-----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, K8Y/6oT0lIng8AEOwQP2TmFNWzM+LQlMBkvkP1fFuZi4GQvBYaxJHwFX2qpspN5z AAqPGQ7geuZEKWMe23leYQ== /in/edgar/work/20000814/0000912057-00-037360/0000912057-00-037360.txt : 20000921 0000912057-00-037360.hdr.sgml : 20000921 ACCESSION NUMBER: 0000912057-00-037360 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACE MEDICAL INC CENTRAL INDEX KEY: 0000814057 STANDARD INDUSTRIAL CLASSIFICATION: [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: 699565 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 a10qsb.txt 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 JUNE 30, 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 August 11, 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 Statements of Operations 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
JUNE 30, 2000 DECEMBER 31, 1999 ------------- ----------------- (Unaudited) (See note below) ASSETS Current assets: Cash and cash equivalents $ 1,473,001 $ 1,513,514 Accounts receivable 331,310 321,084 Inventories: Raw materials 205,143 211,026 Work-in-process 98,112 78,038 Finished goods 184,235 218,981 ----------- ----------- 487,490 508,045 Other current assets 23,241 42,775 ----------- ----------- Total current assets 2,315,042 2,385,418 Plant and equipment, net 83,570 53,350 Other assets 32,587 73,280 ----------- ----------- TOTAL ASSETS $ 2,431,199 $ 2,512,048 ----------- ----------- ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 56,287 $ 77,788 Accrued expenses 21,754 69,699 ----------- ----------- Total current liabilities 78,041 147,487 ----------- ----------- Shareholders' equity: Common stock 34,009 34,009 Additional paid-in capital 3,147,151 3,147,151 Cumulative translation adjustment 45,541 89,606 Accumulated deficit (854,856) (887,518) ----------- ----------- 2,371,845 2,383,248 ----------- ----------- Less Treasury Stock, at Cost (18,687) (18,687) ----------- ----------- Total Shareholders' Equity 2,353,158 2,364,561 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,431,199 $ 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 STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS FOR THE SIX MONTHS ENDED JUNE 30 ENDED JUNE 30 ------------------------ ------------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Net Sales $ 248,263 $431,229 $688,471 $ 951,144 Cost of sales 103,881 126,287 283,356 338,391 --------- --------- --------- --------- 144,382 304,942 405,115 612,753 Other operating expenses 211,555 216,067 402,135 430,113 --------- --------- --------- --------- Income (loss) from operations (67,173) 88,875 2,980 182,640 Other income 14,848 10,551 29,682 21,132 --------- --------- --------- --------- Net income (loss) (52,325) $ 99,426 $ 32,662 $ 203,772 --------- --------- --------- --------- --------- --------- --------- --------- Net income (loss) per share: Basic ($ .02) $ .03 $ .01 $ .06 --------- --------- --------- --------- --------- --------- --------- --------- Diluted ($ .02) $ .03 $ .01 $ .06 --------- --------- --------- --------- --------- --------- --------- ---------
See accompanying notes to condensed consolidated financial statements. - 4 - PACE MEDICAL, INC. AND WHOLLY-OWNED SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30 ---------------------------- 2000 1999 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 32,662 $ 203,772 Adjustments to reconcile net income to net cash (Used in) provided by operating activities: Depreciation and amortization 15,563 9,717 Change in assets and liabilities, net: (83,649) (2,678) ----------- ----------- Net cash (used in) provided by operating activities (35,424) 210,811 CASH FLOWS FROM INVESTING ACTIVITIES -- Purchases of property and equipment (5,089) (71,064) NET INCREASE (DECREASE) IN CASH AND (40,513) 139,747 CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD $ 1,513,514 $ 1,257,700 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,473,001 $ 1,397,447 ----------- ----------- ----------- -----------
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 June 30, 2000 and the results of their operations for the three and six months ended June 30, 2000 and June 30, 1999 and their cash flows for the six months ended June 30, 2000 and June 30, 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 June 30, 2000 or 1999. Cost of sales for such periods was calculated primarily using standard cost methods. 4. The results of operations for the three and six months ended June 30, 2000 are not necessarily indicative of the results to be expected for the full year. 5. The denominator used to determine basic net income 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.
FOR THE THREE MONTHS ENDED JUNE 30, 2000 ---------------------------------------- INCOME SHARES PER SHARE (NUMERATOR) (DENOMINATOR) AMOUNT ----------- ------------- --------- Net Income (loss) $ (52,325) Weighted-average shares outstanding - 3,375,870 --------- --------- Basic net income (loss) per share $ (52,325) 3,375,870 ($ 0.02) Effect of dilutive securities - ========= --------- --------- Diluted net income (loss) per share $ (52,325) 3,375,870 ($ 0.02) --------- --------- -------- --------- --------- --------
- 6 -
FOR THE THREE MONTHS ENDED JUNE 30, 1999 ---------------------------------------- INCOME SHARES PER SHARE (NUMERATOR) (DENOMINATOR) AMOUNT ----------- ------------- --------- Net Income $99,426 Weighted-average shares outstanding - 3,375,870 ------- --------- Basic net income per share $99,426 3,375,870 $ 0.03 ------ ------ Effect of dilutive securities - 62,232 ------- ----------- Diluted net income per share $99,426 3,438,102 $ 0.03 ------- ----------- ------ ------- ----------- ------
FOR THE SIX MONTHS ENDED JUNE 30, 2000 ----------------------------------------- INCOME SHARES PER SHARE (NUMERATOR) (DENOMINATOR) AMOUNT ----------- ------------- --------- Net Income $32,662 Weighted-average shares outstanding - 3,375,870 ------- --------- Basic net income per share $32,662 3,375,870 $ 0.01 ------ ------ Effect of dilutive securities - 103,245 ------- --------- Diluted net income per share $32,662 3,479,115 $ 0.01 ------- --------- ------ ------- --------- ------
FOR THE SIX MONTHS ENDED JUNE 30, 1999 ------------------------------------------- INCOME SHARES PER SHARE (NUMERATOR) (DENOMINATOR) AMOUNT ----------- ------------- ------ Net Income $203,772 Weighted-average shares outstanding - 3,375,870 --------- --------- Basic net income per share $203,772 3,375,870 $ 0.06 ------ ------ Effect of dilutive securities - 48,405 --------- --------- Diluted net income per share $203,772 3,424,275 $ 0.06 --------- --------- ------ --------- --------- ------
6. The Company has adopted the provisions of SFAS No. 130," Reporting Comprehensive Income". Comprehensive income (loss) includes net income (loss) and foreign currency translation adjustments. Comprehensive income (loss) for the three and six months ended June 30, 2000 and 1999 is as follows: - 7 -
THREE MONTHS ENDED SIX MONTHS ENDED ------------------------- ------------------------- JUNE 30, JUNE 30, ------------------------- ------------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Net Income (loss) $(52,325) $ 99,426 $32,662 $203,772 Currency Translation Adjustment (33,786) (12,638) (44,065) (28,072) -------- ------- -------- ------- Total $(86,111) $86,788 $(11,403) $175,700 -------- ------- -------- ------- -------- ------- -------- -------
- 8 - 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 June 30, 2000, the Company had cash and cash equivalents of $1,473,001 and working capital of $2,237,001. Working capital decreased $930 since December 31, 1999 owing to the timing of cash receipts and payments. The Company's cash flows have historically tracked its operational results. 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 JUNE 30, 2000 VERSUS THREE MONTHS ENDED JUNE 30, 1999 Sales in the second quarter of 2000 decreased 42% from the sales posted in the second quarter of 1999. The decrease in sales was caused by lower volume of products shipped to its OEM accounts and a distributor. The Company's margins in the second quarter were lower than those attained in 1999 (from 71% in 1999 to 58% in 2000). This occurred due to a change in the product mix. It should be noted that pricing is continuing to remain firm on all products. Operating expenses were lower in the three months ended June 30, 2000 versus the three months ended June 30, 1999. Management anticipates some increase in its operating expenditures during the balance of 2000. No tax benefit was recorded for the three months ended June 30, 2000 owing to uncertainty regarding the Company's ability to use net operating loss carryforwards in both the U.S. and U.K. Net loss for the quarter was $52,325 or $.02 per share, representing a decrease of $151,751 from the comparable quarter in 1999. - 9 - FINANCIAL RESULTS - SIX MONTHS ENDED JUNE 30, 2000 VERSUS SIX MONTHS ENDED JUNE 30, 1999 Sales in the six months ended June 30, 2000 decreased from the amount posted in the six months ended in June 30, 1999. The decrease in sales is primarily attributed to lower volumes of products shipped to its OEM accounts and a distributor. The Company expects this situation to continue during the second half of fiscal 2000. The Company's margins for the year-to-date period were slightly lower than those achieved in the first half of 1999 (from 64% in 1999 to 59% in 2000). This occurred due to a change in the product mix. It should be noted that pricing continued to remain firm on all products. Operating expenses were lower for the six months ended June 30, 2000 versus the six months ended June 30, 1998. Management anticipates some increase in its operating expenditures during the balance of 2000. No tax provision was recorded for the six months ended June 30, 2000 owing to the Company's ability to use net operating loss carryforwards in both the U.S. and U.K. Net income for the six months was $32,662 or $.01 per share, representing a decrease of $171,110 from the comparable period in 1999. 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. - 10 - PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS At the Company's Annual Meeting of Stockholders held on June 1, 2000, the following members were elected to the Board of Directors:
VOTES VOTES FOR WITHHELD ----- -------- Ralph E. Hanson 3,223,072 0 George F. Harrington 3,223,072 0 Derrick Ebden 3,223,072 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 27. Financial Data Schedule (b) Reports on Form 8-K: None - 11 - 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: AUGUST 14, 2000 /s/ RALPH E. HANSON ------------------ ---------------------------------- Ralph E. Hanson, President and Chief Executive Officer (principal executive officer) Date: AUGUST 14, 2000 /s/ RALPH E. HANSON ------------------ ---------------------------------- Ralph E. Hanson, Chief Financial Officer (principal financial officer) - 12 - EX-27 2 ex-27.txt EXHIBIT 27
5 3-MOS 3-MOS 6-MOS 6-MOS DEC-31-2000 DEC-31-1999 DEC-31-2000 DEC-31-1999 APR-01-2000 APR-01-1999 JAN-01-2000 JAN-01-2000 JUN-30-2000 JUN-30-1999 JUN-30-2000 JUN-30-1999 1,473,001 0 0 0 0 0 0 0 331,310 0 0 0 0 0 0 0 487,490 0 0 0 2,315,042 0 0 0 83,570 0 0 0 0 0 0 0 2,431,199 0 0 0 78,041 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 34,009 0 0 0 2,319,149 0 0 0 2,431,199 0 0 0 248,263 431,229 688,471 951,144 248,263 431,229 688,471 951,144 103,881 126,287 283,356 338,391 103,881 126,287 283,356 338,391 211,555 216,067 402,135 430,113 0 0 0 0 0 0 0 0 (67,173) 88,875 2,980 182,640 0 0 0 0 (67,173) 88,875 2,980 182,640 0 0 0 0 0 0 0 0 0 0 0 0 (52,325) 99,426 32,662 203,772 (0.02) 0.03 0.01 0.06 (0.02) 0.03 0.01 0.06
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