[
x ]
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Quarterly
Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of
1934 for the Quarterly Period Ended September 30,
2009
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or
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[ ]
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Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the Transition Period
from to
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Atrion
Corporation
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(Exact
Name of Registrant as Specified in its Charter)
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Delaware
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63-0821819
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(State
or Other Jurisdiction of
Incorporation
or Organization)
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(I.R.S.
Employer
Identification
No.)
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One Allentown Parkway, Allen,
Texas 75002
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(Address
of Principal Executive Offices) (Zip
Code)
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(972) 390-9800
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(Registrant’s
Telephone Number, Including Area
Code)
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Title
of Each Class
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Number
of Shares Outstanding at
October
22, 2009
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Common
stock, Par Value $0.10 per share
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1,979,771
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PART I. Financial Information | 2 | |
Item 1. Financial Statements | ||
Consolidated Statements of Income (Unaudited) For the Three and Nine months Ended September 30, 2009 and 2008 | 3 | |
Consolidated Balance Sheets (Unaudited) September 30, 2009 and December 31, 2008 | 4 | |
Consolidated Statements of Cash Flows (Unaudited) For the Nine months Ended September 30, 2009 and 2008 | 5 | |
Notes to Consolidated Financial Statements (Unaudited) | 6 | |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 9 | |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 14 | |
Item 4. Controls and Procedures | 14 | |
PART II. Other Information | 15 | |
Item 1. Legal Proceedings | 15 | |
Item 1A. Risk Factors | 15 | |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 15 | |
Item 6. Exhibits | 16 | |
SIGNATURES | 17 | |
Three Months Ended
September
30,
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Nine
Months Ended
September
30,
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2009
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2008
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2009
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2008
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(in
thousands, except per share amounts)
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Revenues
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$ | 25,192 | $ | 23,461 | $ | 76,240 | $ | 72,305 | ||||||||
Cost
of goods sold
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13,973 | 13,221 | 41,902 | 40,279 | ||||||||||||
Gross
profit
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11,219 | 10,240 | 34,338 | 32,026 | ||||||||||||
Operating
expenses:
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||||||||||||||||
Selling
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1,357 | 1,432 | 4,367 | 4,777 | ||||||||||||
General
and administrative
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2,635 | 2,398 | 8,069 | 7,644 | ||||||||||||
Research
and development
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661 | 630 | 2,191 | 2,241 | ||||||||||||
4,653 | 4,460 | 14,627 | 14,662 | |||||||||||||
Operating
income
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6,566 | 5,780 | 19,711 | 17,364 | ||||||||||||
Other
income:
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||||||||||||||||
Interest
income
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162 | 78 | 391 | 164 | ||||||||||||
Other
income
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-- | -- | 1 | 1 | ||||||||||||
162 | 78 | 392 | 165 | |||||||||||||
Income
before provision for income taxes
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6,728 | 5,858 | 20,103 | 17,529 | ||||||||||||
Provision
for income taxes
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(2,268 | ) | (1,866 | ) | (6,852 | ) | (5,746 | ) | ||||||||
Net
income
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$ | 4,460 | $ | 3,992 | $ | 13,251 | $ | 11,783 | ||||||||
Income
per basic share
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$ | 2.25 | $ | 2.03 | $ | 6.70 | $ | 6.02 | ||||||||
Weighted
average basic shares outstanding
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1,980 | 1,968 | 1,978 | 1,958 | ||||||||||||
Income
per diluted share
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$ | 2.20 | $ | 1.99 | $ | 6.57 | $ | 5.88 | ||||||||
Weighted
average diluted shares outstanding
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2,028 | 2,005 | 2,017 | 2,005 | ||||||||||||
Dividends
per common share
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$ | 0.36 | $ | 0.30 | $ | 0.96 | $ | 0.78 |
Assets | September 30, | December 31, | ||||||
2009 |
2008
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(in
thousands)
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||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 14,313 | $ | 12,056 | ||||
Short-term investments | 4,860 | 4,692 | ||||||
Accounts receivable | 11,663 | 10,875 | ||||||
Inventories | 18,866 | 20,169 | ||||||
Prepaid expenses | 1,094 | 719 | ||||||
Deferred income taxes | 596 | 596 | ||||||
51,392 | 49,107 | |||||||
Long-term investments | 11,537 | -- | ||||||
Property,
plant and equipment
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98,768 | 94,364 | ||||||
Less
accumulated depreciation and amortization
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44,875 | 40,994 | ||||||
53,893 | 53,370 | |||||||
Other
assets and deferred charges:
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||||||||
Patents
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1,644 | 1,863 | ||||||
Goodwill
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9,730 | 9,730 | ||||||
Other
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1,097 | 1,283 | ||||||
12,471 | 12,876 | |||||||
$ | 129,293 | $ | 115,353 | |||||
Liabilities and Stockholders’
Equity
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||||||||
Current
liabilities:
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||||||||
Accounts
payable and accrued liabilities
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$ | 6,478 | $ | 5,482 | ||||
Accrued
income and other taxes
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645 | 731 | ||||||
7,123 | 6,213 | |||||||
Line
of credit
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-- | -- | ||||||
Other
non-current liabilities
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9,038 | 8,298 | ||||||
Stockholders’
equity:
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||||||||
Common shares, par value $0.10 per share; authorized 10,000
shares, issued 3,420 shares
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342 | 342 | ||||||
Paid-in
capital
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20,166 | 19,130 | ||||||
Accumulated
other comprehensive loss
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(533 | ) | (533 | ) | ||||
Retained
earnings
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128,894 | 117,554 | ||||||
Treasury
shares, 1,440 at September 30, 2009 and 1,452 at
December 31, 2008, at cost
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(35,737 | ) | (35,651 | ) | ||||
Total stockholders’
equity
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113,132 | 100,842 | ||||||
$ | 129,293 | $ | 115,353 |
Nine months
Ended
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||||||||
September
30,
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||||||||
2009 | 2008 | |||||||
(in
thousands)
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||||||||
Cash
flows from operating activities:
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Net
income
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$ | 13,251 | $ | 11,783 | ||||
Adjustments to reconcile net income to net
cash provided by operating activities:
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Depreciation
and amortization
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5,126 | 4,688 | ||||||
Deferred
income taxes
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771 | 722 | ||||||
Stock-based
compensation
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500 | 482 | ||||||
Other
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-- | 37 | ||||||
19,648 | 17,712 | |||||||
Changes
in operating assets and liabilities:
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||||||||
Accounts
receivable
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(788 | ) | (2,118 | ) | ||||
Inventories
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1,303 | (3,986 | ) | |||||
Prepaid
expenses
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(375 | ) | 427 | |||||
Other
non-current assets
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186 | (149 | ) | |||||
Accounts
payable and accrued liabilities
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996 | 549 | ||||||
Accrued
income and other taxes
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(86 | ) | 481 | |||||
Other
non-current liabilities
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(31 | ) | (133 | ) | ||||
20,853 | 12,783 | |||||||
Cash
flows from investing activities:
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Property,
plant and equipment additions
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(5,430 | ) | (4,556 | ) | ||||
Purchases
of investments
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(15,705 | ) | (625 | ) | ||||
Proceeds
from investments
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4,000 | -- | ||||||
(17,135 | ) | (5,181 | ) | |||||
Cash
flows from financing activities:
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Line
of credit advances
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-- | 3,000 | ||||||
Line
of credit repayments
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-- | -- | ||||||
Exercise
of stock options
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459 | 525 | ||||||
Shares
tendered for employees’ taxes on stock-based compensation
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(122 | ) | (913 | ) | ||||
Tax
benefit related to stock options
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102 | 1,632 | ||||||
Dividends
paid
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(1,900 | ) | (1,532 | ) | ||||
(1,461 | ) | 2,712 | ||||||
Net
change in cash and cash equivalents
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2,257 | 10,314 | ||||||
Cash
and cash equivalents at beginning of period
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12,056 | 3,531 | ||||||
Cash
and cash equivalents at end of period
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$ | 14,313 | $ | 13,845 | ||||
Cash
paid for:
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Income
taxes
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$ | 6,394 | $ | 2,616 |
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ATRION
CORPORATION AND SUBSIDIARIES
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NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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(Unaudited)
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September
30,
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December
31,
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2009
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2008
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Raw
materials
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$ | 8,114 | $ | 8,978 | ||||
Work
in process
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4,422 | 4,579 | ||||||
Finished
goods
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6,330 | 6,612 | ||||||
Total
inventories
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$ | 18,866 | $ | 20,169 |
Three
months ended September 30,
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Nine
months ended September 30,
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2009
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2008
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2009
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2008
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(in
thousands, except per share amounts)
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Net
income
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$ | 4,460 | $ | 3,992 | $ | 13,251 | $ | 11,783 | ||||||||||
Weighted
average basic shares outstanding
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1,980 | 1,968 | 1,978 | 1,958 | ||||||||||||||
Add: Effect
of dilutive securities
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48 | 37 | 39 | 47 | ||||||||||||||
Weighted
average diluted shares outstanding
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2,028 | 2,005 | 2,017 | 2,005 |
Earnings
per share:
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Basic
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$ | 2.25 | $ | 2.03 | $ | 6.70 | $ | 6.02 | ||||||||
Diluted
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$ | 2.20 | $ | 1.99 | $ | 6.57 | $ | 5.88 |
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ATRION
CORPORATION AND SUBSIDIARIES
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NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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(Unaudited)
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Gross
Unrealized
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Cost
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Gains
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Losses
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Fair
Value
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Short-term
Investments:
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Corporate
bonds
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$ | 1,201 | $ | 3 | — | $ | 1,204 | |||||||||
Bank
certificates of deposit
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3,021 | — | — | 3,021 | ||||||||||||
Municipal
tax-exempt bonds
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638 | 2 | — | 640 | ||||||||||||
Short-term
investment securities held to maturity
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$ | 4,860 | $ | 5 | — | $ | 4,865 | |||||||||
Long-term
Investments
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Corporate
bonds
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$ | 11,537 | $ | 94 | $ | (15 | ) | $ | 11,616 |
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ATRION
CORPORATION AND SUBSIDIARIES
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NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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(Unaudited)
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(6)
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Pension
Benefits
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Three
Months ended September 30,
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Nine
Months ended September
30,
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2009
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2008
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2009
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2008
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Service
cost
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$ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Interest
cost
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54 | 56 | 162 | 168 | ||||||||||||
Expected
return on assets
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(54 | ) | (55 | ) | (162 | ) | (165 | ) | ||||||||
Prior
service cost amortization
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-- | -- | -- | -- | ||||||||||||
Actuarial
loss
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8 | 8 | 24 | 24 | ||||||||||||
Net
periodic pension cost
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$ | 8 | $ | 9 | $ | 24 | $ | 27 |
(7)
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Recent
Accounting Pronouncements
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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Three
Months ended
September
30,
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2009
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2008
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Fluid
Delivery
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$ | 9,535 | $ | 7,999 | ||||
Cardiovascular
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6,948 | 7,019 | ||||||
Ophthalmology
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4,418 | 3,733 | ||||||
Other
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4,291 | 4,710 | ||||||
Total
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$ | 25,192 | $ | 23,461 |
Nine
Months ended
September
30,
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2009
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2008
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Fluid
Delivery
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$ | 27,685 | $ | 24,896 | ||||
Cardiovascular
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21,439 | 21,602 | ||||||
Ophthalmology
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14,948 | 11,101 | ||||||
Other
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12,168 | 14,706 | ||||||
Total
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$ | 76,240 | $ | 72,305 |
Period
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Total
Number of Shares Purchased
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Average
Price Paid per Share
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Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
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Maximum
Number of Shares that May Yet Be Purchased Under the Plans or
Programs (1)
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7/1/2009
through 7/31/2009
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-- | -- | -- | 68,100 | ||||||||||||
8/1/2009
through 8/31/2009
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400 | (2) | $ | 130.06 | -- | 68,100 | ||||||||||
9/1/2009
through 9/30/2009
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-- | -- | -- | 68,100 | ||||||||||||
Total
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400 | $ | 130.06 | -- | 68,100 |
(1)
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The
Company has a program that was announced in April 2000 to purchase in open
market or privately negotiated transactions up to 200,000 shares. The
program has no expiration date but may be terminated at any time by the
Board of Directors.
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(2)
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Consists
of shares delivered to the Company in payment of income taxes related to
vesting of restricted stock by a participant in a Company equity incentive
plan. The Company’s equity incentive plans permit a participant under
certain circumstances to deliver shares of Company stock in payment of
income taxes due to be paid on equity
awards.
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Exhibit
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Number
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Description |
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Sarbanes-Oxley
Act Section 302 Certification of Chief Executive
Officer
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Sarbanes-Oxley
Act Section 302 Certification of Chief Financial
Officer
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Certification
Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
The Sarbanes – Oxley Act Of 2002
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Certification
Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
The Sarbanes – Oxley Act Of 2002
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Atrion Corporation | |
(Registrant) | |
Date: November 4, 2009 | By: /s/ Emile A. Battat |
Emile A. Battat | |
Chairman and | |
Chief Executive Officer | |
Date: November 4, 2009 | By: /s/ Jeffery Strickland |
Jeffery Strickland | |
Vice President and | |
Chief Financial Officer | |