x
|
Quarterly
Report Pursuant To Section 13 or 15(d) of the Securities Exchange
Act of
1934 for the Quarterly Period Ended September 30,
2007
|
|
or
|
¨
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934 for the Transition Period
from to
|
Delaware
|
63-0821819
|
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification No.)
|
One
Allentown Parkway, Allen, Texas
|
75002
|
||
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(972)
390-9800
|
||
(Registrant’s
Telephone Number, Including Area Code)
|
Large
accelerated filer ¨
|
Accelerated
filer x
|
Non-accelerated
filer ¨
|
Title
of Each Class
|
Number
of Shares Outstanding at
October
19, 2007
|
|
Common
stock, Par Value $0.10 per share
|
1,902,467
|
Three
Months Ended
September
30,
|
Nine
months Ended
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||
Revenues
|
$ |
21,315
|
$ |
19,290
|
$ |
67,552
|
$ |
59,641
|
||||||||
Cost
of goods sold
|
12,210
|
11,803
|
38,468
|
36,033
|
||||||||||||
Gross
profit
|
9,105
|
7,487
|
29,084
|
23,608
|
||||||||||||
Operating
expenses:
|
||||||||||||||||
Selling
|
1,494
|
1,415
|
4,818
|
4,631
|
||||||||||||
General
and administrative
|
2,595
|
2,190
|
7,682
|
6,541
|
||||||||||||
Dispute
resolution
|
(1,398 | ) |
--
|
(1,398 | ) |
--
|
||||||||||
Research
and development
|
619
|
696
|
2,024
|
2,072
|
||||||||||||
3,310
|
4,301
|
13,126
|
13,244
|
|||||||||||||
Operating
income
|
5,795
|
3,186
|
15,958
|
10,364
|
||||||||||||
Other
income:
|
||||||||||||||||
Interest
income
|
10
|
5
|
30
|
26
|
||||||||||||
Interest
expense
|
(33 | ) | (58 | ) | (251 | ) | (58 | ) | ||||||||
Other
expense, net
|
--
|
(4 | ) |
--
|
(26 | ) | ||||||||||
(23 | ) | (57 | ) | (221 | ) | (58 | ) | |||||||||
Income
before provision for income taxes
|
5,772
|
3,129
|
15,737
|
10,306
|
||||||||||||
Provision
for income taxes
|
(1,662 | ) | (433 | ) | (4,873 | ) | (2,685 | ) | ||||||||
Income
from continuing operations
|
4,110
|
2,696
|
10,864
|
7,621
|
||||||||||||
Gain
on disposal of discontinued operations, net of income
taxes
|
--
|
--
|
--
|
165
|
||||||||||||
Net
income
|
$ |
4,110
|
$ |
2,696
|
$ |
10,864
|
$ |
7,786
|
||||||||
Income
per basic share:
|
||||||||||||||||
Income
from continuing operations
|
$ |
2.17
|
$ |
1.45
|
$ |
5.77
|
$ |
4.13
|
||||||||
Gain
on disposal of discontinued operations
|
--
|
--
|
--
|
0.09
|
||||||||||||
$ |
2.17
|
$ |
1.45
|
$ |
5.77
|
$ |
4.22
|
|||||||||
Weighted
average basic shares outstanding
|
1,895
|
1,858
|
1,883
|
1,846
|
||||||||||||
Income
per diluted share:
|
||||||||||||||||
Income
from continuing operations
|
$ |
2.07
|
$ |
1.38
|
$ |
5.49
|
$ |
3.91
|
||||||||
Gain
on disposal of discontinued operations
|
--
|
--
|
--
|
0.08
|
||||||||||||
$ |
2.07
|
$ |
1.38
|
$ |
5.49
|
$ |
3.99
|
|||||||||
Weighted
average diluted shares outstanding
|
1,988
|
1,960
|
1,980
|
1,951
|
||||||||||||
Dividends
per common share
|
$ |
0.24
|
$ |
0.20
|
$ |
0.64
|
$ |
0.54
|
Assets
|
September
30,
2007
|
December
31,
2006
|
||||||
(in
thousands)
|
||||||||
Current
assets:
|
||||||||
Cash
and cash
equivalents
|
$ |
1,045
|
$ |
333
|
||||
Accounts
receivable
|
10,422
|
10,542
|
||||||
Inventories
|
17,727
|
17,115
|
||||||
Prepaid
expenses
|
1,029
|
1,530
|
||||||
Other
|
738
|
1,138
|
||||||
30,961
|
30,658
|
|||||||
Property,
plant and
equipment
|
87,868
|
82,536
|
||||||
Less
accumulated depreciation and
amortization
|
34,298
|
31,094
|
||||||
53,570
|
51,442
|
|||||||
Other
assets and deferred
charges:
|
||||||||
Patents
|
2,030
|
2,264
|
||||||
Goodwill
|
9,730
|
9,730
|
||||||
Other
|
673
|
1,678
|
||||||
12,433
|
13,672
|
|||||||
$ |
96,964
|
$ |
95,772
|
|||||
Liabilities
and Stockholders’
Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued
liabilities
|
$ |
7,290
|
$ |
6,041
|
||||
Accrued
income and other
taxes
|
1,172
|
882
|
||||||
8,462
|
6,923
|
|||||||
Line
of
credit
|
--
|
11,399
|
||||||
Other
non-current
liabilities
|
6,433
|
6,555
|
||||||
Stockholders’
equity:
|
||||||||
Common
shares, par value $0.10 per
share; authorized 10,000 shares, issued 3,420
shares
|
342
|
342
|
||||||
Paid-in
capital
|
15,367
|
14,140
|
||||||
Accumulated
other comprehensive
loss
|
(665 | ) | (892 | ) | ||||
Retained
earnings
|
101,339
|
91,708
|
||||||
Treasury
shares,1,518 at
September
30,
2007 and 1,546
at
December
31,
2006, at
cost
|
(34,314 | ) | (34,403 | ) | ||||
Total
stockholders’
equity
|
82,069
|
70,895
|
||||||
$ |
96,964
|
$ |
95,772
|
Nine
months Ended
September
30,
|
||||||||
2007
|
2006
|
|||||||
(in
thousands)
|
||||||||
Cash
flows from operating
activities:
|
||||||||
Net
income
|
$ |
10,864
|
$ |
7,786
|
||||
Adjustments
to reconcile net
income to net cash provided by operating
activities:
|
||||||||
Gain
on disposal of discontinued
operations
|
--
|
(165 | ) | |||||
Depreciation
and
amortization
|
4,064
|
3,555
|
||||||
Deferred
income
taxes
|
933
|
179
|
||||||
Stock-based
compensation
|
269
|
61
|
||||||
Pension
charge
|
228
|
--
|
||||||
Other
|
35
|
33
|
||||||
16,393
|
11,449
|
|||||||
Changes
in operating assets and
liabilities:
|
||||||||
Accounts
receivable
|
148
|
(1,250 | ) | |||||
Inventories
|
(612 | ) | (573 | ) | ||||
Prepaid
expenses
|
501
|
(221 | ) | |||||
Other
non-current
assets
|
1,005
|
(99 | ) | |||||
Accounts
payable and current
liabilities
|
1,259
|
968
|
||||||
Accrued
income and other
taxes
|
1,222
|
(386 | ) | |||||
Other
non-current
liabilities
|
(1,614 | ) |
31
|
|||||
Net
cash provided by continuing
operations
|
18,302
|
9,919
|
||||||
Net
cash provided by discontinued
operations
|
--
|
165
|
||||||
18,302
|
10,084
|
|||||||
Cash
flows from investing
activities:
|
||||||||
Property,
plant and equipment
additions
|
(6,021 | ) | (18,589 | ) | ||||
Property,
plant and equipment
sales
|
--
|
3
|
||||||
(6,021 | ) | (18,586 | ) | |||||
Cash
flows from financing
activities:
|
||||||||
Line
of credit
advances
|
19,426
|
30,221
|
||||||
Line
of credit
repayments
|
(30,825 | ) | (21,103 | ) | ||||
Exercise
of stock
options
|
541
|
1,029
|
||||||
Purchase
of treasury
stock
|
--
|
(1,594 | ) | |||||
Tax
benefit related to stock
options
|
502
|
658
|
||||||
Dividends
paid
|
(1,213 | ) | (1,000 | ) | ||||
(11,569 | ) |
8,211
|
||||||
Net
change in cash and cash
equivalents
|
712
|
(291 | ) | |||||
Cash
and cash equivalents at
beginning of period
|
333
|
525
|
||||||
Cash
and cash equivalents at end
of period
|
$ |
1,045
|
$ |
234
|
||||
Cash
paid
for:
|
||||||||
Interest
(net of
capitalization)
|
$ |
309
|
$ |
58
|
||||
Income
taxes
|
$ |
2,349
|
$ |
2,552
|
(1)
|
Basis
of Presentation
|
(2)
|
Inventories
|
September
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Raw
materials
|
$ |
7,153
|
$ |
7,194
|
||||
Work
in process
|
4,578
|
4,084
|
||||||
Finished
goods
|
5,996
|
5,837
|
||||||
Total
inventories
|
$ |
17,727
|
$ |
17,115
|
(3)
|
Income
per share
|
Three
months ended
September
30,
|
Nine
months
ended
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
(in
thousands, except per share
amounts)
|
||||||||||||||||
Income
from continuing operations
|
$ |
4,110
|
$ |
2,696
|
$ |
10,864
|
$ |
7,621
|
||||||||
Weighted
average basic shares outstanding
|
1,895
|
1,858
|
1,883
|
1,846
|
||||||||||||
Add: Effect
of dilutive securities
|
93
|
102
|
97
|
105
|
||||||||||||
Weighted
average diluted shares outstanding
|
1,988
|
1,960
|
1,980
|
1,951
|
||||||||||||
Earnings
per share from continuing operations:
|
||||||||||||||||
Basic
|
$ |
2.17
|
$ |
1.45
|
$ |
5.77
|
$ |
4.13
|
||||||||
Diluted
|
$ |
2.07
|
$ |
1.38
|
$ |
5.49
|
$ |
3.91
|
(4)
|
Pension
Benefits
|
Three
Months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Service
cost
|
$ |
65
|
$ |
69
|
$ |
195
|
$ |
207
|
||||||||
Interest
cost
|
80
|
83
|
240
|
249
|
||||||||||||
Expected
return on assets
|
(123 | ) | (111 | ) | (369 | ) | (333 | ) | ||||||||
Prior
service cost amortization
|
(9 | ) | (9 | ) | (27 | ) | (27 | ) | ||||||||
Net
curtailment/settlement losses
|
(311 | ) |
--
|
(311 | ) |
--
|
||||||||||
Actuarial
loss
|
15
|
29
|
45
|
87
|
||||||||||||
Net
periodic pension cost
|
$ | (283 | ) | $ |
61
|
$ | (227 | ) | $ |
183
|
(5)
|
Recent
Accounting Pronouncements
|
(6)
|
Income
Taxes
|
(7)
|
Dispute
Settlement
|
Management’s
Discussion and
Analysis of Financial Condition and Results of
Operations
|
|
·
|
Focusing
on customer needs;
|
|
·
|
Expanding
existing product lines and developing new
products;
|
|
·
|
Maintaining
a culture of controlling cost; and
|
|
·
|
Preserving
and fostering a collaborative, entrepreneurial management
structure.
|
Three
Months
ended
September
30,
|
||||||||
2007
|
2006
|
|||||||
Fluid
Delivery
|
$ |
7,236
|
$ |
6,121
|
||||
Cardiovascular
|
5,867
|
5,707
|
||||||
Ophthalmology
|
4,230
|
3,301
|
||||||
Other
|
3,982
|
4,161
|
||||||
Total
|
$ |
21,315
|
$ |
19,290
|
Nine
months
ended
September
30,
|
||||||||
2007
|
2006
|
|||||||
Fluid
Delivery
|
$ |
21,984
|
$ |
19,180
|
||||
Cardiovascular
|
17,928
|
17,147
|
||||||
Ophthalmology
|
13,748
|
9,685
|
||||||
Other
|
13,892
|
13,629
|
||||||
Total
|
$ |
67,552
|
$ |
59,641
|
Quantitative
and Qualitative
Disclosures About Market
Risk
|
Controls
and
Procedures
|
Legal
Proceedings
|
Risk
Factors
|
Exhibits
and
Reports on Form
8-K
|
|
(a)
|
Exhibits
|
|
(b)
|
Reports
on Form
8-K
|
|
On
August
7, 2007, the Company
filed a report on
Form 8-K with the SEC regarding the public dissemination of a press
release announcing its financial results for the second quarter ended
June 30,
2007 (Item
12).
|
Date: November
7,
2007
|
/s/
Emile A. Battat
|
|
Emile A. Battat
|
||
Chairman
and
|
||
Chief
Executive
Officer
|
||
Date: November
7,
2007
|
/s/
Jeffery Strickland
|
|
Jeffery
Strickland
|
||
Vice
President
and
|
||
Chief
Financial
Officer
|