10-Q 1 d96873e10-q.txt FORM 10-Q FOR QUARTER ENDED MARCH 31, 2002 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, 2002 Commission File No. 2-82655 -------------- ------- INTERWEST MEDICAL CORPORATION ----------------------------- (Exact name of registrant as specified in its charter) Oklahoma 75-1864474 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 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. 15,917,911 shares of Common Stock, $0.001 Par Value. INTERWEST MEDICAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31, 2002 2001 ------------ ------------ (Unaudited) ASSETS CURRENT ASSETS Cash $ 1,508,311 $ 1,412,024 Accounts receivable - trade 2,154,621 2,359,104 Income tax receivable 4,641 4,641 Investments - trading 1,992,300 1,477,949 Prepaid expenses and other receivables 162,122 86,637 ------------ ------------ Total current assets 5,821,995 5,340,355 PROPERTY AND EQUIPMENT, at cost Land 294,354 294,354 Buildings and improvements 3,960,924 3,960,924 Equipment and furniture 1,280,047 1,236,298 Oil and gas properties (successful efforts method of accounting) 182,636 170,489 ------------ ------------ 5,717,961 5,662,065 Less accumulated depreciation and depletion 2,335,342 2,272,882 ------------ ------------ 3,382,619 3,389,183 OTHER ASSETS Cash escrow accounts 30,022 27,888 Deferred financing costs, net 361,995 361,995 ------------ ------------ 392,017 389,883 ------------ ------------ TOTAL ASSETS $ 9,596,631 $ 9,119,421 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 47,290 $ 47,290 Accounts payable 2,357,382 1,736,400 Accrued expenses 377,289 596,627 ------------ ------------ Total current liabilities 2,781,961 2,380,317 DEFERRED TAX LIABILITY -- -- LONG-TERM DEBT 4,330,568 4,340,814 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) (1,583,434) (1,669,916) ------------ ------------ 3,535,311 3,448,829 Less cost of shares held in the treasury, 2002 - 6,082,089 shares; 2001 - 6,075,389 shares 891,209 890,539 Notes receivable - officer 160,000 160,000 ------------ ------------ 2,484,102 2,398,290 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,596,631 $ 9,119,421 ============ ============
See Accompanying Notes to Condensed Consolidated Financial Statements INTERWEST MEDICAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, 2002 2001 ------------ ------------ REVENUES Patient service revenue $ 3,103,423 $ 3,229,829 Other revenue 31,457 19,111 ------------ ------------ Total revenue 3,134,880 3,248,940 COSTS AND EXPENSES Professional care of patients 1,828,012 1,815,242 General services 619,400 571,031 Administrative services 450,563 533,573 Other costs 13,579 5,584 Depreciation, depletion and amortization 62,460 64,090 ------------ ------------ Income from operations 160,866 259,420 OTHER INCOME (EXPENSES) Investment income (loss) (1,131) (519,886) Interest income 5,847 7,356 Interest expense (79,100) (99,355) ------------ ------------ Income (loss) before taxes on income (loss) 86,482 (352,465) Provision for income taxes -- -- ------------ ------------ Net income (loss) $ 86,482 ($ 352,465) ============ ============ Weighted averages shares outstanding 15,923,494 15,930,111 ============ ============ Earnings (loss) per common share - basic and diluted $ 0.01 ($ 0.02) ============ ============
See Accompanying Notes to Condensed Consolidated Financial Statements INTERWEST MEDICAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, March 31, 2002 2001 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES $ 163,099 ($ 380,423) CASH FLOWS FROM INVESTING ACTIVITIES Payments for acquisition of property (55,896) (20,094) ------------ ------------ Net cash used in investing activities (55,896) (20,094) CASH FLOWS FROM FINANCING ACTIVITIES Purchase of treasury stock (670) -- Payments on borrowings (10,246) (10,985) ------------ ------------ Net cash used in financing activities (10,916) (10,985) ------------ ------------ Net increase (decrease) in cash 96,287 (411,502) CASH, beginning of period 1,412,024 885,513 ------------ ------------ CASH, end of period $ 1,508,311 $ 474,011 ============ ============
See Accompanying Notes to Condensed Consolidated Financial Statements 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, 2002, and its results of operations for the three months ended March 31, 2002 and 2001, and cash flows for the three months ended March 31, 2002 and 2001. 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. 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, 2002 and the condensed consolidated statements of operations for the three months ended March 31, 2002 and 2001, and cash flows for the three months ended March 31, 2002 and 2001, 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. 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, 2002, and the related condensed consolidated statements of operations for the three month periods ended March 31, 2002 and 2001, and cash flows for the three months ended March 31, 2002 and 2001. 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, 2001, 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 February 18, 2002, 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, 2001, 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 9, 2002 621 PART I - EXHIBIT I Item 2. Management's Discussion and Analysis of Financial Position and Results of Operations. Changes in Balance Sheet Accounts Current assets were $5,821,995 and total assets were $9,596,631 at March 31, 2002 as compared to $5,340,355 current assets and $9,119,421 total assets at December 31, 2001. Current liabilities were $2,781,961 at March 31, 2002 as compared to $2,380,317 at December 31, 2001. Results of Operations For the Three Months Ended March 31, 2002, operating revenue was $3,134,880; costs and expenses were $2,974,014, net income was $86,482 and interest income was $5,847, as compared to the Three Months Ended March 31, 2001, operating revenue of $3,248,940, costs and expenses of $2,989,520, net loss was ($352,465) and interest income of $7,356. Cash Flows For the Three Months Ended March 31, 2002, cash flows from operating activities were $163,099, cash flows from investing activities were ($55,896), cash flows from financing activities were ($10,916), net increase in cash was $96,287, cash at the beginning of the period was $1,412,024, and cash at the end of the period was $1,508,311 as compared to the Three Months Ended March 31, 2001, to cash flows from operating activities of ($380,423), cash flows from investing activities of ($20,094), cash flows from financing activities of ($10,985), net decrease in cash of ($411,052), cash at the beginning of the period of $885,513 and cash at the end of the period of $474,011. 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. 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 13, 2002