-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QX6RU5xPY3894DJiau/LyKYYEtTnJLkl44fetiAUzRtjdh9FuwnZv8OqTrd24KCo EgTC31VEPlXJydXDmt9HpQ== 0001047469-98-019952.txt : 19980515 0001047469-98-019952.hdr.sgml : 19980515 ACCESSION NUMBER: 0001047469-98-019952 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHYSIO CONTROL INTERNATIONAL CORP \DE\ CENTRAL INDEX KEY: 0001003088 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 911673799 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-27242 FILM NUMBER: 98619262 BUSINESS ADDRESS: STREET 1: 11811 WILLOWS RD NE CITY: REDMOND STATE: WA ZIP: 98052 BUSINESS PHONE: 2068674331 MAIL ADDRESS: STREET 1: 11811 WILLOWS ROAD NE CITY: REDMOND STATE: WA ZIP: 98052 FORMER COMPANY: FORMER CONFORMED NAME: PHYSIO CONTROL HOLDING CORP \DE\ DATE OF NAME CHANGE: 19951106 10-Q 1 10-Q - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________ FORM 10-Q __________________ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR THE QUARTERLY PERIOD ENDED COMMISSION FILE NUMBER: MARCH 31, 1998 0-27242 _________________________ PHYSIO-CONTROL INTERNATIONAL CORPORATION (Exact name of registrant as specified in its charter) WASHINGTON 91-1673799 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 11811 WILLOWS ROAD N.E. REDMOND, WASHINGTON 98052 (Address of principal executive offices) (425) 867-4000 (Registrant's telephone number, including area code) 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes X No ----- ----- As of April 20, 1998, there were 17,634,508 shares of the Registrant's Common Stock outstanding. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 1 - -------------------------------------------------------------------------------- FORM 10-Q MARCH 31, 1998
INDEX PAGE ----- ---- PART I. FINANCIAL INFORMATION ITEM 1. Consolidated Financial Statements - Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997 . . . . . . . . . . . . . . . . . . . . . 3 - Consolidated Statements of Earnings for the three months ended March 31, 1998 and 1997 . . . . . . . . . . . . . . . . . 4 - Consolidated Statement of Changes in Stockholders' Equity for the three months ended March 31, 1998 . . . . . . . . . . . 5 - Consolidated Statements of Cash Flows for the three months ended March 31, 1998 and 1997 . . . . . . . . . . . . . . . . . 6 - Notes to Consolidated Financial Statements . . . . . . . . . . 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . 9 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . 12 ITEM 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 12
2 PART I. FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
MARCH 31, 1998 DECEMBER 31, 1997 -------------- ----------------- (UNAUDITED) ASSETS CURRENT ASSETS Cash and cash equivalents $3,457 $4,340 Accounts receivable, net 42,717 39,161 Inventories, net 40,775 38,711 Prepaid expense 1,385 1,237 Prepaid income tax 358 Deferred income tax 2,463 2,463 ----------- ---------- Total current assets 91,155 85,912 ----------- ---------- NONCURRENT ASSETS Other assets 1,233 1,281 Deferred income tax 2,114 2,114 Property, plant and equipment, net 18,158 17,352 ----------- ---------- TOTAL ASSETS $112,660 $106,659 ----------- ---------- ----------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $15,649 $14,630 Accrued liabilities 16,546 17,103 Current portion of long-term debt 1,000 1,000 Income tax payable 1,140 ----------- ---------- Total current liabilities 33,195 33,873 ----------- ---------- NONCURRENT LIABILITIES Long-term debt 16,531 15,531 Unfunded pension obligation 901 1,051 ----------- ---------- Total noncurrent liabilities 17,432 16,582 ----------- ---------- Commitments and contingencies (Note 4) STOCKHOLDERS' EQUITY Preferred stock, par value $0.01 per share, 5,000,000 shares authorized, no shares issued or outstanding Common stock, voting, par value $0.01 per share, 40,000,000 shares authorized; 17,628,512 and 17,300,840 shares issued and outstanding, 176 173 respectively Additional paid-in capital 31,587 28,627 Retained earnings 30,246 27,430 Accumulated other comprehensive income 24 (26) ----------- ---------- Total stockholders' equity 62,033 56,204 ----------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $112,660 $106,659 ----------- ---------- ----------- ----------
.......................................................................... THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 3 - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF EARNINGS (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (UNAUDITED) ................................................................................
THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 1998 MARCH 31, 1997 ----------------- ---------------- Net sales $43,968 $40,727 Cost of sales 21,183 19,846 ----------------- ---------------- Gross margin 22,785 20,881 ----------------- ---------------- Research and development 4,951 5,237 Sales and marketing 10,149 8,854 General and administrative 3,133 2,014 ----------------- ---------------- Operating expense 18,233 16,105 ----------------- ---------------- Interest expense (414) (459) Other income (expense), net 194 (236) ----------------- ---------------- Other expense (220) (695) ----------------- ---------------- Income before income taxes 4,332 4,081 Income tax expense (1,516) (1,428) ----------------- ---------------- NET EARNINGS $2,816 $2,653 ----------------- ---------------- ----------------- ---------------- Basic earnings per common share $0.16 $0.16 Weighted average common shares outstanding 17,432,445 17,084,124 Diluted earnings per common and common equivalent share $0.16 $0.15 Weighted average number of common and common equivalent shares outstanding 17,917,751 17,747,189
.......................................................................... THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 4 - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) (UNAUDITED) ................................................................................
ACCUMULATED COMMON STOCK ADDITIONAL OTHER (VOTING) PAID-IN RETAINED COMPREHENSIVE SHARES DOLLARS CAPITAL EARNINGS INCOME TOTAL -------- ------- ------- -------- ------ -------- BALANCE AT DECEMBER 31, 1997 17,300,840 $173 $28,627 $27,430 $(26) $56,204 Issuance of common shares 61,766 1 818 819 Stock issued upon exercise of options 265,906 2 701 703 Income tax benefit from exercise of stock options 1,441 1,441 Comprehensive income: Net earnings 2,816 Other comprehensive income Foreign currency translation adjustments 50 Comprehensive income 2,866 ---------- ---------- --------- --------- -------- ---------- BALANCE AT MARCH 31, 1998 17,628,512 $176 $31,587 $30,246 $24 $62,033 ---------- ---------- --------- --------- -------- ---------- ---------- ---------- --------- --------- -------- ----------
.......................................................................... THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 5 - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED) ................................................................................
THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 1998 MARCH 31, 1997 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $2,816 $2,653 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: Depreciation and amortization 853 421 (Increase) decrease in receivables (3,556) 682 (Increase) decrease in inventories (2,064) (3,032) Decrease in prepaid income taxes 856 Increase in prepaid expense and other assets (505) (443) Increase (decrease) in accounts payable 1,019 2,106 Decrease in taxes payable (1,140) Decrease in accrued and other liabilities (707) (3,056) -------------- -------------- Net cash provided by (used in) operating activities (3,284) 187 -------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment (1,612) (1,732) -------------- -------------- Net cash used in investing activities (1,612) (1,732) -------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES Borrowings under revolving debt 15,106 14,862 Repayments on revolving debt (14,106) (13,757) Net proceeds from issuance of common stock 1,522 1,324 Income tax benefit from issuance of common stock 1,441 428 -------------- -------------- Net cash provided by financing activities 3,963 2,857 -------------- -------------- Effect of foreign currency translation 50 (324) -------------- -------------- Net increase (decrease) in cash and cash equivalents (883) 988 Cash and cash equivalents at beginning of period 4,340 3,336 -------------- -------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $3,457 $4,324 -------------- --------------
.......................................................................... THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 6 - -------------------------------------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (UNAUDITED) ................................................................................ NOTE 1. GENERAL The consolidated financial statements as of March 31, 1998 and for the three month period then ended are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. The consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 1997. The results of operations for the three months ended March 31, 1998 are not necessarily indicative of the results for the entire fiscal year ending December 31, 1998. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES EARNINGS PER SHARE Basic earnings per share is calculated as income available to common stockholders divided by the weighted average number of common shares outstanding during the periods. Diluted earnings per share is based on the weighted average number of shares of common stock and common stock equivalents outstanding during the periods, including options computed using the treasury stock method. All earnings per common share amounts from prior periods have been restated to conform with current period presentation. The difference between the weighted average number of common shares outstanding used to calculate basic earnings per share and the weighted average number of common and the weighted average number of common and common equivalent shares outstanding used to calculate diluted earnings per share is the incremental shares attributed to outstanding options to purchase common stock computed using the treasury stock method.
THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 1998 MARCH 31, 1997 -------------- -------------- Weighted average number of common shares outstanding 17,432,445 17,084,124 Effect of dilutive options 485,306 663,065 ---------- ---------- Weighted average number of common and common equivalent shares outstanding 17,917,751 17,747,189 ---------- ---------- ---------- ----------
RECENT ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board ("FASB") issued SFAS No. 130, "Reporting Comprehensive Income, " in June 1997. This statement establishes new standards for reporting and displaying comprehensive income in the financial statements. In addition to net income, comprehensive income includes charges or credits to equity that are not the result of transactions with shareholders. This statement is effective for fiscal years beginning after December 15, 1997. The Company has adopted this standard as of March 31, 1998. 7 - -------------------------------------------------------------------------------- NOTE 3. INVENTORIES Inventories consist of the following:
MARCH 31, 1998 DECEMBER 31, 1997 -------------- ----------------- Finished products $22,965 $22,665 Purchased parts and assemblies in process 10,406 7,544 Service parts 9,938 10,654 -------------- ----------------- 43,309 40,863 Less inventory allowances (2,534) (2,152) -------------- ----------------- TOTAL INVENTORIES $40,775 $38,711 -------------- ----------------- -------------- -----------------
NOTE 4. COMMITMENTS AND CONTINGENCIES LITIGATION The Company is party to certain legal actions arising in the ordinary course of its business. The Company's estimates of these exposures are based primarily on historical claims experience. The Company expects settlements related to these claims to be paid over the next several years. The majority of the costs associated with defending and disposing of these suits are covered by insurance. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the financial position of the Company. As disclosed in the Company's Annual Report on Form 10(K) for the year ended December 31, 1997, the Company and Heartstream, Inc. ("Heartstream") entered into a settlement agreement during October 1997. The settlement agreement dismissed with prejudice all previous lawsuits and claims between the Company and Heartstream. During May 1998, Heartstream initiated litigation against the Company that contends the Company violated the terms of the October 1997 settlement agreement. The Company had previously sent correspondence to Heartstream regarding violations of the Settlement Agreement by Heartstream, and has received no other response from Heartstream. The Company strongly believes that it has complied with the agreement and intends to vigorously defend itself against such claims. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - -------------------------------------------------------------------------------- This Management Discussion and Analysis of Financial Condition and Results of Operation may contain forward-looking statements that involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements due to many factors, including but not limited to, the effect of general economic conditions, including without limitation those in Asia/Pacific, the impact of competitive products and pricing, customer demand, product development, commercialization and technological difficulties, U.S. and foreign regulatory requirements, the effects of accounting policies and financing requirements, and other such risks and factors. RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 The Company reported worldwide sales of $44.0 million for the first quarter of 1998, reflecting an increase of $3.2 million or 8% from the comparable 1997 quarter. The increase was driven by higher demand for the Company's recently introduced LIFEPAK-Registered Trademark- 12 products as described below. For the three months ended March 31, 1998, domestic sales aggregated $31.8 million, up 7% compared to $29.6 million during the prior year period. International sales of $12.2 million were up 10% from the first three months of 1997 as sales volume growth resulting from LIFEPAK 12 shipments was only partly offset by a 6% decline from unfavorable European currency movements. International sales increases are attributed to a strong performance in France, Germany and Sweden while revenues in Latin America more than doubled. Worldwide equipment sales of $26.5 million remained consistent with the prior year quarter. Worldwide service and supplies revenue of $17.4 million increased 19% from the comparable prior year period. Supplies (disposable and accessories) revenue of $9.8 million increased 27% from 1997 due to higher sales of distributed goods (training materials and portable monitors in Europe) and strong demand for the Company's disposable products, primarily electrodes. Service revenue increased 11% from the comparable 1997 quarter. Revenues in the domestic hospital and out-of-hospital market segments both experienced growth in the current 1998 quarter, with hospital sales up 2% and out-of-hospital sales up 3% when compared to first quarter 1997 revenues. The Company obtained U.S. Food and Drug Administration approval under Section 510(k) in January 1998 for LIFEPAK 12 defibrillator/monitor products. Shipments of the new LIFEPAK 12 products commenced during March 1998 and have been well received within the market due to its size, therapeutic and diagnostic functions and flexibility of use by both out-of-hospital and hospital users. Gross margin of $22.8 million (51.8%) increased $1.9 million during the current quarter from $20.9 million (51.3%) reported in 1997. The increase in gross margin was driven by a favorable product mix, including LIFEPAK 12 product sales, partly offset by the impact of aggressive pricing in international markets to help counteract the effect of the strong U.S. dollar. Research and development ("R&D") expenditures totaled $5.0 million during the current quarter representing a decrease of $0.3 million from the comparable 1997 quarter. As a percentage of sales, R&D expenses decreased from 13% in the 1997 quarter to 11% during the 1998 quarter. R&D expenditures decreased due to lower LIFEPAK 12 product development expenditures. The Company has and will continue to invest in R&D activity, to meet its commitments to additional product development projects and to conduct ongoing research for future products and technology. Sales and marketing expenditures of $10.2 million increased 15% during 1998 from the comparable 1997 quarter. The increase resulted from enhanced sales and marketing efforts associated with the introduction and launch of the Company's new LIFEPAK 12 products. In addition, the Company has expanded its direct sales force by adding more sales representatives in the field, completed a territory realignment, as well as modified its commission program so that commission rates are more even 9 - -------------------------------------------------------------------------------- throughout the year, which impacted total commission expense during the first quarter of 1998. The Company continues to commit resources to develop innovative marketing strategies and gain marketshare. General and administrative ("G&A") expenditures of $3.1 million increased $1.1 million from the comparable 1997 quarter and as a percentage of sales, G&A expenses increased to 7% during the current quarter compared to 5% in the comparable 1997 quarter. The increase is attributable to higher depreciation expense related to the Company's new computer system completed at the end of the comparable 1997 quarter and 1998 bonus accruals. In addition, international G&A expenses also increased $0.3 million due to expansion of the European communication network and tax consulting work. Other expense includes interest expense on bank borrowings and other income. The comparable 1997 quarter includes unfavorable exchange losses and loss upon disposition of assets. The current quarter does not reflect any material amounts related to these transaction types but does include miscellaneous, non-operating income. As a result of the above factors, net earnings for the first quarter of 1998 were $2.8 million or $0.16 per share (basic and diluted), an increase of $0.2 million or 6% from the comparable 1997 quarter. LIQUIDITY AND CAPITAL RESOURCES For the three months ended March 31, 1998, the Company used $3.3 million in cash to finance operations compared with $0.2 million of cash provided by operations in the comparable 1997 quarter. During the current quarter, cash generated from net income was primarily offset by an increase in inventories and trade accounts receivable and a reduction in income taxes payable. Cash used for investing activities during the three months ended March 31, 1998 totaled $1.6 million. Capital expenditures during the quarter included manufacturing and engineering equipment related to LIFEPAK 12 products as well as additional computer equipment. The Company does not have any capital commitments outside the ordinary course of business. The Company's principal working capital requirements are financing accounts receivable and inventories. At March 31, 1998, the Company had net working capital of $57.8 million, including accounts receivable of $42.7 million, inventories of $40.8 million, accounts payable of $15.6 million, and other accruals totaling $16.5 million. The Company obtains its financing for operations through the use of a $30.0 million revolving bank credit facility (the "Agreement") of which up to $5.0 million may be used for issuance of standby letters of credit. The Agreement matures during May 2000. Interest on advances under the Agreement bear interest at the borrower's option, at either (i) LIBOR plus 0.5% or (ii) the reference rate (the higher of the lender's prime rate or federal funds rate plus 1%) or (iii) quoted rate (rate quoted by lender and accepted by borrower plus 0.5%). Such rates are subject to increase in the event that the Company does not meet the fixed charge coverage ratio as defined in the Agreement. At March 31, 1998, the interest rate on drawings under the Agreement was 6.7% and the outstanding balance on the Agreement was $15.0 million. At March 31, 1998, $14.9 million was available for future borrowings, after consideration of outstanding letters of credit of $0.1 million. The Agreement is secured by a first priority security interest in and lien on all of the accounts receivable and inventories of the Company (located in the United States) and is guaranteed by all material subsidiaries. The Company has subordinated notes payable to Lilly in connection with the acquisition of certain foreign assets. Notes with a principal balance of $1.5 million mature on January 31, 2001 and bear interest at LIBOR plus 3.25%. An additional note payable with a principal balance of $1.0 million matures November 15, 1998 and bears interest at LIBOR plus 3.0%. 10 - -------------------------------------------------------------------------------- The Company believes that, based upon current levels of operations and anticipated growth, funds generated from operations, together with other available sources of liquidity, including borrowings under the credit facility, will be sufficient over the next twelve months for the Company to make anticipated capital expenditures and fund working capital requirements. Approximately 28% of the Company's sales in the first quarter of 1998 were to international customers and the Company expects that sales to international customers will continue to represent a material portion of its sales. Certain of the Company's international receivables are denominated in foreign currency and exchange rate fluctuations impact the carrying value of these receivables. The Company has elected to hedge certain assets denominated in foreign currency with the purchase of forward contracts. Historically, fluctuations in foreign currency exchange rates have not had a material effect on the Company's results of operations and, together with certain hedging activities, the Company does not expect such fluctuations to be material in the foreseeable future. YEAR 2000 The Company has begun to review the impact of the Year 2000 upon its business environment and business products. The Company has recently completed a successful transition to a new, fully integrated, computer system with a heavy emphasis in the manufacturing process. The transition also included migration to a PC based, network environment. The new manufacturing and financial modules within the system are designed to deal with the Year 2000. The Company's European computer system, currently used for administrative purposes, is scheduled for a modest software upgrade that is Year 2000 compliant. This upgrade is scheduled for the beginning of 1999. Based on its initial assessment, the Company does not believe the software in the Company's products currently in the marketplace will be materially affected by the Year 2000. The Company has not yet determined the full effect this event may have on its customers, suppliers, and other business partners. RECENT ACCOUNTING PRONOUNCEMENTS In June, 1997, FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." SFAS No. 131 establishes new standards for reporting information about operating segments in interim and annual financial statements. This statement is effective for fiscal years beginning after December 15, 1997. The Company is currently evaluating the impact, if any, this statement will have on disclosures in the consolidated financial statements. EFFECT OF INFLATION Inflation generally affects the Company by increasing the interest expense of floating rate indebtedness and by increasing the cost of labor, equipment and raw materials. The Company does not believe that inflation has had any material effect on the Company's business over the past several years. 11 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is party to certain legal actions arising in the ordinary course of its business. The Company's estimates of these exposures are based primarily on historical claims experience. The Company expects settlements related to these claims to be paid over the next several years. The majority of the costs associated with defending and disposing of these suits are covered by insurance. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the financial position of the Company. As disclosed in the Company's Annual Report on Form 10(K) for the year ended December 31, 1997, the Company and Heartstream, Inc. ("Heartstream") entered into a settlement agreement during October 1997. The settlement agreement dismissed with prejudice all previous lawsuits and claims between the Company and Heartstream. During May 1998, Heartstream initiated litigation against the Company that contends the Company violated the terms of the October 1997 settlement agreement. The Company had previously sent correspondence to Heartstream regarding violations of the Settlement Agreement by Heartstream, and has received no other response from Heartstream. The Company strongly believes that it has complied with the agreement and intends to vigorously defend itself against such claims. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit No. Description of Exhibit - ----------- ---------------------- 27.1 Financial Data Schedule
No reports on Form 8-K were filed during the quarter ended March 31, 1998. 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 to sign on behalf of the registrant and as the principal financial officer thereof. Dated: May 1, 1998 PHYSIO-CONTROL INTERNATIONAL CORPORATION By /s/ Joseph J. Caffarelli -------------------------------- Joseph J. Caffarelli Executive Vice President and Chief Financial Officer 12 EX-27.1 2 EXHIBIT 27.1
5 1,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 3,457 0 42,717 0 40,775 91,155 23,253 5,095 112,660 33,195 0 0 0 176 61,857 112,660 43,968 43,968 21,183 21,183 18,233 0 414 4,332 1,516 2,816 0 0 0 2,816 0.16 0.16
-----END PRIVACY-ENHANCED MESSAGE-----