1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________TO ______. COMMISSION FILE #0-4829-03 Nabi ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 59-1212264 - ---------------------------- ------------------ (State or other jurisdiction (I.R.S. Employer of incorporation Identification No.) or organization) 5800 Park of Commerce Boulevard N.W., Boca Raton, FL 33487 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code): (561) 989-5800 ----------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. YES (X) NO ( ) The number of shares outstanding of registrant's common stock at November 10, 1997 was 34,766,195 shares.
2 QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) Nabi ================================================================================ INDEX <TABLE> <CAPTION> PART I. FINANCIAL INFORMATION PAGE --------------------- ---- <S> <C> <C> ITEM 1. FINANCIAL STATEMENTS.............................................................................3 Consolidated Balance Sheet, September 30, 1997 and December 31, 1996......................................3 Consolidated Statement of Operations for the three-month and nine-month periods ended September 30, 1997 and 1996......................................................................4 Consolidated Statement of Cash Flows for the nine-month periods ended September 30, 1997 and 1996..........................................................................5 Notes to Consolidated Financial Statements................................................................6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS........................................................................................9 PART II. OTHER INFORMATION ----------------- ITEM 1. LEGAL PROCEEDINGS...............................................................................13 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................................................13 Exhibit 11 - Calculation of Earnings (Loss) per Share................................................15 Exhibit 10.27 - $50 Million Loan and Security Agreement dated as of September 12, 1997 between Nabi, the Financial Institutions Party and NationsBank N.A...................................17 </TABLE> 2
3 Nabi PART I Financial Information Item 1 Financial Statements - -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET <TABLE> <CAPTION> (UNAUDITED) SEPTEMBER 30, DECEMBER 31, ------------------------------- (In Thousands) 1997 1996 - -------------------------------------------------------------------------------------------------------------- <S> <C> <C> ASSETS CURRENT ASSETS: Cash and cash equivalents $ 7,995 $ 18,513 Short-term investments -- 8,797 Trade accounts receivable, net 33,848 38,127 Inventories, net 48,946 28,395 Prepaid expenses and other assets 9,437 4,269 --------- --------- TOTAL CURRENT ASSETS 100,226 98,101 PROPERTY AND EQUIPMENT, NET 82,341 60,587 OTHER ASSETS: Excess of acquisition cost over net assets acquired, net 17,351 18,072 Intangible assets, net 8,809 9,684 Other, net 14,916 15,698 --------- --------- TOTAL ASSETS $ 223,643 $ 202,142 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Trade accounts payable $ 7,189 $ 9,800 Accrued expenses 13,858 22,484 Notes payable 6,381 2,187 --------- --------- TOTAL CURRENT LIABILITIES 27,428 34,471 6.5% CONVERTIBLE SUBORDINATED NOTES 80,500 80,500 NOTES PAYABLE 33,850 778 OTHER 365 332 --------- --------- TOTAL LIABILITIES 142,143 116,081 --------- --------- STOCKHOLDERS' EQUITY: Convertible preferred stock, par value $.10 per share: 5,000 shares authorized; no shares outstanding -- -- Common stock, par value $.10 per share: 75,000 shares authorized, 34,767 and 34,614 shares issued and outstanding, respectively 3,477 3,461 Capital in excess of par value 136,373 136,424 Accumulated deficit (58,350) (53,824) --------- --------- TOTAL STOCKHOLDERS' EQUITY 81,500 86,061 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 223,643 $ 202,142 ========= ========= </TABLE> The accompanying Notes are an integral part of these Financial Statements. 3
4 <TABLE> <CAPTION> Nabi - --------------------------------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (UNAUDITED) THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------------------------------- (In Thousands, Except Per Share Data) 1997 1996 1997 1996 - ---------------------------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> SALES $ 52,849 $ 57,635 $ 167,141 $ 173,869 COSTS AND EXPENSES: Cost of products sold 43,370 44,762 129,501 133,226 Research and development expense 4,622 4,020 12,465 12,341 Selling, general and administrative expense 6,992 4,722 17,230 15,598 Royalty expense 1,924 1,182 4,321 3,514 Other operating expense, principally freight and amortization 811 827 2,431 2,676 Non-recurring charges 5,680 -- 5,680 -- -------- -------- --------- --------- OPERATING INCOME (LOSS) (10,550) 2,122 (4,487) 6,514 INTEREST AND OTHER INCOME 16 290 230 1,076 INTEREST AND OTHER EXPENSE (1,249) (1,271) (3,244) (3,263) -------- -------- --------- --------- INCOME (LOSS) BEFORE (PROVISION) BENEFIT FOR INCOME TAXES AND EXTRAORDINARY CHARGE (11,783) 1,141 (7,501) 4,327 (PROVISION) BENEFIT FOR INCOME TAXES 3,894 (46) 2,975 (173) -------- -------- --------- --------- INCOME (LOSS) BEFORE EXTRAORDINARY CHARGE (7,889) 1,095 (4,526) 4,154 EXTRAORDINARY CHARGE -- -- -- (932) -------- -------- --------- --------- NET INCOME (LOSS) $ (7,889) $ 1,095 $ (4,526) $ 3,222 ======== ======== ========= ========= EARNINGS (LOSS) PER SHARE: Income (loss) before extraordinary charge $ (0.23) $ 0.03 $ (0.13) $ 0.12 Extraordinary charge -- -- -- (0.03) -------- -------- --------- --------- Net income (loss) $ (0.23) $ 0.03 $ (0.13) $ 0.09 ======== ======== ========= ========= WEIGHTED AVERAGE NUMBER OF SHARES AND COMMON SHARE EQUIVALENTS 35,120 35,548 35,292 35,680 ======== ======== ========= ========= </TABLE> The accompanying Notes are an integral part of these Financial Statements. 4
5 Nabi - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CASH FLOWS <TABLE> <CAPTION> (UNAUDITED) NINE MONTHS ENDED SEPTEMBER 30, ----------------------- (In Thousands) 1997 1996 - --------------------------------------------------------------------------------------------------- <S> <C> <C> CASH FLOW FROM OPERATING ACTIVITIES: Net income (loss) $( 4,526) $ 3,222 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 6,988 5,838 Provision for doubtful accounts 135 505 Extraordinary charge -- 932 Non-recurring charges 5,680 -- Other 54 341 Change in assets and liabilities: Decrease (increase) in trade accounts receivable 4,145 (13,203) Decrease (increase) in inventories (20,551) (3,304) Decrease (increase) in prepaid expenses and other assets (5,169) (2,181) Decrease (increase) in other assets (3,055) (1,048) Increase (decrease) in accounts payable and accrued liabilities (13,132) 4,462 -------- -------- Total adjustments (24,905) (7,658) -------- -------- NET CASH USED BY OPERATING ACTIVITIES (29,431) (4,436) -------- -------- CASH FLOW FROM INVESTING ACTIVITIES: Purchase of short-term investments -- (18,190) Proceeds from maturity of short-term investments 8,850 5,724 Capital expenditures (27,588) (14,829) -------- -------- NET CASH USED BY INVESTING ACTIVITIES (18,738) (27,295) -------- -------- CASH FLOW FROM FINANCING ACTIVITIES: Net proceeds from issuance of convertible subordinated debentures -- 77,884 Repayments of flexible term notes -- (18,000) Repayments of term debt, net -- (10,000) Borrowing (repayments) under line of credit, net 32,022 (6,760) Other debt 5,219 (2,320) Proceeds from the exercise of options and warrants 410 1,775 -------- -------- NET CASH PROVIDED BY FINANCING ACTIVITIES 37,651 42,579 -------- -------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (10,518) 10,848 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 18,513 3,991 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,995 $ 14,839 ======== ======== </TABLE> The accompanying Notes are an integral part of these Financial Statements. 5
6 Nabi NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 -- GENERAL Nabi is a vertically integrated biopharmaceutical company that supplies human blood plasma and develops and commercializes therapeutic products for the prevention and treatment of infectious diseases and immunological disorders. The consolidated financial statements include the accounts of Nabi and its subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in Nabi's Annual Report to Stockholders for the year ended December 31, 1996. In the opinion of management, the unaudited consolidated financial statements include all adjustments necessary to present fairly Nabi's consolidated financial position at September 30, 1997 and the consolidated results of its operations for the three and nine months ended September 30, 1997 and 1996. The interim results of operations are not necessarily indicative of the results which may occur for the fiscal year. NOTE 2 -- INVENTORIES The components of inventories, stated at the lower of cost (FIFO) or market, are as follows: <TABLE> <CAPTION> SEPTEMBER 30, DECEMBER 31, --------------------------------- (In Thousands) 1997 1996 ----------------------------------------------------------------------- <S> <C> <C> Finished goods $ 45,215 $ 23,610 Work in process 1,185 1,836 Raw materials 9,510 8,504 -------- -------- 55,910 33,950 Less reserves (6,964) (5,555) -------- -------- $ 48,946 $ 28,395 ======== ======== </TABLE> 6
7 NOTE 3 -- PROPERTY AND EQUIPMENT Property and equipment and related allowances for depreciation and amortization are summarized below: <TABLE> <CAPTION> SEPTEMBER 30, DECEMBER 31, -------------------------------- (In Thousands) 1997 1996 -------------------------------------------------------------------------- <S> <C> <C> Land and buildings $ 8,883 $ 7,155 Furniture and fixtures 4,220 4,907 Machinery and equipment 17,992 16,838 Information systems 16,505 4,693 Leasehold improvements 17,435 15,106 Construction in progress 41,964 32,298 --------- -------- Total property and equipment 106,999 80,997 Less: accumulated depreciation and amortization (24,658) (20,410) ========= ======== $ 82,341 $ 60,587 ========= ======== </TABLE> Construction in progress consists primarily of costs incurred in connection with construction of Nabi's biopharmaceutical facility and includes capitalized interest of $4,458 and $2,757 at September 30, 1997 and December 31, 1996, respectively. NOTE 4 -- NON-RECURRING CHARGES During the third quarter of 1997, Nabi incurred non-recurring charges of $5.7 million, comprised of $3.9 million for asset impairment losses, principally associated with Nabi's investment in Michigan Biologic Products Institute (MBPI) and $1.8 million related to streamlining initiatives within plasma operations. NOTE 5 -- NOTE PAYABLE Effective September 12, 1997, Nabi entered into a new credit agreement with its principal lenders which provides for a $50 million revolving line of credit facility, subject to certain borrowing base restrictions as defined in the agreement. Interest on borrowings accrue at the prime rate or a LIBOR option. The agreement matures in September, 2002 with two one year renewal options, requires maintenance of certain financial covenants, restricts the payment of dividends, and is secured by substantially all assets of the Company. Borrowings under the facility were $32 million at September 30, 1997. Effective November 14, 1997, Nabi amended its credit agreement to provide for the suspension or modification of certain financial covenants and the addition of a minimum net worth requirements through December 31, 1999. Under the terms of the amended agreement, Nabi's borrowing rate was increased to prime plus one quarter percent or the equivalent in the case of the LIBOR option. NOTE 6 -- RECLASSIFICATIONS Certain items in the consolidated financial statements for the 1996 period have been reclassified for comparative purposes. 7
8 NOTE 7 -- RECENT DEVELOPMENTS In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) Statement No. 128, "Earnings Per Share", which is effective for years ending after December 15, 1997. Nabi plans to adopt SFAS 128 in the fourth quarter of 1997. Implementation of the Statement is not expected to have a material adverse effect upon the Company's earnings per share. 8
9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - -------------------------------------------------------------------------------- The following is a discussion and analysis of the major factors contributing to Nabi's financial condition and results of operations for the three and nine month periods ended September 30, 1997 and 1996. The discussion and analysis should be read in conjunction with the condensed consolidated financial statements and notes thereto. All dollar amounts are expressed in thousands, except per share amounts. RESULTS OF OPERATIONS The following table sets forth Nabi's results of operations expressed as a percentage of sales: <TABLE> <CAPTION> THREE MONTHS ENDED NINE MONTHS ENDED, SEPTEMBER 30, SEPTEMBER 30, -------------------------------------------- 1997 1996 1997 1996 - ------------------------------------------------------------------------------------ ---------- <S> <C> <C> <C> <C> Sales 100.0 100.0% 100.0 100.0% Cost of products sold 82.1 77.7 77.5 76.6 ----- ----- ----- ----- Gross profit margin 17.9 22.3 22.5 23.4 Research and development expense 8.8 7.0 7.5 7.1 Selling, general and administrative expense 13.2 8.2 10.3 9.0 Royalty expense 3.7 2.0 2.6 2.0 Other operating expense 1.5 1.4 1.4 1.6 Non-recurring charges 10.7 -- 3.4 -- ----- ----- ----- ----- Operating income (loss) (20.0) 3.7 (2.7) 3.7 Interest and other income -- 0.5 0.1 0.6 Interest and other expense (2.3) (2.2) (1.9) (1.8) ----- ----- ----- ----- Income (loss) before (provision) benefit for income taxes and extraordinary charge (22.3) 2.0 (4.5) 2.5 (Provision) benefit for income taxes 7.4 (0.1) 1.8 (0.1) ----- ----- ----- ----- Income loss before extraordinary charge (14.9) 1.9 (2.7) 2.4 Extraordinary charge -- -- -- (0.5) ----- ----- ----- ----- Net income (loss) (14.9) 1.9% (2.7) 1.9% ===== ===== ===== ===== </TABLE> 9
10 Information concerning Nabi's sales by industry segment, for the respective periods, is set forth in the following table. <TABLE> <CAPTION> THREE MONTHS ENDED SEPTEMBER 30, --------------------------------------- Segment 1997 1996 - -------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> Plasma -Source $31,281 59.2% $29,951 52.0% -Specialty 9,869 18.7 19,547 33.9 ------- ----- ------- ----- 41,150 77.9 49,498 85.9 Immunotherapeutic products 10,666 20.2 6,571 11.4 Diagnostic products and services 1,033 1.9 1,566 2.7 ======= ===== ======= ===== Total $52,849 100.0% $57,635 100.0% ======= ===== ======= ===== </TABLE> <TABLE> <CAPTION> NINE MONTHS ENDED SEPTEMBER 30, ----------------------------------------- Segment 1997 1996 - ---------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> Plasma -Source $100,099 59.9% $ 88,778 51.1% -Specialty 40,451 24.2 63,559 36.5 -------- ----- -------- ----- 140,550 84.1 152,337 87.6 Immunotherapeutic products 23,157 13.9 16,973 9.8 Diagnostic products and services 3,434 2.0 4,559 2.6 ======== ===== ======== ===== Total $167,141 100.0% $173,869 100.0% ======== ===== ======== ===== </TABLE> THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 Sales. Sales for the third quarter of 1997 were $52.8 million compared to $57.6 million for the third quarter of 1996. Overall, revenues for the quarter were adversely affected by a decline in plasma sales attributable to several factors, notably the general disruption in the plasma industry due to the regulatory shut down of a major plasma processor; a shift in demand from specialty to source plasma; postponement of certain plasma shipments due to customer delays in obtaining necessary import licenses; and delays experienced in obtaining FDA licensure of certain plasma centers to sell anti-D plasma collected in these centers. The decline in plasma revenue was offset by a substantial increase in immunotherapeutic revenues over the comparable quarter in 1996 largely due to an increased demand for WinRho SDF(TM) and sales of Autoplex(R) T, a product which was acquired from Baxter Healthcare Corporation in May 1997. Gross profit margin. Gross profit and related margin for the third quarter of 1997 was $9.5 million, or 17.9% of sales, compared to $12.9 million, or 22.3% of sales, in the third quarter of 1996. Gross profit margins were adversely affected by several factors including a less favorable sales mix of specialty to source plasma and among specialty plasmas; under absorption of fixed overhead costs as a result of lower production levels in response to the general disruption in the plasma industry; and expenses associated with process improvement initiatives within plasma operations. Increased sales of higher margin immunotherapeutic products partially offset the overall decline in gross profit margin. Selling, general and administrative expense. Selling, general and administrative expense increased to $7.0 million, or 13.2% of sales during the third quarter of 1997 compared to $4.7 million or 8.2% of sales during the third quarter 1996. The increase related primarily to expenses associated with implementation and ongoing support of new information systems, and sales and marketing expenses associated with increased immunotherapeutic sales. 10
11 Royalty expense. Royalty expense increased to $1.9 million or 3.7% of sales during the third quarter of 1997 compared to $1.2 million or 2.0% of sales during the third quarter of 1996 primarily due to increased sales of WinRho SDF(TM) during the third quarter of 1997. Non-recurring charges. Nabi recognized approximately $5.7 million of non-recurring charges during the third quarter of 1997. These charges included $3.9 million of asset impairment losses, principally associated with Nabi's investment in Michigan Biologic Products Institute (MBPI), an alternative contract fractionation facility for the production of H-BIG(R). The non-recurring charge is appropriate in light of Nabi's new H-BIG(R) manufacturing agreement with Cangene Corporation. Streamlining initiatives within plasma operations contributed the remaining $1.8 million in non-recurring charges. Other factors. The benefit for income taxes was $3.9 million or an effective benefit rate of 33%, in the third quarter of 1997 compared to a tax charge of $46,000, or an effective tax rate of 4%, in the third quarter of 1996. The benefit for 1997 results from expected income tax refunds attributable to the carryback of net operating losses incurred in 1997 against prior years' taxable income. The effective tax rate for the third quarter of 1996 differs from the statutory rate primarily due to the utilization of previously reserved net operating loss carryforwards. NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 Sales. Sales for the nine months ended September 30, 1997 were $167.1 million compared to $173.9 million for the nine months of 1996. Overall, revenues for 1997 were adversely affected by a decline in plasma sales attributable to several factors, notably the general disruption in the plasma industry due to the regulatory shut down of a major plasma processor; and a shift in demand from specialty to source plasma. The decline in plasma revenue was offset by a substantial increase in immunotherapeutic revenues over the comparable nine months in 1996 largely due to an increased demand for WinRho SDF(TM) and sales of Autoplex(R) T, a product which was acquired from Baxter Healthcare Corporation in May 1997. Gross profit margin. Gross profit and related margin for the nine months of 1997 were $37.6 million, or 22.5% of sales, compared to $40.6 million, or 23.4% of sales, in the nine months of 1996. Gross profit margins were adversely affected by a less favorable sales mix of specialty plasma to source plasma and among specialty plasmas; under absorption of fixed costs as a result of lower production levels in response to the general disruption in the plasma industry; and expenses associated with process improvement initiatives within plasma operations. Increased sales of higher margin immunotherapeutic products partially offset the overall decline in gross profit margin. Selling, general and administrative expense. Selling, general and administrative expense increased to $17.2 million or 10.3% of sales during the nine months of 1997 compared to $15.6 million, or 9% of sales during the nine months of 1996. The increase related primarily to expenses associated with implementation and ongoing support of new information systems, and sales and marketing expenses associated with increased immunotherapeutic sales. Royalty expense. Royalty expense increased to $4.3 million or 2.6% of sales during the nine months of 1997 compared to $3.5 million or 2.0% of sales during the nine months of 1996 primarily due to increased sales of WinRho SDF(TM) in 1997. 11
12 Non-recurring charges. Nabi recognized approximately $5.7 million of non-recurring charges during the nine months of 1997. These charges included $3.9 million of asset impairment losses, principally associated with Nabi's investment in MBPI, an alternative contract fractionation facility for the production of H-BIG(R). The non-recurring charge is appropriate in light of Nabi's new H-BIG(R) manufacturing agreement with Cangene Corporation. Streamlining initiatives within plasma operations contributed the remaining $1.8 million in non-recurring charges. Interest and other expense, net. Interest and other expense, net for the nine months of 1997 was $3.0 million, or 1.8% of sales, compared to $2.2 million, or 1.3% of sales in the nine months of 1996. The increase was primarily attributable to lower average outstanding investments and related interest income when compared to 1996. Other factors. The income tax benefit for 1997 was $3.0 million or an effective benefit rate of 39.7%, compared to a tax charge of $.2 million, or an effective tax rate of 4% in the nine months of 1996. The benefit for 1997 results from expected income tax refunds attributable to the carryback of net operating losses incurred in 1997 against prior years' taxable income. The effective benefit rate of 39.7% for the nine months of 1997 differs from the statutory benefit rate of 35% primarily due to foreign trade income and a reduction in tax reserves established in prior periods, offset by the effect of non-deductible goodwill. The effective tax rate for 1996 differs from the statutory rate, primarily due to the utilization of previously reserved net operating loss carryforwards. The nine months of 1996 reflect an extraordinary charge of $.9 million, or $.03 per share, due to the recognition of debt issue costs associated with Nabi's early extinguishment of its bank debt through the application of a portion of the net proceeds of the 6.5% Convertible Subordinated Notes issued during the third quarter of 1996. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1997, Nabi's credit agreement provided for a $50 million revolving credit facility subject to certain borrowing base restrictions as defined in the agreement. Borrowings under the facility were $32 million and availability was approximately $8.4 million at September 30, 1997. Effective November 14, 1997, Nabi amended its credit agreement to provide for the suspension or modification of certain financial covenants and the addition of minimum net worth requirements through December 31, 1999. Under the terms of the amended agreement, Nabi's borrowing rate was increased to prime plus one quarter percent or the equivalent in the case of the LIBOR option. As of September 30, 1997, Nabi's current assets exceeded current liabilities by $72.8 million as compared to a net working capital position of $63.6 million at December 31, 1996. Projected capital expenditures for the remainder of 1997 include validation costs for manufacturing facilities, development and implementation of information systems and plasma center renovations. Nabi believes that cash on hand, cash flow from operations and available bank financing will be sufficient to meet its anticipated cash requirements for the remainder of 1997. FACTORS TO BE CONSIDERED The parts of this Quarterly Report on Form 10-Q captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Legal Proceedings" contain certain forward-looking statements which involve risks and uncertainties. Readers should refer to a discussion under "Factors to be Considered" contained in Nabi's Annual Report on Form 10-K for the year ended December 31, 1996 concerning certain factors that could cause Nabi's actual results to differ materially from the results anticipated in such forward-looking statements. Said discussion is hereby incorporated by reference into this Quarterly Report. 12
13 PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Nabi is a party to litigation in the ordinary course of business. There have been no material developments in any of the legal proceedings reported in Nabi's Annual Report on Form 10-K for the year ended December 31, 1996. Nabi does not believe that any such litigation will have a material adverse effect on its business, financial position or results of operations. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits <TABLE> <S> <C> <C> 11 Calculation of Earnings (Loss) Per Share..............................................15 10.27 $50 Million Loan and Security Agreement dated as of September 12, 1997 between Nabi, The Financial Institutions Party and NationsBank, N.A...................17 27 Financial Data Schedule (for SEC use only) </TABLE> c. Reports on Form 8-K: None 13
14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Nabi DATE: November 14, 1997 By: /s/ Alfred J. Fernandez ------------------------------ ALFRED J. FERNANDEZ Senior Vice President and Chief Financial Officer 14