-----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, R/8Hbf5meQvtZuDXwkTjbAmZmdCEEbTwuURnh6OTWtjyW1kRLAQDhHxzbUF4aI5f iHP1jfcrNRdYNM3w+0+OqQ== 0000740726-99-000010.txt : 19990518 0000740726-99-000010.hdr.sgml : 19990518 ACCESSION NUMBER: 0000740726-99-000010 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LASER CORP CENTRAL INDEX KEY: 0000740726 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 870395567 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-13316 FILM NUMBER: 99625919 BUSINESS ADDRESS: STREET 1: 1832 S 3850 WEST CITY: SALT LAKE CITY STATE: UT ZIP: 84104 BUSINESS PHONE: 8019721311 MAIL ADDRESS: STREET 1: 1832 SOUTH 3850 WEST CITY: SALT LAKE CITY STATE: UT ZIP: 84104 10QSB 1 ============================================================================= United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark one) X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE --- ACT OF 1934 For the quarterly period ended March 31, 1999 or TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES --- EXCHANGE ACT OF 1934 For the transition period from to -------------- ------------- Commission File Number 0-13316 LASER CORPORATION ------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Utah 87-0395567 ------------------------------ --------------------------------- (State of Incorporation) (I.R.S. Employer Identification No.) 2417 South 3850 West Salt Lake City, UT 84120 ------------------------------ --------------------------------- (Address of principal (Zip Code) executive office) (801) 972-1311 ------------------------------------------------------------------- (Issuer's telephone number, including area code) Not Applicable ------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (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 ----- ----- State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. The number of shares outstanding of Registrant's Common Stock, par value $0.05 as of May 13, 1999 was 1,387,538 shares. ============================================================================= LASER CORPORATION AND SUBSIDIARIES INDEX PART I. FINANCIAL INFORMATION - ------- --------------------- Item 1. Financial Statements Consolidated Balance Sheets - March 31, 1999 and December 31, 1998. Consolidated Statements of Operations - Three months ended March 31, 1999 and 1998. Consolidated Statements of Cash Flows - Three months ended March 31, 1999 and 1998. Notes to Consolidated Financial Statements - March 31, 1999. Item 2. Management's Discussion and Analysis. PART II. OTHER INFORMATION -------- ----------------- Item 1. Legal Proceedings. Item 2. Changes in Securities and Use of Proceeds. Item 3. Defaults Upon Senior Securities. Item 4. Submission of Matters to a Vote of Security Holders. Item 5. Other Information. Item 6. Exhibits and Reports on Form 8-K. SIGNATURES - ---------- ============================================================================= PART I. FINANCIAL INFORMATION Item 1. LASER CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, December 31, ASSETS 1999 1998 Unaudited ------------ ----------- CURRENT ASSETS Cash and cash equivalents $ 216,664 $ 531,734 Net Receivables 428,447 319,091 Total Inventories 1,021,983 967,722 Other current assets 101,870 72,733 ------------ ---------- Total Current Assets 1,768,964 1,891,280 ------------ ---------- EQUIPMENT AND LEASEHOLD IMPROVEMENTS Equipment 1,606,117 1,591,972 Leasehold improvements 641,692 641,692 ------------ ----------- 2,247,809 2,233,664 Less accumulated depreciation and amortization (2,056,591) (2,020,863) ------------ ----------- 191,218 212,801 ------------ ----------- OTHER ASSETS 130,203 130,203 ------------ ----------- $ 2,090,385 $ 2,234,284 ============ =========== See accompanying notes to consolidated financial statements ============================================================================= LASER CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, December 31, 1999 1998 LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) ---------- ------------- CURRENT LIABILITIES Trade accounts payable $ 867,445 $ 756,078 Accrued expenses 231,106 201,599 Accrued warranty expense 115,000 115,000 ---------- ---------- Total Current Liabilities 1,213,551 1,072,677 ---------- ---------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common Stock, $.05 par value, Shares authorized - 10,000,000 Issued & Outstanding-1,400,038 shares at March 31, 1999 and December 31, 1998 respectively 70,003 70,003 Additional paid-in capital 1,327,583 1,327,583 Retained earnings (deficit) (420,752) (135,979) Treasury stock, at cost (100,000) (100,000) ---------- ---------- Total Stockholders' Equity 876,834 1,161,607 ---------- ---------- $2,090,385 $2,234,284 ========== ========== See accompanying notes to consolidated financial statements ============================================================================= LASER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended ----------------------- March 31, March 31, 1999 1998 ------------ ---------- REVENUES: Net sales $ 930,276 $ 858,393 Interest and other income 4,927 7,041 ---------- ---------- 935,203 865,434 COSTS AND EXPENSES: Cost of products sold 831,464 802,838 Selling, general, and administrative 247,654 211,516 Research and development 128,293 108,942 Royalties 12,565 10,672 ---------- ---------- 1,219,976 1,133,968 ---------- ---------- INCOME (LOSS) BEFORE INCOME TAXES (284,773) (268,534) INCOME TAX BENEFIT (EXPENSE) - CURRENT --- --- --------- --------- NET INCOME (LOSS) $ (284,773) $ (268,534) ========== ========== NET INCOME (LOSS) PER SHR $ (.21) $ (.31) ========== ========== Ave. number of shares of Common Stock outstanding 1,388,000 867,000 ========== ========== See accompanying notes to consolidated financial statements ============================================================================= LASER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (Unaudited) 1999 1998 ---------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (284,773) $(268,534) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 35,728 31,157 (Increase) Decrease in assets: Net receivables (109,356) 505,277 Inventories (54,261) 122,059 Other current assets (29,137) 14,563 Increase (decrease) in liabilities: Trade accounts payable and accrued expenses 140,874 (515,259) ---------- ---------- Net Cash Used in Operating Activities (300,925) (110,737) ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (14,145) (3,344) Payments received on long term notes 0 534,308 ---------- ---------- Net Cash Provided from Investing Activities (14,145) 530,964 ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: --- --- ---------- ---------- DECREASE IN CASH AND CASH EQUIVALENTS (315,070) 420,227 CASH AND CASH EQUIVALENTS, BEG. OF PERIOD 531,734 164,479 ---------- ---------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 216,664 $ 584,706 ========= ========== See accompanying notes to consolidated financial statements ============================================================================== LASER CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) March 31, 1999 NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-QSB and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 1999 are not necessarily indicative of the results that may be expected for the year ending December 31, 1999. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, 1998 included in the Company's Annual Report on Form 10-KSB (file number 0-13316). NOTE B - RECLASSIFICATIONS Certain 1999 financial statement amounts have been reclassified to conform to 1998 presentations. These amounts were not material reclassifications. NOTE C - WEIGHTED AVERAGE SHARES Loss per common share is computed using the weighted average number of common shares outstanding. Common equivalent shares consist of the Company's stock options and are considered to be antidilutive common stock eqivalents, determined using the treasury stock method. ============================================================================= ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION This report contains certain forward-looking statements and information relating to the Company that are based on the beliefs of management as well as assumptions made by, and information currently available to management. Such statements reflect the current view of the Company respecting future events and are subject to certain risks, uncertainties, and assumptions, including the risks and uncertainties noted throughout the document. Although the Company has attempted to identify important factors that could cause the actual results to differ materially, there may be other factors that cause the forward-looking statements not to come true as anticipated, believed, projected, expected, or intended. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those described herein as anticipated, believed, projected, estimated, expected, or intended. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere herein. RESULTS OF OPERATIONS --------------------- Three months ended March 31, 1999. Net sales for the three months ended March 31, 1999 were $930,276 as compared to $858,393 for the same period in 1998, an increase of $71,883 or 8%. This increase was a result of an increase in demand for the Company's laser products and services. Historically, the Company has experienced fluctuations in the demand for its laser product and service sales due in part to (i) changes in the quantity of Company products held in inventory by its customers, (ii) changes in demand for customer products which use the Company's products as a component part, (iii) the competitiveness, cost and customer use of alternative products, technologies or suppliers, and (iv) other factors. Laser product and service sales to two of the Company's three principal customers increased in the three month period ended March 31, 1999, as compared to the same period in 1998. Sales to (i) Company A totaled $499,646 and $332,671 in 1999 and 1998, respectively, (ii) Company B totaled $86,136 and $78,470 in 1999 and 1998 respectively, and (iii) Company C totaled $58,750 and $246,511 in 1999 and 1998, respectively. Laser product and service sales to all other customers for the three month period ending March 31, 1999 increased by $88,525 over the previous quarter. Medical laser system sales were $46,478 and $50,000 for the three months ended March 31, 1999 and 1998 respectively. Cost of products sold increased from $802,838 for the three month period ending March 31, 1998 to $831,464 for the same period in 1999, an increase of $28,626 or 4%. However, as a percentage of Company net sales, cost of products sold were 89% for the three months ended March 31, 1999 as compared to 94% for the same period in 1998, a decrease of 5%. ============================================================================= Selling, general, and administrative expenses for the three months ended March 31, 1999 were $247,654 as compared to $211,516 for the same period in 1998, an increase of $36,138 or 17%. This was primarily the result of increased marketing, consulting, legal, and FDA compliance activities relating to medical laser systems during the three months ended March 31, 1999 as compared to the same period in 1998. Research and development expenditures for the three months ended March 31, 1999 were $128,293 as compared to $108,942 for the same period in 1998, an increase of $19,351 or 18%. This increase was the result of the Company's continuing efforts focusing on laser based ophthalmic and dermatological medical systems, and to a lessor extent the product needs of certain of the Company's OEM customers. Royalty expenses increased from $10,672 for the three months ended March 31, 1998 to $12,565 for the same period in 1999, an increase of $1,893 or 18%. This increase was primarily the result of the increase in the volume of products sold. The Company recognized a net loss for the three months ended March 31, 1999 of $284,773 or $.21 per share compared to a net loss of $268,534 or $.31 per share for the same period in 1998. This difference was primarily a result of an increase in marketing, consulting, FDA compliance, and research and development activities relating to medical laser systems during the three months ended March 31, 1999 as compared to the same period in 1998, which was partially offset by a decrease in the cost of goods sold as a percentage of sales. LIQUIDITY AND CAPITAL RESOURCES On March 31, 1999, the Company had working capital of $555,412 as compared to $818,603 at December 31, 1998, a decrease of $263,191 or 32%. This decrease in working capital was primarily a result of the operating losses incurred by the Company during the three months ended March 31, 1999. Cash equivalents at March 31, 1999 were $216,664 compared to $531,734 on December 31, 1998, a decrease of $315,070 or 59%. During the quarter ending March 31, 1999 the Company entered into an agreement to lease a telephone system for 60 months with payments over the life of the lease totaling $33,217. The Company has no other material commitments for capital expenditures, and has not entered into any agreements for additional sources of borrowing or capital. YEAR 2000 ISSUE The Company is aware of the issues associated with programming codes in existing computer systems as the millennium (year 2000) approaches. The Company has completed the upgrading of its design engineering software and believes, but can give no assurance, that this software is Year 2000 compliant. However, the accounting and material management system is not compliant. The Company has conducted preliminary research into a replacement accounting and material management system. The Company plans to acquire and implement a new system in the third quarter 1999. If the new accounting and material management system is not implemented as ============================================================================= planned, the Company could be adversely affected beginning in the year 2000 since many computer applications could fail. The Company has requested or will request confirmations from the Company's principal vendors stating whether their systems are year 2000 compliant or what plans are being developed to address the issue. Management has not yet fully assessed the year 2000 compliance expense and related potential effect on the Company's earnings. PART II. OTHER INFORMATION ----------------- Item 1. Legal Proceedings. Not applicable. Item 2. Changes in Securities and Use of Proceeds. Not applicable. Item 3. Defaults Upon Senior Securities. Not applicable. Item 4. Submission of Matters to a Vote of Security Holders. Not applicable. Item 5. Other Information. Not applicable. Item 6. Exhibits and Reports on Form 8-K. Not applicable. ============================================================================ 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. LASER CORPORATION Date: May 14, 1999 /s/ B. Joyce Wickham --------------------- ------------------------------------ B. Joyce Wickham President, Chief Executive Officer Treasurer and Director Date: May 14, 1999 /s/ Todd G. Loosle -------------------- ------------------------------------ Todd G. Loosle Controller ============================================================================== 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. LASER CORPORATION Date: May 14, 1999 ----------------------- --------------------------------- B. Joyce Wickham President and Chief Executive Officer Treasurer and Director Date: May 14, 1999 ----------------------- -------------------------------- Todd G. Loosle Controller ============================================================================= -----END PRIVACY-ENHANCED MESSAGE-----