-----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, LHvDpDTtmdQ5OpwekcuDLkMDWfFqVN1sRGUK9ivFwKIzq7EChP4FHr3LCiDRyzJ5 uzninWvPUnN5OGje0ifkvg== 0000912057-00-025153.txt : 20000517 0000912057-00-025153.hdr.sgml : 20000517 ACCESSION NUMBER: 0000912057-00-025153 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACE MEDICAL INC CENTRAL INDEX KEY: 0000814057 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 042867416 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-16257 FILM NUMBER: 637621 BUSINESS ADDRESS: STREET 1: 391 TOTTEN POND RD CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6178905656 MAIL ADDRESS: STREET 1: 391 TOTTEN POND ROAD CITY: WALTHAM STATE: MA ZIP: 02154 10QSB 1 FORM 10-QSB FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 (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, 2000 ------------------------------ 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 0-16257 ------------------------------------------ PACE MEDICAL, INC. ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) MASSACHUSETTS 04-2867416 ------------------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 391 TOTTEN POND ROAD, WALTHAM, MASSACHUSETTS 02451 -------------------------------------------------- (Address of principal executive offices ) (781) 890-5656 -------------- (Issuer's telephone number, including area code) Indicate by check mark 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 ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of May 12, 2000. 3,375,870 shares of Common Stock, par value $.01 per share PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. a) Condensed Consolidated Balance Sheets b) Condensed Consolidated Income Statements c) Condensed Consolidated Statements of Cash Flows d) Notes to Condensed Consolidated Financial Statements -2- PACE MEDICAL, INC. AND WHOLLY-OWNED SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2000 DECEMBER 31, 1999 -------------- ----------------- (Unaudited) (See note below) ASSETS Current assets: Cash and cash equivalents $ 1,455,243 $ 1,513,514 Accounts receivable 446,667 321,084 Inventories: Raw materials 208,580 211,026 Work-in-process 124,625 78,038 Finished goods 149,359 218,981 ----------- ----------- 482,564 508,045 Other current assets 44,123 42,775 ----------- ----------- Total current assets 2,428,597 2,385,418 Plant and equipment, net 113,152 53,350 Other assets 3,972 73,280 ----------- ----------- TOTAL ASSETS $ 2,545,721 $ 2,512,048 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 41,030 $ 77,788 Accrued expenses 65,422 69,699 ----------- ----------- Total current liabilities 106,452 147,487 ----------- ----------- Shareholders' equity: Common stock 34,009 34,009 Additional paid-in capital 3,147,151 3,147,151 Cumulative translation adjustment 79,327 89,606 Accumulated deficit (802,531) (887,518) ----------- ----------- 2,457,956 2,383,248 ----------- ----------- Less Treasury Stock, at Cost (18,687) (18,687) ----------- ----------- Total Shareholders' Equity 2,439,269 2,364,561 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,545,721 $ 2,512,048 =========== ===========
Note: The balance sheet at December 31, 1999 has been taken from the audited financial statements at that date. See accompanying notes to condensed consolidated financial statements. -3- PACE MEDICAL, INC. AND WHOLLY-OWNED SUBSIDIARY CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31 -------------- 2000 1999 ---- ---- Net Sales $440,208 $519,915 Cost of sales 179,476 212,104 -------- -------- 260,732 307,811 Other operating expenses 190,580 214,046 -------- -------- Income from operations 70,152 93,765 Other income 14,835 10,581 -------- -------- Net income $ 84,987 $104,346 ======== ======== Net income per share: Basic $ .03 $ .03 ======== ======== Diluted $ .02 $ .03 ======== ========
See accompanying notes to condensed consolidated financial statements. -4- PACE MEDICAL, INC. AND WHOLLY-OWNED SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED ----------------------------- MARCH 31 ----------------------------- 2000 1999 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 84,987 $ 104,346 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 3,918 6,000 Change in assets and liabilities, net: (83,457) (80,273) ----------- ----------- Net cash (used in) provided by operating activities 5,448 30,073 CASH FLOWS FROM INVESTING ACTIVITIES - Purchases of property and equipment (63,719) (44,194) CASH FLOW FROM FINANCING ACTIVITIES - - - ----------- ----------- NET INCREASE (DECREASE) IN CASH (58,271) (14,121) AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD $ 1,513,514 $ 1,257,700 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,455,243 $ 1,243,579 =========== ===========
See accompanying notes to condensed consolidated financial statements. -5- PACE MEDICAL, INC. AND WHOLLY-OWNED SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. The accompanying unaudited consolidated financial statements and these notes have been condensed and do not contain all disclosures required by generally accepted accounting principles. See notes to audited consolidated financial statements contained in the Company's annual report. 2. In the opinion of the Company, the accompanying unaudited condensed financial statements contain all adjustments, all of which are normal and recurring, necessary to present fairly the financial position of the Company and its wholly-owned subsidiary as of March 31, 2000 and the results of their operations for the three months ended March 31, 2000 and March 31, 1999 and their cash flows for the three months ended March 31, 2000 and March 31, 1999. 3. The Company prepares its financial information using the same accounting principles as for its annual financial statements except that no physical inventories were taken during either of the periods ended March 31, 2000 or 1999. Cost of sales for such periods was calculated primarily using standard cost methods. 4. The results of operations for the three months ended March 31, 2000 are not necessarily indicative of the results to be expected for the full year. 5. The denominator used to determine basic net income (loss) per share includes the weighted average common shares outstanding during the quarter. The denominator used to determine diluted net income per share includes the shares used in the calculation of basic net income per share plus the weighted average options outstanding during the period using the treasury-stock method. -6-
THREE MONTHS ENDED MARCH 31 -------- 2000 1999 ---- ---- Net Income $ 84,987 $ 104,346 ========== ========== Weighted-average shares outstanding 3,375,870 3,375,870 Effect of dilutive securities 101,957 34,578 ---------- ---------- Total shares 3,477,827 3,410,448 ========== ========== Basic net income per share $ 0.03 $ 0.03 ========== ========== Diluted net income per share $ 0.02 $ 0.03 ========== ==========
6. The Company has adopted the provisions of SFAS No. 130, "Reporting Comprehensive Income". Comprehensive income includes net income and foreign currency translation adjustments. Comprehensive income for the three months ended March 31, 2000 and 1999 is as follows:
THREE MONTHS ENDED MARCH 31 -------- 2000 1999 ---- ---- Net Income $ 84,987 $ 104,346 Currency Translation Adjustment (10,279) (15,433) --------- --------- Total $ 74,708 $ 88,913 ========= =========
-7- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. PACE MEDICAL, INC. AND WHOLLY-OWNED SUBSIDIARY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION As of March 31, 2000, the Company had cash and cash equivalents of $1,455,243 and working capital of $2,322,145. Working capital has increased slightly since December 31, 1999 owing to the profitable operations of the Company over the first three months of the year. The Company expects to maintain a sound financial base for the balance of fiscal 2000. Management continues to believe that the current level of working capital, coupled with the flexibility of the Company's cost structure, should suffice to ensure that on-going operations are financed adequately. FINANCIAL RESULTS - THREE MONTHS ENDED MARCH 31, 2000 VERSUS THREE MONTHS ENDED MARCH 31, 1999 Sales in the first quarter of 2000 decreased 15% from the sales posted in the first quarter of 1999. The decrease in sales was due to a decrease in our OEM business. The Company's margins in the first quarter were consistent with those seen in 1999 (59% in 1999 and 59% in 2000). Operating expenses were lower in the three months ended March 31, 2000 versus the three months ended March 31, 1999. Management anticipates some increase in its operating expenditures during the balance of 2000. No tax provision was recorded for the three months ended March 31, 2000 owing to the Company's ability to use net operating loss carryforwards in both the U.S. and United Kingdom. Net income for the quarter was $84,987 or $.03 per share in contrast to $104,346 or $0.03 per share in the first quarter of 1999. -8- FACTORS THAT MAY AFFECT FUTURE RESULTS From time to time, information provided by the Company or statements made by its employees may contain "forward-looking" information which involves risks and uncertainties. In particular, statements contained in this report which are not historical facts (including but not limited to the Company's expectations regarding business strategy, pricing, anticipated operating results, operating expenses and anticipated working capital) may be "forward-looking" statements. The Company's actual results may differ from those stated in any forward-looking statements. Factors that may cause such differences include, but are not limited to, risks associated with the introduction of new products, development of markets for new products offered by the Company, the Company's relationships with distributors and OEM's, the economic health of such OEM's, government regulation, competition and general economic conditions. -9- PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 27. Financial Data Schedule (b) Reports on Form 8-K: 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 behalf by the undersigned thereunto duly authorized. PACE MEDICAL, INC. ------------------------------ (Registrant) Date: MAY 15, 2000 /s/ RALPH E. HANSON --------------- ------------------------------ Ralph E. Hanson, President and Chief Executive Officer (principal executive officer) Date: MAY 15, 2000 /s/ RALPH E. HANSON --------------- ------------------------------ Ralph E. Hanson, Chief Financial Officer (principal financial officer) -11- EX-27 2 EXHIBIT 27
5 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 1,455,243 0 446,667 0 482,564 2,428,597 113,152 0 2,545,721 106,452 0 0 0 34,009 2,405,260 2,545,721 440,208 440,208 179,476 179,476 190,580 0 0 84,987 0 84,987 0 0 0 84,987 0.03 0.02
-----END PRIVACY-ENHANCED MESSAGE-----