10-Q 1 d87348e10-q.txt FORM 10-Q FOR QUARTER ENDED MARCH 31, 2001 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 -------------------------------------------------------------------------------- FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 2001 Commission File No. 2-82655 -------------- ------- INTERWEST MEDICAL CORPORATION ----------------------------- (Exact name of registrant as specified in its charter) Oklahoma 75-1864474 --------------------------------- ------------------------------------ (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) Arlington Heights Professional Office Building 3221 Hulen Street, Suite C, Fort Worth, TX 76107-6193 ----------------------------------------------------- (Address of principal executive offices, zip code) Registrant's telephone number, including area code: (817)731-2743 ------------- 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 a court. (Not Applicable) Yes X No ----- ----- (APPLICABLE TO CORPORATE ISSUERS) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. 15,930,111 shares of Common Stock, $0.001 Par Value. 2 INTERWEST MEDICAL CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the Company's financial position as of March 31, 2001, and its results of operations for the three months ended March 31, 2001 and 2000, and cash flows for the three months ended March 31, 2001 and 2000. The results of operations for the period presented are not necessarily indicative of the results to be expected for a full year. 2. Income per share was computed by dividing the net income by the weighted average number of shares outstanding. 3 REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Weaver and Tidwell, L.L.P., Independent Certified Public Accountants, have performed a review of the condensed consolidated balance sheet as of March 31, 2001 and the condensed consolidated statements of operations for the three months ended March 31, 2001 and 2000, and cash flows for the three months ended March 31, 2001 and 2000, in accordance with established professional standards and procedures for such a review. All adjustments or additional disclosures proposed by Weaver and Tidwell, L.L.P. have been reflected in the data presented. The report of Weaver and Tidwell, L.L.P. commenting upon their review is included as Part I - Exhibit I. 4 INDEPENDENT ACCOUNTANT'S REVIEW REPORT To the Board of Directors InterWest Medical Corporation We have reviewed the condensed consolidated balance sheet of InterWest Medical Corporation as of March 31, 2001, and the related condensed consolidated statements of operations for the three month periods ended March 31, 2001 and 2000, and cash flows for the three months ended March 31, 2001 and 2000. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated statements referred to above, for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 2000, and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated March 5, 2001, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2000, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. /s/ WEAVER AND TIDWELL, L.L.P. Fort Worth, Texas May 11, 2001 605 5 PART I - EXHIBIT I INTERWEST MEDICAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31, 2001 2000 ------------ ------------ ASSETS CURRENT ASSETS Cash $ 474,011 $ 885,513 Accounts receivable - trade 2,558,148 2,485,753 Income tax receivable 898,736 898,736 Investments - trading 1,170,604 1,379,138 Prepaid expenses and other receivables 69,275 85,095 Deferred tax asset 305,077 305,077 ------------ ------------ Total current assets 5,475,851 6,039,312 PROPERTY AND EQUIPMENT, at cost Land 294,354 294,354 Buildings and improvements 3,958,924 3,958,924 Equipment and furniture 1,131,775 1,111,681 Oil and gas properties (successful efforts method of accounting) 166,949 166,949 ------------ ------------ 5,552,002 5,531,908 Less accumulated depreciation and depletion 2,102,937 2,038,847 ------------ ------------ 3,449,065 3,493,061 OTHER ASSETS Cash escrow accounts 62,414 59,213 Deferred financing costs, net 374,670 374,670 ------------ ------------ 437,084 433,883 ------------ ------------ TOTAL ASSETS $ 9,362,000 $ 9,966,256 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 43,938 $ 43,938 Accounts payable 1,464,060 1,561,384 Accrued expenses 512,017 655,499 ------------ ------------ Total current liabilities 2,020,015 2,260,821 DEFERRED TAX LIABILITY 95,550 95,550 LONG-TERM DEBT 4,377,119 4,388,104 STOCKHOLDERS' EQUITY Common stock, par value $0.001, authorized 50,000,000 shares, issued 22,000,000 shares 22,000 22,000 Additional paid-in capital 5,096,745 5,096,745 Retained earnings (deficit) (1,199,440) (846,975) ------------ ------------ 3,919,305 4,271,770 Less cost of shares held in the treasury, 2000 - 6,069,889 shares ; 1999 - 5,816,139 shares 889,989 889,989 Notes receivable - officer 160,000 160,000 ------------ ------------ 2,869,316 3,221,781 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,362,000 $ 9,966,256 ============ ============
See Accompanying Notes to Condensed Consolidated Financial Statements 6 INTERWEST MEDICAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, 2001 2000 ------------ ------------ REVENUES Patient service revenue $ 3,229,829 $ 3,173,602 Other revenue 19,111 22,722 ------------ ------------ Total revenue 3,248,940 3,196,324 COSTS AND EXPENSES Professional care of patients 1,815,242 1,729,566 General services 571,031 510,497 Administrative services 533,573 740,494 Other costs 5,584 15,713 Depreciation, depletion and amortization 64,090 61,015 ------------ ------------ Income from operations 259,420 139,039 OTHER INCOME (EXPENSES) Investment income (loss) (519,886) 541,626 Interest income 7,356 22,799 Interest expense (99,355) (94,909) ------------ ------------ Income (loss) before taxes on income (loss) (352,465) 608,555 Provision for income taxes -- 195,317 ------------ ------------ Net income (loss) $ (352,465) $ 413,238 ============ ============ Weighted averages shares outstanding 15,930,111 16,183,611 ============ ============ Earnings (loss) per common share - basic and diluted $ (0.02) $ 0.03 ============ ============
See Accompanying Notes to Condensed Consolidated Financial Statements 7 INTERWEST MEDICAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Months Ended March 31, March 31, 2001 2000 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES $ (380,423) $ (671,045) CASH FLOWS FROM INVESTING ACTIVITIES Payments for acquisition of property (20,094) (31,790) ---------- ---------- Net cash used in investing activities (20,094) (31,790) CASH FLOWS FROM FINANCING ACTIVITIES Purchase of treasury stock -- (175) Payments on borrowings (10,985) (34,478) ---------- ---------- Net cash used in financing activities (10,985) (34,653) ---------- ---------- Net increase (decrease) in cash (411,502) (737,488) CASH, beginning of period 885,513 947,420 ---------- ---------- CASH, end of period $ 474,011 $ 209,932 ========== ==========
8 Item 2. Management's Discussion and Analysis of Financial Position and Results of Operations. Changes in Balance Sheet Accounts Current assets were $5,475,851 and total assets were $9,362,000 at March 31, 2001 as compared to $6,039,312 current assets and $9,966,256 total assets at December 31, 2000. Current liabilities were $2,020,015 at March 31, 2001 as compared to $2,260,821 at December 31, 2000. Results of Operations For the Three Months Ended March 31, 2001, operating revenue was $3,248,940; costs and expenses were $2,989,520, net loss was ($352,465) and interest income was $7,356, as compared to the Three Months Ended March 31, 2000, operating revenue of $3,196,324, costs and expenses of $3,057,285, net income of $413,238 and interest income of $22,799. Cash Flows For the Three Months Ended March 31, 2001, cash flows from operating activities were ($380,423), cash flows from investing activities were ($20,094), cash flows from financing activities were ($10,985), net decrease in cash was ($411,502), cash at the beginning of the period was $885,513, and cash at the end of the period was $474,011 as compared to the Three Months Ended March 31, 2000, to cash flows from operating activities of ($671,045), cash flows from investing activities of ($31,790), cash flows from financing activities of ($34,653), net decrease in cash of ($737,488), cash at the beginning of the period of $947,420 and cash at the end of the period of $209,932. 9 PART II. OTHER INFORMATION Item 1. Legal Proceedings. Not applicable. Item 2. Changes in Securities. Not applicable. Item 3. Defaults upon Senior Securities. Not applicable. Item 4. Submission of Matters to a Vote of Securities Holders. Not applicable. Item 5. Other Information. Not applicable. Item 6. Exhibits and Reports on Form 8-K. (a) None. 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its half by the undersigned thereunto duly authorized. INTERWEST MEDICAL CORPORATION By: /s/ ARCH B. GILBERT ----------------------------------------- Arch B. Gilbert, President, Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer Date: May 14, 2001