-----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, KMr4vrWs4CkXf739NYwbcLobIrrRnvkpxVlIQZbhVtAji2c1zdw/YxvEd5l2LdjI EvmF3IXWVX52yk2m0BxL1Q== 0000748618-96-000012.txt : 19960129 0000748618-96-000012.hdr.sgml : 19960129 ACCESSION NUMBER: 0000748618-96-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960126 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: 96507663 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 10-Q FOR SECOND QTR FY96 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 December 31, 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: 10,522,600 shares of Common Stock as of January 15, 1996. Infrasonics, Inc. Index to Form 10-Q
PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements PAGE Condensed Consolidated Balance Sheets (unaudited) December 31, 1995 and June 30, 1995 3 Condensed Consolidated Statements of Income (unaudited) Three and Six Months Ended December 31, 1995 and 1994 4 Condensed Consolidated Statements of Cash Flows (unaudited) Six Months Ended December 31, 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 Exhibit 27. Financial Data Schedule 9
Item 1. Condensed Consolidated Financial Statements
INFRASONICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) December 31, June 30, 1995 1995 ___________ ___________ Current assets: Cash and equivalents $ 5,113,100 $ 4,748,900 Short-term investments 2,016,100 989,300 Accounts receivable 5,329,500 6,355,300 Inventories 7,446,000 6,313,000 Other current assets 386,100 203,500 ___________ ___________ Total current assets 20,290,800 18,610,000 Equipment, furniture and fixtures, net of accumulated depreciation 2,604,600 2,538,500 Computer software costs, net of accumulated amortization 2,123,700 2,231,500 Intangible assets and other assets 3,576,600 3,573,800 ___________ ___________ Total assets $28,595,700 $26,953,800 =========== =========== Liabilities & Shareholders' Equity Current liabilities: Accounts payable $ 378,100 $ 274,100 Accrued liabilities 1,426,600 1,119,700 ___________ ___________ Total current liabilities 1,804,700 1,393,800 Shareholders' Equity: Preferred shares, none issued - - Common shares, no par value; 10,519,600 shares issued and outstanding ( 10,339,400 at June 30, 1995) 26,553,700 26,083,700 Deferred consulting expense (55,600) (110,800) Retained earnings 292,900 (412,900) __________ __________ Total shareholders' equity 26,791,000 25,560,000 Total liability and shareholders' equity $28,595,700 $26,953,800 =========== ===========
See accompanying notes.
INFRASONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three months ended Six months ended December 31, December 31, 1995 1994 1995 1994 ___________ ___________ ___________ ___________ Revenues Net sales $ 5,867,600 $ 5,650,900 $12,123,200 $10,242,900 Interest income 88,800 59,300 163,700 99,900 ___________ ___________ ___________ ____________ Total revenues 5,956,400 5,710,200 12,286,900 10,342,800 Costs and expenses Cost of sales 2,590,400 3,344,700 5,844,200 5,770,900 Engineering, research and development 390,400 442,100 952,000 974,800 Selling, general and administrative 2,346,100 3,004,300 4,387,800 4,670,800 ___________ ___________ ___________ ___________ Total costs and expenses 5,326,900 6,791,100 11,184,000 11,416,500 Income before income taxes 629,500 (1,080,900) 1,102,900 (1,073,700) Provision for income taxes 226,700 (2,600) 397,100 -0- ___________ ___________ ___________ ___________ Net income $ 402,800 $(1,078,300) 705,800 (1,073,700) =========== =========== =========== =========== Net income per share $ .04 $ <.10> .07 <.10> =========== =========== =========== =========== Shares used in calculation of net income per share 10,790,000 10,427,700 10,736,900 10,427,000
See accompanying notes.
INFRASONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Six months ended December 31, 1995 1994 ___________ ___________ Operating activities: Net income $ 705,800 $(1,073,700) Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 833,300 779,000 Changes in operating assets and liabilities 112,000 1,915,600 ___________ ___________ Net cash flows from operating activities 1,651,100 1,620,900 Investment activities: Changes in short-term investments (1,026,900) 1,014,800 Additions to equipment, furniture and fixtures (445,700) (327,000) Additions to computer software costs (139,700) (205,400) Changes in other assets (144,500) (129,000) ___________ ___________ Net cash flows from investing activities (1,756,800) 353,400 Financing activities: Exercise of stock options 469,900 8,200 Net change in cash and cash equivalents 364,200 1,982,500 Cash and cash equivalents at beginning of period 4,748,900 2,697,300 ___________ ___________ Cash and cash equivalents at end of period $ 5,113,100 $ 4,697,800 =========== ===========
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 and six- month periods ended December 31, 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 December 31, 1995 and the results of operations for the three and six-month periods ended December 31, 1995 and 1994. The results of operations for the three and six months ended December 31, 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: December 31, June 30, 1995 1995 ___________ ___________ Raw Materials $ 2,615,800 $ 2,864,500 Work in Process 1,202,800 947,000 Finished Goods 3,627,300 2,501,500 ___________ ___________ $ 7,446,000 $ 6,313,000 =========== ===========
3. Income Taxes For the three and six months ended December 31, 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. For the three and six months ended December 31,1994, the common share equivalents are antidilutive. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Revenues Net sales and cost of sales were $5,867,600 and $2,590,400, respectively for the quarter ended December 31, 1995, as compared to $5,650,900 and $3,344,700, respectively, for the corresponding quarter of the prior fiscal year. For the six months ended December 31, 1995 and 1994, net sales were $12,123,200 and $10,242,900, respectively, and the cost of sales for those periods were $5,844,200 and $5,770,900, respectively. The growth in sales was due to the increased number of units of the Company's products sold as well as increased penetration of foreign markets. The Company believes that healthcare reform issues continue to impact sales growth (as compared to historical trends) although to a lesser degree than recent prior years. The current health care reform climate 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 and six-months ended December 31, 1995, cost of sales were 44% and 48%,respectively, of net sales, down from 56% and 59%, respectively, for the same periods in fiscal year 1994. The decrease in cost of sales as a percentage of sales 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 decreased to $390,400 and $952,000 for the three and six months ended December 31, 1995, as compared to $442,100 and $974,800 for the corresponding periods ended December 31, 1994. The decrease is the result of project completions and continuing cost-control programs. These expenses may fluctuate based on the timing of future engineering activities. Selling, general and administrative expenses were $2,346,100 and $4,387,800 for the three and six-month periods ending December 31, 1995, respectively. For the corresponding periods in the prior fiscal year, selling, general and administrative expenses were $3,004,300 and $4,670,800. The decrease in spending is primarily due to expense reduction measures. Liquidity and Capital Resources At December 31, 1995, the Company had working capital of $18,486,100 which is up $1,269,900 from the $17,216,200 on June 30, 1995, due primarily to an increase in cash flow from operations and cash from stock option exercises, partially offset by capital investments. 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 4. Voting results for Annual Meeting held October 19, 1995. Voting results for Directors were as follows: Name of nominee For Withheld _______________ _________ _________ Harry Casari 9,033,477 45,788 Janet Colson 9,033,177 46,088 Jim Hitchin 9,026,377 52,888 Robert Hovee 9,033,327 45,938 E. A. Vanderpool 9,033,327 47,938 Voting results for the 1995 Stock Option Plan were: For Against Withheld _________ _______ ________ 8,706,122 289,200 83,943 Except for votes withheld, there were no other abstentions or broker non-votes. 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: January 16,1996 /s/ Jim Hitchin Jim Hitchin President, Treasurer, Chairman of the Board /s/ Fred McGee Fred McGee Vice President, Chief Financial Officer EX-27 2 ART 5 FDS FOR 2ND QTR 10-Q FY96
5 1 6-MOS JUN-30-1996 DEC-31-1995 5,113,100 2,016,100 5,329,500 0 7,446,000 20,290,800 5,442,900 2,838,300 28,595,700 1,804,700 0 26,553,700 0 0 237,300 28,595,700 12,123,200 12,286,900 5,844,200 11,184,000 0 0 0 1,102,900 397,100 705,800 0 0 0 705,800 .07 .07
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