UNITED STATES SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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x |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
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For the Fiscal Year Ended December 31, 2011 | |
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
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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 of incorporation or organization)
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(I.R.S. Employer Identification No.)
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One Allentown Parkway,
Allen, Texas
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75002
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(Address of principal executive offices)
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(ZIP code)
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Registrant’s telephone number, including area code: (972) 390-9800
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE EXCHANGE ACT:
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Title of Class
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Name of Each Exchange on Which Registered
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Common Stock, $.10 Par Value
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NASDAQ
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SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT
: None
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Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller reporting company o |
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·
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The loss of a key supplier of raw materials could lead to increased costs and lower profit margins.
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Our sales could decline materially if we lost business from one or more of our larger customers or a significant number of our smaller customers.
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Product liability claims could adversely affect our financial condition and results of operations.
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Our business is dependent on the price and availability of resins and our ability to pass on resin price increases to our customers.
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Any losses we incur as a result of our exposure to the credit risk of our customers could harm our results of operations.
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Our success is measured in part by our ability to develop patentable products, to preserve our trade secrets and operate without infringing or violating the proprietary rights of third parties.
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International patent protection is uncertain.
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New lines of business or new products and services may subject us to additional risks.
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Some of our competitors have significantly greater resources than we do, and it may be difficult for us to compete against them.
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We are subject to substantial governmental regulation and our failure to comply with applicable governmental regulations could subject us to numerous penalties, any of which could adversely affect our business.
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impose fines and penalties on us;
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prevent us from manufacturing our products;
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bring civil or criminal charges against us;
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delay the introduction of our new products into the market;
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recall or seize our products;
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exclusion from participation in Medicare and Medicaid and other federal healthcare programs;
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disrupt the manufacture or distribution of our products; or
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withdraw or deny approvals for our products.
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We will be unable to sell our products if we fail to comply with manufacturing regulations.
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Our products are subject to product recalls even after receiving regulatory clearance or approval, and any such recalls would negatively affect our financial performance and could harm our reputation.
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We may not receive regulatory approvals for new product candidates or for modifications of existing products or approvals may be delayed.
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We rely on technology to operate our business and any failure of these systems could harm our business.
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We sell many of our products to healthcare providers that rely on Medicare, Medicaid and private health insurance plans to reimburse the costs associated with the procedures performed using our products and these third party payors may deny reimbursement for use of our products.
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Healthcare policy changes, including recently enacted legislation reforming the United States healthcare system, may have a material adverse effect on our business, financial condition and results of operations.
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We may not be able to attract and retain skilled people.
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We utilize distributors for a portion of our sales, which subjects us to risks that could harm our business.
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Severe weather, natural disasters, acts of war or terrorism or other external events could significantly impact our business.
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Our stock price can be volatile.
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actual or anticipated variations in quarterly results of operations;
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recommendations by securities analysts;
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operating and stock price performance of other companies that investors deem comparable to the Company;
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perceptions in the marketplace regarding the Company and our competitors;
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new technology used, or services offered, by competitors;
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trading by funds with high-turnover practices or strategies;
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significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving the Company or our competitors;
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failure to integrate acquisitions or realize anticipated benefits from acquisitions;
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changes in government regulations; and
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geopolitical conditions such as acts or threats of terrorism or military conflicts.
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Our sales and operations are subject to the risks of doing business internationally.
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economic or political problems that disrupt foreign healthcare payment systems;
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the imposition of governmental controls;
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less favorable intellectual property or other applicable laws;
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protectionist laws and business practices that favor local competitors;
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the inability to obtain any necessary foreign regulatory or pricing approvals of products in a timely manner;
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changes in tax laws and tariffs; and
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longer payment cycles.
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A significant portion of our sales is to customers in foreign countries. We may lose revenues, market share and profits due to exchange rate fluctuations and other factors related to our international business.
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We may experience fluctuations in our quarterly operating results.
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demand for our products;
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pricing decisions, and those of our competitors, including decisions to increase or decrease prices;
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regulatory approvals for our products;
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timing and levels of spending for research and development, sales and marketing;
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timing and market acceptance of new product introductions by us or our competitors;
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development or expansion of business infrastructure in new clinical and geographic markets;
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tax rates in the jurisdictions in which we operate;
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shipping delays or interruptions;
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customer credit holds;
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timing and recognition of certain research and development milestones and license fees; and
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ability to control our costs;
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If we make acquisitions, we could encounter difficulties that harm our business.
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Political and economic conditions could materially and adversely affect our revenue and results of operations.
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If we fail to manage our exposure to financial and securities market risk successfully, our operating results could be adversely impacted.
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Provisions in our governing documents and Delaware law may discourage or prevent a change of control, which could cause our stock price to decline and prevent attempts by our stockholders to replace or remove our current management.
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Name
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Age
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Title
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Emile A Battat
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72
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Chairman of the Company and Chairman of all subsidiaries
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David A. Battat
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41
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President and Chief Executive Officer of the Company and President of Halkey-Roberts Corporation, one of our subsidiaries
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Jeffery Strickland
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52
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Vice President and Chief Financial Officer, Secretary and Treasurer of the Company and Vice President or Secretary-Treasurer of all subsidiaries
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ITEM 5.
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MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER REPURCHASES OF EQUITY SECURITIES
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Year Ended
December 31, 2010:
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High
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Low
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||||||
First Quarter
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$164.56 | $129.51 | ||||||
Second Quarter
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$153.90 | $127.01 | ||||||
Third Quarter
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$157.51 | $130.50 | ||||||
Fourth Quarter
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$184.99 | $154.63 | ||||||
Year Ended
December 31, 2011:
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High
|
Low
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||||||
First Quarter
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$187.22 | $163.80 | ||||||
Second Quarter
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$200.56 | $165.76 | ||||||
Third Quarter
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$219.06 | $186.22 | ||||||
Fourth Quarter
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$244.30 | $200.95 |
2011
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2010
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2009
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2008
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2007
|
||||||||||||||||
Operating Results for the Year ended December 31,
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||||||||||||||||||||
Revenues
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$ | 117,704 | $ | 108,569 | $ | 100,643 | $ | 95,895 | $ | 88,540 | ||||||||||
Operating income
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38,168 | 30,977 | 25,004 | (a) | 22,973 | 20,195 | (b) | |||||||||||||
Income from continuing operations
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26,038 | 20,952 | 16,843 | (a) | 15,667 | 14,006 | (b) | |||||||||||||
Net income
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26,038 | 20,952 | 16,843 | (a) | 15,667 | 14,006 | (b) | |||||||||||||
Depreciation and amortization
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6,544 | 7,041 | 7,163 | 6,353 | 5,534 | |||||||||||||||
Per Share Data:
|
||||||||||||||||||||
Income from continuing
operations, per diluted share
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12.82 | 10.32 | 8.36 | (a) | 7.82 | 7.06 | (b) | |||||||||||||
Net income per diluted share
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12.82 | 10.32 | 8.36 | (a) | 7.82 | 7.06 | (b) | |||||||||||||
Cash dividends per common share
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1.82 | 10.56 | 1.32 | 1.08 | .88 | |||||||||||||||
Average diluted shares outstanding
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2,031 | 2,030 | 2,015 | 2,004 | 1,985 | |||||||||||||||
Financial Position at
December 31,
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||||||||||||||||||||
Total assets
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161,895 | 134,652 | 132,749 | 115,353 | 99,313 | |||||||||||||||
Long-term debt
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- | - | - | - | - |
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(a)
Included a non-cash charge for the settlement of the 2007 termination of pension plans that subtracted $1.0 million from operating income, $643,000 from net income and $0.32 from net income per diluted share. (See Note 11)
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(b)
Included two special items that, when combined, added $1.1 million to operating income, $695,000 to net income and $0.35 to net income per diluted share.
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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·
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Focusing on customer needs;
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·
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Expanding existing product lines and developing new products;
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Maintaining a culture of controlling cost; and
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Preserving and fostering a collaborative, entrepreneurial management structure.
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2011
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2010
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2009
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||||||||||
Fluid Delivery
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$ | 45,274 | $ | 39,442 | $ | 35,540 | ||||||
Cardiovascular
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34,072 | 31,280 | 29,051 | |||||||||
Ophthalmology
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19,581 | 19,370 | 19,452 | |||||||||
Other
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18,777 | 18,477 | 16,600 | |||||||||
Total
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$ | 117,704 | $ | 108,569 | $ | 100,643 |
Payments due by period
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||||||||||||||||
Contractual Obligations
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Total
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2012
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2013 - 2014 |
2015 and
thereafter
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||||||||||||
(In thousands)
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||||||||||||||||
Purchase Obligations
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$ | 13,955 | $ | 13,895 | $ | 60 | $ | - | ||||||||
Total
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$ | 13,955 | $ | 13,895 | $ | 60 | $ | - |
2011
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2010
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2009
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(In thousands, except per share amounts)
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Revenues
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$ | 117,704 | $ | 108,569 | $ | 100,643 | ||||||
Cost of Goods Sold
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57,697 | 57,655 | 55,312 | |||||||||
Gross Profit
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60,007 | 50,914 | 45,331 | |||||||||
Operating Expenses:
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||||||||||||
Selling
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5,325 | 5,368 | 5,650 | |||||||||
General and administrative
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13,646 | 11,900 | 11,623 | |||||||||
Research and development
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2,868 | 2,669 | 3,054 | |||||||||
21,839 | 19,937 | 20,327 | ||||||||||
Operating Income
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38,168 | 30,977 | 25,004 | |||||||||
Interest Income
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1,295 | 1,009 | 578 | |||||||||
Other Income (Expense), net
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12 | 2 | 2 | |||||||||
Income before Provision for Income Taxes
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39,475 | 31,988 | 25,584 | |||||||||
Provision for Income Taxes
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(13,437 | ) | (11,036 | ) | (8,741 | ) | ||||||
Net Income
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$ | 26,038 | $ | 20,952 | $ | 16,843 | ||||||
Net Income Per Basic Share
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$ | 12.90 | $ | 10.38 | $ | 8.51 | ||||||
Weighted Average Basic Shares Outstanding
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2,019 | 2,018 | 1,979 | |||||||||
Net Income Per Diluted Share
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$ | 12.82 | $ | 10.32 | $ | 8.36 | ||||||
Weighted Average Diluted Shares Outstanding
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2,031 | 2,030 | 2,015 | |||||||||
Dividends Per Common Share
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$ | 1.82 | $ | 10.56 | $ | 1.32 |
Assets:
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2011
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2010
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||||||
(In thousands)
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||||||||
Current Assets:
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||||||||
Cash and cash equivalents
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$ | 24,590 | $ | 10,670 | ||||
Short-term investments
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20,279 | 10,715 | ||||||
Accounts receivable, net of allowance for doubtful accounts
of $42 and $36 in 2011 and 2010, respectively
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11,223 | 11,521 | ||||||
Inventories
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24,582 | 17,400 | ||||||
Prepaid expenses and other current assets
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2,313 | 1,050 | ||||||
Deferred income taxes
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755 | 625 | ||||||
Total Current Assets
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83,742 | 51,981 | ||||||
Property, Plant and Equipment
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114,975 | 103,789 | ||||||
Less accumulated depreciation and amortization
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58,605 | 53,125 | ||||||
56,370 | 50,664 | |||||||
Other Assets and Deferred Charges:
|
||||||||
Patents and licenses, net of accumulated amortization of $10,691 and
$10,419 in 2011 and 2010, respectively
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999 | 1,249 | ||||||
Goodwill
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9,730 | 9,730 | ||||||
Other
|
718 | 737 | ||||||
Long-term investments
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10,336 | 20,291 | ||||||
21,783 | 32,007 | |||||||
Total Assets
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$ | 161,895 | $ | 134,652 |
Liabilities and Stockholders’ Equity:
|
2011
|
2010
|
||||||
(In thousands)
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
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$ | 3,642 | $ | 2,550 | ||||
Accrued liabilities
|
5,566 | 4,650 | ||||||
Accrued income and other taxes
|
835 | 552 | ||||||
Total Current Liabilities
|
10,043 | 7,752 | ||||||
Line of credit
|
-- | -- | ||||||
Other Liabilities and Deferred Credits:
|
||||||||
Deferred income taxes
|
10,902 | 8,188 | ||||||
Other
|
2,436 | 2,095 | ||||||
13,338 | 10,283 | |||||||
Total Liabilities
|
23,381 | 18,035 | ||||||
Commitments and Contingencies
|
||||||||
Stockholders’ Equity:
|
||||||||
Common stock, par value $.10 per share, authorized
10,000 shares, issued 3,420 shares
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342 | 342 | ||||||
Additional paid-in capital
|
25,452 | 24,331 | ||||||
Retained earnings
|
153,618 | 131,286 | ||||||
Treasury shares, 1,404 shares in 2011 and 1,404 shares
in 2010, at cost
|
(40,898 | ) | (39,342 | ) | ||||
Total Stockholders’ Equity
|
138,514 | 116,617 | ||||||
Total Liabilities and Stockholders’ Equity
|
$ | 161,895 | $ | 134,652 |
2011
|
2010
|
2009
|
||||||||||
(In thousands)
|
||||||||||||
Cash Flows From Operating Activities:
|
||||||||||||
Net income
|
$ | 26,038 | $ | 20,952 | $ | 16,843 | ||||||
Adjustments to reconcile net income to net cash
provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
6,544 | 7,041 | 7,163 | |||||||||
Deferred income taxes
|
2,584 | 309 | 608 | |||||||||
Stock-based compensation
|
1,047 | 606 | 668 | |||||||||
Pension charge
|
-- | -- | 989 | |||||||||
36,213 | 28,908 | 26,271 | ||||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
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298 | (495 | ) | (151 | ) | |||||||
Inventories
|
(7,182 | ) | 1,275 | 1,494 | ||||||||
Prepaid expenses and other current assets
|
(1,263 | ) | (69 | ) | (262 | ) | ||||||
Other non-current assets
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18 | (57 | ) | 434 | ||||||||
Accounts payable and accrued liabilities
|
2,008 | 1,075 | 643 | |||||||||
Accrued income and other taxes
|
283 | (5 | ) | (174 | ) | |||||||
Other non-current liabilities
|
341 | 609 | 144 | |||||||||
30,716 | 31,241 | 28,399 | ||||||||||
Cash Flows From Investing Activities:
|
||||||||||||
Property, plant and equipment additions
|
(11,999 | ) | (4,293 | ) | (6,591 | ) | ||||||
Purchase of investments
|
(14,723 | ) | (19,117 | ) | (15,485 | ) | ||||||
Proceeds from maturities of investments
|
14,290 | 4,000 | 4,625 | |||||||||
Net change in accrued interest, premiums, and discounts on investments
|
824 | (183 | ) | (155 | ) | |||||||
(11,608 | ) | (19,593 | ) | (17,606 | ) | |||||||
Cash Flows From Financing Activities:
|
||||||||||||
Exercise of stock options
|
-- | 542 | 459 | |||||||||
Shares tendered for employees’ taxes on stock-based compensation
|
(78 | ) | (725 | ) | (122 | ) | ||||||
Tax benefit related to stock-based compensation
|
79 | 1,239 | 121 | |||||||||
Purchase of treasury stock
|
(1,513 | ) | (1,407 | ) | -- | |||||||
Dividends paid
|
(3,676 | ) | (21,321 | ) | (2,613 | ) | ||||||
(5,188 | ) | (21,672 | ) | (2,155 | ) | |||||||
Net change in cash and cash equivalents
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13,920 | (10,024 | ) | 8,638 | ||||||||
Cash and cash equivalents, beginning of year
|
10,670 | 20,694 | 12,056 | |||||||||
Cash and cash equivalents, end of year
|
$ | 24,590 | $ | 10,670 | $ | 20,694 | ||||||
Cash paid for:
|
||||||||||||
Income taxes
|
11,921 | 9,080 | 8,170 |
Common Stock
|
Treasury Stock
|
Accumulated | ||||||||||||||||||||||||||||||
Shares
Outstanding
|
Amount
|
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Other Comprehensive Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||||||||||||
Balances, January 1, 2009
|
1,968 | $ | 342 | 1,452 | $ | (35,651 | ) | $ | 19,130 | $ | (533 | ) | $ | 117,554 | $ | 100,842 | ||||||||||||||||
Net income
|
16,843 | 16,843 | ||||||||||||||||||||||||||||||
Recognition of pension plan settlement loss, net of income taxes of $286
|
533 | 533 | ||||||||||||||||||||||||||||||
Total comprehensive income
|
533 | 16,843 | 17,376 | |||||||||||||||||||||||||||||
Tax benefit from stock-based compensation
|
121 | 121 | ||||||||||||||||||||||||||||||
Stock options and restricted stock
|
15 | (15 | ) | 171 | 1,105 | 1,276 | ||||||||||||||||||||||||||
Shares surrendered in stock transactions
|
(3 | ) | 3 | (256 | ) | (256 | ) | |||||||||||||||||||||||||
Dividends
|
(2,628 | ) | (2,628 | ) | ||||||||||||||||||||||||||||
Balances, December 31, 2009
|
1,980 | 342 | 1,440 | (35,736 | ) | 20,356 | -- | 131,769 | 116,731 | |||||||||||||||||||||||
Net income
|
20,952 | 20,952 | ||||||||||||||||||||||||||||||
Tax benefit from stock-based compensation
|
1,239 | 1,239 | ||||||||||||||||||||||||||||||
Stock options and restricted stock
|
64 | (64 | ) | 671 | 2,736 | 3,407 | ||||||||||||||||||||||||||
Shares surrendered in stock transactions
|
(18 | ) | 18 | (2,870 | ) | (2,870 | ) | |||||||||||||||||||||||||
Purchase of treasury stock
|
(10 | ) | 10 | (1,407 | ) | (1,407 | ) | |||||||||||||||||||||||||
Dividends
|
(21,435 | ) | (21,435 | ) | ||||||||||||||||||||||||||||
Balances, December 31, 2010
|
2,016 | 342 | 1,404 | (39,342 | ) | 24,331 | -- | 131,286 | $ | 116,617 | ||||||||||||||||||||||
Net income
|
26,038 | 26,038 | ||||||||||||||||||||||||||||||
Tax benefit from stock-based compensation
|
79 | 79 | ||||||||||||||||||||||||||||||
Stock options and restricted stock
|
8 | (8 | ) | 35 | 1,042 | 1,077 | ||||||||||||||||||||||||||
Shares surrendered in stock transactions
|
(78 | ) | (78 | ) | ||||||||||||||||||||||||||||
Purchase of treasury stock
|
(8 | ) | 8 | (1,513 | ) | (1,513 | ) | |||||||||||||||||||||||||
Dividends
|
(3,706 | ) | (3,706 | ) | ||||||||||||||||||||||||||||
Balances, December 31, 2011
|
2,016 | $ | 342 | 1,404 | $ | (40,898 | ) | $ | 25,452 | $ | -- | $ | 153,618 | $ | 138,514 |
December 31,
|
||||||||
2011
|
2010
|
|||||||
Raw materials
|
$ | 9,074 | $ | 7,888 | ||||
Work in process
|
4,843 | 3,985 | ||||||
Finished goods
|
10,665 | 5,527 | ||||||
Total inventories
|
$ | 24,582 | $ | 17,400 |
December 31,
|
Useful
|
|||||||||||
|
2011
|
2010
|
Lives
|
|||||||||
Land
|
$ | 5,260 | $ | 5,260 | — | |||||||
Buildings
|
30,579 | 29,798 |
30-40 yrs
|
|||||||||
Machinery and equipment
|
79,136 | 68,731 |
3-15 yrs
|
|||||||||
Total property, plant and equipment
|
$ | 114,975 | $ | 103,789 |
December 31,
|
||||||||
2011
|
2010
|
|||||||
Accrued payroll and related expenses
|
$ | 4,409 | $ | 3,833 | ||||
Accrued vacation
|
195 | 171 | ||||||
Accrued professional fees
|
613 | 215 | ||||||
Other accrued liabilities
|
349 | 431 | ||||||
Total accrued liabilities
|
$ | 5,566 | $ | 4,650 |
Gross Unrealized
|
||||||||||||||||
Cost
|
Gains
|
Losses
|
Fair value
|
|||||||||||||
As of December 31, 2011
:
|
||||||||||||||||
Short-term Investments:
|
||||||||||||||||
Corporate bonds
|
$ | 20,279 | $ | 44 | $ | 8 | $ | 20,315 | ||||||||
Long-term Investments:
|
||||||||||||||||
Corporate bonds
|
$ | 10,336 | — | $ | 55 | $ | 10,281 | |||||||||
As of December 31, 2010
:
|
||||||||||||||||
Short-term Investments:
|
||||||||||||||||
Corporate bonds
|
$ | 10,715 | $ | 178 | — | $ | 10,893 | |||||||||
Long-term Investments:
|
||||||||||||||||
Corporate bonds
|
$ | 20,291 | $ | 602 | — | $ | 20,893 |
December 31, 2011
|
December 31, 2010
|
|||||||||||||||||||||
Weighted Average
Original Life
(years)
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Weighted Average
Original Life
(years)
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
|||||||||||||||||
14.88 | $ | 11,690 | $ | 10,691 | 14.76 | $ | 11,668 | $ | 10,419 |
2012
|
$ | 162 | ||
2013
|
$ | 162 | ||
2014
|
$ | 162 | ||
2015
|
$ | 162 | ||
2016
|
$ | 162 |
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Current — Federal
|
$ | 9,973 | $ | 9,916 | $ | 7,421 | ||||||
— State
|
880 | 831 | 712 | |||||||||
10,853 | 10,747 | 8,133 | ||||||||||
Deferred — Federal
|
2,372 | 293 | 560 | |||||||||
— State
|
212 | (4 | ) | 48 | ||||||||
2,584 | 289 | 608 | ||||||||||
Total income tax expense
|
$ | 13,437 | $ | 11,036 | $ | 8,741 |
2011
|
2010
|
|||||||
Deferred tax assets:
|
||||||||
Benefit plans
|
$ | 1,021 | $ | 695 | ||||
Inventories
|
506 | 495 | ||||||
Other
|
206 | 89 | ||||||
Total deferred tax assets
|
$ | 1,733 | $ | 1,279 | ||||
Deferred tax liabilities:
|
||||||||
Property, plant and equipment
|
$ | 9,147 | $ | 6,359 | ||||
Patents and goodwill
|
2,719 | 2,466 | ||||||
Other
|
14 | 17 | ||||||
Total deferred tax liabilities
|
$ | 11,880 | $ | 8,842 | ||||
Net deferred tax liability
|
$ | 10,147 | $ | 7,563 | ||||
Balance Sheet classification:
|
||||||||
Non-current deferred income tax liability
|
$ | 10,902 | $ | 8,188 | ||||
Current deferred income tax asset
|
755 | 625 | ||||||
Net deferred tax liability
|
$ | 10,147 | $ | 7,563 |
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Income tax expense at the statutory
federal income tax rate
|
$ | 13,816 | $ | 11,196 | $ | 8,954 | ||||||
Increase (decrease) resulting from:
|
||||||||||||
State income taxes
|
710 | 538 | 421 | |||||||||
Section 199 manufacturing deduction
|
(996 | ) | (957 | ) | (491 | ) | ||||||
Other, net
|
(93 | ) | 259 | (143 | ) | |||||||
Total income tax expense
|
$ | 13,437 | $ | 11,036 | $ | 8,741 |
Gross unrecognized tax benefits at January 1, 2009
|
$ | 1,022 | ||
Increases in tax positions for prior years
|
204 | |||
Increases in tax positions for current year
|
332 | |||
Lapse in statute of limitations
|
(393 | ) | ||
Gross unrecognized tax benefits at December 31, 2009
|
$ | 1,165 | ||
Decreases in tax positions for prior years
|
(14 | ) | ||
Increases in tax positions for current year
|
322 | |||
Lapse in statute of limitations
|
(53 | ) | ||
Gross unrecognized tax benefits at December 31, 2010
|
$ | 1,420 | ||
Decreases in tax positions for prior years
|
(77 | ) | ||
Increases in tax positions for current year
|
134 | |||
Lapse in statute of limitations
|
(216 | ) | ||
Gross unrecognized tax benefits at December 31, 2011
|
$ | 1,261 |
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
(In thousands, except per share amounts)
|
||||||||||||
Net Income
|
$ | 26,038 | $ | 20,952 | $ | 16,843 | ||||||
Weighted average basic shares outstanding
|
2,019 | 2,018 | 1,979 | |||||||||
Add: Effect of dilutive securities
|
12 | 12 | 36 | |||||||||
Weighted average diluted shares outstanding
|
2,031 | 2,030 | 2,015 | |||||||||
Net Income per share
|
||||||||||||
Basic
|
$ | 12.90 | $ | 10.38 | $ | 8.51 | ||||||
Diluted
|
$ | 12.82 | $ | 10.32 | $ | 8.36 |
Shares
|
Weighted Average Exercise Price
|
|||||||
Options outstanding at January 1, 2009
|
99,000 | $ | 51.96 | |||||
Granted in 2009
|
-- | -- | ||||||
Exercised in 2009
|
(14,000 | ) | $ | 42.29 | ||||
Options outstanding at December 31, 2009
|
85,000 | $ | 53.56 | |||||
Granted in 2010
|
-- | -- | ||||||
Exercised in 2010
|
(62,792 | ) | $ | 42.80 | ||||
Options outstanding at December 31, 2010
|
22,208 | $ | 83.96 | |||||
Granted in 2011
|
25,000 | $ | 181.44 | |||||
Exercised in 2011
|
-- | -- | ||||||
Options outstanding at December 31, 2011
|
47,208 | $ | 135.58 |
Exercisable options at December 31, 2009
|
66,750 | $ | 41.49 | |||||
Exercisable options at December 31, 2010
|
14,208 | $ | 68.65 | |||||
Exercisable options at December 31, 2011
|
18,208 | $ | 77.99 |
Options Outstanding
|
Options Exercisable
|
|||||
Range of exercise prices
|
Number
outstanding
|
Weighted
average
remaining
contractual life
|
Weighted
average
exercise
price
|
Number
exercisable
|
Weighted
average
exercise
price
|
|
$26.13-$43.75
|
8,000
|
1.8 years
|
$ 35.73
|
8,000
|
$35.73
|
|
$111.06-$111.50
|
14,208
|
1.4 years
|
$111.12
|
10,208
|
$111.10
|
|
$181.44
|
25,000
|
6.4 years
|
$181.44
|
--
|
--
|
|
47,208
|
4.1 years
|
$135.58
|
18,208
|
$77.99
|
2011
|
2010
|
2009
|
|
Risk-free interest rate
|
1.7%
|
--
|
--
|
Dividend yield
|
1%
|
--
|
--
|
Volatility factor
|
25.0%
|
--
|
--
|
Expected life
|
5 years
|
--
|
--
|
Shares
|
Weighted Average Award Date Fair Value Per Share
|
|||||||
Restricted stock at January 1, 2009
|
8,500 | $ | 90.31 | |||||
Granted in 2009
|
-- | -- | ||||||
Vested in 2009
|
(2,500 | ) | $ | 113.90 | ||||
Restricted stock at December 31, 2009
|
6,000 | $ | 91.46 | |||||
Granted in 2010
|
200 | $ | 150.23 | |||||
Vested in 2010
|
(2,500 | ) | $ | 144.94 | ||||
Restricted stock at December 31, 2010
|
3,700 | $ | 97.29 | |||||
Granted in 2011
|
7,500 | $ | 181.44 | |||||
Vested in 2011
|
(2,600 | ) | $ | 185.13 | ||||
Restricted stock at December 31, 2011
|
8,600 | $ | 172.89 |
Restricted
Stock Units
|
Weighted
Average
Award Date
Fair Value
Per Unit
|
Directors’
Stock Units
|
Weighted
Average
Award
Date
Fair
Value
Per Unit
|
|||||||||||||
Unvested stock units at
|
||||||||||||||||
January 1, 2009
|
||||||||||||||||
Granted in 2009
|
10,117 | $ | 96.09 | -- | ||||||||||||
Vested in 2009
|
825 | $ | 102.08 | 81 | $ | 99.35 | ||||||||||
Unvested stock units at
|
-- | (81 | ) | $ | 99.35 | |||||||||||
December 31, 2009
|
10,942 | $ | 96.53 | -- | ||||||||||||
Granted in 2010
|
736 | $ | 157.43 | 60 | $ | 155.04 | ||||||||||
Forfeited in 2010
|
(469 | ) | $ | 104.94 | -- | |||||||||||
Vested in 2010
|
-- | (60 | ) | $ | 155.04 | |||||||||||
Unvested stock units at
|
||||||||||||||||
December 31, 2011
|
11,209 | $ | 100.19 | -- | ||||||||||||
Granted in 2011
|
6,171 | $ | 181.33 | 42 | $ | 180.73 | ||||||||||
Vested in 2011
|
-- | (42 | ) | $ | 180.73 | |||||||||||
Unvested stock units at
|
||||||||||||||||
December 31, 2011
|
17,380 | $ | 129.00 | -- |
Unrecognized
Compensation
Cost
|
Weighted Average
Remaining Years in Amortization Period
|
|||||||
Stock options
|
$ | 930,000 | 4.3 | |||||
Restricted stock
|
1,245,000 | 4.3 | ||||||
Restricted stock units
|
1,077,000 | 4.2 | ||||||
Total
|
$ | 3,252,000 |
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
United States
|
$ | 68,156 | $ | 64,854 | $ | 61,198 | ||||||
Canada
|
17,524 | 17,792 | 16,674 | |||||||||
Other countries less than 10% of revenues
|
32,024 | 25,923 | 22,771 | |||||||||
Total
|
$ | 117,704 | $ | 108,569 | $ | 100,643 |
2011
|
2010
|
2009
|
||||||||||
Fluid Delivery
|
$ | 45,274 | $ | 39,442 | $ | 35,540 | ||||||
Cardiovascular
|
34,072 | 31,280 | 29,051 | |||||||||
Ophthalmology
|
19,581 | 19,370 | 19,452 | |||||||||
Other
|
18,777 | 18,477 | 16,600 | |||||||||
Total
|
$ | 117,704 | $ | 108,569 | $ | 100,643 |
Quarter
Ended
|
Operating
Revenue
|
Operating
Income
|
Net Income
|
Income
Per Basic
Share
|
Income
Per Diluted
Share
|
|||||||||||||||
(In thousands, except per share amounts)
|
||||||||||||||||||||
03/31/11
|
$ | 30,589 | $ | 10,096 | $ | 6,858 | $ | 3.40 | $ | 3.38 | ||||||||||
06/30/11
|
31,139 | 10,437 | 7,019 | 3.48 | 3.46 | |||||||||||||||
09/30/11
|
30,457 | 10,004 | 6,774 | 3.35 | 3.33 | |||||||||||||||
12/31/11
|
25,519 | 7,631 | 5,388 | 2.67 | 2.65 | |||||||||||||||
03/31/10
|
$ | 26,902 | $ | 7,038 | $ | 4,697 | $ | 2.33 | $ | 2.31 | ||||||||||
06/30/10
|
27,881 | 8,180 | 5,431 | 2.69 | 2.67 | |||||||||||||||
09/30/10
|
27,156 | 8,003 | 5,400 | 2.68 | 2.66 | |||||||||||||||
12/31/10
|
26,630 | 7,755 | 5,423 | 2.69 | 2.67 |
Plan Category
|
Number of securities to be issued upon exercise of outstanding options
(a)
|
Weighted-average exercise price of outstanding options, warrants and rights
(b)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)
|
|||||||||
Equity compensation plans approved by security holders
(1)
|
64,588 | $ | 77.99 | (2) | 98,486 | |||||||
Equity compensation plans not approved by security holders
(3)
|
254 | - | 2,945 | (4) | ||||||||
Total
|
64,842 | $ | 77.99 | 101,431 |
(1)
|
Consists of shares of our common stock authorized for issuance under our 1997 Stock Incentive Plan and our Amended and Restated 2006 Equity Incentive Plan, or 2006 Plan. The number of shares available for issuance under both plans is subject to equitable adjustment by the Compensation Committee of the Board of Directors in the event of any change in our capitalization, including, without limitation, a stock dividend or stock split. For more information regarding these plans, see Note 8 of the Notes to Consolidated Financial Statements presented in Part II, Item 8 of this Form 10-K.
|
(2)
|
The deferred stock units and restricted stock units awarded under our 2006 Plan are excluded from the calculation of the weighted average exercise price.
|
(3)
|
Consists of our Deferred Compensation Plan for Non-Employee Directors, or Deferred Compensation Plan, and our Non-Employee Director Stock Purchase Plan, or Director Stock Purchase plan. For more information regarding these plans, see Note 8 of the Notes to Consolidated Financial Statements presented in Part II, Item 8 of this Form 10-K.
|
(4)
|
The Deferred Compensation Plan and the Director Stock Purchase Plan do not provide for a specified limit on the number of shares of our common stock that may be issued thereunder. The 2,945 shares shown as available for future issuance (1,765 shares under the Deferred Compensation Plan and 1,180 shares under the Director Stock Purchase Plan) reflect the number of shares initially reserved, in the aggregate, for issuance under those plans less the number of shares of our common stock issued or to be issued with respect to stock units that have been credited to non-employee directors' stock unit accounts under the Deferred Compensation Plan and our stock that has been purchased under the Director Stock Purchase Plan on or before December 31, 2011.
|
Allowance for Doubtful Receivables
|
|||||||||||||
December 31,
|
|||||||||||||
2011
|
2010
|
2009
|
|||||||||||
(in thousands)
|
|||||||||||||
Beginning balance
|
$ | 36 | $ | 61 | $ | 31 | |||||||
Additions charged to expense
|
40 | 18 | 67 | ||||||||||
Deductions from reserve
|
(23 | ) | (43 | ) | (37 | ) | |||||||
Recovery
|
(11 | ) | - | - | |||||||||
Ending balance
|
$ | 42 | $ | 36 | $ | 61 |
Exhibit
Numbers
|
Description | |
3a
|
Certificate of Incorporation of Atrion Corporation, dated December 30, 1996
(1)
|
|
3b
|
Bylaws of Atrion Corporation (as last amended on February 20, 2012)
(2)
|
|
10a*
|
Atrion Corporation 1997 Stock Incentive Plan
(3)
|
|
10b*
|
Form of Award Agreement for Nonqualified Stock Option for Director for 1997 Stock Incentive Plan
(4)
|
|
10c*
|
Severance Plan for Chief Financial Officer
(5)
|
|
10d*
|
Amended and Restated Employment Agreement for Chairman
(6)
|
|
10e*
|
First Amendment to Amended and Restated Employment Agreement for Chairman
(7)
|
|
10f*
|
Amended and Restated Atrion Corporation 2006 Equity Incentive Plan (as last amended on May 26, 2011)
(8)
|
|
10g*
|
Form of Award Agreement for Incentive Stock Option under the Atrion Corporation 2006 Equity Incentive Plan
(9)
|
|
10h*
|
Form of Award Agreement for Non-Qualified Stock Option under the Atrion Corporation 2006 Equity Incentive Plan
(10)
|
|
10i*
|
Form of Award Agreement for Restricted Stock under the Atrion Corporation 2006 Equity Incentive Plan
(11)
|
|
10j*
|
Form of Award Agreement for Incentive Stock Option Award under Amended and Restated Atrion Corporation 2006 Equity Incentive Plan
(12)
|
|
10k*
|
Form of Award Agreement for Non-Qualified Stock Option Award under Amended and Restated Atrion Corporation 2006 Equity Incentive Plan
(13)
|
|
10l*
|
Form of Award Agreement for Common Stock Award under Amended and Restated Atrion Corporation 2006 Equity Incentive Plan
(14)
|
|
10m*
|
Form of Award Agreement for Restricted Stock Award under Amended and Restated Atrion Corporation 2006 Equity Incentive Plan
(15)
|
|
10n*
|
Form of Award Agreement for Restricted Stock Units Award under Amended and Restated Atrion Corporation 2006 Equity Incentive Plan
(16)
|
|
10o*
|
Non-Employee Directors Stock Purchase Plan (as amended and restated as of December 2, 2008)
(17)
|
|
10p*
|
Form of Stock Purchase Election Form – Non-Employee Director Stock Purchase Plan
(18)
|
|
10q*
|
Deferred Compensation Plan for Non-Employee Directors (as amended and restated as of December 2, 2008)
(19)
|
|
10r*
|
Form of Deferred Fee Election Form – Deferred Compensation Plan for Non-Employee Directors
(20)
|
|
10s*
|
Incentive Compensation Plan for Chief Financial Officer for Calendar Years Beginning 2007
(21)
|
|
10t*
|
Halkey-Roberts Corporation Incentive Compensation Plan
(22)
|
|
10u*
|
Change in Control Agreement for President
(23)
|
|
10v*
|
Form of Indemnification Agreement for Directors and Executive Officers
(24)
|
|
13.1
|
Stock Performance Graph
(24)
|
|
21
|
Subsidiaries of Atrion Corporation as of December 31, 2011
(24)
|
|
23
|
Consent of Grant Thornton LLP
(24)
|
|
31.1
|
Sarbanes-Oxley Act Section 302 Certification of Chief Executive Officer
(24)
|
|
31.2
|
Sarbanes-Oxley Act Section 302 Certification of Chief Financial Officer
(24)
|
|
32.1
|
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes – Oxley Act Of 2002
(24)
|
|
32.2
|
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of The Sarbanes – Oxley Act Of 2002
(24)
|
|
101.INS** |
XBRL Instance Document
|
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL** |
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF** |
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB** |
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Atrion Corporation | |
By: | /s/ David A. Battat |
David A. Battat | |
President and Chief | |
Executive Officer |
Signature
|
Title
|
Date
|
/s/ David A. Battat
|
President and Chief Executive
|
March 12, 2012
|
David A. Battat
|
Officer (Principal Executive Officer)
|
|
/s/ Jeffery Strickland
|
Vice President, Chief Financial Officer and
|
March 12, 2012
|
Jeffery Strickland
|
Secretary-Treasurer (Principal Financial
|
|
and Accounting Officer)
|
||
/s/ Emile A Battat
|
Chairman
|
March 12, 2012
|
Emile A Battat
|
||
/s/ Hugh J. Morgan, Jr.
|
Director
|
March 12, 2012
|
Hugh J. Morgan, Jr.
|
||
/s/ Roger F. Stebbing
|
Director
|
March 12, 2012
|
Roger F. Stebbing
|
||
/s/ John P. Stupp, Jr.
|
Director
|
March 12, 2012
|
John P. Stupp, Jr.
|
||
/s/ Ronald N. Spaulding
|
Director
|
March 12, 2012
|
Ronald N. Spaulding
|
||
ATRION CORPORATION | |
By: | |
Its: |
INDEMNITEE | |
Address: | |||
Company/Index
|
2006
|
2007
|
2008
|
2009
|
2010
|
2011
|
||||||||||||||||||
Atrion Corporation
|
$100.00 | $162.45 | $127.50 | $206.84 | $254.36 | $343.72 | ||||||||||||||||||
Russell 2000 Index
|
$100.00 | $98.44 | $65.18 | $82.89 | $105.16 | $100.77 | ||||||||||||||||||
SIC Code Index
|
$100.00 | $112.88 | $81.88 | $103.60 | $106.28 | $98.60 |
Subsidiary
|
State of
Incorporation
|
Ownership
|
Atrion Medical Products, Inc.
|
Delaware
|
100%
|
Halkey-Roberts Corporation
|
Delaware
|
100%
|
Quest Medical, Inc.
|
Texas
|
100%
|
AlaTenn Pipeline Company LLC
|
Alabama
|
100%
|
Atrion Leasing Company LLC
|
Alabama
|
100%
|
/s/ David A. Battat | |||
David A. Battat | |||
President and | |||
Chief Executive Officer
|
/s/ Jeffery Strickland | |||
Jeffery Strickland | |||
Vice President and | |||
Chief Financial Officer
|
Dated: March 12, 2012 | /s/ David A. Battat | ||
David A. Battat | |||
President and | |||
Chief Executive Officer |
Dated: March 12, 2012 | /s/ Jeffery Strickland | ||
Jeffery Strickland | |||
Vice President and | |||
Chief Financial Officer |