FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1995
Commission File Number 1-8635
AMERICAN MEDICAL ALERT CORP.
(Exact Name of Registrant as Specified in its Charter)
New York 11-2571221
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3265 Lawson Boulevard, Oceanside, New York 11572
(Address of principal executive offices)
(Zip Code)
(516) 536-5850
(Registrant's telephone number, including area code)
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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 5,504,074 shares of $.01 par
value common stock as of November 13 , 1995.
<PAGE>
AMERICAN MEDICAL ALERT CORP.
INDEX PAGE
Part I Condensed Balance Sheets for September 30, 1995
and December 31, 1994 1
Condensed Statements of Income for the
Nine Months Ended September 30, 1995 and 1994 2
Condensed Statements of Income for the
Three Months Ended September 30, 1995 and 1994 3
Condensed Statements of Cash Flows for
the Nine Months Ended September 30, 1995 and 1994 4-5
Notes to Condensed Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-8
Part II Other Information 9
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
Sept.30, 1995 Dec. 31, 1994*
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $243,825 $157,435
Accounts and notes receivable
(net of allowance for doubtful
accounts of $30,000 in '95 & '94) 1,439,923 1,281,067
Inventory 1,180,084 1,084,385
Prepaid expenses and other
current assets 104,904 42,744
Deferred income tax benefit 52,000 173,000
Total Current Assets 3,020,736 2,738,631
--------- ---------
NOTES RECEIVABLE -0- 16,391
FIXED ASSETS:
(Net of accumulated depreciation
and amortization) 2,424,097 2,206,882
OTHER ASSETS 26,696 21,489
--------- ---------
TOTAL $5,471,529 $4,983,393
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable -bank $450,000 $550,000
Accounts payable 346,473 455,369
Accrued expenses 231,378 170,924
Taxes payable 57,000 58,296
Current portion of long-term debt 8,133 9,162
--------- ---------
Total Current Liabilities 1,092,984 1,243,751
DEFERRED INCOME TAX LIABILITY 80,000 80,000
LONG-TERM DEBT -LESS CURRENT
MATURITIES 10,582 13,276
--------- ---------
Total Liabilities 1,183,566 1,337,027
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY
Common stock -$.01 par value;
authorized - 10,000,000 shares;
issued, and outstanding -
5,504,074 shares in 1995 and
5,462,712 shares in 1994. 55,040 54,627
Additional paid-in capital 4,087,949 4,069,384
Retain Earnings (Deficit) 151,458 (471,161)
--------- ---------
4,294,447 3,652,850
Less 1,995 shares of treasury stock,
at cost (6,484) (6,484)
4,287,963 3,646,366
--------- ---------
TOTAL $5,471,529 $4,983,393
========= =========
</TABLE>
See accompanying notes to condensed financial statements.
* Derived from audited financial statements
-1-<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1995 1994
---- ----
<S> <C> <C>
Revenues:
Services $3,885,048 $3,302,925
Product sales 668,466 588,035
--------- ---------
4,553,514 3,890,960
--------- ---------
Cost and Expenses (Income):
Costs related to services 1,303,161 1,120,791
Costs of products sold 467,192 361,130
Selling, general and
administrative expenses 1,675,099 1,445,630
Interest expense 42,510 31,463
Other income (355) (2,648)
--------- ---------
3,487,607 2,956,366
--------- ---------
Income before provision for income
taxes. 1,065,907 934,594
Provision for income taxes 443,288 374,019
--------- ---------
NET INCOME $622,619 $560,575
========= =========
Net income per share $0.11 $0.10
========= =========
Weighted average number of
common shares outstanding (Note 3) 5,866,058 5,784,618
========= =========
</TABLE>
See accompanying notes to condensed financial statements
-2-<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months Ended September 30,
1995 1994
---- ----
<S> <C> <C>
Revenues:
Services $1,375,717 $1,206,891
Product sales 384,304 194,396
--------- ---------
1,760,021 1,401,287
--------- ---------
Cost and Expenses (Income):
Costs related to services 532,828 374,503
Costs of products sold 213,686 68,292
Selling, general and
administrative expenses 599,857 456,812
Interest expense 13,114 14,626
Other income (64) (172)
--------- ---------
1,359,421 914,061
--------- ---------
Income before provision for income
taxes. 400,600 487,226
Provision for income taxes 160,300 194,366
--------- ---------
NET INCOME $240,300 $292,860
========= =========
Net income per share $0.04 $0.05
========= =========
Weighted average number of
common shares outstanding (Note 3) 5,961,037 5,748,901
========= =========
</TABLE>
See accompanying notes to condensed financial statements
-3-<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1995 1994
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $622,619 $560,575
Adjustments to reconcile net
income to net cash provided by
operating activities
Depreciation and amortization 375,389 304,438
Cash savings/charge equivalent to tax
benefit resulting from utilization
of operating loss carry forwards 121,000 307,000
Issuance of common stock in
connection with consulting services
performed -0- 14,844
Amortization of deferred charges -0- 730
Change in Assets and Liabilities:
(Increase) in receivables (142,465) (318,492)
(Increase) decrease in inventory (95,699) 202,090
(Increase) in prepaid expenses
and other assets (67,367) ( 51,239)
(Decrease) increase in accounts
payable, accrued expenses and
taxes payable (49,738) 292,249
---------- ----------
Net Cash Provided by Operating
Activities 763,739 1,312,195
---------- ----------
Cash Flows from Investing Activities:
Expenditures for fixed assets (592,604) (1,730,073)
---------- ----------
Net Cash (Used In) Investing
Activities (592,604) (1,730,073)
---------- ----------
Cash Flows from Financing Activities:
(Repayments of) net proceeds from bank
borrowings (100,000) 300,000
Change in capital lease obligation -0- 4,240
Repayment of long term debt (3,723) (5,014)
Proceeds upon exercise of stock options 18,978 46,277
---------- ----------
Net Cash (Used In) Provided by Financing
Activities (84,745) 345,503
---------- ----------
</TABLE>
See accompanying notes to condensed financial statements.
-4-<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1995 1994
---- ----
<S> <C> <C>
Net Increase (Decrease)in Cash $86,390 $(72,375)
Cash, Beginning of Period 157,435 180,276
---------- ----------
Cash, End of Period $243,825 $107,901
========== ==========
</TABLE>
<TABLE>
<CAPTION>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
<S> <C> <C>
CASH PAID DURING THE PERIOD
FOR INTEREST $42,510 $31,463
========== ==========
CASH PAID DURING THE PERIOD
FOR INCOME TAXES $323,584 $23,020
========== ==========
</TABLE>
See accompanying notes to condensed financial statements
-5-<PAGE>
AMERICAN MEDICAL ALERT CORP.
Notes to Condensed Financial Statements
(Unaudited)
1. General:
These financial statements should be read in conjunction with the
notes to the financial statements contained in the latest annual
report for the year ended December 31, 1994.
2. Results of Operations:
In the opinion of management, the accompanying unaudited condensed
financial statements contain all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the financial
position as of September 30, 1995, the condensed statements of income
for the nine and three month periods ended September 30, 1995 and
1994, and the statements of cash flows for the nine months ended
September 30, 1995 and 1994.
The condensed statements of income for the nine and three month period
ended September 30, 1995 are not necessarily indicative of the results
to be expected for the full year.
3. Income Per Share:
Income Per Share -Income per share is computed using the weighted
average number of shares issued and committed for issuance during each
period. In 1995 and 1994, the dilutive effect of outstanding options
and warrants was included in the weighted average number of common
shares.
-6-<PAGE>
AMERICAN MEDICAL ALERT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(for the Quarter Ended September 30, 1995)
LIQUIDITY AND CAPITAL RESOURCES
On February 16, 1994, the Company renegotiated its existing credit facility and
an amended revolving credit note was issued for $1,500,000 due July 31, 1995.
Effective October 31, 1995, the note was extended until November 30, 1995 of
which $450,000 is currently outstanding. Currently the Company is negotiating
this existing credit agreement. The Company's working capital on September 30,
1995 was $1,927,752.
As of September 30, 1995, during the next twelve months the Company anticipates
that it will make capital expenditures of approximately $2,000,000 for the
purchase of additional systems which the Company intends to rent to what it
believes is its expanding customer base. The Company believes that its present
cash and working capital position, its borrowing availability and future
anticipated income from operations will be sufficient to meet its cash and
working capital needs for the foreseeable future.
RESULTS OF OPERATIONS
Revenue from services increased $582,123 for the nine months ended September
30, 1995 as compared to the same period in 1994, an increase of 18%. These
increases resulted from expansion of the Company's customer base for monthly
monitoring and leasing services. Costs related to services for the nine months
ended September 30, 1995 and 1994 were 34% and 34%, respectively.
Revenue from services increased $168,826 for the three months ended September
30, 1995 as compared to the same period in 1994, an increase of 14%. These
increases resulted from expansion of the Company's customer base for monthly
monitoring and leasing services. Costs related to services for the three
months ended September 30, 1995 and 1994 were 39% and 32%, respectively. The
increase in costs was due to a write off of unrecoverable and unrepairable
units.
Revenue from product sales increased $80,431 for the nine months ended
September 30, 1995 as compared to the same period in 1994, an increase of 14%.
This increase was primarily due to an increase in sales to distributors and
retirement communities. The gross profit percentage on product sales for the
nine months ended September 30, 1995 and 1994 was 30% and 38% respectively.
-7-<PAGE>
Revenue from product sales increased $189,908 for the three months ended
September 30, 1995 as compared to the same period in 1994, an increase of 98%.
This increase was primarily due to the increase in sales to distributors and
retirement communities. The gross profit percentage on product sales for the
three months ended September 30, 1995 and 1994 was 44% and 65%, respectively.
Interest expense for the nine months ended September 30, 1995 and 1994 was
$42,510 and $31,463, respectively. The increase in interest expense in 1995
was due to the increase of borrowings from a bank. This increase in
indebtedness is directly attributable to the increased demand for rental of the
VOICE OF HELP(R).
Interest expense for the three months ended September 30, 1995 and 1994 was
$13,114 and $14,626, respectively.
Selling, general and administrative expenses as compared as a percentage of
total revenues for the nine months ended September 30, 1995 and 1994 were 37%
and 37%, respectively.
Selling, general and administrative expenses as compared as a percentage of
total revenues for the three months ended September 30, 1995 and 1994 were 34%
and 33% respectively. This increase was due to the opening of our Illinois
office in the 3rd quarter. This effected costs by $53,045 or one cent per
share for the three months ended September 30, 1995. Also attributing to the
increase in Selling, general and administrative expense was the continued
efforts by our Lobbyist and greater marketing endeavors.
OUTLOOK
The Company's management strategy has remained committed to serving the needs
of its customer base consisting of funded programs, long term care facilities,
home healthcare providers, developers of retirement communities and the private
sector. In November 1993, New York City initiated its program to provide the
VOICE OF HELP(R) System to a segment of recipients served by the Home Attendant
Care Program. Medicaid patients will now be assessed to determine if they meet
the criteria to receive the VOICE OF HELP(R) System. In preparation for the
increased demand from New York City, the Company made substantial capital
improvements to its facilities in Queens and Oceanside, New York, while
establishing several new management positions. The Company will continue to
experience higher SG&A costs through first quarter 1996 associated with its
Illinois Office until revenue growth is recognized thereafter. Continued
strength in the construction and remodeling of multi-housing facilities helped
maintain a strong demand for the Company's products.
-8-<PAGE>
PART II -OTHER INFORMATION
Item 6. Exhibit and Reports on Form 8-K.
(a) Exhibits:
27. Financial Data Schedule
(b) Reports on Form 8-K:
On August 23, 1995, the Company filed a Form 8-K to report a change
in its certifying accountants (Item 4 of Form 8-K). On August 31,
1995, the Company filed an amendment to the Form 8-K for all
purpose of filing the letter from the Company's former accountants
Deloitte & Touche LLP stating that it agreed with the statement
made by the Company, as required by Item 304 of Regulation S-B.
-9-<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN MEDICAL ALERT CORP.
By: /s/ Howard M. Siegel
Howard M. Siegel
President & Chief Operating Officer
(Chief Financial & Accounting Officer)
Dated: November 13, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000700721
<NAME> AMERICAN MEDICAL ALERT CORP.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<CASH> 243,825
<SECURITIES> 0
<RECEIVABLES> 1,469,923
<ALLOWANCES> 30,000
<INVENTORY> 1,180,084
<CURRENT-ASSETS> 3,020,736
<PP&E> 2,424,097
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,471,529
<CURRENT-LIABILITIES> 1,092,984
<BONDS> 0
<COMMON> 55,040
0
0
<OTHER-SE> 4,087,949
<TOTAL-LIABILITY-AND-EQUITY> 5,471,529
<SALES> 0
<TOTAL-REVENUES> 4,553,514
<CGS> 0
<TOTAL-COSTS> 3,445,097
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<INTEREST-EXPENSE> 42,510
<INCOME-PRETAX> 1,065,907
<INCOME-TAX> 443,288
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<NET-INCOME> 622,619
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</TABLE>
