<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 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 1-9983
OEC MEDICAL SYSTEMS, INC.
(Registrant)
Incorporated in the State of Delaware
I.R.S. Employer Identification Number 94-2538512
384 Wright Brothers Drive, Salt Lake City, Utah 84116
(Address of Principal Executive Offices)
Telephone: (801) 328-9300
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 requirements
for the past 90 days.
Yes [X] No[ ]
As of October 31, 1997, there were 13,365,682 shares of Common Stock ($.01 par
value) outstanding.
<PAGE> 2
PART I. Financial Information
ITEM 1. Financial Statements
OEC MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
FOR THE QUARTER & NINE MONTHS ENDED SEPTEMBER 30, 1997
AND 1996 (In thousands, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended September 30, Nine Months Ended September 30,
----------------------- ------------------------
1997 1996 1997 1996
-------- -------- --------- --------
<S> <C> <C> <C> <C>
Net sales
Product $ 34,519 $ 29,948 $ 97,209 $ 78,611
Service 4,440 4,079 12,944 12,193
-------- -------- --------- --------
Total net sales 38,959 34,027 110,153 90,804
-------- -------- --------- --------
Cost of sales
Product 19,542 17,477 55,959 46,170
Service 3,288 2,927 9,405 8,228
-------- -------- --------- --------
Total cost of sales 22,830 20,404 65,364 54,398
-------- -------- --------- --------
Gross margin 16,129 13,623 44,789 36,406
-------- -------- --------- --------
Operating Expenses
Research and development 2,776 2,229 8,295 6,447
Marketing and sales 6,177 5,577 18,081 15,357
Administrative, general
and other 2,125 2,116 6,103 5,210
-------- -------- --------- --------
Total operating expenses 11,078 9,922 32,479 27,014
-------- -------- --------- --------
Operating income 5,051 3,701 12,310 9,392
Interest income 220 179 677 566
Interest expense (1) (5) (6) (8)
-------- -------- --------- --------
Income before income taxes 5,270 3,875 12,981 9,950
Income tax expense 1,825 -- 4,492 --
-------- -------- --------- --------
Net income $ 3,445 $ 3,875 $ 8,489 $ 9,950
======== ======== ========= ========
Net income per common and
common equivalent share: $ 0.26 $ 0.30 $ 0.65 $ 0.78
======== ======== ========= ========
Common and
common equivalent shares 13,132 12,777 13,096 12,815
</TABLE>
(See Accompanying Notes)
2
<PAGE> 3
OEC MEDICAL SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(In thousands)
ASSETS
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
(Unaudited)
Current Assets:
Cash and temporary cash investments $ 15,190 $ 17,103
Accounts and notes receivable, net of
allowances of $1,064 and $853, respectively 39,231 33,191
Inventories 28,216 23,868
Prepaid expenses and other current assets 2,719 1,451
Deferred income taxes 8,810 8,006
--------- ---------
Total current assets 94,166 83,619
Long-term receivables 1,082 1,627
Property and equipment, net 13,645 11,903
Cost in excess of net assets acquired, net of accumulated
amortization of $8,912 and $8,183, respectively 11,136 10,213
Deferred income taxes 1,621 3,879
Other assets, net 729 705
--------- ---------
$ 122,379 $ 111,946
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 9,638 $ 7,358
Accrued salaries and benefits 3,945 4,127
Accrued warranty and installation costs 2,244 1,748
Deferred income and customer deposits 5,345 5,462
Income taxes payable 293 509
Accrued legal fees and litigation settlements 4,249 4,062
Accrued distributor commissions 2,914 2,891
Other accrued liabilities 4,025 3,615
--------- ---------
Total current liabilities 32,653 29,772
--------- ---------
Stockholders' equity:
Preferred stock, $.01 par value
Authorized--2,000 shares, including 1,100 shares
of convertible preferred stock, none outstanding
Common stock, $.01 par value
Authorized--30,000 shares
Outstanding--13,357 and 13,158 shares, respectively 134 132
Capital in excess of par value 80,924 79,341
Retained earnings 18,275 9,786
Treasury stock, 954 and 801 shares at cost, respectively (9,285) (6,850)
Foreign currency translation adjustment (322) (235)
--------- ---------
Total stockholders' equity 89,726 82,174
--------- ---------
$ 122,379 $ 111,946
========= =========
</TABLE>
(See Accompanying Notes)
3
<PAGE> 4
OEC MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 8,489 $ 9,950
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 2,557 2,191
Bad debt expense (240) 115
Deferred income tax expense (benefit) 1,454 (2,384)
Current tax benefit attributable to stock options exercised 546 --
Changes in current assets and liabilities, net of effects of
purchase of subsidiary:
Accounts and notes receivable, net (5,658) (7,267)
Inventories (3,623) (5,839)
Prepaid expenses and other current assets (1,186) (548)
Other assets, net (213) (170)
Accounts payable 1,256 2,781
Accrued salaries and benefits (182) 746
Accrued warranty and installation costs 496 488
Deferred income and customer deposits (117) 534
Income taxes payable (216) (354)
Accrued legal fees and litigation settlements 187 136
Accrued distributor commissions 23 868
Other accrued liabilities (119) 1,013
-------- --------
Net cash provided by operating activities 3,454 2,260
INVESTING ACTIVITIES:
Increase in long-term receivables (553) (605)
Additions to property and equipment (3,448) (3,227)
Net cash acquired upon purchase of subsidiary 116 --
Other (87) (162)
-------- --------
Net cash used by investing activities (3,972) (3,994)
FINANCING ACTIVITIES:
Common stock issued under benefit plans 2,040 825
Repurchase of warrants (1,000) --
Purchases of treasury stock (2,435) (1,786)
-------- --------
Net cash used by financing activities (1,395) (961)
Net decrease in cash and short-term cash investments (1,913) (2,695)
Cash and short-term cash investments at beginning of period 17,103 16,584
-------- --------
Cash and short-term cash investments at end of period $ 15,190 $ 13,889
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 6 $ 8
Cash paid during the period for income taxes $ 2,708 $ 2,738
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
During the nine months ended September 30, 1997, the Company increased its
ownership in BMS from 19.8% to 100% as follows:
<TABLE>
<S> <C>
Original 19.8% interest $ 190
January 1, 1997 transactions:
Cash payment 193
Options granted 274
Loans converted to equity 615
------
Total investment 1,272
Net Liabilities acquired 380
------
Total purchase price in excess of net liabilities acquired $1,652
======
</TABLE>
(See Accompanying Notes)
4
<PAGE> 5
OEC MEDICAL SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(unaudited)
1. Interim information is unaudited but, in the opinion of Company
management, all adjustments necessary for a fair presentation of interim
results have been included. The results for the nine months ended
September 30, 1997 and 1996, are not necessarily indicative of the results
to be expected for the entire year. These consolidated financial
statements and notes should be read in conjunction with the Company's
consolidated financial statements for the year ended December 31, 1996,
filed on Form 10-K on March 27, 1997.
2. Inventories are stated at the lower of cost, utilizing the
first-in/first-out method, or market. Inventories consist of the
following:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996*
-------- --------
(In thousands)
<S> <C> <C>
Purchased parts and
completed subassemblies $ 14,505 $ 10,432
Work-in-process 2,742 3,097
Finished goods 1,042 2,023
Demonstration equipment 11,978 8,203
Service and repair parts 4,719 4,475
-------- --------
Total $ 34,986 $ 28,230
Less: reserves for excess and obsolete inventory (6,770) (4,362)
-------- --------
Net $ 28,216 $ 23,868
</TABLE>
* Certain prior year amounts have been reclassified to conform with the
current year's presentation.
3. In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings per Share." This standard establishes standards for
computing and presenting earnings per share (EPS). SFAS No. 128 simplifies
the approach for computing earnings per share previously found in
Accounting Principles Board Opinion (APB) Opinion No. 5. It replaces the
presentation of primary EPS with a presentation of basic EPS. It also
requires dual presentation of basic and diluted EPS on the face of the
income statement for all entries with complex capital structures.
Under the new statement, basic EPS excludes dilution and is computed by
dividing income available to common stockholders by the weighted-average
number of common shares outstanding for the period. Diluted EPS reflects
the potential dilution that could occur if securities or other contracts
to issue common stock were exercised or converted into common stock.
Diluted EPS is computed similarly to fully diluted EPS pursuant to APB
Opinion No. 15.
SFAS No. 128 is effective for financial statements issued for periods
ending after December 15, 1997, with earlier application not permitted.
The computation of basic EPS under SFAS No. 128 would have resulted in net
income per common share of $0.68 for the nine months ended September 30,
1997, compared to $0.82 for the same period in 1996. Diluted EPS computed
under FASB No. 128 would have resulted in net income per common share of
$0.65 for the nine months ended September 30, 1997, compared to $0.78 for
the same period in 1996.
5
<PAGE> 6
OEC MEDICAL SYSTEMS, INC.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Except for historical information, this discussion contains forward-looking
statements that involve risks and uncertainties that could cause actual results
to differ materially from those projected. Such risk and uncertainties include
those described in the "Risk Factors" section on page 8 of this Form 10-Q.
Results of Operations
For the third quarter and nine months ended September 30, 1997, OEC Medical
Systems, Inc. had net income of $3.4 million and $8.5 million, respectively,
compared with net income of $3.9 million and $10.0 million, respectively, for
the same periods last year. The results for the nine month period ended
September 30, 1997 reflect tax expense of $4.5 million, as compared to the same
period in 1996, in which the Company had no tax expense. Operating income
improved for the third quarter and nine months ended September 30, 1997, from
$3.7 million and $9.4 million, respectively, in 1996 to $5.1 million and $12.3
million, respectively, in 1997.
The following table sets forth OEC's operating results as a percent of net
sales:
<TABLE>
<CAPTION>
Three Months Nine Months
------------------- -------------------
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net sales
Product 88.60% 88.01% 88.25% 86.57%
Service 11.40% 11.99% 11.75% 13.43%
------ ------ ------ ------
Total net sales 100.00% 100.00% 100.00% 100.00%
Cost of sales
Product 50.16% 51.36% 50.80% 50.85%
Service 8.44% 8.60% 8.54% 9.06%
------ ------ ------ ------
Total cost of sales 58.60% 59.96% 59.34% 59.91%
Gross margin 41.40% 40.04% 40.66% 40.09%
Operating expenses:
Research and development 7.13% 6.55% 7.53% 7.10%
Marketing and sales 15.86% 16.39% 16.41% 16.91%
Administrative, general and other 5.45% 6.22% 5.54% 5.74%
------ ------ ------ ------
Total operating expenses 28.44% 29.16% 29.49% 29.75%
------ ------ ------ ------
Operating income 12.96% 10.88% 11.18% 10.34%
Net income 8.84% 11.39% 7.71% 10.96%
</TABLE>
Sales and Markets
Net product sales for the quarter and nine months ended September 30, 1997, were
$34.5 million and $97.2 million, respectively, compared to net product sales of
$29.9 million and $78.6 million for the comparable periods of 1996. This
reflects a 15% and 24% increase, respectively.
The order rate for the company's core product, the Series 9600 Digital Mobile
Imaging System, is ahead of last year, both domestically and internationally.
The increase is a result of several factors including increased sales coverage
and market acceptance of the product in all regions as well as growth in sales
of the Series 9600 12" image intensifier option. The 12" option offers a wider
field-of-view needed for some existing procedures along with developing
6
<PAGE> 7
applications such as aortic stent graft placement. Revenue for the Uroview 2600
through nine months of 1997is flat but year-to-date bookings are up 16% in 1997
over the same period in 1996. Revenue from the MINI 6600 and 7600 C-arms
contributed to the overall revenue growth compared to the year ago quarter. The
6600 is gaining market share in line with the company's expectations, and the
7600 market acceptance has improved and is now in line with company
expectations. Year-to-date international growth as measured in local currency is
in line with expectations, however, the strength of the dollar has lowered
international revenues. Even though we expect the fourth quarter to improve
reported international performance on the year, continuing exchange rate trends
are causing international revenue to fall below expectations.
Service revenue for the quarter and nine months ended September 30, 1997 was
$4.4 million and $12.9 million, respectively, and very nearly mirrors the $4.1
million and $12.2 million for the comparable periods of 1996. The slowed service
revenue growth is the result of independent service organizations and hospitals
increasing the use of in-house biomedical service. The Company is aggressively
pursuing this business to increase the growth rate to more closely mirror system
sales growth.
Margin Analysis
OEC's gross margin expressed as a percentage of net sales increased 1.4% for the
third quarter and 0.6% for the nine months compared with the same periods in
1996. Ongoing improvements in manufacturing efficiency along with a product mix
towards higher revenue systems are the main reasons for the increase.
Service expenses for the quarter and nine months were up against last year by
$0.4 million and $1.2 million, respectively. These increases are attributed to
higher labor costs associated with additional personnel to handle more new
system installations along with lower warranty utilization due to higher system
reliability.
Operating Expenses
Research and development costs are up $0.6 million and $1.9 million, for the
three and nine month periods, respectively, compared to the prior year. This
reflects the Company's continuing investment in new product development and
improvements aimed at emerging applications in the minimally invasive market
with a focus on cost efficient healthcare delivery. Recent results of this
effort are the introduction of the Series 9600 Cardiac imager and the MINI 6600
6"/4" option.
Marketing and sales expenses are up against the prior year $.6 million and $2.7
million, for the three and nine month periods, respectively. This increase is
due primarily to larger commissions associated with higher sales and increased
costs associated with additional sales coverage to obtain the higher revenue,
both domestically and internationally. In the first quarter of 1997 the Company
recorded expense of $0.4 million due to unrealized currency translation losses.
Expressed as a percentage of total revenue, the marketing and sales expense was
down 0.50% for the first nine months of 1997.
Administrative expenses were flat for the three months and up $.9 million for
the nine months compared to the prior year. The main reason for the increase
year-to-date was the cost associated with the implementation of a new computer
system and associated training costs. The computer system went live on July 1,
1997 and the expense incurred in the first half of the year for implementation
slowed during the third quarter. Software bugs in the vendor's product has
caused additional implementation time and expense not originally anticipated.
The Company is likely to continue to experience additional costs into the first
quarter of 1998.
Income Taxes
During the third quarter and nine months ended September 30, 1997, the Company
recorded tax expense of $1.8 million and $4.5 million, respectively, compared to
no tax expense in the third quarter and nine months ended September 30, 1996.
The reversal of the valuation allowance for deferred tax assets in that period
had offset the tax provisions required for federal and state income taxes.
During 1996, the company has reversed the remaining balance of the valuation
allowance for the deferred tax assets. The company believes that it will
generate enough taxable income to fully utilize the deferred tax assets,
primarily made up of tax credits, prior to their expiration.
7
<PAGE> 8
Liquidity and Capital Resources
Cash provided by operations for the first nine months of 1997 was $3.5 million,
compared to $2.3 million for the first nine months of 1996. Part of the 1997 net
income was offset by operating cash requirements needed for higher accounts
receivable due to increased sales and additional inventory to support production
of a broadened product line and to provide more demonstration units.
A stock repurchase program covering 750,000 shares of the Company's outstanding
common stock was announced December 1994 and the authorized amount was increased
to 1,250,000 shares in January 1996. As of September 30, 1997, 1,042,083 shares
have been repurchased at a cost of $9,800,540 of which 87,983 were retired and
954,100 shares were recorded as treasury stock. Also, $1.0 million was used in
the first quarter of 1997 to buy back 200,000 warrants to purchase common stock
from PaineWebber R&D Partners II, L.P.
The Company began building additions to its Salt Lake City facility in the third
quarter of 1997 and completion is expected by the first quarter of 1998. Total
expenditures for this project are estimated at $3.0 million. This building
expansion is for increased manufacturing capacity.
OEC believes that it has sufficient liquidity and anticipated cash flow to meet
its obligations in 1997. In addition, OEC continues to carry an unused $10
million line of credit.
Risk Factors
The Company's business involves risks and uncertainties that could cause actual
results to differ materially from those projected. Such risks and uncertainties
include: Product demand and market acceptance; the effect of general economic
conditions and foreign currency fluctuations; the impact of competitive products
and pricing; new product development and commercialization; the effect of the
continuing shift in growth from domestic to international healthcare customers,
and the impact of managed care initiatives in the United States and the ability
to increase operating margins on higher sales.
Future operating results are dependent on the Company's' ability to develop,
manufacture and market innovative products that meet customers' needs. Inherent
in this process are a number of risks that the Company must successfully manage
in order to achieve favorable operating results. The process of developing new
high technology medical products is complex and uncertain and requires
innovative designs that anticipate customer needs, technological trends and
healthcare shifts. There can be no assurance that the Company will be able to
develop and market new products on a cost-effective and timely basis, that such
products will compete favorably with products developed by others or that
technology will not be superseded by new discoveries or breakthroughs. For
example, the delay in introduction of the Series 9600 in 1994 negatively
impacted revenue and earnings for the year.
Because of the substantial length of time and expense associated with bringing
new products through development and regulatory approval to the marketplace, the
medical device industry places considerable importance on obtaining patent,
trademark, copyright and trade secret protection for new technologies, products
and processes. A loss of protection could have a material adverse effect on the
Company's business.
Major items that OEC currently purchases from others include video monitors,
X-ray tubes, image intensifiers, CCD cameras and power supplies. Some of these
parts and components are available from a limited number of single-source
manufacturers or suppliers. While the Company believes any of these
single-source items could be replaced over time, abrupt disruption in the supply
of a part for a product could have a material adverse effect on the Company's
production in cases where the existing inventory of the components is not
adequate to meet the Company's demand for the component during such disruption
and could have a material adverse effect on its financial condition and results
of operations.
The testing, marketing and sale of human healthcare products entails an inherent
risk of product liability, and there can be no assurance that product liability
claims will not be asserted against OEC. Although OEC has product liability
insurance coverage, there can be no assurance that such coverage will provide
adequate coverage against all potential claims.
8
<PAGE> 9
As a manufacturer of medical devices, OEC is subject to extensive and rigorous
governmental regulation, principally by the FDA and corresponding state and
foreign agencies. Failure to comply with FDA regulations could result in
sanctions being imposed, including restrictions on the marketing of or recall of
the affected products.
The FDA and other agencies have periodically inspected OEC's facilities and
manufacturing processes, but remain subject to audit from time to time. OEC
continues to devote substantial human and financial resources to regulatory
compliance and believes that it remains in substantial compliance with all
applicable federal and state regulations. Nevertheless, there can be no
assurance that the FDA or a state agency will agree with OEC's positions, or
that its GMP compliance will not be challenged at some subsequent point in time.
OEC has received approval from the FDA and foreign regulatory authorities in the
past, when required, to market its products. In general, the length of time for
all reviews and approvals, most particularly from the FDA, has been lengthening
and the review or approval process for medical devices has become substantially
more difficult and expensive. Moreover, regulatory approvals, when granted, may
contain significant limitations on the standards due to unforeseen problems. To
date, product reviews for medical imaging technologies have been obtained within
three to twelve months. There can be no assurance that OEC will be able to
obtain necessary regulatory approvals in the future, and delays in the receipt
of or failure to receive such approvals, the loss of existing approvals or
failure to comply with regulatory requirements could have a material adverse
effect on the business, financial condition and results of operation of OEC.
A portion of the Company's research and development activities, its corporate
headquarters and other critical business operations are located near a major
earthquake fault. The ultimate impact on the Company, significant suppliers and
the general infrastructure is unknown, but operating results could be materially
affected in the event of a major earthquake.
Although OEC believes that it has the product offerings and resources needed for
continuing success, future revenue and margin trends cannot be reliably
predicted and may cause the Company to adjust its operations. Factors external
to the Company can result in volatility of the Company's common stock price.
PART II. Other information.
ITEM 1. Legal proceedings
There are no significant changes in legal proceedings from the previous stated
position in the Company's annual report for 1996 on Form 10K filed with the
Securities & Exchange Commission on March 27, 1997.
9
<PAGE> 10
ITEM 6. Exhibits and Reports on Form 8K
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit Number Description ------
----------- <S> <C>
3.1 Certificate of Incorporation, as amended. Incorporated by reference to the
OEC Medical Systems, Inc. Form 10-K, filed March 30, 1994.
3.2 By-Laws, as amended May 15, 1997. Incorporated by reference to the OEC
Medical Systems, Inc. Form 10-Q filed August 8, 1997.
4 Rights Agreement, dated as of June 20, 1988, between Diasonics, Inc. and
Bank of America NT&SA. Incorporated by reference to Exhibit 4.3 of the
Diasonics, Inc. Form 8-K, filed August 1, 1988
10.1 Diasonics, Inc. 1979 Stock Option Plan, amended and restated as of June 1,
1982. Incorporated by reference to Exhibit 10.6 of the Diasonics, Inc.
Registration Statement on Form S-8, filed May 2, 1983.
10.4 Diasonics, Inc. 1990 Stock Option/Stock Purchase Plan. Incorporated by
reference to Exhibit 10.79 of the Diasonics, Inc. Form S-8, filed on May
1, 1991.
10.5 Warrant for the Purchase of Common Shares issued to PaineWebber R&D
Partners II, L.P., as amended. Incorporated by reference to the OEC
Medical Systems, Inc. Form 10-K, filed on March 30, 1994.
10.14 Form of Option Agreement used in connection with options having
service-vesting provisions. Incorporated by reference to the OEC Medical
Systems, Inc. Form 10-K, filed March 30, 1994.
10.15 Form of Option Agreement used in connection with options having milestone
provisions. Incorporated by reference to the OEC Medical Systems, Inc.
Form 10-K, filed March 30, 1994.
10.16 Form of Option Agreement used in connection with automatic option grant
program for non-employee directors. Incorporated by reference to the OEC
Medical Systems, Inc. Form 10-K, filed March 30, 1994.
10.19 Note and Stock Pledge Agreement between Ruediger Naumann-Etienne and OEC
Medical Systems, Inc., dated September 5, 1995. Incorporated by reference
to the OEC Medical Systems, Inc. Form 10-K, filed April 1, 1996.
10.20 Form of Warrant Agreement used in connection with grant to independent
contractors for the purchase of common shares. Incorporated by reference
to the OEC Medical Systems, Inc. Form 10-K, filed March 27, 1997.
10.21 Agreement, dated December 17, 1996, to acquire full ownership of Barwig
Medizinische Systeme GmbH (BMS). Incorporated by reference to the OEC
Medical Systems, Inc. Form 10-K, filed March 27, 1997.
10.22 Agreement dated January 10, 1997 to repurchase warrants for the purchase
of common shares issued to PaineWebber R&D Partners II, L.P. Incorporated
by reference to the OEC Medical Systems, Inc. Form 10-Q, filed May 13,
1997.
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
Exhibit Number Description ------
----------- <S> <C>
10.23 Offer of Employment between Joseph W. Pepper and OEC Medical Systems, Inc.
dated April 21, 1997. Incorporated by reference to the OEC Medical
Systems, Inc. Form 10-Q, filed August 8, 1997.
21 List of Subsidiaries. Incorporated by reference to the OEC Medical
Systems, Inc. Form 10-Q filed May 13, 1997.
27 Financial Data Schedule (FDS) for Edgar Filing.
(b) Reports on Form 8-K:
</TABLE>
Not applicable
11
<PAGE> 12
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.
OEC MEDICAL SYSTEMS, INC.
(Registrant)
By: /s/ Randy W. Zundel
-------------------------------
Randy W. Zundel
Chief Financial Officer
(Principal Accounting Officer)
Date: November 3, 1997
12
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- -------- -----------
<S> <C>
27 Financial Data Schedule (FDS) for Edgar filing.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S 3RD QUARTER 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 15,190
<SECURITIES> 0
<RECEIVABLES> 40,295
<ALLOWANCES> 1,064
<INVENTORY> 28,216
<CURRENT-ASSETS> 94,166
<PP&E> 28,737
<DEPRECIATION> 15,092
<TOTAL-ASSETS> 122,379
<CURRENT-LIABILITIES> 32,653
<BONDS> 0
0
0
<COMMON> 134
<OTHER-SE> 89,562
<TOTAL-LIABILITY-AND-EQUITY> 122,379
<SALES> 97,209
<TOTAL-REVENUES> 110,153
<CGS> 55,959
<TOTAL-COSTS> 65,364
<OTHER-EXPENSES> 32,479
<LOSS-PROVISION> (240)
<INTEREST-EXPENSE> 6
<INCOME-PRETAX> 12,981
<INCOME-TAX> 4,492
<INCOME-CONTINUING> 8,489
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,489
<EPS-PRIMARY> 0.65
<EPS-DILUTED> 0.65
</TABLE>
