<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 March 31, 1998
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 April 30, 1998, there were 13,706,699 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 THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Net sales:
Product $ 36,339 $ 28,120
Service 5,256 4,194
-------- --------
Total net sales 41,595 32,314
-------- --------
Cost of sales:
Product 20,219 16,634
Service 3,978 2,983
-------- --------
Total cost of sales 24,197 19,617
-------- --------
Gross margin 17,398 12,697
-------- --------
Operating expenses:
Research and development 3,010 2,625
Marketing and sales 7,323 5,283
Administrative, general and other 2,295 1,663
-------- --------
Total operating expenses 12,628 9,571
-------- --------
Operating income 4,770 3,126
Interest income 267 255
Interest expense (76) (3)
-------- --------
Income before income taxes 4,961 3,378
Income tax expense 1,716 1,077
-------- --------
Net income $ 3,245 $ 2,301
======== ========
Net income per common share:
Diluted $ .24 $ .18
Basic $ .26 $ .19
Common shares:
Diluted 13,397 13,072
Basic 12,639 12,393
</TABLE>
(See Accompanying Notes)
2
<PAGE> 3
OEC MEDICAL SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
(In thousands, except per share amounts)
ASSETS
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
-------------- -----------------
(unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 16,146 $ 17,502
Securities available for sale 3,811 2,843
Accounts receivable, net of
allowance of $1,165 and $1,114, respectively 40,636 40,058
Inventories, net 31,827 28,376
Prepaid expenses and other current assets 1,669 2,988
Income taxes receivable 343 1,025
Deferred income taxes 7,792 7,304
--------- ---------
Total current assets 102,224 100,096
Long-term receivables -- 998
Property and equipment, net 15,796 15,307
Cost in excess of net assets acquired, net of
accumulated amortization of $9,398 and $9,155, respectively 10,650 10,893
Deferred income taxes 2,495 2,643
Investment in unconsolidated affiliate 1,575 --
Other assets 989 750
--------- ---------
Total $ 133,729 $ 130,687
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 8,841 $ 10,339
Accrued salaries and benefits 4,200 5,172
Accrued warranty and installation costs 2,698 2,258
Deferred income and customer deposits 5,336 5,075
Accrued legal fees and litigation settlements 4,835 4,697
Accrued distributor commissions 2,816 3,725
Other accrued liabilities 4,268 4,869
--------- ---------
Total current liabilities 32,994 36,135
--------- ---------
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--13,710 and 13,474 shares, respectively 137 135
Capital in excess of par value 85,398 82,317
Retained earnings 25,209 21,964
Treasury stock, 970 shares at cost (9,678) (9,678)
Foreign currency translation adjustment (331) (186)
--------- ---------
Total stockholders' equity 100,735 94,552
--------- ---------
Total $ 133,729 $ 130,687
========= =========
</TABLE>
(See Accompanying Notes)
3
<PAGE> 4
OEC MEDICAL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(In thousands)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 3,245 $ 2,301
Adjustments to reconcile net income
to net cash used by operating activities:
Depreciation and amortization expense 917 758
Bad debt expense (recoveries) 30 (270)
Deferred income tax expense (benefit) (340) 184
Current tax benefit attributable to stock options exercised 1,296 286
Changes in current assets and liabilities:
Accounts receivable (608) 1,201
Inventories (3,451) (2,254)
Prepaid expenses and other current assets 1,319 (389)
Income taxes 682 304
Other assets (239) (213)
Accounts payable (1,498) 1,035
Accrued salaries and benefits (972) (1,395)
Accrued warranty and installation costs 440 140
Deferred income and customer deposits 261 (117)
Accrued legal fees and litigation settlements 138 133
Accrued distributor commissions (909) (758)
Other accrued liabilities (601) (1,190)
-------- --------
Net cash used by operating activities (290) (244)
-------- --------
INVESTING ACTIVITIES:
Reduction (increase) in long-term receivables 998 (714)
Additions to property and equipment (1,163) (304)
Purchase of securities available for sale (968) --
Payment for the purchase of unconsolidated affiliate (1,575) --
Cash acquired in connection with the acquisition of BMS -- 116
Other (145) (160)
-------- --------
Net cash used by investing activities (2,853) (1,062)
-------- --------
FINANCING ACTIVITIES:
Common stock issued under benefit plans 1,787 1,015
Purchase of stock warrants -- (1,000)
Purchases of treasury stock -- (829)
-------- --------
Net cash provided (used) by financing activities 1,787 (814)
-------- --------
Net decrease in cash and cash equivalents (1,356) (2,120)
Cash and cash equivalents at beginning of period 17,502 17,103
-------- --------
Cash and cash equivalents at end of period $ 16,146 $ 14,983
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 13 $ 3
Cash paid during the period for income taxes $ 78 $ 303
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: During the
quarter ended March 31, 1997, the Company increased its ownership in BMS from
19.8% to 100% as follows:
Original 19.8% interest $ 190
January 1, 1997 transactions:
Cash payment 193
Options granted 274
Loans converted to equity 615
Net liabilities acquired 380
--------
Cost in excess of net assets acquired $ 1,652
</TABLE>
(See Accompanying Notes)
4
<PAGE> 5
OEC MEDICAL SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1998 AND 1997
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 three months ended March 31, 1998 and
1997, 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, 1997, filed on Form 10-K on March 26, 1998.
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>
March 31, December 31,
1998 1997
-------- --------
(In thousands)
<S> <C> <C>
Purchased parts and completed subassemblies $ 13,424 $ 13,340
Work-in-process 5,325 4,301
Finished goods 371 456
Demonstration equipment 11,324 8,985
Service and repair parts 5,862 5,077
-------- --------
Total $ 36,306 $ 32,159
Less: reserves for excess and obsolete inventory (4,479) (3,783)
-------- --------
Net $ 31,827 $ 28,376
======== ========
</TABLE>
3. In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains and losses) in a full set of
general-purpose financial statements. This statement requires that an
enterprise (a) classify items of other comprehensive income by their nature
in a financial statement and (b) display the accumulated balance of other
comprehensive income separately from retained earnings and additional
paid-in capital in the equity section of a statement of financial position.
Effective January 1, 1998, the Company adopted the provisions of SFAS No.
130. Accordingly, the Company determined that the only transactions
considered to be an additional component of comprehensive income is the
cumulative effect of foreign currency translation adjustments. As of March
31, 1998 and 1997, the cumulative effect of such transactions reduced
stockholders' equity by approximately $331,000 and $395,000, respectively.
The net impact to operations for the three months ended March 31, 1998 and
1997 would reduce comprehensive income by approximately $145,000 and
$160,000, respectively.
In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of
an Enterprise and Related Information," which redefines how public business
enterprises report information about operating segments in annual financial
statements. The statement also establishes standards for related
disclosures about products and services, geographical areas, and major
customers. SFAS No. 131 is effective for annual financial statements for
periods beginning after December 15, 1997. In the initial year of
application, comparative information for earlier years is to be restated.
The adoption of SFAS No. 131 will likely not result in additional
disclosures by the Company.
4. On April 20, 1998, the Company's Board of Directors unanimously authorized
the Company to repurchase 1,000,000 shares of the Company's common stock in
the open market. The manner and timing of the repurchase will depend on
market conditions and the Company's available cash reserves.
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 "Factors That May Affect Future Operations" section on
page 8 of this Form 10-Q.
Results of Operations
For the quarter ended March 31, 1998, OEC Medical Systems, Inc. had net income
of $3.2 million, compared with net income of $2.3 million for the same period in
1997. Operating income improved from $3.1 million in 1997 to $4.8 million in
1998.
The following table sets forth OEC's operating results as a percentage of net
sales:
<TABLE>
<CAPTION>
Three Months
1998 1997
----- -----
<S> <C> <C>
Net sales:
Product 87.4 87.0
Service 12.6 13.0
----- -----
Total net sales 100.0 100.0
----- -----
Cost of sales:
Product 48.6 51.5
Service 9.6 9.2
----- -----
Total cost of sales 58.2 60.7
----- -----
Gross margin 41.8 39.3
----- -----
Operating expenses:
Research and development 7.2 8.1
Marketing and sales 17.6 16.3
Administrative, general and other 5.6 5.2
----- -----
Total operating expenses 30.4 29.6
----- -----
Operating income 11.5 9.7
----- -----
Net income 7.8 7.1
===== =====
</TABLE>
Sales and Markets
Net sales for the quarter ended March 31, 1998, were $41.6 million, compared
with net sales of $32.3 million for the comparable period of 1997. This reflects
a 29% increase. Product sales for the quarter ended March 31, 1998 were $36.3
million, compared with product sales of $28.1 million for the same quarter last
year.
The order rate was strong across all products, up 26% over last year, in part,
from particularly strong bookings generated by a group buy promotional program
that ended February 28, 1998.
6
<PAGE> 7
Service revenue for the quarter ended March 31, 1998 was $5.3 million compared
with service revenue of $4.2 million for the same quarter last year. This
reflects a 25% increase, in line with the product sales increases. New service
contract bookings for the quarter grew at an even faster rate that is a result
of renewed marketing efforts and a corresponding higher percentage of contract
renewals.
International revenue was down 25% compared to the same period in 1997. The
chief reasons for this shortfall are the economic turmoil in Asia and the slower
than expected progress in Latin America along with timing issues related to
product mix, i.e., customer orders taken late in the quarter and falling into
backlog instead of revenue. International orders for the first quarter of 1998
were 9% higher than the same period in 1997.
Margin Analysis
OEC's gross margin was up to 41.8% of net sales for the first quarter of 1998
compared to 39.3% for the same period in 1997. Despite pricing pressures on
lower cost C-arms, this margin improvement was accomplished through continued
efficiency gains in manufacturing, increased overhead absorption resulting from
higher production volumes and as a result of sales of higher margin products
like the Cardiac and 12 inch field-of-view C-arm products.
Service expenses were up by $1.0 million compared to the same period in 1997.
This increase is attributed to higher labor and material costs associated with
the growth in revenue.
Operating Expenses
Research and development costs were up $0.4 million for the three-month period
compared to the prior year. This reflects the Company's continuing investment in
new product development and enhancements such as the Series 9600 Cardiac system
introduced in 1997.
Marketing and sales expenses were up $2 million or 39% compared to the prior
year, but were up only 1.3% as a percentage of net sales. This category was
higher because of additional manpower in sales coverage and application
personnel worldwide, along with additional trade show participation. Trade show
activities expanded to accommodate a broader product line as well as more
countries. In addition, OEC developed and implemented a comprehensive cardiac
training curriculum in the first quarter for our worldwide sales force. This
added to the increase but is expected to further enhance cardiac sales going
forward.
Administrative expenses as a percentage of sales were up slightly for the first
three months of 1998 compared to last year. This increase is a reflection of the
Company's on-going investment in information technology systems.
Income Taxes
During the first quarter of 1998 and 1997, the Company recorded $1.7 million and
$1.1 million of tax expense, respectively. The effective tax rate increased
slightly from 31.9% in the first quarter of 1997 to 34.6% for the first three
months of 1998 and is expected to remain at around that level throughout 1998.
Liquidity and Capital Resources
Cash used by operations for the first three months of 1998 and 1997 was $0.3
million and $0.2 million, respectively. The primary operational cash usage was
for inventory increases to support increased production due to the broadened
product line and to provide additional demonstration units.
During the first quarter of 1998, the Company used $2.9 million in investing
activities. This cash usage was primarily made up of the investment in Heartlab,
Inc., a Rhode Island based . . . .for a minority interest and for additions to
property and equipment. The building additions to the Salt Lake City facility
were 95% complete by quarter end. The manufacturing area has been fully occupied
and the engineering and administration areas will be ready for occupancy early
in second quarter.
7
<PAGE> 8
On April 20, the board of directors of OEC authorized a one million share
repurchase program to commence immediately. There is no time limitation on its
completion. OEC believes that it has sufficient liquidity and anticipated cash
flow to meet its obligations and support the share repurchase program in 1998.
In addition, OEC continues to carry an unused $10 million line of credit.
Factors That May Affect Future Results
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 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;
the impact of managed care initiatives in the United States; and the ability to
increase operating margins on higher sales.
OEC's future operating results are dependent on its ability to develop,
manufacture and market innovative products that meet customers' needs. 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 existing technology will not be superseded by new discoveries
or breakthroughs.
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. The loss of protection could have a material adverse effect on
the Company's business.
OEC depends on some significant and single-source vendors for certain important
component parts for certain products. 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 and on its financial condition and results of operations in cases
where the existing inventory of the components is not adequate to meet the
Company's demand for the component during such disruption.
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.
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 further
inspections 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 or ISO compliance will not be
challenged at some subsequent point in time.
A portion of the Company's research and development activities, some of its
single-source vendors, 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.
8
<PAGE> 9
Foreign Currency Rate Exposure
The Company has operating subsidiaries located in Europe and utilizes forward
exchange contracts with durations generally less than six months to hedge
against the effect of exchange rate fluctuations of European income. The Company
also has other customers located throughout the world; however, these customers'
invoices are denominated in U.S. dollars. As a result, the Company has not
incurred material gains or losses resulting from foreign currency fluctuations.
The Company's forward exchange contracts are not material.
Interest Rate Risk Exposure
The Company has purchased certain debt obligations of the U.S. government and
various corporations with maturities generally less than one year. As of
December 31, 1997, such investments totaled approximately $2.8 million and the
difference between amortized cost and fair market value is immaterial. Interest
rate risk and default risk underlying these securities is not considered to be
significant.
Other Exposures
The Company has not entered into any speculative derivatives and does not
foresee utilizing such instruments in the future. The Company does not utilize
commodities in the normal course of its manufacturing process. Accordingly, the
Company does not believe it has any significant commodity risks or exposures.
Year 2000 Compliance
The Company has reviewed its primary financial and other business information
systems and it believes that these systems will be able to manage and manipulate
all material data involving the transition from 1999 to 2000 without functional
or data abnormality and without inaccurate results related to such data. Two
tertiary computer systems are in the process of being upgraded to Year 2000
compliance and reviews are underway with all suppliers, especially sole-source
vendors, to ensure compliance. The Company has reviewed the software associated
with the operation of its products to ensure Year 2000 compliance and has
determined that such software is capable of meeting the compliance standards.
While the Company believes the issues associated with Year 2000 compliance have
been or are being addressed, there remains the risk that suppliers may encounter
disruptions due to year 2000 compliance or the costs associated with
implementing computer system changes would have an adverse effect on the
Company's results of operations and financial condition. There is also risk that
Year 2000 compliance may have an effect on the purchase patterns of customers
that would adversely affect demand for the Company's products for a period of
time.
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 1997 or Form 10K filed with the
Securities & Exchange Commission on March 26, 1998.
9
<PAGE> 10
ITEM 6. Exhibits
(a) The following exhibit (numbered in accordance with Item 601 of SEC
Regulations S-K) is filed as part of this report:
<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.
10.20 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>
<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.
11 Statement of Computation of Per Share Earnings.
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:
Not Applicable
</TABLE>
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: May 13, 1998
12
<PAGE> 13
INDEX TO 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.
10.20 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>
13
<PAGE> 14
<TABLE>
<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.
11 Statement of Computation of Per Share Earnings.
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:
Not Applicable
</TABLE>
14
<PAGE> 1
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE FOR THE THREE MONTHS ENDED MARCH 31, 1998
AND 1997: (In thousands, except per share amounts)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Net income* $ 3,245 $ 2,301
Earnings per common share:
Basic $ .26 $ .19
Diluted $ .24 $ .18
Shares outstanding (average):
Common shares 13,609 13,211
Treasury shares (970) (818)
-------- --------
Common shares - basic (average) 12,639 12,393
Options: common equivalents 739 679
Warrants: common equivalents 19 --
-------- --------
Common shares - diluted (average) 13,397 13,072
======== ========
</TABLE>
*Note: The Company did not have any outstanding preferred stock for the periods
ending March 31, 1997 through 1998.
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S 1ST QUARTER 10-Q FOR 1998.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 16,146
<SECURITIES> 3,811
<RECEIVABLES> 41,801
<ALLOWANCES> 1,165
<INVENTORY> 31,827
<CURRENT-ASSETS> 102,224
<PP&E> 28,623
<DEPRECIATION> 12,827
<TOTAL-ASSETS> 133,729
<CURRENT-LIABILITIES> 32,994
<BONDS> 0
0
0
<COMMON> 137
<OTHER-SE> 100,598
<TOTAL-LIABILITY-AND-EQUITY> 133,729
<SALES> 36,339
<TOTAL-REVENUES> 41,595
<CGS> 20,219
<TOTAL-COSTS> 24,197
<OTHER-EXPENSES> 12,598
<LOSS-PROVISION> 30
<INTEREST-EXPENSE> 76
<INCOME-PRETAX> 4,961
<INCOME-TAX> 1,716
<INCOME-CONTINUING> 3,245
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,245
<EPS-PRIMARY> .26<F1>
<EPS-DILUTED> .24
<FN>
<F1>FOR PURPOSES OF THIS EXHIBIT, PRIMARY MEANS BASIC.
</FN>
</TABLE>
