Rory, here is the Edgar filing....eom Gordon
May 14, 1998
BIOPOOL INTERNATIONAL INC (BIPL)
Quarterly Report (SEC form 10QSB)
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
Sales were $3.8 million for the three-month period ended March 31, 1998, compared with $4.1 million for the corresponding
period of 1997. Approximately $200,000 of the decline was the result of the unavailability of a finished product (BayRho )
from a single supplier. This product became backordered in February without notice, and management has been advised by the
manufacturer that this product may not be available again until August of this year. For the year ended December 31, 1997,
sales of this product had been approximately $140,000 per month. The Company currently has no alternative source for a
product equivalent to BayRho . Prolonged disruption in the supply of this product will likely lead to the loss of customers for,
and future sales of, this product, and such loss could continue to have an adverse impact on the Company's sales and results of
operations.
Cost of sales, as a percentage of sales, was unchanged at 61% for the two comparable periods.
In the first quarter of 1997, selling, general and administrative expenses included approximately $50,000 of transitional costs
associated with the BCA acquisition. In the same period of 1998, increased selling and marketing expenditures and general
wage increases resulted in expenditures on par with the prior year period.
On December 23, 1997, the Company announced the restructuring of its operations by closing its facilities in Canada and
consolidating the operations of its subsidiary, Biopool Canada Inc., with operations conducted at the Company's facilities in
Ventura, California. Restructuring charges of $342,000 were charged in the fourth quarter of 1997 and $43,000 in the first
quarter of 1998. It is anticipated that the transfer of technology, manufacturing, and administrative functions will be completed
by June 30, 1998, for an additional charge of approximately $100,000. Management anticipates cost savings from the
restructuring beginning in the third quarter of 1998.
Interest expense for the first quarter of 1998 decreased $28,000 from the prior year period as a result of lower outstanding
loan balances. Total debt outstanding at March 31, 1998, was $2.6 million versus $3.6 million a year ago.
Income tax expense for the first quarter of 1997 includes a benefit related to utilization of domestic NOL carryforwards. All
NOL benefits were exhausted during 1997, which has the effect of increasing the Company's effective tax rate beginning the
first quarter of 1998.
Financial Condition
The Company's liquidity and capital resources remained strong into the first quarter of 1998. Working capital as of March 31,
1998, was $5.5 million, with a current ratio of 3.2 to 1.0. Approximately $276,000 of cash was used to pay down debt during
the current quarter. The total debt to equity ratio at March 31, 1998, was 28%. The Company's management believes that the
current availability of cash, lines of credit, working capital, and cash flow from operations are adequate to meet the Company's
needs for at least the next twelve months. The Company continues to seek potential acquisitions and sources of capital to
finance such acquisitions, although it has no commitments for either at this time.
BIOPOOL INTERNATIONAL, INC.
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