
Gamma. The total transaction value of $24,831,841 was satisfied with
$5,000,000 paid in cash and $19,831,841 funded by a $20,000,000 loan from
the Company's primary U.S. bank to Gamma Acquisition Corporation. Included
in the liabilities assumed was an accrual for severance payments of
$2,474,000 to Gamma employees of which $2,387,000 was paid prior to May 31,
1999, with the remainder paid during the year ended May 31, 2000. During
the years ended May 31, 1999 and 2000, the Company paid out $2,516,875 and
$510,740 in acquisition costs, respectively.
Located in Houston, Texas, Gamma manufactures and sells a wide variety of
in-vitro diagnostic reagents to blood donation centers, transfusion
departments of hospitals, medical laboratories and research institutions
through a direct sales force and distributor network. The Company accounted
for the transaction as a purchase business combination. The results of the
operations of Gamma since October 27, 1998 are included in the Consolidated
Statements of Income. The excess of costs over net assets acquired,
including goodwill and customer lists, is being amortized using the
straight-line method over the related assets' useful life ranging from 20
to 30 years.
The final purchase price allocation is as follows:
Current assets $9,773,473
Property, plant and equipment, net 7,535,909
Other assets 2,584,253
Excess of costs over net assets acquired 18,798,691
Less: Liabilities assumed (10,832,870)
---------------
$27,859,456
===============
Medichim, S.A. and Immunochim, s.a.r.l.
On March 15, 1999, the Company, through a newly formed subsidiary ("Immucor
Acquisitions Inc., S.A."), acquired the available issued and outstanding
shares of Immunochim s.a.r.l. (France) ("Immunochim) and Medichim S.A.
(Belgium) ("Medichim") for a cash payment of $990,000, Company stock
options valued at $310,000, acquisition costs of $105,719 and an incentive
earnout of up to $501,000, which is earned over the course of three years
from the acquisition date based on attaining certain operating profit
goals, as defined. Amounts earned, if any, will be reflected as
compensation expense in the Statement of Income. In conjunction with the
acquisition, a non-compete agreement and intellectual property rights were
purchased for $100,000 and $257,148, respectively. Such amounts are being
amortized over the terms of the related agreements and are classified as
other assets.
The acquisition was accounted for as a purchase business combination. The
results of the operations of Medichim and Immunochim since March 15, 1999
are included in the Consolidated Statements of Income. Excess of costs over
net assets acquired is being amortized using the straight-line method over
25 years.
The final purchase price allocation is as follows:
Fair value of assets acquired $ 3,695,751
Excess of costs over net assets acquired 2,738,316
Less: Liabilities assumed (4,671,200)
---------------
$ 1,762,867
===============
BCA
On April 30, 1999, the Company acquired certain assets of the BCA blood
bank division of Biopool International, Inc. ("BCA") for a total purchase
price of approximately $4.5 million. During the years ended May 31, 1999
and 2000, the Company paid out $6,621 and $12,942 in acquisition costs,
respectively.
The acquisition was accounted for as a purchase business combination. The
results of the operations of BCA since April 30, 1999 are included in the
Consolidated Statements of Income. Excess of costs over net assets acquired
is being amortized using the straight-line method over 20 years.
The final purchase price allocation is as follows:
Fair value of assets acquired $ 1,543,452
Excess of costs over net assets acquired 3,247,146
Less: Liabilities assumed (319,034)
-------------
$ 4,471,564
==============
The pro forma unaudited results of operations for the years ended May 31,
1999 and May 31, 1998, assuming consummation of all of the above purchases
as of June 1, 1997, including financing from the proceeds of a bank loan
and ignoring any cost-saving initiatives are presented below:
Year Ended Year Ended
May 31, 1999 May 31, 1998
------------------ ---------------
Net sales $75,214,000 $69,326,000
Net income 2,484,000 2,857,000
Net income per common share:
Basic .32 .35
Diluted .31 .34
4. BANK LINE OF CREDIT AGREEMENTS AND DEBT OBLIGATIONS
[Enlarge/Download Table]
May 31,
-----------------------------------
2000 1999
---------------- -----------------
Lines of credit - for the Italian subsidiary (denominated in Lira with
interest rates ranging from 5.650% to 8.625% maturing in
fiscal 2001) $ 369,785 $ 661,858
Line of credit - for the Spanish subsidiary (denominated in
Pesetas with an interest rate of 4.75% maturing in fiscal
2001) 1,313,268 -
Revolving line of credit - Canadian subsidiary (denominated in Canadian
dollars with interest rates ranging from 5.31% to
6.64% maturing December 2001) 3,053,523 3,122,680
Subordinated promissory notes payable to non-related parties
(denominated in Canadian dollars at an interest rate of 6%
maturing December 1999) - 2,257,349
Subordinated promissory notes payable to related party
(denominated in Canadian dollars at an interest rate of 6% - 1,637,495
maturing December 1999)
Note payable - German subsidiary (denominated in Deutsche Marks at
an interest rate of 4.14% maturing September 2000) 719,217 799,233
Mortgage note payable - Belgian subsidiary (denominated in Belgian
Francs at an interest rate of 6.25% maturing November 2007) 247,133 280,084
Notes payable - Belgian subsidiary (denominated in Belgian Francs
at interest rates ranging from 5.03% to 10.29%) 36,570 88,037
Line of credit - Belgian subsidiary (denominated in Belgian
Francs with interest rates ranging from 5.50% to 6.0% 502,727 887,691
maturing in fiscal 2001)
Acquisition term note ($15,000,000 at 5.33% and remaining balance
at 6.20% to 8.11% depending on LIBOR rate) 18,125,000 19,625,000
Additional term loan (interest rate ranging from 6.20% to 8.11%) 4,250,000 4,500,000
Third additional term loan (interest rate ranging from 6.12% to 3,515,655 -
6.25%)
Fourth additional term loan (interest rate ranging from 9.00% to 3,200,000 -
9.25%)
Line of credit (interest rate ranging from 6.20% to 10.30%) 5,000,000 5,000,000
Mortgage note payable (interest rate of 10.50%) 47,512 145,297
---------------- -----------------
40,380,390 39,004,724
Less current portion (7,229,905) (8,256,869)
---------------- -----------------
$ 33,150,485 $ 30,747,855
================ =================
The Company's Italian subsidiary has $369,785 in line of credit agreements
denominated in Lira with three Italian banks bearing interest between
5.650% to 8.625%. At May 31, 2000, the Company had $729,600 available under
these line of credit agreements. The Company has an additional $1,313,268
line of credit agreement for the Spanish subsidiary denominated in Pesetas
with a Spanish bank bearing interest at 4.75%. At May 31, 2000, the Company
had $186,700 available under the Spanish line of credit agreement.
In connection with the acquisition of Dominion Biologicals Limited in
December 1996, the Company entered into a $4,566,200 ($6,200,000 CDN$)
long-term revolving line of credit facility with the Company's primary U.S.
bank and bearing interest at LIBOR plus .4375%. The Company simultaneously
entered into an interest rate swap agreement with a notional amount of
$2,338,166 ($3,500,000 CDN$). This transaction effectively converts the
revolver's floating rate to a fixed rate of 6.6375% on the principal
balance of $2,338,166. The interest rate on the remaining principal balance
of $715,357 ($1,000,000 CDN$) is LIBOR plus .4375%, which was 7.275% at May
31, 2000, and is adjusted every 90 days. At May 31, 2000, the Company had
$1,088,000 available under this line of credit agreement. The fair value of
the interest rate swap agreement is $390 at May 31, 2000. The Company also
issued subordinated promissory notes to the former shareholders of Dominion
bearing interest at 6% payable semiannually with principal due in December
1999. On December 17, 1999 the Company entered into an additional term loan
of $3,884,800 ($5,741,000 CDN$) to retire the Canadian subordinated
promissory notes. Principal and interest payments are due quarterly
commencing March 1, 2000 and continuing through September 1, 2002.
In March 1995, the Company refinanced its Deutsche Mark denominated debt
through the issuance of a note payable to the Company's primary U.S. bank
in Deutsche Marks with interest of LIBOR plus .375%. At the same time, the
Company entered into an interest rate swap agreement with the bank which
expired September 1998, which effectively converted the note payable's
floating rate to a fixed rate of 4.14% per annum up to September 1998.
Upon the acquisition of Medichim, the Company assumed a mortgage note which
is collateralized by a first lien on Medichim's land and building. Medichim
has various notes payable with a local bank bearing interest between 5.03%
and 10.29%. Medichim also has $619,000 in line of credit agreements
denominated in Belgian Francs with one Belgian bank. Such lines are
guaranteed by the Company. At May 31, 2000, the Company had $116,200
available under these line of credit agreements.
In connection with the acquisition of Gamma in October 1998, and the
subsequent acquisitions of Medichim, Immunochim and BCA, the Company
entered into a bank loan agreement (the "Loan Agreement") with the
Company's primary U.S. bank including an acquisition term note of
$20,000,000 maturing in December 2005, an additional term loan of
$4,500,000 maturing in March 2004 and a line of credit of $2,000,000
maturing in October 2001. On November 4, 1998, the Company entered into an
interest rate swap agreement with an effective date of December 1, 1998,
for a notional amount of $15,000,000, also maturing December 2005. This
transaction effectively converts the acquisition term note's floating rate
to a fixed rate of 5.33% on the principal balance of $15,000,000. On April
30, 1999 the line of credit for $2,000,000 was canceled and a new line of
credit was executed for $5,000,000. These borrowings, other than the
interest rate swap notional amount, bear interest rates at LIBOR plus
additional percentage points ranging from .5% to 1.4% based on certain
calculations as defined in the Loan Agreement. Debt issue costs of $56,250
for advisory fees were paid to an investment banker in conjunction with the
acquisition of Gamma. These debt issue costs have been deferred and are
being amortized over the life of the Loan Agreement. The fair value of the
interest rate swap agreement was $767,655 at May 31, 2000.
On April 20, 2000 the Company entered into an additional term loan of
$5,000,000 to finance the repurchase of 415,500 shares common stock.
Principal and interest payments are due quarterly commencing September 1,
2001 and continuing through June 1, 2006. The principal balance as of May
31, 2000 was $3,200,000.
When the Company acquired Gamma, it assumed a mortgage note which is
collateralized by a first lien on the Gamma Biologicals' land and building
located in northwest Houston. The mortgage note, which matures in November
2000, bears interest at the bank's base rate, but not less than 7% nor more
than 13%.
The Loan Agreement, Dominion revolving line of credit and Deutsche Mark
note payable are guaranteed by the Company and require the maintenance of
certain income and other financial ratios, and place certain limited
restrictions on the Company's ability to acquire other entities. The
Company was not in compliance with certain covenants as of May 31, 2000 but
obtained appropriate waivers and amended its loan agreement with the U.S.
bank effective August 29, 2000. The interest rate swap agreements with the
U.S. bank are guaranteed by the Company. In addition, the Company has
pledged 66% of the shares of stock of the Company's subsidiaries, whereby,
in the event of default, the bank would gain control of the shares' voting
rights.
Aggregate maturities of all long-term obligations for each of the next five
years and thereafter are as follows:
Year Ending May 31:
2001 $ 7,229,905
2002 13,882,806
2003 6,132,762
2004 5,420,589
2005 4,170,941
Thereafter 3,543,387
-------------
$ 40,380,390
==============
5. CAPITAL LEASE OBLIGATIONS
[Enlarge/Download Table]
May 31,
-----------------------------------
2000 1999
----------------- ----------------
Manufacturing equipment, bearing interest at rates ranging from 4.54% $ 985,666 $ 588,503
to 9.89% and with maturities ranging from April 2003 to July 2004.
Enterprise wide resource planning (ERP) computer system and related
equipment, bearing interest at rates ranging from 2.21% to 8.23%
and with maturities ranging from June 2001 to February 2004. 782,227 406,090
Office furniture and build-outs for facility expansion, bearing
interest at rates ranging from 5.6% to 7.63% and with maturities
ranging from January 2002 to December 2004. 357,351 -
Office equipment, bearing interest at rates ranging from 4.53% to
10.72% and with maturities ranging from December 2003 to May 2005. 157,161 -
----------------- ----------------
2,282,405 994,593
Less current portion (618,240) (194,476)
----------------- ----------------
$ 1,664,165 $ 800,117
================= ================
All of the above capital lease obligations are collateralized by the
indicated assets. Amortization on related assets is included in
depreciation expense. Aggregate maturities of capital leases for each of
the next five years and thereafter are as follows:
Year Ending May 31:
2001 $ 618,240
2002 642,645
2003 583,338
2004 311,151
2005 127,031
-------------
$ 2,282,405
===============
Total imputed interest to be paid out under existing capital leases as of
May 31, 2000 is $321,795.
6. ACCOUNTS RECEIVABLE FROM OFFICERS AND DIRECTORS
In July 1997, management of the Company discovered that Mr. Josef Wilms,
the former president of the Company's German subsidiary, Immucor GmbH had
caused Immucor GmbH to make unauthorized loans to him since 1994. The
amounts advanced were documented in the records of Immucor GmbH, including
interest rates ranging from 7.75% to 9.5%, and were generally paid down by
the end of each accounting period, but were not disclosed to the Company's
management. The largest aggregate amounts outstanding under the Immucor
GmbH loans were $29,600 in fiscal 1994, $290,000 in fiscal 1995, $669,000
in fiscal 1996, $1,311,000 in fiscal 1997 and $528,000 in fiscal 1998 and
$141,000 in fiscal 1999 and 2000. As of August 9, 1999 the entire
unauthorized loan balance owed to the Company by Mr. Wilms, plus accrued
interest and amounts of incidental collection expenses allowable under
German law, were paid to the Company. In addition, Mr. Wilms paid an amount
equal to Immucor's outstanding trade receivable totaling approximately
$320,000 from Diag Human, a company Mr. Wilms owed monies to, on behalf of
Diag Human.
Mr. Wilms has had no continuing employment or consulting relationships with
Immucor, Inc. or Immucor GmbH since December 31, 1997.
7. COMMON STOCK
At May 31, 2000, the following shares of Common Stock are reserved for
future issuance:
Common stock options - directors and employees 2,250,030
Common stock warrants - other 878,417
---------
3,128,447
In connection with the acquisition of Medichim, S.A. and Immunochim,
s.a.r.l., the Company issued to the seller an option to acquire, in whole
or in part, 100,000 shares of Immucor stock at $8.938 per share. The
100,000 options become exercisable at the rate of 33% per year commencing
March 2001, expire in fiscal year 2010 and were valued at $310,000 at the
date of the acquisition.
As part of the acquisition of Dominion Biologicals Limited, the Company
issued to the sellers five and ten year warrants to acquire, in whole or in
part, 478,417 and 150,000 shares of Immucor stock at $12.00 and $11.98 per
share, respectively. These warrants became exercisable one year after the
issuance date, with the five-year warrants expiring in 2001 and the
ten-year warrants expiring in 2006. Immucor has submitted the required
registration to the Securities and Exchange Commission for approval of the
resale of the shares covered by both sets of warrants.
In connection with other 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. The 150,000 warrants became exercisable at the rate of 20%
per year commencing August 1993, and expire in 2001. At May 31, 2000,
375,000 warrants had been exercised.
The Company has a Shareholders' 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 at least 20% ownership. Once exercisable, each right
entitles the holder to purchase one share of the Company's Common Stock at
an exercise price of $45, 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, 2009, and in most
cases are redeemable at the discretion of the Board of Directors at $.01
each. 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 or a group acquires at least 20% ownership, except in an offer
approved by the Company under the rights 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 at least 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.
8. STOCK OPTIONS
The Company has various stock option plans which authorize the Company's
Compensation Committee to grant employees, officers and directors options
to purchase shares of the Company's Common Stock. Exercise prices of stock
options are determined by the Compensation Committee and have generally
been the fair market value at the date of the grant.
The Company's 1995 Non-Incentive Stock Option Plan authorizes the grant of
options to employees, officers and directors for up to 1,000,000 shares of
the Company's common stock. All options have 10 year terms and vest and
become fully exercisable 50% at the end of two years, 25% at the end of
three years, and 25% at the end of four years of continued employment.
The Company's 1998 Non-Incentive Stock Option Plan authorizes the grant of
options to employees, officers and directors for up to 1,000,000 shares of
the Company's common stock. All options have 10 year terms and vest and
become fully exercisable 50% at the end of two years, 25% at the end of
three years, and 25% at the end of four years of continued employment.
The Company has elected to follow Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees, (APB 25) and related
Interpretations in accounting for its employee stock options because the
alternative fair value accounting provided for under FASB Statement No.
123, Accounting for Stock-Based Compensation, requires use of option
valuation models that were not developed for use in valuing employee stock
options. Under APB 25, because the exercise price of the Company's employee
stock options equals the market price of the underlying stock on the date
of grant, no compensation is recognized.
Pro forma information regarding net income and earnings per share is
required by Statement 123, which also requires that the information be
determined as if the Company has accounted for its employee stock options
granted subsequent to June 1, 1995 under the fair value method of that
Statement. The fair value for these options was estimated at the date of
grant using a Black-Scholes option pricing model with the following
weighted average assumptions: a risk-free interest rate of 6.27%, 5.34% and
6.22% in fiscal 2000, 1999 and 1998 respectively, no dividend yields; a
volatility factor of the expected market price of the Company's common
stock of .584 for 2000, .525 for 1999, and .458 for 1998 based on quarterly
closing prices since 1986; and an expected life of each option of eight
years.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting periods. The
Company's pro forma information follows:
2000 1999 1998
---- ---- ----
Net income as reported $2,812,020 $3,561,024 $2,068,773
Pro forma net income $1,753,101 $2,980,206 $1,646,037
Earnings per share as reported:
Basic $ .36 $ .47 $ .26
Diluted $ .33 $ .45 $ .25
Pro forma earnings per share:
Basic $ .23 $ .39 $ .20
Diluted $ .21 $ .37 $ .19
Because Statement 123 is applicable only to options granted subsequent to
May 31, 1995, its pro forma effect is not fully reflected until fiscal year
2000.
The Company is authorized to issue up to 2,250,030 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 2009.
Transactions involving these stock option arrangements are summarized as
follows:
Range Weighted Average
of Exercise Exercise
Shares Prices Price
------------------- ------------------------------------------
Outstanding at May 31, 1997 1,644,490 $3.000 - 15.375 $ 7.53
Granted 343,500 $8.000 - 12.000 $ 8.20
Exercised (119,774) $3.000 - 6.000 $ 5.13
Canceled (77,250) $6.000 - 12.000 $ 7.10
-------------------
Outstanding at May 31, 1998 1,790,966 $3.130 - 15.375 $ 7.84
Granted 779,750 $8.750 - 9.688 $ 9.35
Exercised (88,650) $3.130 - 9.330 $ 6.43
Canceled (27,144) $8.000 - 12.000 $ 8.41
-------------------
Outstanding at May 31, 1999 2,454,922 $3.330 - 15.375 $ 8.37
Granted 114,400 $8.375 - 14.500 $ 11.93
Exercised (377,706) $3.330 - 12.000 $ 7.67
Canceled (97,025) $8.000 - 14.500 $ 9.32
-------------------
Outstanding at May 31, 2000 2,094,591 $5.400 - 15.375 $ 8.65
===================
At May 31, 1999 and 1998, options for 1,355,797 and 1,293,535 shares of
Common Stock, respectively, were exercisable, at weighted average exercise
prices of $7.82 and $7.87, respectively. At May 31, 2000 155,439 shares of
Common Stock were available for future grants.
The following table as of May 31, 2000 sets forth by group of exercise
price ranges, the number of shares, weighted average exercise prices and
weighted average remaining contractual lives of options outstanding, and
the number and weighted average exercise prices of options currently
exercisable.
[Enlarge/Download Table]
Options Outstanding Options Exercisable
------------------------------------------- -------------------------------
Weighted
Range of Number Weighted Average Number Weighted
Exercise of Average Contractual of Average
Prices Shares Exercise Life (Years) Shares Exercise Price
Price
--------------------- ------------- -------------- -------------- -------------- ----------------
$ 5.40 $ 5.50 15,854 $5.47 3.3 15,854 $5.47
6.00 9.88 1,946,112 8.44 5.5 1,087,612 7.88
10.00 15.38 132,625 12.09 8.0 37,250 11.00
------------- --------------
5.40 15.38 2,094,591 8.65 5.6 1,140,716 7.95
============= ==============
9. EARNINGS PER SHARE
In 1997, the FASB issued Statement No. 128 which replaced the calculation
of primary and fully diluted earnings per share with basic and diluted
earnings per share. Unlike primary earnings per share, basic earnings per
share excludes dilutive effects of options, warrants and convertible
securities. Diluted earnings per share is very similar to the previously
reported fully diluted earnings per share. The following table sets forth
the computation of basic and diluted earnings per share.
[Enlarge/Download Table]
Year Ended May 31,
----------------------------------------------------
2000 1999 1998
Numerator for basic and diluted earnings per share:
Income available to common shareholders $2,812,020 $3,561,024 $2,068,773
====================================================
Denominator:
For basic earnings per share - weighted average basis 7,713,229 7,645,769 8,095,254
Effect of dilutive stock options and warrants 806,992 312,844 347,847
----------------------------------------------------
Denominator for diluted earnings per share -
Adjusted weighted-average shares 8,520,221 7,958,613 8,443,101
====================================================
Basic earnings per share $0.36 $0.47 $0.26
====================================================
Diluted earnings per share $0.33 $0.45 $0.25
====================================================
10. COMMITMENTS AND CONTINGENCIES
Lease Commitments
The Company leases domestic office and warehouse facilities under an
operating lease agreement expiring in 2003 with a right to renew for an
additional five years. 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 $945,300 in fiscal 2000, $776,800 in fiscal 1999
and $690,400 in fiscal 1998.
In Germany, the office facility is leased from a company owned by Mr. Josef
Wilms' family (see Note 6). Rental payments under this lease were $172,000,
$189,000 and $184,500 for fiscal 2000, 1999 and 1998, respectively.
The following is a schedule of approximate future annual lease payments
under all operating leases that have initial or remaining noncancelable
lease terms in excess of one year as of May 31, 2000:
Year Ending May 31:
2001 $ 902,965
2002 944,085
2003 961,879
2004 905,517
2005 830,974
Thereafter 921,219
-----------------
$ 5,466,639
=================
The Company may, at its option, extend its office and warehouse facilities
lease terms through various dates.
Other Commitments
In connection with certain sales of the Company's automated systems, the
customers are committed to purchasing reagent products exclusively from the
Company and the Company supplies such products based on the terms of the
agreements.
On July 1, 1999 the Company entered into a purchase agreement with an
equipment manufacturer for an instrument product currently marketed by the
Company which requires the Company to purchase a minimum number of
instruments with an aggregate purchase price totaling $315,000 on or before
July 1, 2001. The Company has purchased approximately $121,000 as of May
31, 2000.
Contingencies
Subsequent to May 31, 2000, isolated performance issues have arisen at
certain ABS2000 installations. The Company has taken a prudent approach and
issued a safety notification requesting customers to confirm, by alternate
method, ABS2000 results until the cause of the difficulty is identified and
corrected. These performance issues may result in delays in customer
instrument acceptance, which would adversely affect revenues and earnings.
When the Company acquired Gamma in October 1998, Gamma was a party to an
existing legal proceeding. On May 12, 1998, Gamma received notification
that a claim of patent infringement had been filed on that date in U.S.
District Court, Southern District of Florida, Miami Division, by Micro
Typing Systems, Inc. and Stiftung fur Diagnostiche Forschung (the
Foundation). Subsequently, in February 1999 the Company received
notification that a second claim was filed in the U.S. District Court for
the Northern District of Georgia, against Immucor, Inc. and Gamma for
patent infringement on the first patent described above and a second patent
recently granted to the Foundation. The claim alleges that the recently
introduced Gamma ReACT Test System infringes U.S. patent No. 5,512,432
granted to the Foundation April 30, 1996 and U.S. patent No. 5,863,802
granted to the Foundation on January 26, 1999. The estimated cost of this
litigation was included in the Gamma purchase price allocation. The
plaintiffs seek a preliminary and permanent injunction against the
continued alleged infringement by Gamma and Immucor, and an award of treble
damages, with interest and costs and reasonable attorney's fees. Management
is confident that ReACT technology does not infringe the Foundation's
patents; however, an unfavorable outcome in this action could have a
material adverse effect upon the business and the results of operations in
a given reporting period. The Company filed a motion for summary judgement
based on the belief that said patent was not timely filed. Since this
matter is in the earliest stage of proceedings and due to uncertainties
involved in litigation, management cannot predict the likelihood of a
particular outcome or estimate the financial impact of an unfavorable
resolution. Management believes it has a meritorious defense against the
alleged infringement.
11. INCOME TAXES
Sources of income before income taxes are summarized below:
Year Ended May 31,
--------------------------------------------------
2000 1999 1998
Domestic Operations $2,629,676 $2,799,843 $1,962,591
Foreign Operations 2,079,979 2,607,957 1,916,598
--------------- -------------- -----------------
Total $4,709,655 $5,407,800 $3,879,189
=============== ============== =================
The provision for income taxes is summarized as follows:
Year Ended May 31,
-------------------------------------------------------
2000 1999 1998
Current:
Federal $448,706 $481,466 $652,941
Foreign 1,317,178 1,083,622 645,914
State 52,641 56,643 30,221
----------------- ----------------- -----------------
1,818,525 1,621,731 1,329,076
----------------- ----------------- -----------------
Deferred:
Federal 123,913 181,162 10,394
Foreign (59,340) 22,570 469,723
State 14,537 21,313 1,223
----------------- ----------------- -----------------
79,110 225,045 481,340
----------------- ----------------- -----------------
Income taxes $1,897,635 $1,846,776 $1,810,416
================= ================= =================
Deferred income taxes reflect the net tax effects of: (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and 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. Based on an assessment of all available evidence
including, but not limited to, the operating history and lack of
profitability of certain subsidiaries, the Company is uncertain as to
the realizability of these subsidiary's net operating loss
carryforwards and, as a result, a 100% deferred tax valuation
allowance has been recorded against these deferred tax assets. The tax
effects of significant items comprising the Company's net deferred tax
liability at May 31, 2000 and 1999 are as follows:
Year Ended May 31,
----------------------------------
2000 1999
Deferred tax liabilities:
Amortization $(902,368) $(1,112,470)
Depreciation (1,558,230) (1,487,692)
Other (768,023) (753,251)
Deferred tax assets:
Reserves not currently deductible 1,411,319 1,307,655
Foreign operating loss carryforwards 740,563 469,161
Uniform capitalization 594,958 702,478
---------------- ----------------
(481,781) (874,119)
Valuation allowance (722,146) (252,902)
------------------ -----------------
Net deferred tax liability $ (1,203,927) $ (1,127,021)
================== =================
The Company's effective tax rate differs from the federal statutory rate as
follows:
[Enlarge/Download Table]
Year Ended May 31,
-----------------------------------------------
2000 1999 1998
Federal statutory tax rate 34% 34% 34%
State income taxes, net of federal tax benefit 1 1 1
Interest on state municipal obligations - (1) (2)
Foreign Sales Corporation commissions (5) (4) (5)
Higher effective income tax rates of other countries 9 4 10
Excess of cost over tangible assets acquired - net 6 4 3
Reduction in deferred tax valuation allowance - (9) -
Research and development tax credits - - (1)
Change in entity classification for Spanish subsidiary (7) - -
Other 2 5 7
-------- --------- --------
40% 34% 47%
======== ========= =========
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
$320,027, $133,713, and $122,409 in fiscal 2000, 1999 and 1998,
respectively. Additionally, the Company recorded income tax benefits
of $57,348 in fiscal 2000 and $55,142 1999 and 1998, caused by patent
amortization expense deductions resulting from a 1993 exercise of
stock options previously issued in connection with the acquisition of
certain technology (see Note 12). These income tax benefits are
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 related compensation deductions are
not recognized as compensation expense for financial reporting
purposes.
At May 31, 2000, the Company's Italian subsidiary had net operating
loss carryforwards for income tax purposes of $366,000, which expire
in 2001. The Company's Spanish subsidiary had net operating loss
carryforwards for income tax purposes of $592,000, which expire in
2002, 2003 and 2004. The Company's French subsidiary had net operating
loss carryforwards for income tax purposes of $380,395, which expire
in 2002, 2003 and 2004. The Company's Belgian subsidiary had net
operating loss carryforwards for income tax purposes of $492,440,
which do not expire. The Company's Portuguese subsidiary had net
operating loss carryforwards for income tax purposes of $181,554,
which expire in 2001, 2002 and 2003.
12. 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 Blood Center of Greater
Kansas City royalties equal to 4% of the net sales from products utilizing
the technology. Royalties under this agreement amounted to approximately
$409,300, $411,100 and $389,900 in fiscal 2000, 1999 and 1998,
respectively.
In May 1997 Gamma entered into a license agreement with Pasteur Sanofi
Diagnostics ("Sanofi") with headquarters in France for the use and sale of
their microcolumn test for the detection of antibodies called ReACT. Under
the terms of the agreement the Company will pay Sanofi royalties equal to
12% of the net sales from the ReACT products in six countries of Europe.
The agreement expires on the expiration of the patent of the technology.
To date the Company has made insignificant payments as the product is in
the initial stages of its market launch.
13. INSTRUMENT DEVELOPMENT AND MANUFACTURING AGREEMENTS
The Company has contracted with Bio-Tek Instruments, Inc. (see Note 1) for
the development of a fully automated, "walk-away", blood bank analyzer.
Known as the ABS2000, the analyzer utilizes the Company's patented
Capture(R) technology and is being marketed in Europe and the United
States to hospital transfusion laboratories for patient testing. Under the
terms of the 15 year agreement, the Company reimburses Bio-Tek
Instruments, Inc. for its development costs, and the Company is granted
worldwide marketing rights to sell the instrument for use in the human
clinical diagnostic market for testing of human blood or blood components
with centrifugation. Bio-Tek Instruments, Inc. may sell the product in
other markets paying the Company up to a 4% royalty of the selling price.
In order to maintain the exclusive worldwide marketing rights the Company
must purchase 250 instruments over a six year period beginning with the
delivery of the first production instrument which occurred in fiscal 1997.
If the Company purchases less than 250 instruments over a six year period
it has the right to continue to purchase the instruments on a
non-exclusive basis. Based upon the Company's current projections, the
Company presently believes it will maintain its exclusivity rights for the
term of the agreement.
During fiscal 1996, the Company entered into a second development and
manufacturing agreement with DYNEX Technologies, Inc. ("DYNEX"). Under the
terms of the agreement, DYNEX will design and manufacture a second
analyzer known as the ABSHV utilizing the Company's Capture products
technology which will be marketed by the Company to blood donor centers
for donor testing. In exchange for reimbursing DYNEX for its development
costs and pursuing FDA 510(k) approval, the Company is granted exclusive
distribution rights to sell the instrument to blood banks and centralized
and hospital transfusion laboratories. In order to maintain exclusive
distribution rights the Company must purchase 240 instruments over a three
year period beginning on the date FDA 510(k) clearance is granted. The
510(k) application has yet to be submitted. If the Company does not
purchase the minimum amount of instruments within the time period
specified the Company has the right to continue purchasing the instruments
on a non-exclusive basis. Based upon the Company's current projections, it
does not appear that these minimums will be met.
In April 1999 the Company entered into a manufacturing and development
agreement with Rosys Anthos AG ("Rosys") with headquarters in Switzerland.
Under the terms of the agreement, Rosys will manufacture and develop an
analyzer known as the Rosys Plato in the U.S. and the ABS Precis in Europe
utilizing the Company's Capture technologies. The instrument will be
marketed exclusively by Immucor to hospital transfusion laboratories and
blood donor centers for patient and donor blood typing and antibody
screening and identification. In order to maintain exclusive worldwide
distribution rights the Company must purchase 120 instruments over the
three year initial term of the agreement. If the Company purchases less
than 120 instruments over the period it will be allowed to continue
purchasing the instrument on a non-exclusive basis for an additional two
year period. Based on fiscal 2000 sales and purchases the Company
presently believes it will maintain its exclusivity rights for the term of
the agreement.
On September 1, 1999, the Company entered into a manufacturing and
development agreement with Stratec Biomedical AG ("Stratec") with
headquarters in Germany. Under the terms of the agreement, Stratec will
manufacture and develop an fully automated analyzer known as the Galileo
which will be initially targeted to the European community utilizing the
Company's Capture and ReACT technologies. The instrument will be marketed
exclusively by Immucor to hospital transfusion laboratories and blood
donor centers for patient and donor blood typing and antibody screening
and identification. In order to maintain exclusive European distribution
rights the Company must purchase 250 instruments over the five year
initial term of the agreement. If the Company purchases less than 250
instruments over the period it will be allowed to negotiate a good faith
extension.
In fiscal 2000, 1999 and 1998, the Company incurred $753,786, $161,480 and
$302,850, respectively, in instrument research and development costs
principally under these contracts.
14. DOMESTIC AND FOREIGN OPERATIONS
Information concerning the Company's domestic and foreign operations is
summarized below (in 000s):
[Enlarge/Download Table]
Year Ended May 31, 2000
----------------------------------------------------------------------------------------------------
Note 1
U.S. Germany Italy Canada Other Eliminations Consolidated
Net sales:
Unaffiliated $48,105 $9,302 $6,656 $5,195 $7,283 - $76,541
customers
Affiliates 6,695 548 - 262 2,663 $(10,168) -
---------- ---------- ---------- ---------- --------- ------------ --------------
Total 54,800 9,850 6,656 5,457 9,946 (10,168) 76,541
Income from operations 4,303 836 559 1,596 105 (40) 7,359
Interest expense (2,354) (32) (26) (345) (154) - (2,911)
Interest income - 4 24 - 3 - 31
Income tax expense 640 470 147 580 78 (17) 1,898
Long-lived assets 63,477 3,340 2,415 7,551 4,826 (24,976) 56,633
Identifiable assets 94,406 7,526 10,386 10,052 12,683 (32,278) 102,775
Net assets 43,965 4,482 802 2,284 2,730 (13,344) 40,919
[Enlarge/Download Table]
Year Ended May 31, 1999
----------------------------------------------------------------------------------------------------
Note 1
U.S. Germany Italy Canada Other Eliminations Consolidated
Net sales:
Unaffiliated $34,842 $10,246 $6,804 $4,368 $3,265 - $59,525
customers
Affiliates 5,100 381 15 160 647 $(6,303) -
---------- ---------- ---------- ---------- --------- ------------ --------------
Total 39,942 10,627 6,819 4,528 3,912 (6,303) 59,525
Income from operations 2,912 1,537 774 1,167 (96) 15 6,309
Interest expense (909) (44) (2) (436) (25) - (1,416)
Interest income 241 44 28 - - - 313
Income tax expense 740 750 (65) 388 33 1 1,847
Long-lived assets 53,259 3,917 2,409 7,965 4,263 (16,810) 55,003
Identifiable assets 85,366 8,180 10,064 9,616 9,334 (22,826) 99,734
Net assets 41,632 5,022 (1,286) 1,755 1,327 (8,397) 40,053
[Enlarge/Download Table]
Year Ended May 31, 1998
----------------------------------------------------------------------------------------------------
Note 2
U.S. Germany Italy Canada Other Eliminations Consolidated
Net sales:
Unaffiliated $19,207 $9,493 $5,834 $4,439 $817 - $39,790
customers
Affiliates 3,716 285 - 149 - $(4,150) -
---------- ---------- ---------- ---------- --------- ------------ --------------
Total 22,923 9,778 5,834 4,588 817 (4,150) 39,790
Income from operations 756 1,015 567 1,290 84 21 3,733
Interest expense - (122) (1) (466) (27) - (616)
Interest income 621 137 31 - - - 789
Income tax expense 684 600 - 516 - 10 1,810
[FN]
Note 1: Included in "Other" are net sales, income from operations, interest
expense, interest income, income tax expense, long-lived assets,
identifiable assets and net assets of Spain, Portugal, France, Belgium,
and the Netherlands.
Note 2: Included in "Other" are net sales, income from operations, interest
expense, interest income and income tax expense of Spain and Portugal.
</FN>
During the years ended May 31, 2000, 1999 and 1998, the Company's U.S.
operations made net export sales to unaffiliated customers of approximately
$6,712,000, $5,558,000 and $3,518,000, respectively. The Company's German
operation made net export sales to unaffiliated customers of $1,515,000,
$1,309,000 and $1,191,000 for the years ended May 31, 2000, 1999, and 1998,
respectively. The Company's Canadian operation made net export sales to
unaffiliated customers of $2,224,000, $2,542,000 and $3,137,000 for the
years ending May 31, 2000, 1999, and 1998, respectively.
Product sales to affiliates are valued at market prices.
15. 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, 2000, 1999 and 1998, the Company's
matching contributions to the plan were $184,000, $149,000 and $88,000,
respectively. Vesting in the Company's matching contributions is based on
years of continuous service.
16. QUARTERLY FINANCIAL DATA (UNAUDITED)
[Enlarge/Download Table]
(In thousands, except per share amounts)
Basic Diluted
Net Gross Operating Net Earnings Earnings
Sales Margin Income Income Per Share Per Share
--------------- -------------- --------------- --------------- --------------- ---------------
FISCAL 2000
First Quarter $18,930 $9,976 $2,233 $1,219 $.16 $.14
Second Quarter 20,250 10,981 2,935 1,440 .19 .17
Third Quarter 19,201 10,176 2,015 838 .11 .10
Fourth Quarter 18,160 9,000 176 (685) (.09) (.09)
--------------- -------------- --------------- --------------- -------------- --------------
$76,541 $40,133 $7,359 $2,812 $.36 $.33
=============== ============== =============== =============== =============== ===============
FISCAL 1999
First Quarter $10,358 $5,706 $1,033 $628 $.08 $.08
Second Quarter 13,665 7,349 1,358 716 .09 .09
Third Quarter 16,758 9,168 1,955 976 .13 .13
Fourth Quarter 18,744 9,751 2,032 1,241 .17 . 16
--------------- -------------- --------------- --------------- --------------- ---------------
$59,525 $31,974 $6,378 $3,561 $.47 $.45
=============== ============== =============== =============== =============== ===============
17. SUBSEQUENT EVENT
On June 6, 2000 Edward L. Gallup, President and CEO of Immucor, Inc.
entered into a loan agreement with Immucor, Inc. to borrow up to $400,000
in order to meet margin calls related to loans made by brokerage
companies. The Company acknowledges that certain benefits would accrue to
Immucor, Inc. and its shareholders if such margin calls are satisfied by
some means other than having those shares sold by the broker. The interest
rate on the loan is LIBOR plus 1%, which is the Company's current
borrowing rate. As of July 27, 2000 the amount owed to Immucor, Inc. is
$250,000 and is secured by 105,000 Immucor shares.
During June 2000 the Company repurchased an additional 184,500 shares of
common stock for approximately $1,500,000. The Company financed the
repurchase with an additional term loan (see Note 4 to the Consolidated
Financial Statements).
Since the close of the fiscal year, isolated performance issues have been
experienced with certain ABS2000 installations. The Company has issued a
safety notification requesting customers to confirm ABS2000 results until
the cause of the difficulty is identified and corrected. The Company
believes it has identified the factors which caused the performance issues
and is in the process of submitting this information to the FDA. If the
FDA concurs, the Company will suspend the safety notification and expects
that customers may again use the ABS2000 without separate verification.
The Company cannot predict how long it will take to resolve these issues
with the FDA. These performance issues may result in delays in customers
accepting instruments, and may affect sales of reagents used in the
instruments, and both of these factors may adversely impact sales and
earnings. In addition, the Company may receive requests for refunds on
machines already placed in service or requests for financial concessions
attributable to inconveniences associated with these performance issues,
although it has not yet received any such requests. A private label
leasing company that finances customers' purchases of ABS2000 machines has
advised the Company that it is not willing to provide financing for
additional sales of this machine until the performance issues related to
the ABS2000 are resolved to the satisfaction of the FDA.
IMMUCOR, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MAY 31, 2000, 1999 AND 1998
[Enlarge/Download Table]
Charged
Balance at Charged to to Other Balance
Beginning Costs and Accounts Deductions at End
of Period Expense (Note 1) (Note 2) of Period
2000:
Allowance for doubtful accounts $804,470 $452,983 $ 0 $(92,871) $1,164,582
======== ======== ===== ========= ==========
1999:
Allowance for doubtful accounts $502,372 $116,031 $236,902 $(50,835) $804,470
======== ======== ======== ========= ========
1998:
Allowance for doubtful accounts $395,076 $114,334 $ 0 $(7,038) $502,372
======== ======== ======= ======== ========
[FN]
Note 1: "Charged to Other Accounts" represents allowance for doubtful
accounts of acquired businesses at date of acquisition.
Note 2: "Deductions" represent accounts written off during the period less
recoveries of accounts previously written off.
</FN>
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 information contained under "Proposal One - The Election of Eight
Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the
Company's definitive proxy statement related to its 2000 annual meeting of
shareholders which the Company will file with the Securities and Exchange
Commission no later than September 28, 2000, is incorporated herein by
reference.
Item 11.--Executive Compensation.
The information contained under "Executive Compensation" (except for
the Compensation Committee Report and Performance Graph therein) in the
Company's definitive proxy statement related to its 2000 annual meeting of
shareholders which the Company will file with the Securities and Exchange
Commission no later than September 28, 2000, is incorporated herein by
reference.
Item 12.--Security Ownership of Certain Beneficial Owners and Management.
The information contained under "Security Ownership of Certain
Beneficial Owners and Management" in the Company's definitive proxy statement
related to its 2000 annual meeting of shareholders which the Company will file
with the Securities and Exchange Commission no later than September 28, 2000, is
incorporated herein by reference.
Item 13.--Certain Relationships and Related Transactions.
The information contained under "Certain Relationships and Related
Transactions" in the Company's definitive proxy statement related to its 2000
annual meeting of shareholders which the Company will file with the Securities
and Exchange Commission no later than September 28, 2000, is incorporated herein
by reference.
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 Report of
Independent Auditors 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.
3. Exhibits
3.1 Articles of Correction to the Articles of Incorporation
(incorporated by reference to Exhibit 3.2 to Immucor, Inc.'s
Registration statement of Form S-3 filed on May 20, 1999).
3.2 Amended and Restated Bylaws (amended and restated as of
April 16, 1999) (incorporated by reference to Immucor,
Inc.'s Registration statement of Form S-3 filed on May 20,
1999).
4.1 Immucor, Inc. Shareholder Rights Plan, adopted April 16,
1999 (incorporated by reference to Exhibit 1 to Immucor,
Inc.'s Current Report on Form 8-K dated April 16, 1999).
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).
10.1-3 Lease Agreement, dated February 2, 1996, between the Company
and Connecticut General Life Insurance Company (incorporated
by reference to Exhibit 10.1-3 to Immucor's Annual Report on
Form 10-K for the fiscal year ended May 31, 1996).
10.1-4 Lease Amendment, dated March 8, 1998, between the Company
and Connecticut General Life Insurance Company (incorporated
by reference to Exhibit 10.1-4 to Immucor's Annual Report on
Form 10-K for the fiscal year ended May 31, 1998).
10.1-5 Lease Amendment, dated August 11, 1999, between the Company
and Connecticut General Life Insurance Company (incorporated
by reference to Exhibit 10.1-5 to Immucor's Annual Report on
Form 10-K for the fiscal year ended May 31, 1999).
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 October 13, 1998, between the
Company and Edward L. Gallup (incorporated by reference to
Exhibit 10.8 to Immucor's Annual Report on Form 10-K for the
fiscal year ended May 31, 1999).
10.9* Employment Agreement dated October 13, 1998, between the
Company and Ralph A. Eatz (incorporated by reference to
Exhibit 10.9 to Immucor's Annual Report on Form 10-K for the
fiscal year ended May 31, 1999).
10.10* 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).
10.11* Agreement dated December 31, 1993, between Immucor Italia,
S.r.l. and Dr. Gioacchino De Chirico (incorporated by
reference to Exhibit 10.12 to Immucor, Inc. Annual Report
on Form 10-K for the fiscal year ended May 31, 1995).
10.12* Agreement dated December 31, 1993, between Immucor Italia,
S.r.l. and Dr. Gioacchino De Chirico (incorporated by
reference to Exhibit 10.13 to Immucor, Inc. Annual Report
on Form 10-K for the fiscal year ended May 31, 1995).
10.13* Severance Agreement dated October 13, 1998, between Immucor
Inc. and Dr. Gioacchino De Chirico (incorporated by
reference to Exhibit 10.13 to Immucor's Annual Report on
Form 10-K for the fiscal year ended May 31, 1999).
10.14* 1999 Stock Option Plan, including form of Stock Option
Agreement used thereunder (incorporated by reference to
Exhibit 10.14 to Immucor's Annual Report on Form 10-K for
the fiscal year ended May 31, 1999).
10.15* 1995 Stock Option Plan, including form of Stock Option
Agreement used thereunder (incorporated by reference to
Exhibit 10.14 to Immucor, Inc. Annual Report on Form 10-K
for the fiscal year ended May 31, 1995).
10.16* 1990 Stock Option Plan, including form of Stock Option
Agreement used thereunder (incorporated by reference to
Exhibit 10.15 to Immucor, Inc. Annual Report on Form 10-K
for the fiscal year ended May 31, 1995).
.
10.17* 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).
10.18* 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).
10.19* 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).
10.20* Employment Agreement dated October 13, 1998, between the
Company and Steven C. Ramsey (incorporated by reference to
Exhibit 10.2 to Immucor's Annual Report on Form 10-K for the
fiscal year ended May 31, 1999).
10.21* Agreement dated July 26, 1997 between the Company and Josef
Wilms (incorporated by reference to Exhibit 10.20 to
Immucor, Inc. Annual Report on Form 10-K for the fiscal year
ended May 31, 1998).
.
10.22* Employment Agreement dated October 13, 1998, between the
Company and Patrick Waddy (incorporated by reference to
Exhibit 10.22 to Immucor's Annual Report on Form 10-K for
the fiscal year ended May 31, 1999).
10.23 Loan Agreement between Immucor, Inc. and Wachovia Bank,
National Association dated October 27,
1998 (incorporated by reference to Exhibit 10.1 to
Immucor, Inc. Quarterly Report on Form 10-Q
for the fiscal quarter ended November 30, 1998).
10.24 First Modification of Loan Agreement dated April 30, 1999
(incorporated by reference to Exhibit 10.24 to Immucor's
Annual Report on Form 10-K for the fiscal year ended May 31,
1999).
10.25 Second Modification of Loan Agreement dated
December 11, 1999.
10.26 Third Modification of Loan Agreement dated
December 20, 1999.
10.27 Fourth Modification of Loan Agreement dated April 20, 2000.
21 Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP.
27 Financial Data Schedule
*Denotes a management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K April 19,1999 relating
to its adoption of a Shareholder Rights Agreement on April 16, 1999.
(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 29, 2000
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 29, 2000
/s/ STEVEN C. RAMSEY
Steven C. Ramsey, Vice President - Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
August 29, 2000
/s/RALPH A. EATZ
Ralph A. Eatz, Director, Senior Vice President - Operations
August 29, 2000
/s/ PATRICK WADDY
Patrick Waddy, European Finance Director and President of Dominion
Biologicals Limited
August 29, 2000
/s/DANIEL T. MCKEITHAN
Daniel T. McKeithan, Director
August 29, 2000
/s/G. BRUCE PAPESH
G. Bruce Papesh, Director
August 29, 2000
/s/ DIDIER L. LANSON
Didier L. Lanson, Director
August 29, 2000
/s/ DR. GIOACCHINO DE CHIRICO
Dr. Gioacchino De Chirico, Director, Director of European Operations and
President of Immucor Italia S.r.l.
August 29, 2000
/s/ DENNIS M. SMITH
Dennis M. Smith, Jr., M.D., Director
August 29, 2000
/s/JOSEPH E. ROSEN
Joseph E. Rosen, Director
August 29, 2000
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EXHIBIT INDEX
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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 16, 1999
(incorporated by reference to Exhibit 1 to Immucor, Inc.'s Current
Report on Form 8-K dated April 16, 1999).
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).
10.1-3 Lease Agreement dated February 2, 1996, between the Company and
Connecticut General Life Insurance Company. (incorporated by
reference to Exhibit 10.1-3 to Immucor's Annual Report on Form 10-K
for the fiscal year ended May 31, 1996).
10.1-4 Lease Amendment dated March 8, 1998, between the Company and
Connecticut General Life Insurance Company.
10.1-5 Lease Amendment dated August 11, 1999, between the Company and
Connecticut General Life Insurance Company.
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 October 13, 1998, between the Company and
Edward L. Gallup.
10.9* Employment Agreement dated October 13, 1998, between the Company and
Ralph A. Eatz.
10.10* 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).
10.11* Agreement dated December 31, 1993, between Immucor Italia, S.r.l.
and Dr. Gioacchino De Chirico (incorporated by reference to
Exhibit 10.12 to Immucor, Inc. Annual Report on Form
10-K for the fiscal year ended May 31, 1995).
10.12* Agreement dated December 31, 1993, between Immucor Italia, S.r.l.
and Dr. Gioacchino De Chirico (incorporated by reference to
Exhibit 10.13 to Immucor, Inc. Annual Report on Form
10-K for the fiscal year ended May 31, 1995).
10.13* Severance Agreement dated October 13, 1998, between Immucor,
Inc. and Dr. Gioacchino De Chirico.
10.14* 1999 Stock Option Plan, including form of Stock Option Agreement used
thereunder.
10.15* 1995 Stock Option Plan, including form of Stock Option Agreement used
thereunder (incorporated by reference to Exhibit 10.14 to Immucor,
Inc. Annual Report on Form 10-K for the fiscal year ended May 31,
1995).
10.16* 1990 Stock Option Plan, including form of Stock Option Agreement used
thereunder (incorporated by reference to Exhibit 10.15 to Immucor,
Inc. Annual Report on Form 10-K for the fiscal year ended May 31,
1995).
10.17* 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).
10.18* 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).
10.19* 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).
10.20* Employment Agreement dated October 13, 1998, between the Company and
Steven C. Ramsey.
10.21* Agreement date July 26, 1997, between the Company and Josef Wilms
(incorporated by reference to Exhibit 10.20 to Immucor, Inc. Annual
Report on Form 10-K for the fiscal year ended May 31, 1998).
10.22* Employment Agreement dated October 13, 1998, between the Company and
Patrick Waddy
10.23 Loan Agreement between Immucor, Inc. and Wachovia Bank, National
Association dated October 27, 1998 (incorporated by reference to
Exhibit 10.1 to Immucor, Inc. Quarterly Report on
Form 10-Q for the fiscal quarter ended November 30, 1998).
10.24 First Modification of Loan Agreement dated April 30, 1999
(incorporated by reference to Exhibit 10.24 to Immucor's Annual
Report on Form 10-K for the fiscal year ended May 31, 1999).
10.25 Second Modification of Loan Agreement dated December 11, 1999.
10.26 Third Modification of Loan Agreement dated December 20, 1999.
10.27 Fourth Modification of Loan Agreement dated April 20, 2000.
21 Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP
27 Financial Data Schedule
*Denotes a management contract or compensatory plan or arrangement.
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘10-K405’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 4/20/09 | | 27 |
| | 8/26/06 | | 6 |
| | 6/1/06 | | 10 | | 25 |
| | 9/1/02 | | 10 | | 24 |
| | 9/1/01 | | 10 | | 25 |
| | 7/1/01 | | 30 |
| | 9/28/00 | | 35 | | | | | DEF 14A |
| Changed as of / Corrected on: | | 8/31/00 | | | | | | | 10-Q |
| Filed on: | | 8/29/00 | | 14 | | 37 |
| | 8/22/00 | | 14 |
| | 7/31/00 | | 1 | | 8 |
| | 7/27/00 | | 33 |
| | 7/14/00 | | 6 |
| | 6/20/00 | | 6 |
| | 6/15/00 | | 12 | | 21 |
| | 6/6/00 | | 33 |
| For Period End: | | 5/31/00 | | 1 | | 34 | | | 5, 5/A, DEF 14A |
| | 5/15/00 | | 6 |
| | 5/9/00 | | 8 |
| | 4/20/00 | | 10 | | 38 |
| | 4/13/00 | | 6 |
| | 3/20/00 | | 6 |
| | 3/9/00 | | 6 |
| | 3/1/00 | | 10 | | 24 |
| | 12/20/99 | | 35 | | 38 |
| | 12/17/99 | | 10 | | 24 |
| | 12/15/99 | | 13 | | 21 |
| | 12/11/99 | | 35 | | 38 |
| | 9/1/99 | | 2 | | 32 |
| | 8/11/99 | | 10 | | 38 |
| | 8/9/99 | | 26 |
| | 7/1/99 | | 30 |
| | 5/31/99 | | 4 | | 38 | | | 10-K405, 5, DEF 14A, PRE 14A |
| | 5/20/99 | | 35 | | | | | S-3 |
| | 4/30/99 | | 2 | | 38 |
| | 4/16/99 | | 35 | | 38 | | | 8-K |
| | 3/15/99 | | 2 | | 23 |
| | 1/26/99 | | 8 | | 30 |
| | 12/1/98 | | 10 | | 25 |
| | 11/30/98 | | 35 | | 38 | | | 10-Q |
| | 11/4/98 | | 10 | | 25 |
| | 10/30/98 | | 22 |
| | 10/27/98 | | 2 | | 38 | | | 8-K, 8-K/A |
| | 10/13/98 | | 35 | | 38 | | | DEF 14A |
| | 9/21/98 | | 22 |
| | 9/1/98 | | 2 | | 21 |
| | 7/6/98 | | 2 | | 4 |
| | 5/31/98 | | 4 | | 38 | | | 10-K405, 10-K405/A, 5, DEF 14A |
| | 5/12/98 | | 8 | | 30 |
| | 3/8/98 | | 35 | | 38 |
| | 12/31/97 | | 26 |
| | 7/26/97 | | 35 | | 38 |
| | 6/1/97 | | 23 |
| | 12/11/96 | | 9 | | | | | 8-K |
| | 5/31/96 | | 35 | | 38 | | | 10-K405, 4, DEF 14A |
| | 4/30/96 | | 8 | | 30 |
| | 2/2/96 | | 35 | | 38 |
| | 6/1/95 | | 27 |
| | 5/31/95 | | 21 | | 38 | | | 10-K, DEF 14A, PRE 14A |
| | 12/31/93 | | 35 | | 38 |
| | 5/31/92 | | 35 | | 38 |
| List all Filings |
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