-----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, MGbhY2/wvjsgHEK6H9CCe+BLtT9LNfJRgSm2+Mf3f8gkrtH7zT5YqiugUjM2YBCB a4svURubcDAv30xWWbS2Lw== 0000891618-97-003281.txt : 19970812 0000891618-97-003281.hdr.sgml : 19970812 ACCESSION NUMBER: 0000891618-97-003281 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970811 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LASERSCOPE CENTRAL INDEX KEY: 0000851737 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 770049527 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18053 FILM NUMBER: 97654906 BUSINESS ADDRESS: STREET 1: 3052 ORCHARD DR CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4089430636 10-Q 1 FORM 10-Q FOR PERIOD ENDING JUNE 30, 1997 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 June 30,1997 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 0-18053 LASERSCOPE (Exact name of Registrant as specified in its charter) CALIFORNIA 77-0049527 (State of Incorporation) (I.R.S. Employer Identification No.) 3052 ORCHARD DRIVE, SAN JOSE, CALIFORNIA 95134-2011 (Address of principal executive offices) Registrant's telephone number: (408) 943-0636 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 [ ] The number of shares of Registrant's common stock issued and outstanding as of July 31, 1997 was 12,261,584. 2 TABLE OF CONTENTS
PAGE ---- PART I. FINANCIAL INFORMATION............................................................................ 3 Item 1. Condensed Consolidated Balance Sheets..................................................... 3 Condensed Consolidated Statements of Income ............................................. 4 Condensed Consolidated Statements of Cash Flows........................................... 5 Notes to Condensed Consolidated Financial Statements...................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................. 9 Results of Operations..................................................................... 9 Liquidity and Capital Resources........................................................... 12 Item 3. Qualitative and Quantitative Disclosures About Market Risk................................ 13 PART II. OTHER INFORMATION.............................................................................. 13 Item 1. Legal Proceedings........................................................................ 13 Item 2. Changes in Securities.................................................................... 13 Item 3. Defaults upon Senior Securities.......................................................... 13 Item 4. Submission of Matters to a Vote of Security Holders...................................... 13 Item 5. Other Items.............................................................................. 14 Item 6. Exhibits and Reports on Form 8-K........................................................ 14 SIGNATURE................................................................................................ 14
2 3 PART I. FINANCIAL INFORMATION ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: LASERSCOPE CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 30, DECEMBER 31, (thousands) 1997 1996 - ------------------------------------------------------------------------------------------- ASSETS Current assets: Cash and cash equivalents $ 1,837 $ 3,917 Accounts receivable, net 17,385 13,286 Inventories 21,307 17,407 Other current assets 877 926 -------- -------- Total current assets 41,406 35,536 Property and equipment, net 5,542 3,109 Investment in NWL - 1,681 Developed technology and other intangibles, net 5,313 3,473 Other assets 683 670 -------- -------- Total assets $ 52,944 $ 44,469 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 8,787 $ 9,246 Accrued compensation 1,970 2,947 Bank loans 4,291 - Other current liabilities 5,141 4,899 -------- -------- Total current liabilities 20,189 17,092 Obligations under capital leases 179 202 Mortgages & other long term loans 1,756 - Commitments and contingencies Minority interest in net assets of NWL 564 - Shareholders' equity: Common stock 50,500 48,798 Accumulated deficit (19,351) (20,988) Translation adjustments (518) (260) Notes receivable from shareholders (375) (375) -------- -------- Total shareholders' equity 30,256 27,175 -------- -------- Total liabilities and shareholders' equity $ 52,944 $ 44,469 ======== ========
See notes to condensed consolidated financial statements 3 4 LASERSCOPE CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, (thousands except per share amounts) 1997 1996 1997 1996 - ----------------------------------------------------------------------------------------------------------- Net revenues ................................. $ 15,207 $ 8,481 $ 30,970 $ 16,203 Cost of sales ................................ 8,178 4,288 16,865 8,140 -------- -------- -------- -------- Gross margin ................................. 7,029 4,193 14,105 8,063 Operating expenses: Research and development ................ 695 522 1,365 1,151 Selling, general and administrative ..... 5,277 3,401 10,678 6,493 -------- -------- -------- -------- 5,972 3,923 12,043 7,644 Operating income ............................. 1,057 270 2,062 419 Interest and other income (expense), net ..... 2 15 (24) 22 -------- -------- -------- -------- Income before income taxes & minority interest 1,059 285 2,038 441 Provision for income taxes ................... 229 34 327 53 -------- -------- -------- -------- Income before minority interest .............. 830 251 1,711 388 Minority interest ............................ 74 - 74 - -------- -------- -------- -------- Net income ................................... $ 756 $ 251 $ 1,637 $ 388 ======== ======== ======== ======== Net income per share ......................... $ 0.06 $ 0.03 $ 0.13 $ 0.05 ======== ======== ======== ======== Shares used in per share calculations ........ 12,994 7,657 13,017 7,512 ======== ======== ======== ========
See notes to condensed consolidated financial statements 4 5 LASERSCOPE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, (thousands) 1997 1996 - ---------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,637 $ 388 Adjustments to reconcile net income to cash cash provided (used) by operating activities: Depreciation and amortization 1,023 513 Increase (decrease) from changes in: Accounts receivable (2,425) (720) Inventories (769) 1,290 Other current assets 173 157 Other assets - (245) Accounts payable (2,077) 185 Accrued compensation (977) 213 Other current liabilities 243 (397) ------- ------- Cash provided (used) by operating activities (3,172) 1,384 ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (2,049) (280) Cash paid for NWL acquisition, net of cash received (954) - Other (184) (99) ------- ------- Cash used by investing activities (3,187) (379) ------- ------- CASH USED BY FINANCING ACTIVITIES: Payments on obligations under capital leases (23) (7) Proceeds from the sale of common stock under stock plans 1,702 156 Proceeds from short-term bank loans 3,900 - Repayment of short-term bank loans (1,300) - ------- ------- Cash provided by financing activities 4,279 149 Increase (decrease) in cash and cash equivalents (2,080) 1,154 Cash and cash equivalents, beginning of period 3,917 2,278 ------- ------- Cash and cash equivalents, end of period $ 1,837 $ 3,432 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 132 $ 6 Income taxes $ 56 $ 32
See notes to condensed consolidated financial statements 5 6 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: 1. The accompanying condensed consolidated financial statements include Laserscope (the "Company") and its wholly and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated. While the financial information in this report is unaudited, in the opinion of management, all adjustments (which included only normal recurring adjustments) necessary to present fairly the financial position and results of operations as of and for the periods indicated have been recorded. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those reported. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto for the year ended December 31, 1996 included in the Company's annual report on Form 10-K/A for the year ended December 31, 1996. The results of operations for the three and six month periods ended June 30, 1997 are not necessarily indicative of the results expected for the full year. 2. Inventory was comprised of the following (in thousands):
JUNE 30, DECEMBER 31, 1997 1996 ------------------------ Sub-assemblies and purchased parts $14,870 $12,015 Finished goods 6,437 5,392 ------- ------- $21,307 $17,407 ======= =======
(See note 7 for a description of the impact from the NWL Laser-Technologie acquisition.) 3. Net income per share is based upon the weighted average number of shares of common stock outstanding and dilutive common equivalent shares from stock options (using the treasury stock method). 4. The Company invests its excess cash in investment grade debt instruments. The Company considers cash equivalents to be financial instruments that are readily convertible to cash, subject to no more than insignificant interest rate risk and that have original maturities of three months or less. At June 30, 1997 and December 31, 1996 the Company's cash equivalents were in the form of institutional money market accounts and totaled $0.6 million and $1.8 million, respectively. At June 30, 1997 and December 31, 1996 the Company had no investment in debt securities. 5. In February 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings Per Share", which is required to be adopted on December 31, 1997. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating primary earnings per share, the dilutive effect of stock options will be excluded. The impact of Statement 128 is expected to increase primary earnings per share in each of the three and six month periods ended June 30, 1997 by $0.01 per share and to have no material effect on the primary earnings per share for 6 7 the corresponding periods in 1996. The impact of Statement 128 on the calculation of fully diluted earnings per share for these periods is not expected to be material. 6. On August 30, 1996 the Company completed the acquisition of Heraeus Surgical, Inc. ("HSI"). The acquisition was accounted for as a purchase. Accordingly, the operating results of HSI are included in the Company's consolidated results of operations for the quarter and six months ended June 30, 1997; however, such HSI results are not included in the Company's consolidated results of operations for the corresponding periods in 1996. 7. In March 1995, the Company entered into an agreement with NWL Laser-Technologie ("NWL") whereby the Company paid approximately $1.6 million in exchange for a cross-distribution and development agreement, minority equity position in NWL and an option to purchase all of the ownership interests in NWL. On June 13, 1997, the Company exercised its option and increased its ownership interest to 52% of NWL. The purchase price was allocated to the acquired assets and liabilities based on Company estimates of their respective fair values. The consolidation of the acquired assets and liabilities significantly impacted the Company's Balance Sheet at June 30, 1997 as depicted in the following tables: The approximate purchase price for the NWL acquisition was (in thousands): Laserscope investment prior to June 1997 $1,640 Cash paid in June 1997 1,000 ------ Total $2,640
The allocation of the approximate purchase price was determined as follows: Net tangible assets acquired: Accounts receivable, net $ 1,670 Inventories 3,130 Property, plant & equipment 1,070 Other assets 200 Less: Accounts payable and other current liabilities (3,300) Mortgages and other long term debt (1,750) ------- Total net tangible assets 1,020 Minority interest in net tangible assets (490) ------- Laserscope interest in net tangible assets 530 Intangible assets acquired: Developed technology & workforce 2,110 ------- $ 2,640
7 8 8. The following unaudited pro forma combined results of operations of the Company and NWL for the three and six months ended June 30, 1997 and June 30, 1996 have been prepared assuming that the NWL acquisition had occurred at the beginning of the period presented. The following pro forma information is not necessarily indicative of the results that would have occurred had the acquisition been completed at the beginning of the period indicated, nor is it indicative of future operating results (in thousands, except per share data):
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, 1997 1996 1997 1996 - --------------------------------------------------------------------------------------------- Net revenues ........................ $16,127 $ 9,655 $32,709 $18,443 Income from operations .............. $ 910 $ 220 $ 1,984 $ 472 Net income .......................... $ 693 $ 267 $ 1,607 $ 419 Net income per share ................ $ 0.05 $ 0.03 $ 0.12 $ 0.06 Shares used in per share calculations 12,994 7,657 13,017 7,512
8 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: Except for the historical information contained in this Quarterly Report on Form 10-Q, the matters discussed herein are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected. Factors that could cause actual results to differ materially include, but are not limited to, the risks associated with the acquisitions of Heraeus Surgical, Inc. ("HSI") and NWL Laser-Technologie, GmbH ("NWL"), including the integration of the operations and assets acquired and the assumption of the liabilities assumed by Laserscope, the timing of orders and shipments, the Company's ability to balance its inventory and production schedules, the timely development, clearance by the F.D.A. and other regulatory agencies and market acceptance of new products and surgical/therapeutic procedures, the impact of competitive products and pricing, the Company's ability to raise capital on terms acceptable to the Company, or at all, the Company's ability to expand further into international markets, and public policy relating to health care reform in the United States and other countries. The Company desires to continue expansion of its operations outside of the United States and to enter additional international markets, requiring significant management attention and financial resources and further subjecting the Company to the risks of operating internationally. These risks include unexpected changes in regulatory requirements, delays resulting from difficulty in obtaining export licenses for certain technology, customs, tariffs and other barriers and restrictions, and the burdens of complying with a variety of foreign laws. The Company is also subject to general geopolitical risks in connection with its international operations, such as political and economic instability and changes in diplomatic and trade relationships. The Company cannot predict whether quotas, duties, taxes or other charges or restrictions will be imposed by the United States, Japan, countries in the European Union or other countries upon the import or export of the Company's products in the future, or what effect any such actions would have on its business, financial condition or results of operations. In addition, fluctuations in currency exchange rates may negatively impact the Company's ability to compete in terms of price against products denominated in local currencies. In addition, there can be no assurance that regulatory, geopolitical and other factors will not adversely impact the Company's operations in the future or require the Company to modify its current business practices. Other risks are detailed from time to time in the Company's press releases and other public disclosure filings with the U.S. Securities and Exchange Commission (SEC), copies of which are available upon request from the Company. The forward-looking statements included herein speak only as of the date hereof. The Company assumes no obligation to update any forward-looking statements included herein. RESULTS OF OPERATIONS: The following discussion should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in Part I -- Item 1 of this Quarterly Report and the audited financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 1996 contained in the Company's Annual Report on Form 10-K/A. 9 10 The following table contains selected income statement information which serves as the basis of the discussion of the Company's results of operations for the quarter and six months ended June 30, 1997 (in thousands except for percentages):
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, 1997 JUNE 30, 1996 % JUNE 30,1997 JUNE 30, 1996 % AMOUNT %(a) AMOUNT %(a) CHANGE AMOUNT %(a) AMOUNT %(a) CHANGE ------------ ------------- ------ ------------- ------------- ------ Revenues from sales of: Lasers $ 6,997 46% $ 3,976 47% 76% $13,904 45% $ 6,978 43% 99% Ascent medical systems 2,662 17% - - - 5,538 18% - - - Instruments & supplies 3,599 24% 3,292 39% 9% 7,655 25% 6,761 42% 13% Service 1,949 13% 1,213 14% 61% 3,873 12% 2,464 15% 57% ------- -- ------- -- -- ------- -- ------- -- -- Total net revenues $15,207 100% $ 8,481 100% 79% $30,970 100% $16,203 100% 91% Gross margin $ 7,029 46% $ 4,193 49% 68% $14,105 46% $ 8,063 50% 76% Research & Development $ 695 5% $ 522 6% 33% $ 1,365 4% $ 1,151 7% 19% Selling, general & admin. $ 5,277 35% $ 3,401 40% 55% $10,678 34% $ 6,493 40% 64%
(a) expressed as a percentage of total net revenues. The Company's results for the quarter and six month period ended June 30, 1997 were favorably impacted by the acquisition of a majority interest in NWL which closed June 13, 1997. NWL contributed approximately $1.0 million in revenue and $80 thousand in net income after distribution to minority interests during the period from the closing date until June 30, 1997. The Company believes that these results are not indicative of a normal two week period but reflect a shipment pattern whereby a significant portion of a quarter's shipments may take place in the latter part of the quarter. Net revenues increased during the three and six months ended June 30, 1997 relative to the corresponding periods of 1996 as a combined result of higher unit shipments of the Company's laser systems at lower average selling prices, higher shipments of instrumentation, shipments of products and sales of services acquired in the acquisition of HSI completed in August 1996 and shipments of products acquired in the acquisition of NWL completed in June 1997. Revenues from the sales of laser systems increased during the quarter and six month periods ended June 30, 1997 relative to the same periods in 1996 primarily due to higher unit shipments of the Company's Aura office lasers and to a lesser extent, sales of lasers acquired in the acquisitions of HSI and NWL. Average unit prices decreased during these periods as a combined result of the greater shipments of lower priced Aura office laser units as well as increased shipments to independent international distributors. The Company believes that the continuing trend toward reduced health care costs in the United States is still a factor which continues to impact negatively capital equipment procurement by its hospital customers in the United States. As a result, the Company expects that its revenue mix trends for laser equipment in the U.S. market will continue to shift toward its lower priced Aura office laser. The increase in revenues from the sales of instrumentation and disposable supplies during the quarter and six months ended June 30, 1997 compared to the corresponding periods in 1996 is principally attributable to increased shipments of scanning devices sold as accessories to the Aura office laser system, partially offset by lower shipments of side-firing devices which the Company sells for use in prostate surgeries. The decreases in percentage of net revenues were primarily the result of revenues from the sales of lasers and AMS equipment increasing at a faster rate than revenues from the sales of instrumentation and disposable supplies. 10 11 The Company believes that acceptance of lasers in aesthetic surgery, dermatology, urology, and ear, nose and throat surgery will continue to be important to its business. In addition, the adoption of photodynamic therapy by medical practitioners will be important. The Company continues to invest in developing new instrumentation for emerging surgical applications and to educate surgeons in the United States and internationally to encourage the adoption of such new applications. However, there can be no assurance that such investments will encourage adoption of the Company's products. Finally, penetration of the international market, although increasing, has been limited. The decrease in gross margin as a percentage of net sales during the quarter and six months ended June 30, 1997 relative to the corresponding periods of 1996 is due in part to revenues generated from sales of AMS products. These products generally generate lower gross margins than product lines that the Company manufactures. In addition, a higher proportion of revenues from sales to independent international distributors were generated during the first half of 1997 than in the first half of 1996. These revenues generally generate lower gross margins than those generated by revenues from sales through the Company's direct sales force. The Company expects that gross margin as a percentage of revenues for the remainder of 1997 may vary from quarter to quarter as it continues to balance production volumes and inventory levels with product demand and as product and distribution mix varies. Research and development expenses, are the result of activities related to the development of new laser, instrumentation and disposable products and the enhancement of the Company's existing products. The decrease in spending as a percentage of net revenues during the quarter and six months ended June 30, 1997 was due principally to the increase in revenues resulting from the acquisition of HSI without comparable increases in spending on research and development. The Company acts as a distributor for the majority of the AMS product line, and, as such, the research and development activity required to support these products is minimal The Company expects to increase amounts spent in research and development on non-AMS products during 1997; however, as a percentage of total net revenues, the Company expects these amounts to vary from quarter to quarter as net revenues change. The increase in selling, general and administrative expenses during the quarter and six months ended June 30, 1997 primarily results from new personnel acquired by the Company in the HSI acquisition. The Company expects these amounts to remain at similar levels during the remainder of 1997 as the Company continues to invest in international expansion, marketing programs and educational support. During the quarters and six months ended June 30, 1997 the Company recorded income tax provisions representing effective tax rates of 22% and 16%, respectively, compared to tax provisions representing effective tax rates of 12% in each of the corresponding periods in 1996. The 1997 tax rates are higher than the 1996 rates due to the combined effect of higher tax rates on the income generated by NWL partially offset by lower effective rates in 1997 than in 1996 due to the impact of non-deductible acquisition related charges in 1996. Both years' tax rates are below the combined federal and state statutory rates due to the utilization of available net operating loss carryforwards. 11 12 LIQUIDITY AND CAPITAL RESOURCES: The following table contains selected balance sheet information which serves as the basis of the discussion of the Company's liquidity and capital resources at June 30, 1997 and for the six months then ended (in thousands):
JUNE 30, DECEMBER 31, 1997 1996 -------------------------- Cash and cash equivalents $ 1,837 $ 3,917 Total assets $52,944 $44,469 Net working capital $21,217 $18,444
The net decrease in cash and cash equivalents during the six month period was due principally to the combination of cash used by operating activities of $3.2 million, capital expenditures of $2.0 million and the $1.0 million paid for the acquisition of a majority interest in NWL, offset by proceeds from the sale of common stock pursuant to option exercises of $1.3 million and net short-term bank borrowings of $2.6 million. Significant components of cash used by operating activities included an increase in accounts receivable of $2.4 million, an increase in inventory of $0.8 million and decreases to accounts payable and accrued compensation of $2.0 million and $1.0 million, respectively. The Company believes that the increase to accounts receivable was due to longer collection cycles for sales by its international subsidiaries, particularly in France and similarly long collection cycles for sales to its AMS customers. The Company anticipates that future changes in cash and working capital will be dependent on a number of factors. As a result of the acquisitions of HSI and NWL, the Company's Balance Sheet liquidity ratios changed and the Company's ability to generate cash will be partially dependent on management's ability to manage effectively non-cash assets such as inventory and accounts receivable. In addition, the level of profitability of the Company will have a significant impact on cash resources. From time to time, the Company may also consider the acquisition of, or evaluate investments in, certain products and businesses complementary to the Company's business. Any such acquisition or investment may require additional capital resources. The Company anticipates that current cash resources, internally generated funds, capital and operating lease lines and available bank borrowings will be sufficient to meet liquidity and capital needs at least through the next twelve months. The Company financed the HSI and NWL acquisitions using its existing cash resources. While the Company believes its remaining cash resources will be sufficient to fund its short term operating needs, additional financing either through its bank line of credit or otherwise will be required for the Company's currently envisioned long term needs. There can be no assurance that such additional financing will be available on terms acceptable to the Company, or at all. The Company has in place a $5.0 million revolving bank line of credit which expires in November 1997, under which $2.6 million in borrowings were outstanding at June 30, 1997. In addition, NWL has in place various revolving bank lines totaling approximately $2.0 million which expire at various dates within the next year and under which approximately $1.7 million in borrowings were outstanding at June 30, 1997. 12 13 ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is a party to a number of legal proceedings arising in the ordinary course of business. While it is not feasible to predict or determine the outcome of the actions brought against it, the Company believes that the ultimate resolution of these claims will not have a material adverse effect on its financial position or results of operations. 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 (a) The annual meeting of shareholders was held on June 27, 1997. (b) The first matter voted upon at the meeting was the election of directors and the results of that vote were as follows:
Present but For Withheld Abstained Not Voting --- -------- --------- ---------- David Cohen 11,053,907 456,431 0 0 Klaus Goffloo 11,065,856 444,482 0 0 Benjamin L. Holmes 11,065,756 444,582 0 0 Thomas Ihlenfeldt 11,071,354 438,984 0 0 E. Walter Lange 11,071,354 438,984 0 0 Robert V. McCormick 11,071,054 439,284 0 0 Rodney Perkins, M.D. 11,021,354 488,984 0 0 Robert J. Pressley, Ph.D. 11,021,354 488,984 0 0
(c) The second matter voted upon at the meeting and the results of that vote were as follows:
Present but For Opposed Abstained Not Voting --- ------- --------- ---------- To authorize an 9,881,046 1,574,543 52,749 2,000 amendment to the Company's 1994 Stock Option Plan to increase the number of shares for issuance thereunder by 400,000 shares to an aggregate of 2,100,000 shares.
13 14 (d) The third matter voted upon at the meeting and the results of that vote were as follows:
Present but For Opposed Abstained Not Voting --- ------- --------- ---------- To authorize an 10,169,891 1,281,028 59,419 0 amendment to the Company's 1989 Stock Purchase Plan to increase the number of shares for issuance thereunder by 150,000 shares to an aggregate of 600,000 shares.
(e) The fourth matter voted upon at the meeting and the results of that vote were as follows:
Present but For Opposed Abstained Not Voting --- ------- --------- ---------- To ratify the appointment 11,227,527 250,701 32,110 0 of Ernst & Young LLP as the independent auditors for the Company for the fiscal year ending December 31, 1997.
ITEM 5. OTHER ITEMS Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: None (b) Reports on Form 8-K: None 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. LASERSCOPE Registrant /s/ Dennis LaLumandiere ---------------------------------------- Dennis LaLumandiere Vice President of Finance and Chief Financial Officer (Principal Financial and Accounting Officer) Date: August 11, 1997 14 15 INDEX TO EXHIBITS
Exhibit Number Exhibits - -------- -------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1997 JUN-30-1997 1,837 0 17,385 1,725 21,307 41,406 17,763 12,221 52,944 20,189 1,756 0 0 50,500 (20,244) 30,256 30,970 30,970 16,865 16,865 12,043 0 24 2,038 327 1,711 0 0 0 1,637 .13 .13
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