x |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the quarterly period ended March 31, 2006
|
|
OR
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
371172197
|
(State
or other jurisdiction
of
|
(I.R.S.
Employer Identification
Number)
|
incorporation
or
organization)
|
|
|
|
136
Chesterfield Industrial
Boulevard
|
|
Chesterfield,
Missouri
|
63005
|
(Address
of principal executive
offices)
|
(Zip
Code)
|
PART I - FINANCIAL INFORMATION | ||
Item No. 1 | Financial Statements | 1 |
Item No. 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 1 |
Item No. 3 | Quantitative and Qualitative Disclosures Regarding Market Risk | 6 |
Item No. 4 | Controls and Procedures | 6 |
PART II - OTHER INFORMATION | ||
Item No. 1A | Risk Factors | 7 |
Item No. 6 | Exhibits | 7 |
Certification
of CEO Pursuant to Rule 13a-14(a)/15d-14(a)
Certification
of CFO Pursuant to Rule 13a-14(a)/15d-14(a)
Certification
of CEO and CFO Pursuant to 18 U.S.C. 1350
|
Three
months ended March 31,
|
|||||||
2006
|
2005
|
||||||
Net
sales
|
100.0
|
%
|
100.0
|
%
|
|||
Costs
and expenses:
|
|||||||
Cost
of products sold
|
16.3
|
17.1
|
|||||
Distributor
royalties and commissions
|
40.5
|
40.4
|
|||||
Selling,
general and administrative
|
30.3
|
30.9
|
|||||
Income
from operations
|
12.9
|
11.6
|
|||||
Interest
expense
|
(0.1
|
)
|
(0.3
|
)
|
|||
Interest
and other income
|
0.5
|
0.2
|
|||||
Income
before income taxes
|
13.3
|
11.5
|
|||||
Provision
for income taxes
|
5.4
|
4.4
|
|||||
Net
income
|
7.9
|
%
|
7.1
|
%
|
Three
months ended March 31,
|
|||||||||||||||||||||||
2006
|
2005
|
Change
from prior year
|
|||||||||||||||||||||
Amount
|
%
of Net Sales
|
Amount
|
%
of Net Sales
|
Amount
|
%
|
||||||||||||||||||
(dollars
in thousands)
|
|||||||||||||||||||||||
United
States
|
$
|
28,530
|
|
|
91.5
|
%
|
$
|
25,969
|
|
|
89.6
|
%
|
$
|
2,561
|
|
9.9
|
%
|
||||||
Australia/New
Zealand
|
|
579
|
|
|
1.9
|
|
576
|
|
|
2.0
|
|
3
|
|
|
0.5
|
|
|||||||
Canada
|
|
409
|
|
|
1.3
|
|
451
|
|
|
1.6
|
|
(42
|
)
|
|
(9.4
|
)
|
|||||||
Mexico
|
|
329
|
|
|
1.0
|
|
542
|
|
|
1.9
|
|
(213
|
)
|
|
(39.2
|
)
|
|||||||
United
Kingdom/Ireland
|
|
273
|
|
|
0.9
|
|
167
|
|
|
0.6
|
|
106
|
|
63.3
|
|||||||||
Philippines
|
|
493
|
|
|
1.5
|
|
802
|
|
|
2.8
|
|
(309
|
)
|
|
(38.5
|
)
|
|||||||
Malaysia/Singapore
|
|
458
|
|
|
1.5
|
|
472
|
|
|
1.6
|
|
(14
|
)
|
|
(3.1
|
)
|
|||||||
Germany
|
|
124
|
|
|
0.4
|
|
—
|
|
|
—
|
|
124
|
|
|
—
|
|
|||||||
|
|
|
|
||||||||||||||||||||
Consolidated
total
|
$
|
31,195
|
|
|
100.0
|
%
|
$
|
28,979
|
|
|
100.0
|
%
|
$
|
2,216
|
|
|
7.7
|
%
|
March
31, 2006
|
March
31, 2005
|
%
Change
|
|||||||||||||||||||||
Active
Distributors
|
Master
Affiliates and Above
|
Active
Distributors
|
Master
Affiliates and Above
|
Active
Distributors
|
Master
Affiliates and Above
|
||||||||||||||||||
United
States
|
52,360
|
|
|
12,930
|
|
49,040
|
|
|
11,170
|
|
6.8
|
%
|
|
15.8
|
%
|
||||||||
Australia/New
Zealand
|
|
2,370
|
|
|
180
|
|
3,010
|
|
|
220
|
|
(21.3
|
)
|
|
(18.2
|
)
|
|||||||
Canada
|
|
1,160
|
|
|
140
|
|
1,430
|
|
|
170
|
|
(18.9
|
)
|
|
(17.6
|
)
|
|||||||
Mexico
|
|
1,230
|
|
|
200
|
|
7,900
|
|
|
470
|
|
(84.4
|
)
|
|
(57.4
|
)
|
|||||||
United
Kingdom/Ireland
|
|
800
|
|
|
110
|
|
470
|
|
|
40
|
|
70.2
|
|
175.0
|
|||||||||
Philippines
|
|
3,500
|
|
|
270
|
|
6,360
|
|
|
500
|
|
(45.0
|
)
|
|
(46.0
|
)
|
|||||||
Malaysia/Singapore
|
|
3,100
|
|
|
380
|
|
4,850
|
|
|
710
|
|
(36.1
|
)
|
|
(46.5
|
)
|
|||||||
Germany
|
|
180
|
|
|
70
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|||||||||
|
|
|
|
|
|
||||||||||||||||||
Consolidated
total
|
64,700
|
|
|
14,280
|
|
73,060
|
|
|
13,280
|
|
(11.4
|
)%
|
|
7.5
|
%
|
Exhibit
Number
|
Document |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith). |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith). |
32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). |
RELIV’ INTERNATIONAL, INC. |
By: | /s/ Robert L. Montgomery |
|
|
Robert L. Montgomery, Chairman of the Board of Directors, President and Chief Executive Officer |
Date: May 10, 2006 |
By: | /s/ Steven D. Albright |
|
|
Steven D. Albright, Chief Financial Officer (and accounting officer) |
Date: May 10, 2006 |
Reliv International, Inc. and Subsidiaries | |||||||
Consolidated
Balance Sheets
|
|||||||
March
31
|
December
31
|
||||||
2006
|
2005
|
||||||
(unaudited)
|
|||||||
Assets | |||||||
Current assets: | |||||||
Cash
and cash equivalents
|
$
|
8,998,864
|
$
|
5,653,594
|
|||
Accounts
and notes receivable, less allowances of $40,300 in 2006 and
$39,700 in
2005
|
766,686
|
775,623
|
|||||
Accounts
due from employees and distributors
|
170,330
|
152,760
|
|||||
Inventories
|
|||||||
Finished
goods
|
3,357,581
|
3,569,449
|
|||||
Raw
materials
|
1,313,667
|
1,441,107
|
|||||
Sales
aids and promotional materials
|
516,776
|
573,900
|
|||||
Total
inventories
|
5,188,024
|
5,584,456
|
|||||
Prepaid
expenses and other current assets
|
2,009,564
|
1,240,138
|
|||||
Deferred
income taxes
|
418,430
|
452,430
|
|||||
Total
current assets
|
17,551,898
|
13,859,001
|
|||||
Other
assets
|
1,915,902
|
1,626,330
|
|||||
Accounts
due from employees and distributors
|
300,083
|
355,651
|
|||||
Property,
plant and equipment:
|
|||||||
Land
|
829,222
|
829,222
|
|||||
Building
|
9,568,219
|
9,553,311
|
|||||
Machinery
& equipment
|
4,397,760
|
4,736,274
|
|||||
Office
equipment
|
1,409,032
|
1,400,544
|
|||||
Computer
equipment & software
|
2,380,936
|
2,536,415
|
|||||
18,585,169
|
19,055,766
|
||||||
Less:
Accumulated depreciation
|
8,630,656
|
8,915,325
|
|||||
Net
property, plant and equipment
|
9,954,513
|
10,140,441
|
|||||
Total
assets
|
$
|
29,722,396
|
$
|
25,981,423
|
|||
See
notes to financial statements.
|
Reliv
International, Inc. and Subsidiaries
|
|||||||
Consolidated
Balance Sheets
|
|||||||
March
31
|
December
31
|
||||||
2006
|
2005
|
||||||
(unaudited)
|
|||||||
Liabilities
and stockholders' equity
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable and accrued expenses:
|
|||||||
Trade
accounts payable and other accrued expenses
|
$
|
3,706,035
|
$
|
3,165,871
|
|||
Distributors
commissions payable
|
4,116,265
|
3,578,405
|
|||||
Sales
taxes payable
|
558,893
|
518,870
|
|||||
Interest
payable
|
-
|
31,000
|
|||||
Payroll
and payroll taxes payable
|
1,051,209
|
864,624
|
|||||
Total
accounts payable and accrued expenses
|
9,432,402
|
8,158,770
|
|||||
Income
taxes payable
|
1,709,229
|
820,246
|
|||||
Current
maturities of long-term debt
|
916,013
|
916,244
|
|||||
Total
current liabilities
|
12,057,644
|
9,895,260
|
|||||
Noncurrent
liabilities:
|
|||||||
Long-term
debt, less current maturities
|
1,306,965
|
2,211,065
|
|||||
Deferred
income taxes
|
66,000
|
89,000
|
|||||
Other
non-current liabilities
|
1,235,349
|
1,221,270
|
|||||
Total
noncurrent liabilities
|
2,608,314
|
3,521,335
|
|||||
Stockholders'
equity:
|
|||||||
Preferred
stock, par value $.001 per share;
3,000,000
|
|||||||
shares
authorized; -0- shares issued and outstanding
|
|||||||
in
2006 and 2005
|
- | - | |||||
Common
stock, par value $.001 per share; 30,000,000
|
|||||||
authorized;
15,622,590 shares issued and 15,572,508
|
|||||||
shares
outstanding as of 3/31/2006; 15,613,644 shares
|
|||||||
issued
and 15,563,562 shares outstanding as of
12/31/2005
|
15,623
|
15,614
|
|||||
Additional paid-in capital
|
23,016,024
|
22,972,463
|
|||||
Accumulated deficit
|
(6,802,144
|
)
|
(9,252,413
|
)
|
|||
Accumulated other comprehensive loss:
|
|||||||
Foreign currency translation adjustment
|
(671,575
|
)
|
(669,346
|
)
|
|||
Treasury stock
|
(501,490
|
)
|
(501,490
|
)
|
|||
Total
stockholders' equity
|
15,056,438
|
12,564,828
|
|||||
Total
liabilities and stockholders' equity
|
$
|
29,722,396
|
$
|
25,981,423
|
|||
See
notes to financial statements.
|
Reliv
International, Inc. and Subsidiaries
|
|||||||
Consolidated
Statements of Income
|
|||||||
(unaudited)
|
|||||||
Three
months ended March 31
|
|||||||
2006
|
2005
|
||||||
Product
sales
|
$
|
28,041,335
|
$
|
26,114,493
|
|||
Handling
& freight income
|
3,154,017
|
2,864,603
|
|||||
Net
sales
|
31,195,352
|
28,979,096
|
|||||
Costs
and expenses:
|
|||||||
Cost
of products sold
|
5,082,181
|
4,943,304
|
|||||
Distributor
royalties and commissions
|
12,627,032
|
11,711,716
|
|||||
Selling,
general and administrative
|
9,466,741
|
8,963,286
|
|||||
Total
costs and expenses
|
27,175,954
|
25,618,306
|
|||||
Income
from operations
|
4,019,398
|
3,360,790
|
|||||
Other
income (expense):
|
|||||||
Interest
income
|
84,676
|
70,023
|
|||||
Interest
expense
|
(34,441
|
)
|
(85,490
|
)
|
|||
Other
income
|
60,636
|
3,066
|
|||||
Income
before income taxes
|
4,130,269
|
3,348,389
|
|||||
Provision
for income taxes
|
1,680,000
|
1,285,000
|
|||||
Net
income
|
$
|
2,450,269
|
$
|
2,063,389
|
|||
Earnings
per common share - Basic
|
$
|
0.16
|
$
|
0.13
|
|||
Weighted
average shares
|
15,569,000
|
16,479,000
|
|||||
Earnings
per common share - Diluted
|
$
|
0.15
|
$
|
0.12
|
|||
Weighted
average shares
|
15,981,000
|
17,162,000
|
|||||
Cash
dividends declared per common share
|
$
|
-
|
$
|
-
|
|||
See
notes to financial statements.
|
Reliv
International, Inc. and Subsidiaries
|
|||||||
Consolidated
Statements of Cash Flows
|
|||||||
(unaudited)
|
|||||||
Three
months ended March 31
|
|||||||
2006
|
2005
|
||||||
Operating
activities:
|
|||||||
Net
income
|
$
|
2,450,269
|
$
|
2,063,389
|
|||
Adjustments
to reconcile net income to net
cash provided by operating activities:
|
|||||||
Depreciation
and amortization
|
315,325
|
325,333
|
|||||
Stock-based
compensation
|
29,060
|
16,725
|
|||||
Tax
benefit from exercise of options
|
-
|
1,185,000
|
|||||
Deferred
income taxes
|
11,000
|
-
|
|||||
Foreign
currency transaction (gain)/loss
|
(10,304
|
)
|
51,556
|
||||
(Increase)
decrease in accounts and notes receivable
|
45,105
|
(160,575
|
)
|
||||
(Increase)
decrease in inventories
|
415,004
|
85,988
|
|||||
(Increase)
decrease in refundable income taxes
|
-
|
1,263,308
|
|||||
(Increase)
decrease in prepaid expenses and
other current assets
|
(764,700
|
)
|
(869,636
|
)
|
|||
(Increase)
decrease in other assets
|
(298,705
|
)
|
(221,910
|
)
|
|||
Increase
(decrease) in accounts payable and accrued expenses
|
1,285,994
|
2,264,678
|
|||||
Increase
(decrease) in income taxes payable
|
889,022
|
6,790
|
|||||
Net
cash provided by operating activities
|
4,367,070
|
6,010,646
|
|||||
Investing
activities:
|
|||||||
Proceeds
from the sale of property, plant and equipment
|
5,835
|
-
|
|||||
Purchase
of property, plant and equipment
|
(121,764
|
)
|
(279,821
|
)
|
|||
Net
cash used in investing activities
|
(115,929
|
)
|
(279,821
|
)
|
|||
Financing
activities:
|
|||||||
Principal
payments on long-term borrowings
|
(904,339
|
)
|
(81,972
|
)
|
|||
Proceeds
from options and warrants exercised
|
14,510
|
12,412
|
|||||
Purchase
of stock for treasury
|
-
|
(1,355,285
|
)
|
||||
Net
cash used in financing activities
|
(889,829
|
)
|
(1,424,845
|
)
|
|||
Effect
of exchange rate changes on cash and cash equivalents
|
(16,042
|
)
|
(40,147
|
)
|
|||
Increase
in cash and cash equivalents
|
3,345,270
|
4,265,833
|
|||||
Cash
and cash equivalents at beginning of period
|
5,653,594
|
10,151,503
|
|||||
Cash
and cash equivalents at end of period
|
$
|
8,998,864
|
$
|
14,417,336
|
|||
See
notes to financial statements
|
Note 1-- | Basis of Presentation |
The
accompanying unaudited consolidated financial statements and
notes thereto
have been prepared in accordance with the instructions to Form
10-Q and
reflect all adjustments which management believes necessary
(which
primarily include normal recurring accruals) to present fairly
the
financial position, results of operations and cash flows. These
statements, however, do not include all information and footnotes
necessary for a complete presentation of financial position,
results of
operations and cash flows in conformity with accounting principles
generally accepted in the United States. Interim results may
not
necessarily be indicative of results that may be expected for
any other
interim period or for the year as a whole. These financial
statements
should be read in conjunction with the audited consolidated
financial
statements and footnotes included in the annual report on Form
10-K for
the year ended December 31, 2005, filed March 16, 2006 with
the Securities
and Exchange Commission.
|
|
Note 2-- | Reclassifications |
In
previous years, in addition to the required disclosure of "net
sales," the
Company reported "sales at suggested retail," representing
the gross sales
amount reflected on the Company's invoices to distributors
before
"distributor allowances." In the current year, the Company
has
reclassified the presentation of "net sales" by presenting "products
sales" and "handling & freight income." Handling and freight income
represents the amounts billed to distributors for shipping
costs. Product
sales represent the actual product purchase price typically
paid by the
Company's distributors, after giving effect to distributor
allowances,
which range from 20% to 40% of suggested retail prices. Subsequent
to this
classification, net sales represent sales and handling & freight
income.
|
|
Note 3-- | Basic and Diluted Earnings per Share |
Basic earnings per common share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed using the weighted average number of common shares and potential dilutive common shares that were outstanding during the period. Potential dilutive common shares consist of outstanding stock options, outstanding stock warrants, and convertible preferred stock. | |
The
following table sets forth the computation of basic and diluted
earnings
per share:
|
Three
months ended March 31
|
||||||||
2006
|
2005
|
|||||||
Numerator: | ||||||||
Net
income
|
$
|
2,450,269
|
$
|
2,063,389
|
||||
Denominator:
|
||||||||
Denominator
for basic earnings per share--weighted average
shares
|
15,569,000
|
16,479,000
|
||||||
Dilutive
effect of employee stock options and
other warrants
|
412,000
|
683,000
|
||||||
Denominator
for diluted earnings per share--adjusted weighted average
shares
|
15,981,000
|
17,162,000
|
||||||
Basic
earnings per share
|
$
|
0.16
|
$
|
0.13
|
||||
Diluted
earnings per share
|
$
|
0.15
|
$
|
0.12
|
Note 4-- |
Comprehensive
Income
|
Total
comprehensive income was $2,448,041 and $2,079,062 for the
three months
ended March 31, 2006 and 2005, respectively. The Company's
only component
of other comprehensive income is the foreign currency translation
adjustment.
|
|
Note 5-- |
Stock-Based
Compensation
|
Stock
Options
|
|
On
January 1, 2006, the Company adopted Statement of Financial
Accounting
Standards No. 123(R), "Share-Based Payment" ("SFAS 123(R)").
Prior to the
adoption of SFAS 123(R), the Company had adopted the disclosure-only
provisions of SFAS 123 and accounted for employee stock-based
compensation
under the intrinsic value method, and no expense related
to stock options
was recognized. The Company adopted the provisions of SFAS
123(R) using
the modified prospective transition method. Under this method,
the
Company's consolidated financial statements as of and for
the three months
ended March 31, 2006 reflect the impact of SFAS 123(R), while
the
consolidated financial statements for prior periods have
not been restated
to reflect, and do not include, the impact of SFAS 123(R).
SFAS 123(R)
amends SFAS No. 95, "Statement of Cash Flows," to require
that excess tax
benefits be reported as a financing cash flow rather than
as an operating
cash flow. Adoption of SFAS 123(R) did not have a material
impact on the
consolidated statements of cash flows for the three months
ended March 31,
2006.
The
Company sponsors a stock option plan (the "2003 Plan") allowing
for
incentive stock options and non-qualified stock options to
be granted to
employees and eligible directors. The 2003 Plan provides
that 1,000,000
shares may be issued under the 2003 Plan at an option price
not less than
the fair market value of the stock at the time the option
is granted. The
2003 Plan expires on March 20, 2013. In 2005, the Company
issued grants of
543,000 shares under the 2003 Plan. The 2005 option grants
were issued
with an exercise price equal to the fair value of the shares
at the time
of grant and were fully vested in the year of grant. Accordingly,
no
stock-based compensation expense has been recognized relating
to the 2005
option grants. As of March 31, 2006, 457,000 shares remain
available for
grant under the 2003 Plan.
The
fair value of the options granted in 2005 was estimated at
the date of
grant using a Black-Scholes option pricing model with the
following
weighted average assumptions: risk-free interest rates ranging
from 4.02%
to 4.31%; dividend yield ranging from 0.55% to 0.80%; volatility
factor of
the expected price of the Company's stock ranging from 0.448
to 0.516; and
a weighted average expected life of 7.0 years. The weighted
average fair
value of options granted during 2005 was $4.19 per share.
There
were no options granted during the three months ended March
31, 2006 and
for the years ended December 31, 2004, 2003, and 2002. As
of March 31,
2006, there exist unexercised stock options from grants made
in 2001 under
a prior stock option plan. The fair value of options granted
in 2001 were
estimated at the date of grant using a Black-Scholes option
pricing model
with the following weighted average assumptions: risk-free
interest rates
ranging from 3.07% to 4.78%; dividend yield of zero; volatility
factor of
the expected price of the Company's stock of 0.729; and a
weighted average
expected life of 4.51 years. The weighted average fair value
of options
granted during 2001 was $0.42 per share.
Compensation
cost for the stock option plans was approximately $4,000
for the three
months ended March 31, 2006 and has been recorded in selling,
general, and
administrative expense. As of March 31, 2006 there was approximately
$59,000 of unrecognized compensation cost related to 128,720
nonvested
stock options that the Company estimates to ultimately vest
which have a
$0.78 per share weighted average exercise price. There has been no
change to the number of unvested stock options during the
three months
ended March 31, 2006.
|
A
summary of the Company's stock option activity and related
information for
the three months ended March 31, 2006
follows:
|
Options
|
Weighted
Avg.
Exercise
Price
|
Aggregate
Intrinsic
Value
|
Weighted
Avg.
Remaining
Life
|
|||||||||||
Outstanding
beginning of the year
|
813,074
|
$
|
5.57
|
|||||||||||
Granted
|
--
|
--
|
||||||||||||
Exercised
|
(7,732
|
)
|
0.71
|
|||||||||||
Forfeited
|
--
|
--
|
||||||||||||
Outstanding
at end of quarter
|
805,342
|
$
|
5.61
|
$
|
5,458,000
|
6.03
|
||||||||
Exercisable
at end of quarter
|
676,622
|
$
|
6.53
|
$
|
3,963,000
|
7.12
|
As
of March 31, 2006
|
|||||||||||||||||
Options
Outstanding
|
Options
Exercisable
|
||||||||||||||||
Range
of Exercise Prices
|
Number
Outstanding
|
Weighted
Avg. Remaining Life
|
Weighted
Avg. Exercise Price
|
Number
Exercisable
|
Weighted
Avg. Exercise Price
|
||||||||||||
$0.71
- $0.78
|
262,342
|
0.29
|
$
|
0.74
|
133,622
|
$
|
0.71
|
||||||||||
$7.92 - $8.68 | 543,000 |
8.80
|
$
|
7.97
|
543,000 |
$
|
7.97
|
||||||||||
$0.71
- $8.68
|
805,342
|
676,622
|
For
the three months ended March 31, 2006, the total intrinsic value,
cash
received, and actual tax benefit realized for stock options exercised
(7,732 shares) was $113,000, $5,000, and $-0-,
respectively.
|
|
In accordance with the modified prospective transition method, the Company's consolidated financial statements for prior periods have not been restated and do not include the impact of SFAS 123(R). Accordingly, no compensation expense related to such stock option awards was recognized in the three-month period ended March 31, 2005 because all stock options granted had an exercise price equal to the fair market value of the underlying common stock on the date of grant. The following table shows the effect on net income and earnings per share as if the fair-value-based method of accounting had been applied to all outstanding and unvested stock option awards prior to adoption of SFAS 123(R). For purposes of this pro forma disclosure, the estimated fair value of the stock option award is assumed to be expensed over the award's vesting periods using the Black-Scholes model. |
Three
months ended March 31, 2005
|
|||||
Net
income, as reported
|
$
|
2,063,389
|
|||
|
|||||
Deduct:
Total stock-based employee compensation expense
determined under fair value based method for
all awards, net of related tax effects
|
854,500
|
||||
|
|||||
Pro
forma net income available to common
shareholders
|
$
|
1,208,889
|
|||
Earnings
per share:
|
|||||
Basic--as
reported
|
$
|
0.13
|
|||
Basic--pro
forma
|
$
|
0.07
|
|||
Diluted--as
reported
|
$
|
0.12
|
|||
Diluted--pro
forma
|
$
|
0.07
|
Note 6-- |
Subsequent
Event
|
On
February 21, 2006, the Company filed a registration statement
on Form S-3
with the Securities and Exchange Commission relating to an
underwritten
public offering of 2,000,000 shares of its common stock. On
April 5, 2006,
the Company commenced the public offering at a price of $11.25
per share.
The public offering was completed on April 11, 2006 and consisted
of
1,200,000 shares of common stock offered and sold by the Company
and
800,000 shares of common stock offered and sold by selling
stockholders.
The selling stockholders were four directors and/or officers
of the
Company. The underwriters had a 30-day option to purchase up
to 300,000
additional shares from certain of the selling stockholders
to cover
over-allotments, if any. This option was exercised for the
full 300,000
shares and closed on May 9, 2006. The Company did not receive
any proceeds
from the sale of common stock by the selling stockholders.
The
Company intends to use the net proceeds from the offering for
the
repayment of debt and for general corporate purposes, including
working
capital, continued domestic and international growth, and for
possible
product acquisitions. Net proceeds to the Company from the
offering, after
reduction for the underwriters' fees and other estimated offering
expenses, are expected to be $12.0
million.
|
Exhibit
Number
|
Document |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith). |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith). |
32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). |