-----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, Ne1Fi4BIORHj03gxIJy514QwtYfkn0QhmSJCn46QTQy9pF9kkqR+klHy08I8Gk9c 4AXRQrNNS9NA8VjnfTtxWw== 0000910680-98-000294.txt : 19980807 0000910680-98-000294.hdr.sgml : 19980807 ACCESSION NUMBER: 0000910680-98-000294 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980806 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MEDICAL ALERT CORP CENTRAL INDEX KEY: 0000700721 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS BUSINESS SERVICES [7380] IRS NUMBER: 112571221 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 001-08635 FILM NUMBER: 98678142 BUSINESS ADDRESS: STREET 1: 3265 LAWSON BLVD CITY: OCEANSIDE STATE: NY ZIP: 11572 BUSINESS PHONE: 5165365850 MAIL ADDRESS: STREET 1: 3265 LAWSON BLVD CITY: OCEANSIDE STATE: NY ZIP: 11572 10QSB 1 AMERICAN MEDICAL ALERT 10QSB FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 1998 Commission File Number 1-8635 AMERICAN MEDICAL ALERT CORP. (Exact Name of Small Business Issuer as Specified in its Charter) New York 11-2571221 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 3265 Lawson Boulevard, Oceanside, New York 11572 (Address of principal executive offices) (Zip Code) (516) 536-5850 (Issuer's telephone number, including area code) Check whether the issuer (1) 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 Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 5,989,208 shares of $.01 par value common stock as of August 3, 1998. AMERICAN MEDICAL ALERT CORP. INDEX PART I FINANCIAL INFORMATION PAGE Item 1. Financial Statements. Condensed Balance Sheets for June 30, 1998 2 and December 31, 1997 Condensed Statements of Income for the 3 Six Months Ended June 30, 1998 and 1997 Condensed Statements of Income for the 4 Three Months Ended June 30, 1998 and 1997 Condensed Statements of Cash Flows for 5 the Six Months Ended June 30, 1998 and 1997 Notes to Condensed Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 7 PART II OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security-Holders. 8 Item 6. Exhibits and Reports on Form 8-K. 9 Item 1. Financial Statements. AMERICAN MEDICAL ALERT CORP. CONDENSED BALANCE SHEETS ASSETS
June 30,1998 December 31, (Audited) 1997* CURRENT ASSETS: Cash Accounts and notes receivable $ 476,460 $ 304,739 (net of allowance for doubtful accounts of $50,000 in '98 & $30,000 in '97) 1,701,634 1,574,738 Inventory 1,209,787 1,310,551 Prepaid expenses and other current assets 234,132 196,990 Deferred income tax benefit 93,000 97,000 ------------ ------------ Total Current Assets 3,715,013 3.484,018 ----------- ----------- FIXED ASSETS: (Net of accumulated depreciation and amortization) 4,150,311 3,732,849 OTHER ASSETS 228,455 34,761 ----------- ------------ TOTAL ASSETS $8,093,779 $7,251,628 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Note Payable Bank $ -0- $ 150,000 Accounts payable 260,795 161,795 Accrued expenses 133,211 139,802 Taxes payable 8,271 -0- Current portion of deferred income 4,700 -0- Current portion of long-term debt 116,985 9,056 ------------- ------------- Total Current Liabilities 523,962 460,653 ------------- ----------- DEFERRED INCOME TAX LIABILITY 318,000 318,000 DEFERRED INCOME 20,866 -0- LONG-TERM DEBT-LESS CURRENT MATURITIES 145,171 2,797 ------------ ----------- Total Liabilities 1,007,999 781,450 ----------- ---------- COMMITMENTS AND CONTINGENT LIABILITIES SHAREHOLDERS' EQUITY Common stock - $.01 par value; authorized - 10,000,000 shares; 59,668 59,045 issued - 5,966,783 shares in 1998 and 5,904,607 shares in 1997. 4,648,908 4,523,189 Additional paid-in capital 2,483,236 1,993,976 ----------- ----------- Retained Earnings 7,191,812 6,576,210 Less 43,910 shares in 1998 & 1997 of treasury stock, at cost (106,032) (106,032) ----------- ----------- Total Shareholders' Equity 7,085,780 6,470,178 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY See accompanying notes to condensed financial statements. $8,093,779 $7,251,628 ========== ==========
* Derived from audited financial statements -2- AMERICAN MEDICAL ALERT CORP. CONDENSED STATEMENTS OF INCOME (Unaudited)
Six Months Ended June 30 ------------------------ 1998 1997 ---- ---- Revenues: Services $ 3,730,217 $ 3,284,793 Product Sales 314,803 291,893 ------------- ------------- 4,045,020 3,576,686 ------------ ------------ Cost and Expenses (Income): Costs related to services 1,367,279 1,233,608 Costs of products sold 250,747 270,419 Selling, general and administrative expenses 1,542,238 1,355,578 Interest expense 10,096 23,934 Other income (3,600) (680) -------------- -------------- 3,166,760 2,882,859 ------------ ----------- Income before provision for income taxes 878,260 693,827 Provision for income taxes 389,000 305,700 ------------- ------------ NET INCOME $ 489,260 $ 388,127 ------------ =========== Net Income per share: Basic Diluted $ .08 $ .07 --------------- -------------- $ .08 $ .07 --------------- -------------- Weighted average number of common shares outstanding (Note 3) Basic Diluted 5,886,905 5,819,549 ============ ===========
See accompanying notes to condensed financial statements -3- AMERICAN MEDICAL ALERT CORP. CONDENSED STATEMENTS OF INCOME (Unaudited)
Three months Ended June 30, ------------------------------ < 1998 1997 ---- ---- Revenues: Services $ 1,907,792 $ 1,669,028 Product Sales 93,545 177,318 ------------ ----------- 2,001,337 1,846,346 Cost and Expenses (Income): Cost related to service 705,175 642,316 Costs of products sold 89,550 163,020 Selling, general and administrative expenses 791,025 650,759 Interest expense 3,548 11,104 Other Income (2,974) (334) ------------ ------------- 1,586,324 1,466,865 ---------- ---------- Income before provisions for income taxes 415,013 379,481 Provision for income taxes 181,000 166,700 ----------- ----------- NET INCOME $ 234,013 $ 212,781 ============= ============== Net income per share Basic $ .04 $ .04 ============= ============== Diluted $ .04 $ .04 ============= ============== Weighted average number of common shares outstanding (Note 3) Basic 5,902,094 5,834,425 ========== ========== Diluted 5,990,777 5,936,156 ========== ==========
See accompanying notes to condensed financial statements -4- AMERICAN MEDICAL ALERT CORP. CONDENSED STATEMENT OF CASH FLOWS (Unaudited)
Six Months Ended June 30 ------------------------- 1998 1997 ---- ---- Cash Flows From Operating Activities: Net Income $ 489,260 $ 388,127 Adjustments to reconcile net income to Net cash provided by operating activities Provision for bad debts 20,000 -0- Depreciation and amortization 477,709 357,580 Loss on unrecovered leased medical equipment 42,390 -0- Change in Assets and Liabilities: (Increase) in receivables (146,896) (204,468) Decrease in inventory 100,764 90,743 (Increase) in prepaid expenses, deferred taxes, and other assets (59,336) (156,375 (Increase) in accounts payable, accrued expenses, taxes payable and deferred income (126,246) (163,438 ---------- --------- Net Cash Provided by Operating Activities 797,645 312,169 Cash Flows from Investing Activities: Net expenditures for fixed assets (806,288) (469,347) Payment for account acquisitions 175,000 -0- Net Cash (Used In) Investing Activities 981,288 469,347 ------------- ------------- Cash Flows from Financing Activities: Repayment of bank borrowing (150,000) -0- Increase (Decrease) in loans payable 250,303 (4,455) Net Proceeds upon exercise of stock options 126,342 91,940 Sale/leaseback of equipment 128,719 -0- ------------- ------------- Net Cash Provided by Financing Activities 355,364 87,485 ------------- ------------ Net (Decrease) increase in Cash $ 171,721 $ (69,693) Cash, Beginning of Period 304,739 301,013 ------------- ------------- Cash, End of Period $ 476,460 $ 231,320 ============= ============= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: CASH PAID DURING THE PERIOD FOR INTEREST $ 10,096 $ 25,256 ========= ========= CASH PAID DURING THE PERIOD FOR INCOME TAXES $344,730 $207,129 ========== ==========
AMERICAN MEDICAL ALERT CORP. Notes to Condensed Financial Statements (Unaudited) 1. General: These financial statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 1997 included in the Company's Annual Report on Form 10-KSB. 2. Results of Operations: In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of June 30, 1998, and the results of operations and of cash flows for the six months ended June 30, 1998 and 1997. The accounting policies used in preparing these financial statements are the same as those described in the December 31, 1997 financial statements. The results of operations for the six months ended June 30, 1998 are not necessarily indicative of the results to be expected for any other interim period or for the full year. 3. Income Per Share: In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share" which changes the methodology of calculating earnings per share. SFAS No. 128 requires the disclosure of diluted earnings per share regardless of its difference from basic earnings per share. The Company adopted SFAS No. 128 in December 1997. Earnings per share data for the six months ended June 30, 1998 and 1997 have been stated to conform with this pronouncement. -6- AMERICAN MEDICAL ALERT CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (for the Six Months Ended June 30, 1998) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company's results of operations and financial condition. The discussion should be read in conjunction with the consolidated financial statements contained in the latest Annual Report dated December 31, 1997. This discussion contains forward-looking statements which, in addition to assuming a continuation of the degree and timing of customer utilization and rate of renewals of contracts with the Company at historical levels, are subject to a number of known and unknown risks that, in addition to general economic, competitive and other business conditions, could cause actual results, performance and achievements to differ materially from those described or implied in the forward-looking statements. Liquidity and Capital Resources On April 27, 1998, the Company renegotiated a $ 2,000,000 Revolving Credit Facility with a bank (based upon 75% of eligible accounts receivable and 25% of inventory, as defined) expiring May 31, 2000. The note bears interest at the lower of prime rate or LIBOR Rate plus 2.50% (as defined) and is collateralized by the Company's assets. There are no amounts outstanding under the Credit Facility as of July 31, 1998. The agreement provides for negative and affirmative covenants including those related to tangible net worth, working capital and other borrowings. During 1998, the Company anticipates that it will make capital investments of approximately $1,500,000 of which approximately $655,000 has been expended through June 30, 1998 for the purchase and production of additional systems the Company intends to rent. In addition, approximately $145,000 has been expended for the purchase of office and computer equipment used in operations. The Company has also entered into a sale/leaseback agreement for equipment. The Company believes that its present cash and working capital position, its borrowing availability and future anticipated income will be sufficient to meet its cash and working capital needs for the foreseeable future. Results of Operations Revenue from services increased $ 445,424 for the six months ended June 30, 1998 as compared to the same period in 1997, an increase of 14%. This increase resulted from the expansion of the Company's customer base for monthly monitoring and rental services. Costs related to services for the six months ended June 30, 1998 and 1997 were 37% and 38% respectively. Revenue from services increased $ 238,764 for the three months ended June 30, 1998 as compared to the same period in 1997, an increase of 14%. This increase resulted from the expansion of the -7- Company's customer base for monthly monitoring and rental services. Costs related to services for the three months ended June 30, 1998 and 1997 were 37% and 38% respectively. Revenue from product sales increased $ 22,910 for the six months ended June 30, 1998 as compared to the same period in 1997, an increase of 8%. The gross profit on product sales for the six months ended June 30, 1998 and 1997 was 20% and 7% respectively. Revenue from product sales decreased $ 83,773 for the three months ended June 30, 1998 as compared to the same period in 1997, a decrease of 47%. The gross profit on product sales for the three months ended June 30, 1998 and 1997 was 4% and 8% respectively. The decrease in product sales was a result of management's changing focus toward the growth of its subscriber base and rental income. Interest expense for the six months ended June 30, 1998 and 1997 was $10,096 and $25,236 respectively. Selling, general and administrative expenses as compared as a percentage of total revenues for the six months ended June 30, 1998 and 1997 were 38% and 38% respectively. Interest expense for the three months ended June 30, 1998 and 1997 was $3,548 and $11,104 respectively. Selling, general and administrative expenses as compared as a percentage of total revenues for the three months ended June 30, 1998 and 1997 were 40% and 35% respectively. PART II. - OTHER INFORMATION Item 4. Submission of matters to a Vote of Security Holders. On June 6, 1998, the Company held its 1998 Annual Meeting of Shareholders (the "1998 Meeting"). At the 1998 Meeting, the Company's shareholders elected five directors to serve until the 1999 Annual Meeting of Shareholders and until their respective successors shall be elected and qualified. The vote for such directors was as follows: For Withheld Howard M. Siegel 4,710,468 41,275 Peter Breitstone 4,714,893 16,850 Leonard Herz 4,712,793 18,950 Theodore Simon 4,710,893 20,850 Dennis Stern 4,716,093 15,650 The Company's shareholders voted with respect to the ratification and approval of Margolin, Winer & Evens, LLP as the Company's independent auditors for the year ending December 31, 1998. Approximately 99% of the votes cast with respect to the ratification and approval voted in favor of the proposal and accordingly, the proposal was approved. -8- Item 6. Exhibit and Reports on Form 8-K: (a) Exhibits: 27. Financial Data Schedule (b) Reports on Form 8-K: No reports on Form 8-K were filed. -9- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERICAN MEDICAL ALERT CORP. Dated: August 6, 1998 By: /s/ Howard M. Siegel -------------------- Howard M. Siegel President and Chief Operating Officer By: /s/ Corey M. Aronin ------------------- Corey M. Aronin Chief Financial Officer EXHIBIT INDEX Exhibit No. Description - ---------- ----------- 27. Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 AMERICAN MEDICAL ALERT CORP 0000700721 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 476,460 0 1,751,634 50,000 1,209,787 3,715,013 4,150,311 0 8,093,779 523,962 262,156 0 0 59,668 7,026,112 8,093,779 314,803 4,045,020 250,747 3,166,760 0 0 10,096 878,260 389,000 0 0 0 0 489,260 .08 .08
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