-----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, KIsFGKGQah6rt7LJnZdUqpxWISdJXOgrzaHRXggZD4M0G4KPIXg6agNi5CITi3wc CzfSTrVHNeqxOU9HHj+tng== 0000890566-97-001118.txt : 19970515 0000890566-97-001118.hdr.sgml : 19970515 ACCESSION NUMBER: 0000890566-97-001118 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MEDICAL TECHNOLOGIES INC CENTRAL INDEX KEY: 0000842695 STANDARD INDUSTRIAL CLASSIFICATION: CALCULATING & ACCOUNTING MACHINES (NO ELECTRONIC COMPUTERS) [3578] IRS NUMBER: 752193593 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17288 FILM NUMBER: 97604565 BUSINESS ADDRESS: STREET 1: 5847 SAN FELIPE STE 900 STREET 2: SAN FELIPE PLZ CITY: HOUSTON STATE: TX ZIP: 77057 BUSINESS PHONE: 7137838200 MAIL ADDRESS: STREET 1: 5847 SAN FELIPE STREET 2: SUITE 900 CITY: HOUSTON STATE: TX ZIP: 77057 10-Q 1 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 March 31, 1997 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 000-17288 AMERICAN MEDICAL TECHNOLOGIES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 75-2193593 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5847 San Felipe, Suite 900 Houston, Texas 77057 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713)783-8200 ---------------------- 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 requirement for the past 90 days. YES [X] NO [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES [ ] NO [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: The number of shares of Common Stock outstanding as of the close of business on May 14, 1997 was 14,648,379. AMERICAN MEDICAL TECHNOLOGIES, INC. I N D E X PAGE NUMBER ------ PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets as of March 31, 1997 and September 30, 1996 (unaudited) ........................ 1 Consolidated Statements of Operations for the three months and six months ended March 31, 1997 and 1996 (unaudited) ...................................... 2 Consolidated Statements of Cash Flows for the six months ended March 31, 1997 and 1996 (unaudited) .......... 3 Notes to Consolidated Financial Statements (unaudited) .................................... 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ....................... 5 PART II. OTHER INFORMATION: Item 1. Legal Proceedings ........................................... 10 Item 2. Changes in Securities ....................................... 10 Item 3. Defaults Upon Senior Securities ............................. 10 Item 4. Submission of Matters to a Vote Of Security Holders ......... 10 Item 5. Other Information ........................................... 10 Item 6. Exhibits and Reports on Form 8-K ............................ 10 SIGNATURE ............................................................... 11 AMERICAN MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 31, SEPTEMBER 30, ASSETS 1997 1996 ------------ ------------ Current Assets: Cash and cash equivalents .......................... $ 969,798 $ 582,108 Trade accounts receivable, net of allowance of $207,448 and $184,900, respectively ......... 6,639,746 5,234,307 Notes and other receivables ........................ 1,216,300 417,673 Inventories ........................................ 4,092,081 3,341,486 Prepaid expenses and other assets .................. 271,285 239,621 ------------ ------------ Total current assets ........................... 13,189,210 9,815,195 Investment in 3CI, at market value ..................... 595,716 893,914 Property, plant and equipment, at cost ................. 1,961,052 1,601,145 Accumulated depreciation ........................... (1,047,541) (928,762) ------------ ------------ Net property, plant and equipment .............. 913,511 672,383 Intangible assets, net of accumulated amortization of $627,178 and $556,546, respectively ............. 866,659 937,291 Other assets ........................................... 113,457 44,360 ------------ ------------ Total assets ................................... $ 15,678,553 $ 12,363,143 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Short-term notes payable ........................... $ 3,748,267 $ 4,128,886 Accounts payable ................................... 3,270,943 1,857,601 Accrued liabilities ................................ 1,487,516 1,607,885 ------------ ------------ Total current liabilities ...................... 8,506,726 7,594,372 Long-term debt ......................................... -- 640,000 ------------ ------------ Total liabilities .............................. 8,506,726 8,234,372 ------------ ------------ Commitments and contingencies Shareholders' Equity: Common stock, $.01 par value, authorized 100,000,000 shares; issued and outstanding 14,613,379 and 12,397,404 shares, respectively ............ 146,134 123,974 Additional paid-in capital ......................... 13,201,679 10,801,273 Accumulated deficit ................................ (5,224,794) (6,143,482) Unrealized loss on investment in 3CI ............... (951,192) (652,994) ------------ ------------ Total shareholders' equity ..................... 7,171,827 4,128,771 ------------ ------------ Total liabilities and shareholders' equity ..... $ 15,678,553 $ 12,363,143 ============ ============
See accompanying notes to consolidated financial statements. AMERICAN MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS SIX MONTHS ENDED MARCH 31, ENDED MARCH 31, --------------------------- --------------------------- 1997 1996 1997 1996 ----------- ----------- ----------- ----------- Revenues .......................... $ 6,802,255 $ 4,837,926 $13,058,391 $ 8,956,434 Cost of sales ..................... 4,512,266 3,000,679 8,553,647 5,657,394 ----------- ----------- ----------- ----------- Gross profit .................. 2,289,989 1,837,247 4,504,744 3,299,040 Selling, general and administrative 1,526,806 1,300,684 3,091,770 2,411,784 Depreciation and amortization ..... 115,003 85,307 223,333 172,268 ----------- ----------- ----------- ----------- Operating income .............. 648,180 451,256 1,189,641 714,988 Interest expense, net ............. 134,887 95,087 270,953 158,311 ----------- ----------- ----------- ----------- Net income ........................ $ 513,293 $ 356,169 $ 918,688 $ 556,677 =========== =========== =========== =========== Net income per share .............. $ 0.04 $ 0.03 $ 0.06 $ 0.04 =========== =========== =========== =========== Weighted average common and common equivalent shares ...... 14,078,385 12,568,194 14,437,783 12,454,137 =========== =========== =========== ===========
See accompanying notes to consolidated financial statements. AMERICAN MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED MARCH 31, ---------------------------- 1997 1996 ----------- ----------- Cash flows from operating activities: Net income ............................................ $ 918,688 $ 556,677 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization ..................... 223,333 172,268 Changes in assets and liabilities: Trade accounts receivable, net ................ (1,405,439) (2,088,784) Notes and other receivables ................... (55,627) 2,300,000 Inventories ................................... (750,595) (934,804) Prepaid expenses and other assets ............. (101,127) (17,514) Accounts payable and accrued liabilities ...... 1,292,973 (581,281) ----------- ----------- Net cash used in operating activities ............. 122,206 (593,438) ----------- ----------- Cash flows from investing activities: Purchases of property, plant and equipment ............ (432,613) (42,320) Proceeds from sale of property, plant and equipment ... 39,150 -- ----------- ----------- Net cash used in investing activities ............. (393,463) (42,320) ----------- ----------- Cash flows from financing activities: Proceeds from issuance of notes payable ............... 895,000 1,444,372 Repayments of notes payable ........................... (1,816,869) (755,894) Proceeds from exercise of warrants .................... 1,580,816 161,250 ----------- ----------- Net cash provided by financing activities ......... 658,947 849,728 ----------- ----------- Net increase in cash and cash equivalents ......... 387,690 213,970 Cash and cash equivalents at beginning of period .......... 582,108 233,765 ----------- ----------- Cash and cash equivalents at end of period ................ $ 969,798 $ 447,735 =========== =========== Supplemental disclosure of cash flow information: Cash paid for interest ................................ $ 300,645 $ 168,250 =========== =========== Supplemental disclosure of noncash financing activities: Exercise of warrants in exchange for notes receivable $ 743,000 $ -- =========== =========== Exercise of warrants in exchange for retirement of note payable ...................................... $ 38,750 $ -- =========== =========== Conversion of note payable to common stock ............ $ 60,000 $ -- =========== ===========
See accompanying notes to consolidated financial statements. AMERICAN MEDICAL TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED) (1) CONSOLIDATED FINANCIAL STATEMENTS The consolidated balance sheets of American Medical Technologies, Inc. d/b/a AMT Industries, Inc. (the "Company"), a Delaware corporation, and its wholly owned subsidiaries as of March 31, 1997 and the related statements of operations for the three months and six months ended March 31, 1997 and 1996, and the related statements of cash flows for the six months ended March 31, 1997 and 1996 are unaudited. In the opinion of management, all adjustments, which include only normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented, have been made. All significant intercompany items have been eliminated in consolidation. Certain disclosures and other information required by generally accepted accounting principles have been omitted from these financial statements as permitted by reference to other Securities and Exchange Commission filings. These statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended September 30, 1996. (2) INVENTORIES Inventories consist of the following at March 31, 1997 and September 30, 1996: March 31, September 30, 1997 1996 ----------- ----------- Raw materials .................. $ 3,171,803 $ 2,061,659 Work in process ................ 656,848 740,627 Finished goods ................. 553,059 916,246 Other (demo) ................... 189,371 98,954 ----------- ----------- 4,571,081 3,817,486 Inventory reserve .............. (479,000) (476,000) ----------- ----------- $ 4,092,081 $ 3,341,486 =========== =========== (3) NET INCOME PER SHARE Net income per share is computed by dividing the net income by the weighted average number of common and common equivalent shares outstanding during the period. For purposes of this calculation, outstanding warrants and employee stock options are considered common stock equivalents. Fully diluted earnings per share is materially equal to primary earnings per share for the three months and six months ended March 31, 1997 and 1996. (4) INVESTMENT IN 3CI The Company owns 680,818 shares of the common stock of 3CI Complete Compliance Corporation. The investment is carried at market value. (5) LITIGATION The Company and its subsidiaries are each subject to certain litigation and claims arising in the ordinary course of business. In the opinion of the management of the Company, the amounts ultimately payable, if any, as a result of such litigation and claims will not have a materially adverse effect on the Company's financial position. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996 REVENUES increased $1,964,329 for the three months ended March 31, 1997 compared to the three months ended March 31, 1996. Revenues for the three months ended March 31, 1997 and 1996 are broken down by individual product in the following table: Net Sales (000's) -------------------- Increase Product Line 1997 1996 (Decrease) ------------ ------ ------ ------- AnyCard ................... $4,497 $2,519 $ 1,978 TACC ...................... 1,501 1,594 (93) Parts, service and other .. 529 491 38 EMS ....................... 275 234 41 ------ ------ ------- $6,802 $4,838 $ 1,964 ====== ====== ======= AnyCard(TM) sales increased 79% due to continued strong demand for the single cassette model automated teller machine, which was introduced in November 1995 as an alternative to the tube-type model. TACC sales decreased 6% due to the shift of marketing emphasis to the automated teller machine products. Management believes that this trend will continue throughout the rest of the year. All marketing activities for EMS products have terminated as the marketing focus of the Company is shifted to other product lines. Management believes that certain existing customers will continue to purchase these products, however, to complete retrofit projects that are currently in progress. Parts, service and other revenues increased due to slightly higher demand for replacement parts. As more AnyCard machines are sold, and the level of transactions per machine increases, this revenue component is expected to become significant. COST OF SALES was 66% and 62% of revenues for the three months ended March 31, 1997 and 1996, respectively. A portion of this increase was attributable to certain sales discounts and allowances. SELLING, GENERAL AND ADMINISTRATIVE expense was 22% of revenues for the three months ended March 31, 1997, a decrease from 27% of revenues for the same period in 1996. Management believes that selling, general and administrative expense, as a percentage of revenues, should continue to decrease over the remainder of the year. DEPRECIATION AND AMORTIZATION increased $29,696, or 35%, from 1996 due to the recent addition of property, plant and equipment utilized in the development of new automated teller machine products. INTEREST EXPENSE increased from $95,087 in 1996 to $134,887 in 1997 as a result of increased indebtedness. Management believes that interest expense will be reduced during the remainder of the year due to repayments of short-term indebtedness with the proceeds from the exercise of warrants as discussed more fully hereinbelow. SIX MONTHS ENDED MARCH 31, 1997 COMPARED TO SIX MONTHS ENDED MARCH 31, 1996 REVENUES increased $4,101,957 for the six months ended March 31, 1997 compared to the six months ended March 31, 1996. Revenues for the six months ended March 31, 1997 and 1996 are broken down by individual product in the following table: Net Sales (000's) --------------------- Increase Product Line 1997 1996 (Decrease) ------------ ------- ------ ------- AnyCard .................... $ 8,724 $4,376 $ 4,348 TACC ....................... 2,838 3,189 (351) Parts, service and other ... 1,050 897 153 EMS ........................ 446 494 (48) ------- ------ ------- $13,058 $8,956 $ 4,102 ======= ====== ======= AnyCard sales increased 99% due to continued strong demand for the single cassette model automated teller machine, which was introduced in November 1995 as an alternative to the tube-type model. TACC sales decreased 11% due to the shift of marketing emphasis to the automated teller machine products. Management believes that this trend will continue throughout the rest of the year. All marketing activities for EMS products have terminated as the marketing focus of the Company is shifted to other product lines. Management believes that certain existing customers will continue to purchase these products, however, to complete retrofit projects that are currently in progress. Parts, service and other revenues increased 17% due to slightly higher demand for replacement parts. As more AnyCard machines are sold, and the level of transactions per machine increases, this revenue component is expected to become significant. COST OF SALES was 66% and 63% of revenues for the six months ended March 31, 1997 and 1996, respectively. A portion of this increase was attributable to certain sales discounts and allowances. SELLING, GENERAL AND ADMINISTRATIVE expense was 24% of revenues for the six months ended March 31, 1997, a decrease from 27% of revenues for the same period in 1996. Management believes that selling, general and administrative expense, as a percentage of revenues, should continue to decrease over the remainder of the year. DEPRECIATION AND AMORTIZATION increased $51,065, or 30%, from 1996 due to the recent addition of property, plant and equipment utilized in the development of new automated teller machine products. INTEREST EXPENSE increased from $158,311 in 1996 to $270,953 in 1997 as a result of increased indebtedness. Management believes that interest expense will be reduced during the remainder of the year due to repayments of short-term indebtedness with the proceeds from the exercise of warrants as discussed more fully hereinbelow. LIQUIDITY AND CAPITAL RESOURCES The financial position of the Company continues to improve primarily as a result of profitable operations and the infusion of capital from the exercise of warrants, as reflected in the following key indicators as of March 31, 1997 and September 30, 1996: March 31, September 30, 1997 1996 ---------- ---------- Shareholders' equity .......... $7,171,827 $4,128,771 Tangible net worth ............ 6,305,168 3,191,480 Working capital ............... 4,682,484 2,220,823 During March 1996, the Company extended its revolving credit note until May 31, 1997 and increased the maximum borrowing line to $3,000,000. Upon maturity of the note, the Company expects to renew or replace its borrowing facility at essentially the same terms and for an amount required to satisfy its needs for the foreseeable future. At March 31, 1997, $2,582,856 was outstanding pursuant to the note as compared to $2,640,387 at September 30, 1996. The Company continues to own 680,818 shares of 3CI common stock subsequent to its divestiture of a majority interest in February 1994. The Company has no immediate plans for the disposal of the shares, and accordingly, the shares may be utilized to collateralize borrowings. At present, 480,818 shares are pledged to secure an outstanding note payable in the principal amount of $400,000. The Company's registration statement covering the offering and sale by selling shareholders of the common stock underlying all of the Company's 5,517,500 outstanding warrants was declared effective on January 29, 1997. As of March 31, 1997, warrants to purchase 2,095,975 shares have been exercised generating net proceeds to the Company of approximately $2,324,000, and warrants for the purchase of 718,780 shares have expired. As of March 31, 1997, the Company has outstanding warrants to purchase 2,702,745 shares of common stock, which if exercised would generate proceeds to the Company of approximately $2,263,000. Of the total warrants exercised, certain directors purchased 700,000 shares through a contribution of cash and promissory notes. The notes, which are due March 31, 1998, have an aggregate prinicipal balance of $743,000, bear interest at 10% per annum, and are secured by a pledge of all of the shares. The Company's research and development budget for fiscal 1997 has been estimated at $1,300,000. The majority of these expenditures are applicable to enhancements of the existing product lines, development of new automated teller machine products and the development of new technology to facilitate the dispensing of products such as postage stamps, money orders, and prepaid telephone cards, as well as multiple denominations of currency. During the six months ended March 31, 1997, $468,889 had been expended for research and development. With its present capital resources, its potential capital from the exercise of warrants, and with its borrowing facility, the Company should have sufficient resources to meet its operating needs for the foreseeable future and to provide for debt maturities and capital expenditures. The Company does not anticipate paying dividends on shares of its common stock in the foreseeable future. SEASONALITY The Company can experience seasonal variances in operations and historically has its lowest dollar volume sales months between November and March. With the favorable sales of its new automated teller machine, however, the Company did not experience any downturn during the three months ended March 31, 1997. The Company's operating results for any particular quarter may not be indicative of the results for the future quarter or for the year. MAJOR CUSTOMERS AND CREDIT RISKS The Company generally does not require collateral or other security from its customers and would incur an accounting loss equal to the carrying value of the accounts receivable if a customer failed to perform according to the terms of the credit arrangements. Sales to major customers were as follows for the three and six months ended March 31, 1997 and 1996: Three months ended Six months ended March 31, March 31, ---------------------- ------------------------ 1997 1996 1997 1996 ---------- -------- ---------- ---------- Customer A $1,802,920 $ -- Customer A $2,277,994 $ -- Customer B 515,847 1,223,846 Foreign sales accounted for 7% and 10% of the Company's total sales during the three months ended March 31, 1997 and 1996, respectively, and 6% and 13% of the Company's total sales during the six months ended March 31, 1997 and 1996, respectively. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Not applicable. ITEM 2. CHANGES IN SECURITIES 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 The Company filed no Reports on Form 8-K during the quarter ended March 31, 1997. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERICAN MEDICAL TECHNOLOGIES, INC. (Registrant) DATE: May 14, 1997 By: /s/ JAMES T. RASH James T. Rash Principal Executive and Financial Officer EX-27 2
5 THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDING MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS SEP-30-1997 MAR-31-1997 969,798 0 6,639,746 207,448 4,092,081 13,189,210 1,961,052 1,047,541 15,678,553 8,506,726 0 0 0 146,134 7,025,693 15,678,553 13,058,391 13,058,391 8,553,647 8,553,647 0 0 270,953 918,688 0 918,688 0 0 0 918,688 .06 .06
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