-----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, QLF8g62yPHZr254Qt5lJVZ8HWTHW1Fnb07weZgsLLhGa6XWnfzblajCQvpbavrfr PG22XjLbRdHMY74bNq7eIA== 0000748618-95-000006.txt : 19951020 0000748618-95-000006.hdr.sgml : 19951020 ACCESSION NUMBER: 0000748618-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951019 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INFRASONICS INC CENTRAL INDEX KEY: 0000748618 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 953797283 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12998 FILM NUMBER: 95581654 BUSINESS ADDRESS: STREET 1: 3911 SORRENTO VALLY BLVD CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6194509898 MAIL ADDRESS: STREET 1: 3911 SORRENTO VALLEY BLVD CITY: SAN DIEGO STATE: CA ZIP: 92121 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 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 0-12998 INFRASONICS, INC (Exact name of registrant as specified in its charter) California 95-3797283 (State or other jurisdiction of (I.R.S.Employer incorporation or organization) Identification Number) 3911 Sorrento Valley Blvd. San Diego, California 92121 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (619) 450-9898 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 Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date: 10,443,900 shares of Common Stock as of October 10, 1995. Infrasonics, Inc. Index to Form 10-Q
PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements PAGE Condensed Consolidated Balance Sheets (unaudited) September 30, 1995 and June 30, 1995 3 Condensed Consolidated Statements of Income (unaudited) Three Months Ended September 30, 1995 and 1994 4 Condensed Consolidated Statements of Cash Flows (unaudited) Three Months Ended September 30, 1995 and 1994 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION 8 SIGNATURES 8
Item 1. Condensed Consolidated Financial Statements
INFRASONICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) September 30, June 30, 1995 1995 ___________ ___________ Current assets: Cash and equivalents $ 4,807,500 $ 4,748,900 Short-term investments 1,920,700 989,300 Accounts receivable 6,205,900 6,355,300 Inventories 6,442,500 6,313,000 Other current assets 441,400 203,500 ___________ ___________ Total current assets 19,818,000 18,610,000 Equipment, furniture and fixtures, net of accumulated depreciation 2,453,700 2,538,500 Computer software costs, net of accumulated amortization 2,177,100 2,231,500 Intangible assets and other assets 3,533,600 3,573,800 ___________ ___________ Total assets $27,982,400 $26,953,800 =========== =========== Liabilities & Shareholders' Equity Current liabilities: Accounts payable $ 401,100 $ 274,100 Accrued liabilities 1,422,000 1,119,700 ___________ ___________ Total current liabilities 1,823,100 1,393,800 Shareholders' Equity: Preferred shares, none issued - - Common shares, no par value; 10,436,900 shares issued and outstanding ( 10,339,400 at June 30, 1995) 26,352,400 26,083,700 Deferred consulting expense (83,200) (110,800) Retained earnings (109,900) (412,900) __________ __________ Total shareholders' equity 26,159,300 25,560,000 Total liability and shareholders' equity $27,982,400 $26,953,800 =========== ===========
See accompanying notes.
INFRASONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three months ended September 30, 1995 1994 ___________ ___________ Revenues Net sales $ 6,255,600 $ 4,592,000 Interest income 74,900 40,600 ___________ ___________ Total revenues 6,330,500 4,632,600 Costs and expenses Cost of sales 3,253,800 2,426,200 Engineering, research and development 561,600 532,700 Selling, general and administrative 2,041,700 1,666,500 ___________ ___________ Total costs and expenses 5,857,100 4,625,400 Income before income taxes 473,400 7,200 Provision for income taxes 170,400 2,600 ___________ ___________ Net income $ 303,000 $ 4,600 =========== =========== Net income per share $ .03 $ .00 =========== =========== Shares used in calculation of net income per share 10,783,400 10,466,600
See accompanying notes.
INFRASONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three months ended September 30, 1995 1994 ___________ ___________ Operating activities: Net income $ 303,000 $ 4,600 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 431,500 391,500 Changes in operating assets and liabilities 202,100 938,600 ___________ ___________ Net cash flows from operating activities 936,600 1,334,700 Investment activities: Changes in short-term investments (931,400) 1,028,700 Additions to equipment, furniture and fixtures (120,100) (146,400) Additions to computer software costs (69,400) (175,400) Changes in other assets (25,800) (38,200) ___________ ___________ Net cash flows from investing activities (1,146,700) 668,700 Financing activities: Exercise of stock options 268,700 - Net change in cash and cash equivalents 58,600 2,003,400 Cash and cash equivalents at beginning of period 4,748,900 2,697,300 ___________ ___________ Cash and cash equivalents at end of period $ 4,807,500 $ 4,700,700 =========== ===========
See accompanying notes. INFRASONICS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The condensed consolidated financial statements of Infrasonics, Inc. (the "Company") for the three month periods ended September 30, 1995 and 1994 are unaudited. These financial statements reflect all adjustments, consisting of only normal recurring adjustments which in the opinion of management, are necessary to fairly present the financial position at September 30, 1995 and the results of operations for the three-month periods ended September 30, 1995 and 1994. The results of operations for the three months ended September 30, 1995 are not necessarily indicative of the results to be expected for the year ending June 30, 1996. For more complete financial information, these financial statements, and the notes thereto, should be read in conjunction with the audited financial statements for the year ended June 30, 1995 included in the Company's Form 10-K filed with the Securities and Exchange Commission.
2. Inventory consisted of: September 30, June 30, 1995 1995 ___________ ___________ Raw Materials $ 2,772,500 $ 2,864,500 Work in Process 1,083,600 947,000 Finished Goods 2,586,400 2,501,500 ___________ ___________ $ 6,442,500 $ 6,313,000 =========== ===========
3. Income Taxes For the three months ended September 30, 1995 and 1994, income taxes have been provided based on the estimated annualized effective tax rate applied to pretax income for interim periods. The estimated effective rate is less than the federal and state statutory rates principally due to the benefits of estimated tax credits, net operating loss carryforwards and the use of a Foreign Sales Corporation for the Company's export sales. 4. Per Share Information Net income per common share has been computed using the weighted average number of common shares and dilutive common share equivalents outstanding during each period presented. Common share equivalents result from outstanding options and warrants to purchase common shares. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Revenues Net sales and cost of sales were $6,255,600 and $3,253,800, respectively for the quarter ended September 30, 1995, as compared to $4,592,600 and $2,426,200, respectively, for the corresponding quarter of the prior fiscal year. For the three months ended September 30, 1995, net sales increased 36% over the same period from the prior year. The growth was due to the the increased number of units of the Company's products sold as well as increased penetration of foreign markets. The current health care reform trends consisting of cost containment and consolidation may continue to affect product sales adversely, although the Company is unable to determine the potential effect on revenues and profits at this time. In addition, variances in quarterly results, government regulation, competitive conditions, and changes in third party reimbursement present certain other risks to operating results which are more fully described in the Company's 1995 10-K and Annual Report to Shareholders. For the three months ended September 30, 1995, cost of sales were 52% of sales, down from 53% for the same period last year. The decrease in cost of sales as a percentage ofsales is primarily the result of the Company's continuing efforts to control costs in manufacturing and purchasing along with an increase in certain product prices. The cost of sales percentage may change in the future as a result of the mix of products sold. Expenses Engineering, research and development expenses increased to $561,600 for the three months ended September 30, 1995, as compared to $532,700 for the corresponding period ended September 30, 1994. This represents a decrease from 12% of net sales in the quarter ended September 30, 1994 to 9% in the quarter ended September 30, 1995 primarily due to the higher level of sales. The $28,900 increase in expenses resulted from continued work on new products as well as improvements to existing ventilators. Selling, general and administrative expenses were $2,041,700 for the three month period ending September 30, 1995. For the corresponding period in the prior fiscal year, selling, general and administrative expenses were $1,666,500. The increase in spending of $375,200 is primarily due to the addition of sales personnel. As a percentage of net sales, these expenses decreased from 36% in the three months ended September 30, 1994 to 33% in the same period in 1995 as a result of increased sales levels. Liquidity and Capital Resources At September 30, 1995, the Company had working capital of $17,994,900 which is up $778,700 from the $17,216,200 on June 30, 1995. Cash and cash flow from operations were both up from June 30, 1995 due to profitability and an increase in liabilities. Management believes that its present sources of liquidity should be sufficient to finance operations over the next year and may be used to fund acquisitions of complimentary businesses, products or technologies in related industries. Long-term liquidity is dependent upon results of operations and the level of funding necessary to market existing and new products. The need for additional equity or debt financing at some point in the future is therefore possible. Part II OTHER INFORMATION 6.(b) Exhibits and Reports on Form 8-K. No reports were filed on Form 8-K during the preceding quarter. 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. INFRASONICS, INC. Date: October 16,1995 /s/ Jim Hitchin Jim Hitchin President, Treasurer, Chairman of the Board /s/ Fred McGee Fred McGee Vice President, Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----