-----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, EVZrgbzNt1oma6Tt23boP5dVcyqDVVVx38qUZR60AhF1++56MP+hdGYvriyBNRyL //DY7kNrStzkICkxNYxtWQ== 0000912057-96-009876.txt : 19960521 0000912057-96-009876.hdr.sgml : 19960521 ACCESSION NUMBER: 0000912057-96-009876 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAHAM FIELD HEALTH PRODUCTS INC CENTRAL INDEX KEY: 0000709136 STANDARD INDUSTRIAL CLASSIFICATION: 5047 IRS NUMBER: 112578230 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08801 FILM NUMBER: 96566340 BUSINESS ADDRESS: STREET 1: 400 RABRO DR E CITY: HAUPPAUGE STATE: NY ZIP: 11788 BUSINESS PHONE: 5165825800 FORMER COMPANY: FORMER CONFORMED NAME: PATIENT TECHNOLOGY INC DATE OF NAME CHANGE: 19880811 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (MARK ONE) [ x ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 1996 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 number 0-10881 NY GRAHAM-FIELD HEALTH PRODUCTS, INC. - - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 11-2578230 - - ----------------------------------------- ---------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 400 Rabro Drive East, Hauppauge, New York 11788 - - ----------------------------------------- ---------------------------- (Address of principal executive offices) (Zip Code) (516) 582-5900 - - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Not applicable - - ------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 ---- ---- Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court. Yes No ------ ------ Applicable Only to Corporate Issuers: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.025 Par Value--- 14,111,153 shares as of May 8, 1996 GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES I N D E X Part I. Financial Information: Page Item 1. Financial Statements: Condensed Consolidated Balance Sheets - March 31, 1996 (Unaudited) and December 31, 1995 (Audited) 3 Condensed Consolidated Statements of Operations for the three months ended March 31, 1996 and 1995 (Unaudited) 4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1996 and 1995 (Unaudited) 5/6 Notes to Condensed Consolidated Financial Statements 7/8/9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10/11/12 Part II. Other Information: Item 1. Legal Proceedings 12 Item 6. Exhibits and Reports on Form 8-K 12 Page 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements CONDENSED CONSOLIDATED BALANCE SHEETS GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES
March 31, December 31, ASSETS 1996 1995 ------ ------------- ------------- (unaudited) (audited) CURRENT ASSETS: Cash and cash equivalents $ 364,000 $ 214,000 Accounts receivable - net 22,989,000 21,936,000 Inventories 30,835,000 29,819,000 Other current assets 2,050,000 1,789,000 Recoverable and prepaid income taxes 217,000 221,000 ------------- ------------- TOTAL CURRENT ASSETS 56,455,000 53,979,000 PROPERTY, PLANT AND EQUIPMENT - net 7,835,000 8,120,000 EXCESS OF COST OVER NET ASSETS ACQUIRED - net 28,716,000 29,291,000 INVESTMENT IN LEVERAGED LEASE 486,000 487,000 OTHER ASSETS 5,683,000 4,910,000 DEFERRED TAX ASSET 2,594,000 3,012,000 ------------- ------------- TOTAL ASSETS $101,769,000 $99,799,000 ------------- ------------- ------------- ------------- LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Note payable to bank $ 100,000 $ 2,100,000 Current maturities of long-term debt and Guaranteed Senior Notes 2,590,000 1,578,000 Accounts payable 10,503,000 8,750,000 Acceptances payable 8,000,000 5,000,000 Accrued expenses 2,645,000 2,788,000 ------------- ------------- TOTAL CURRENT LIABILITIES 23,838,000 20,216,000 LONG-TERM DEBT 828,000 972,000 GUARANTEED SENIOR NOTES 17,000,000 19,000,000 ------------- ------------- TOTAL LIABILITIES 41,666,000 40,188,000 STOCKHOLDERS' EQUITY: Preferred Stock Common Stock 353,000 352,000 Additional paid-in capital 66,962,000 66,887,000 (Deficit) (7,118,000) (7,628,000) ------------- ------------- Sub-Total 60,197,000 59,611,000 Notes receivable from sale of shares (94,000) - ------------- ------------- TOTAL STOCKHOLDERS' EQUITY 60,103,000 59,611,000 ------------- ------------- COMMITMENTS AND CONTINGENCIES TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $101,769,000 $99,799,000 ------------- ------------- ------------- -------------
See notes to condensed consolidated financial statements. Page 3 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES (Unaudited)
Three Months Ended March 31 ------------------ 1996 1995 ----------- ----------- REVENUES: Operations $26,929,000 $24,491,000 Interest and other income 419,000 8,000 ----------- ----------- 27,348,000 24,499,000 COST AND EXPENSES: Cost of revenues 18,502,000 16,772,000 Selling, general and administrative 7,329,000 6,872,000 Interest expense 589,000 745,000 ----------- ----------- 26,420,000 24,389,000 ----------- ----------- INCOME BEFORE INCOME TAXES 928,000 110,000 INCOME TAXES 418,000 44,000 ----------- ----------- NET INCOME $ 510,000 $ 66,000 ----------- ----------- ----------- ----------- PER SHARE DATA: NET INCOME PER SHARE $ .04 $ .01 ----------- ----------- ----------- ----------- WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 14,182,000 12,950,000 ----------- ----------- ----------- -----------
See notes to condensed consolidated financial statements. Page 4 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES (Unaudited)
Three Months Ended March 31 ------------------ 1996 1995 ----------- ----------- OPERATING ACTIVITIES Net income $ 510,000 $ 66,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 794,000 841,000 Provision for losses on accounts receivable 132,000 73,000 Deferred income taxes 418,000 44,000 Gain on sale of product line (360,000) - Changes in operating assets and liabilities: Accounts receivable (1,185,000) 320,000 Inventories, other current assets and recoverable and prepaid income taxes (1,217,000) 3,644,000 Accounts and acceptances payable and accrued expenses 4,383,000 (2,896,000) ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 3,475,000 2,092,000 ----------- ----------- INVESTING ACTIVITIES Purchases of property, plant and equipment (97,000) (168,000) Notes receivable from officers (94,000) - Initial payment in connection with acquisition (500,000) - Proceeds from sale of product line 500,000 - Net (increase) decrease in other assets (78,000) 21,000 ----------- ----------- NET CASH USED IN INVESTING ACTIVITIES $ (269,000) $ (147,000) ----------- ----------- ----------- -----------
See notes to condensed consolidated financial statements. Page 5 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS--Continued GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES (Unaudited)
Three Months Ended March 31 ------------------ 1996 1995 ----------- ----------- FINANCING ACTIVITIES Proceeds from note payable to bank $ 500,000 $ 1,000,000 Payments on note payable to bank (2,500,000) (1,673,000) Principal payments on long term debt (1,132,000) (139,000) Proceeds on exercise of stock options 76,000 172,000 ----------- ----------- NET CASH USED IN FINANCING ACTIVITIES (3,056,000) (640,000) ----------- ----------- INCREASE IN CASH AND CASH EQUIVALENTS 150,000 1,305,000 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 214,000 121,000 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 364,000 $ 1,426,000 ----------- ----------- ----------- -----------
See notes to condensed consolidated financial statements. Page 6 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES (Unaudited) 1. GENERAL In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of March 31, 1996 (unaudited), the results of operations for the three months ended March 31, 1996 and 1995 (unaudited) and the statements of cash flows for the three months ended March 31, 1996 and 1995 (unaudited). Additionally, it should be noted that the accompanying financial statements and notes thereto do not purport to be complete disclosures in conformity with generally accepted accounting principles. While the Company believes that the disclosures presented are adequate to make the information contained herein not misleading, it is suggested that these financial statements be read in conjunction with the financial statements and the notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. Inventories at March 31, 1996 have been valued at average cost based on perpetual records or the gross profit method. Effective January 1, 1996, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." This standard establishes the accounting for the impairment of long-lived assets, certain identifiable intangibles and the excess of cost over net assets acquired, related to those assets to be held and used in operations, whereby impairment losses are required to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. SFAS No. 121 also addresses the accounting for long-lived assets and certain identifiable intangibles that are expected to be disposed of. The adoption of SFAS No. 121 did not have a material effect on the results of operations or financial condition of the Company. In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based Compensation," which requires adoption of the disclosure provisions no later than the fourth quarter of 1996. The new standard defines a fair value method of accounting for the issuance of stock options and other equity instruments. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. Pursuant to SFAS No. 123, companies are encouraged, but are not required, to adopt the fair value method of accounting for employee stock-based transactions. Companies are also permitted to continue to account for such transactions under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," but would be required to disclose in a note to the 1996 financial statements proforma net income and per share amounts as if the Company had applied the new method of accounting. SFAS No. 123 also requires increased disclosures for stock-based compensation arrangements. The Company has decided not to adopt the fair value method but will provide the necessary proforma information. The results of operations for the three months ended March 31, 1996 and 1995 are not necessarily indicative of results for the full year. Page 7 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--Continued GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES (Unaudited) 2. NET INCOME PER SHARE Net income per common share for 1996 and 1995 was computed using the weighted average number of common shares and dilutive common equivalent shares outstanding during the period. 3. INVENTORIES Inventories consist of the following:
March 31 December 31 1996 1995 ----------- ----------- Raw materials $ 2,905,000 $ 2,871,000 Work-in-process 1,678,000 1,620,000 Finished goods 26,252,000 25,328,000 ----------- ----------- $30,835,000 $29,819,000 ----------- ----------- ----------- -----------
4. INCOME TAXES Effective January 1, 1993, the Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("Statement No. 109"). Under Statement No. 109, the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. As of March 31, 1996, the Company has recorded net deferred tax assets of $2,594,000. These tax assets are primarily composed of net operating loss carryforwards and investment, research and development, jobs tax and alternative minimum tax credits. Based upon the Company's expectation that future taxable income will be sufficient to utilize the carryforwards prior to December 31, 2009, the Company has not recorded a valuation allowance on these deferred tax assets, except for an allowance of $55,000 related to tax assets recorded for acquired carryforwards. Future taxable income is expected to be derived from the Company's existing operations and the taxable gain which will be realized from the sale of the Company's Gentle Expressions-R- breast pump product line. The amount of the deferred tax asset considered realizable could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. 5. OTHER MATTERS On March 4, 1996, the Company sold its Gentle Expressions-R- breast pump product line for $1,000,000 of which $500,000 was paid in cash with the balance in a secured subordinated promissory note, and recorded a gain of $360,000, which is included in other revenue on the accompanying condensed consolidated statements of operations. Page 8 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--Continued GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES (Unaudited) In March 1996, the Company introduced a new regional operation under the name "GF Express" to provide "next-day" and "same-day" service to home healthcare dealers of certain strategic home healthcare products. In connection with the introduction of GF Express, the Company made an initial payment of $500,000 on March 16, 1996 to acquire certain assets at a future date of Jeffco Express Medical Supply, Inc. ("JEM"), including a customer list, certain contracts and other assets. As part of the transaction, the Company entered into a Management and Administrative Agreement pursuant to which JEM managed and administered GF Express for a management fee. The Company acquired the assets of JEM on May 14, 1996, and delivered a non- negotiable promissory note in the amount of $500,000 for the balance of the purchase price, which is payable within one year to JEM, subject to the attainment of certain financial criteria. 6. LEGAL PROCEEDINGS SEE PART II, ITEM 1 ON PAGE 11 Page 9 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition OPERATING REVENUES Operating revenues for the three months ended March 31, 1996 increased approximately $2,438,000 or 10%, as compared to the same period last year. The increase in operating revenues was primarily attributable to the Company's expansion of its Consolidation Advantage Program ("CAP") through its inventory buy-back program, the introduction of a new regional operation in the metropolitan New York area under the name "GF Express," and the Company's revenue growth in the international market. During the first quarter of 1996, the Company's inventory buy- back program was introduced to provide an outlet for its customers to eliminate their excess inventory. Under the program, the Company purchases certain excess inventory from its customers, who in turn place additional purchase orders with the Company exceeding the value of the excess inventory purchased. The Company is able to utilize its vast customer base and distribution network to market and distribute the excess inventory through its recently acquired division, National Medical Excess Corp. ("NME"). In March 1996, GF Express was introduced to offer "next day" and "same day" service to home healthcare dealers of certain strategic home healthcare products, including Temco patient aids, adult incontinence products, wheelchairs, and nutritional supplements. Revenues attributable to GF Express were approximately $733,000 for the first quarter of 1996. The Company's revenue growth in the international market increased by approximately 30% from $1,200,000 to $1,600,000. In April 1996, the Company entered into an agreement with a major Mexican distributor, which the Company believes will result in incremental revenues in 1996 and 1997. However, no assurances can be provided that the Company will achieve such incremental revenues under the agreement with the Mexican distributor. In addition, 1996 revenues include approximately $566,000 attributable to the operations of NME, which was acquired as of July 1, 1995. The revenue increase was achieved despite the decline in sales to Apria Healthcare Group, Inc. ("Apria") of approximately $1,500,000 as compared to the first quarter of 1995. The Company's supply agreement with Apria expired on December 31, 1995. INTEREST AND OTHER INCOME Interest and other income for the three months ended March 31, 1996 increased $411,000, as compared to the same period last year. The increase is primarily attributable to the gain of $360,000 recorded from the sale of the Gentle Expressions-R- breast pump product line. COST OF REVENUES Cost of revenues as a percentage of operating revenues for the three months ended March 31, 1996, remained relatively unchanged at 69%, as compared to the same period last year. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses as a percentage of operating revenues for the three months ended March 31, 1996 was 27%, as compared to 28% in the same period last year. The decrease is Page 10 primarily due to cost reduction programs and the continuing efficiencies generated by the investment in new business processing systems. INTEREST EXPENSE Interest expense for the three months ended March 31, 1996 decreased $156,000 or 21%, as compared to the same period last year. The decrease is primarily due to lower interest rates and decreased borrowings as compared to the same period last year. NET INCOME Income before income taxes for the three months ended March 31, 1996 was $928,000, as compared to $110,000 for the same period last year, an increase of $818,000. The increase is primarily due to the increase in revenues, the decrease in selling, general and administrative expenses as a percentage of operating revenue, the decrease in interest expense and the gain realized from the sale of the Gentle Expressions-R- breast pump product line. Net income for the three months ended March 31, 1996 was $510,000, as compared to $66,000 for the same period last year. The Company recorded income tax expense of $418,000 during the three month period ended March 31, 1996, as compared to $44,000 recorded during the 1995 period. As of March 31, 1996, the Company has recorded net deferred tax assets of $2,594,000, primarily comprised of net operating loss carryforwards and investment, research and development, jobs tax and alternative minimum tax credits. Based upon the Company's expectation that future taxable income will be sufficient to utilize the carryforwards prior to December 31, 2009, the Company has not recorded a valuation allowance on these deferred tax assets, except for an allowance of $55,000 related to tax assets recorded for acquired carryforwards. Future taxable income is expected to be derived from the Company's existing operations, and the taxable gain to be realized on the sale of the Company's Gentle Expressions-R- breast pump product line. The total deferred tax asset will continue to be evaluated by management as to its realizability on a quarterly basis. The amount of the deferred tax asset considered realizable could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. Uncertainties which may impact the future realizability but are not expected to occur, include a decline in sales and margins resulting from a possible loss of market share and increased competition. The Company's business has not been materially affected by inflation. LIQUIDITY AND CAPITAL RESOURCES The Company had working capital of $32,617,000 at March 31, 1996, as compared to $33,763,000 at December 31, 1995. The decrease in working capital is due to the reclassification of an additional $1,000,000 of principal related to the John Hancock Guaranteed Senior Notes, to reflect the scheduled principal payment of $2,000,000 due in February 1997, and the initial payment of $500,000 in connection with an acquisition, offset by working capital generated from the Company's operating profit of $510,000, which included $794,000 of depreciation and amortization expense. Cash provided by operations for the three months ended March 31, 1996 was $3,475,000, as compared to $2,092,000 in the same period last year. The principal reasons for the increase in cash provided by operations were the Company's operating profit and changes in operating assets and liabilities. The Company anticipates that its current cash balance together with expected cash flow from operations and the anticipated renewal of its bank line of credit will be sufficient to meet its working capital requirements. Page 11 FINANCING At March 31, 1996, the Company had an unsecured line-of-credit with a bank available for letters of credit, acceptances and short-term borrowings. The total amount available under the line-of-credit is $15,000,000. The line is available for the direct borrowings in the amount of up to $5,000,000, and provides for commercial letters of credit and bankers' acceptances. Credit availability under this line is subject to the bank's continuing satisfaction with current financial information. Although the line-of-credit by its terms expires on June 30, 1996, the Company anticipates that the line-of-credit will be renewed. Interest on direct borrowings is payable at the bank's prime rate plus 1%, acceptances are created for a fee of 1-1/2% above the bank's acceptance rate, and commercial letters of credit have a commission rate of 3/8% per drawing. At March 31, 1996, the Company had direct borrowings of $100,000 and $8,000,000 had been utilized under acceptances payable. Open letters of credit at March 31, 1996 relating to vendor purchases were $ 2,336,000. Part II. OTHER INFORMATION Item 1. Legal Proceedings There is no action, proceeding or investigation pending or threatened which has or may have a material affect on the condition (financial or otherwise), business, operations or properties of the Company. Item 6. Exhibits and Reports on Form 8-K Exhibit 10(kk). Amendment to Employment Agreement dated as of May 3, 1996, by and between the Company and Irwin Selinger. Page 12 S I G N A T U R E S 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. GRAHAM-FIELD HEALTH PRODUCTS, INC. (Registrant) Date: May 14, 1996 s/Irwin Selinger -------------------------------------- Irwin Selinger Chairman of the Board and Chief Executive Officer Date: May 14, 1996 s/Gary M. Jacobs -------------------------------------- Gary M. Jacobs Vice President - Finance Chief Financial and Accounting Officer Page 13 EX-10.KK 2 EXHIBIT 10.KK ITEM 6. EXHIBITS AND REPORTSON FORM 8-K EXHIBIT 10(KK) AMENDMENT TO EMPLOYMENT AGREEMENT DATED AS OF MAY 3, 1996 BY AND BETWEEN THE COMPANY AND IRWIN SELINGER AMENDMENT TO EMPLOYMENT AGREEMENT BETWEEN GRAHAM-FIELD HEALTH PRODUCTS, INC. AND IRWIN SELINGER AMENDMENT, dated as of May 3, 1996 (the "Amendment"), to the Employment Agreement dated as of July 8, 1981, as amended on June 19, 1991, by and between Graham-Field Health Products, Inc., a Delaware corporation (the "Corporation"), and Irwin Selinger ("Selinger"). W I T N E S S E T H: WHEREAS, the Corporation and Selinger are parties to an Employment Agreement dated as of July 8, 1981, as amended on June 19, 1991 (the "Employment Agreement"); WHEREAS, the Corporation and Selinger have agreed to amend and modify certain terms and provisions of the Employment Agreement; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto hereby agree to amend and modify the Employment Agreement as follows: 1. The term of the Employment Agreement, which is due to expire on July 8, 1996, shall be extended for an additional five (5) year period ending July 8, 2001 (the "New Term"). 2. Effective as of January 1, 1997 (the "Effective Date"), the Corporation shall pay Selinger an annual salary during the 1997 calendar year (the "Base Year") of $300,000 (the "New Base Salary"). The annual salary during each year of the New Term following the Base Year shall be such amount as the Corporation and Selinger shall agree upon and shall not be less than the New Base Salary increased in each subsequent year of the New Term by an amount which is determined by multiplying the New Base Salary by the percentage increase, if any, of the Consumer Price Index for all Urban Workers (New York - Northeastern New Jersey) (1967=100), issued by the Bureau of Labor Statistics of the United States Department of Labor (the "Index") for such subsequent year over the Index for the Base Year. The New Base Salary shall be payable in equal, or as nearly equal as may be practicable, installments not less frequently than semimonthly. The Employment Agreement, as amended, shall not be deemed abrogated or terminated if the Corporation, in its discretion shall determine to increase the compensation of Selinger for any period of time, or if Selinger shall accept such increase, but nothing shall be deemed to obligate the Corporation to make such increase. 3. In all other respects, all of the terms and provisions of the Employment Agreement shall remain in full force and effect during the New Term. -2- IN WITNESS WHEREOF, parties hereto have executed this Amendment this 3rd day of May 1996. GRAHAM-FIELD HEALTH PRODUCTS, INC. By: s/Richard S. Kolodny ---------------------------------- Richard S. Kolodny Vice President, General Counsel s/Irwin Selinger ---------------------------------- Irwin Selinger -3- EX-27 3 EXHIBIT 27 FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AT MARCH 31, 1996 AND THE CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1996 AS INCLUDED IN THE FORM 10Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1996 MAR-31-1996 364 0 22,989 0 30,835 56,455 7,835 0 101,769 23,838 17,828 0 0 353 59,750 101,769 26,929 27,348 18,502 18,502 7,329 0 589 928 418 510 0 0 0 510 .04 .04
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