x
|
Quarterly
Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of
1934 for the Quarterly Period Ended September 30,
2008
|
|
or
|
o
|
Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the Transition Period
from to
|
Atrion
Corporation
|
||
(Exact
Name of Registrant as Specified in its Charter)
|
||
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 o
|
Accelerated
filer x
|
Non-accelerated
filer o
|
Smaller
reporting company o
|
Title
of Each Class
|
Number
of Shares Outstanding at
October
27, 2008
|
|
Common
stock, Par Value $0.10 per share
|
1,966,885
|
2
|
|||
Item
1.
|
|||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
Item
2.
|
8
|
||
Item 3.
|
13
|
||
Item
4.
|
13
|
||
14
|
|||
Item
1.
|
14
|
||
Item
1A.
|
14
|
||
Item
6.
|
14
|
||
15
|
Three
Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||
Revenues
|
$ | 23,461 | $ | 21,315 | $ | 72,305 | $ | 67,552 | ||||||||
Cost
of goods sold
|
13,221 | 12,210 | 40,279 | 38,468 | ||||||||||||
Gross
profit
|
10,240 | 9,105 | 32,026 | 29,084 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Selling
|
1,432 | 1,494 | 4,777 | 4,818 | ||||||||||||
General
and administrative
|
2,398 | 2,595 | 7,644 | 7,682 | ||||||||||||
Dispute
resolution
|
-- | (1,398 | ) | -- | (1,398 | ) | ||||||||||
Research
and development
|
630 | 619 | 2,241 | 2,024 | ||||||||||||
4,460 | 3,310 | 14,662 | 13,126 | |||||||||||||
Operating
income
|
5,780 | 5,795 | 17,364 | 15,958 | ||||||||||||
Other
income:
|
||||||||||||||||
Interest
income
|
79 | 10 | 165 | 30 | ||||||||||||
Interest
expense
|
(1 | ) | (33 | ) | (1 | ) | (251 | ) | ||||||||
Other
income (expense), net
|
-- | -- | 1 | -- | ||||||||||||
78 | (23 | ) | 165 | (221 | ) | |||||||||||
Income
before provision for income taxes
|
5,858 | 5,772 | 17,529 | 15,737 | ||||||||||||
Provision
for income taxes
|
(1,866 | ) | (1,662 | ) | (5,746 | ) | (4,873 | ) | ||||||||
Net
income
|
$ | 3,992 | $ | 4,110 | $ | 11,783 | $ | 10,864 | ||||||||
Income
per basic share
|
$ | 2.04 | $ | 2.17 | $ | 6.04 | $ | 5.77 | ||||||||
Weighted
average basic shares outstanding
|
1,958 | 1,895 | 1,950 | 1,883 | ||||||||||||
Income
per diluted share
|
$ | 1.99 | $ | 2.07 | $ | 5.88 | $ | 5.49 | ||||||||
Weighted
average diluted shares outstanding
|
2,005 | 1,988 | 2,005 | 1,980 | ||||||||||||
Dividends
per common share
|
$ | 0.30 | $ | 0.24 | $ | 0.78 | $ | 0.64 |
Assets
|
September 30,
2008
|
December 31,
2007
|
||||||
(in
thousands, except per share amounts)
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 13,845 | $ | 3,531 | ||||
Accounts
receivable
|
11,719 | 9,601 | ||||||
Inventories
|
21,373 | 17,387 | ||||||
Prepaid
expenses
|
1,057 | 1,483 | ||||||
Other
|
607 | 607 | ||||||
48,601 | 32,609 | |||||||
Property,
plant and equipment
|
93,681 | 89,736 | ||||||
Less
accumulated depreciation and amortization
|
39,572 | 35,686 | ||||||
54,109 | 54,050 | |||||||
Other
assets and deferred charges:
|
||||||||
Patents
|
1,783 | 2,011 | ||||||
Goodwill
|
9,730 | 9,730 | ||||||
Other
|
1,687 | 913 | ||||||
13,200 | 12,654 | |||||||
$ | 115,910 | $ | 99,313 | |||||
Liabilities and Stockholders’
Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable and accrued liabilities
|
$ | 6,898 | $ | 6,349 | ||||
Accrued
income and other taxes
|
996 | 515 | ||||||
7,894 | 6,864 | |||||||
Line
of credit
|
3,000 | -- | ||||||
Other
non-current liabilities
|
7,596 | 7,007 | ||||||
Stockholders’
equity:
|
||||||||
Common
shares, par value $0.10 per share; authorized 10,000 shares, issued 3,420
shares
|
342 | 342 | ||||||
Paid-in
capital
|
18,968 | 15,790 | ||||||
Accumulated
other comprehensive loss
|
(486 | ) | (486 | ) | ||||
Retained
earnings
|
114,263 | 104,021 | ||||||
Treasury
shares,1,453 at September 30, 2008 and 1,509 at December 31, 2007, at
cost
|
(35,667 | ) | (34,225 | ) | ||||
Total
stockholders’ equity
|
97,420 | 85,442 | ||||||
$ | 115,910 | $ | 99,313 |
Nine
months Ended
September 30,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 11,783 | $ | 10,864 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
4,688 | 4,064 | ||||||
Deferred
income taxes
|
722 | 933 | ||||||
Stock-based
compensation
|
482 | 269 | ||||||
Pension
charge
|
-- | 228 | ||||||
Other
|
37 | 35 | ||||||
17,712 | 16,393 | |||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable
|
(2,118 | ) | 148 | |||||
Inventories
|
(3,986 | ) | (612 | ) | ||||
Prepaid
expenses
|
427 | 501 | ||||||
Other
non-current assets
|
(149 | ) | 1,005 | |||||
Accounts
payable and current liabilities
|
549 | 1,259 | ||||||
Accrued
income and other taxes
|
481 | 1,222 | ||||||
Other
non-current liabilities
|
(133 | ) | (1,614 | ) | ||||
12,783 | 18,302 | |||||||
Cash
flows from investing activities:
|
||||||||
Property,
plant and equipment additions
|
(4,556 | ) | (6,021 | ) | ||||
Other
|
(625 | ) | - | |||||
(5,181 | ) | (6,021 | ) | |||||
Cash
flows from financing activities:
|
||||||||
Line
of credit advances
|
3,000 | 19,426 | ||||||
Line
of credit repayments
|
-- | (30,825 | ) | |||||
Exercise
of stock options
|
525 | 588 | ||||||
Shares
tendered for employees’ taxes on stock-based compensation
|
(913 | ) | (47 | ) | ||||
Tax
benefit related to stock options
|
1,632 | 502 | ||||||
Dividends
paid
|
(1,532 | ) | (1,213 | ) | ||||
2,712 | (11,569 | ) | ||||||
Net
change in cash and cash equivalents
|
10,314 | 712 | ||||||
Cash
and cash equivalents at beginning of period
|
3,531 | 333 | ||||||
Cash
and cash equivalents at end of period
|
$ | 13,845 | $ | 1,045 | ||||
Cash
paid for:
|
||||||||
Interest
(net of capitalization)
|
$ | -- | $ | 309 | ||||
Income
taxes
|
$ | 2,616 | $ | 2,349 |
NOTES
TO CONSOLIDATED FINANCIAL
STATEMENTS
|
(Unaudited)
|
(1)
|
Basis
of Presentation
|
(2)
|
Inventories
|
September 30,
2008
|
December 31,
2007
|
|||||||
Raw
materials
|
$ | 8,965 | $ | 7,452 | ||||
Work
in process
|
5,005 | 4,513 | ||||||
Finished
goods
|
7,403 | 5,422 | ||||||
Total
inventories
|
$ | 21,373 | $ | 17,387 |
(3)
|
Income
per share
|
Three
months ended
September 30,
|
Nine
months ended
September 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||
Net
income
|
$ | 3,992 | $ | 4,110 | $ | 11,783 | $ | 10,864 | ||||||||
Weighted
average basic shares outstanding
|
1,958 | 1,895 | 1,950 | 1,883 | ||||||||||||
Add: Effect
of dilutive securities
|
47 | 93 | 55 | 97 | ||||||||||||
Weighted
average diluted shares outstanding
|
2,005 | 1,988 | 2,005 | 1,980 | ||||||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ | 2.04 | $ | 2.17 | $ | 6.04 | $ | 5.77 | ||||||||
Diluted
|
$ | 1.99 | $ | 2.07 | $ | 5.88 | $ | 5.49 |
ATRION
CORPORATION AND SUBSIDIARIES
|
NOTES
TO CONSOLIDATED FINANCIAL
STATEMENTS
|
(Unaudited)
|
(4)
|
Pension
Benefits
|
Three
Months ended September 30,
|
Nine
Months ended
September 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Service
cost
|
$ | -- | $ | 65 | $ | -- | $ | 195 | ||||||||
Interest
cost
|
56 | 80 | 168 | 240 | ||||||||||||
Expected
return on assets
|
(55 | ) | (123 | ) | (165 | ) | (369 | ) | ||||||||
Prior
service cost amortization
|
-- | (9 | ) | -- | (27 | ) | ||||||||||
Net
curtailment/settlement losses
|
310 | 310 | ||||||||||||||
Actuarial
loss
|
8 | 15 | 24 | 45 | ||||||||||||
Net
periodic pension cost
|
$ | 9 | $ | 338 | $ | 27 | $ | 394 |
(5)
|
Recent
Accounting Pronouncements
|
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,
|
||||||||
2008
|
2007
|
|||||||
Fluid
Delivery
|
$ | 7,999 | $ | 7,236 | ||||
Cardiovascular
|
7,019 | 5,867 | ||||||
Ophthalmology
|
3,733 | 4,230 | ||||||
Other
|
4,710 | 3,982 | ||||||
Total
|
$ | 23,461 | $ | 21,315 |
Nine
Months ended
September 30,
|
||||||||
2008
|
2007
|
|||||||
Fluid
Delivery
|
$ | 24,896 | $ | 21,984 | ||||
Cardiovascular
|
21,602 | 17,928 | ||||||
Ophthalmology
|
11,101 | 13,748 | ||||||
Other
|
14,706 | 13,892 | ||||||
Total
|
$ | 72,305 | $ | 67,552 |
Quantitative
and Qualitative Disclosures About Market
Risk
|
Controls
and Procedures
|
Legal
Proceedings
|
Risk
Factors
|
Exhibits
and Reports on Form 8-K
|
|
(a)
|
Exhibits
|
|
Certification
Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
The Sarbanes – Oxley Act Of
2002
|
|
Certification
Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
The Sarbanes – Oxley Act Of
2002
|
|
(b)
|
Reports
on Form 8-K
|
Date: November
7, 2008
|
/s/ Emile A. Battat
|
|
Emile A. Battat
|
||
Chairman
and
|
||
Chief
Executive Officer
|
||
Date: November
7, 2008
|
/s/ Jeffery Strickland
|
|
Jeffery
Strickland
|
||
Vice
President and
|
||
Chief
Financial Officer
|