SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File Number 1-8635
AMERICAN MEDICAL ALERT CORP.
(Exact name of small business issuer 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)
(516) 536-5850
(Issuer's telephone number, including area code)
Check whether the issuer (1) 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: 5,727,298 shares of $.01 par
value common stock as of October 29, 1996.
<PAGE>
AMERICAN MEDICAL ALERT CORP.
INDEX
PART I FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements.
Condensed Balance Sheets for September 30, 1996
and December 31, 1995 1
Condensed Statements of Income for the
Nine Months Ended September 30, 1996 and 1995 2
Condensed Statements of Income for the
Three Months Ended September 30, 1996 and 1995 3
Condensed Statements of Cash Flows for
the Nine Months Ended September 30, 1996 and 1995 4
Notes to Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis or Plan 6
of Operation.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. 7
<PAGE>
Item 1. Financial Statements.
AMERICAN MEDICAL ALERT CORP.
CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, 1996 Dec. 31, 1995*
(UNAUDITED)
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 338,566 $ 319,989
Accounts and notes receivable
(net of allowance for doubtful accounts of
$30,000 in '96 & '95) 1,407,636 1,236,938
Inventory 1,657,604 1,116,810
Prepaid expenses and other current assets 209,983 149,309
Deferred income tax benefit 30,000 54,000
----------- -----------
Total Current Assets 3,643,789 2,877,046
----------- -----------
NOTE RECEIVABLE 16,658 -0-
----------- -----------
FIXED ASSETS:
(Net of accumulated depreciation and amortization) 2,998,666 2,848,109
OTHER ASSETS 24,142 24,887
----------- -----------
TOTAL ASSETS $ 6,683,255 $ 5,750,042
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Note Payable Bank $ 300,000 $ -0-
Accounts payable 534,733 467,300
Accrued expenses 236,251 214,092
Taxes payable 149,559 -0-
Current portion of long-term debt 9,612 7,351
----------- -----------
Total Current Liabilities 1,230,155 688,743
DEFERRED INCOME TAX LIABILITY 195,000 195,000
NOTE PAYABLE BANK -0- 450,000
LONG-TERM DEBT - LESS CURRENT MATURITIES 14,248 8,949
----------- -----------
Total Liabilities 1,439,403 1,342,692
----------- -----------
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY
Common stock - $.01 par value; authorized - 10,000,000 shares;
issued, and outstanding - 5,771,208 shares in 1996
and 5,504,741 shares in 1995 57,712 55,047
Additional paid-in capital 4,230,618 4,088,212
Retained Earnings 1,061,554 270,575
----------- -----------
5,349,884 4,413,834
Less 43,910 shares in 1996 & 1,995 in 1995 of treasury
stock, at cost (106,032) (6,484)
----------- -----------
Total Shareholders Equity 5,243,852 4,407,350
----------- -----------
TOTAL Liabilities & Shareholders Equity $ 6,683,255 $ 5,750,042
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
* Derived from audited financial statement
1
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
Nine months Ended September 30,
-------------------------------
1996 1995
----------- -----------
Revenues:
Services $ 4,575,177 $ 3,885,048
Product sales 901,915 668,466
----------- -----------
5,477,092 4,553,514
----------- -----------
Cost and Expenses (Income):
Costs related to services 1,526,525 1,303,161
Costs of products sold 623,974 467,192
Selling, general and
administrative expenses 1,880,979 1,675,099
Interest expense 33,635 42,510
Other income (1,000) (355)
----------- -----------
4,064,113 3,487,607
----------- -----------
Income before provision for income
taxes 1,412,979 1,065,907
Provision for income taxes 622,000 443,288
----------- -----------
NET INCOME $ 790,979 $ 622,619
=========== ===========
Net income per share $ .14 $ .11
=========== ===========
Weighted average number of
common shares outstanding (Note 3) 5,837,120 5,866,058
=========== ===========
See accompanying notes to condensed financial statements
2
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended September 30,
--------------------------------
1996 1995
----------- -----------
Revenues:
Services $ 1,561,149 $ 1,375,717
Product sales 392,927 384,304
----------- -----------
1,954,076 1,760,021
----------- -----------
Cost and Expenses (Income):
Costs related to services 514,221 532,828
Costs of products sold 276,928 213,686
Selling, general and
administrative expenses 629,808 599,857
Interest expense 8,399 13,114
Other income (-0-) (64)
----------- -----------
1,429,356 1,359,421
----------- -----------
Income before provision for income
taxes 524,720 400,600
Provision for income taxes 231,000 160,300
----------- -----------
NET INCOME $ 293,720 $ 240,300
=========== ===========
Net income per share $ .05 $ .04
=========== ===========
Weighted average number of
common shares outstanding (Note 3) 5,921,582 5,961,037
=========== ===========
See accompanying notes to condensed financial statements
3
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
Nine months Ended June 30,
--------------------------
1996 1995
---- ----
Cash Flows From Operating Activities:
Net Income $ 790,979 $ 622,619
Adjustments to reconcile net income to
net cash provided by operating activities
Provision for deferred income taxes 24,000 121,000
Depreciation and amortization 468,864 375,389
Change in Assets and Liabilities:
(Increase) in receivables (187,356) (142,465)
(Increase) in inventory (540,794) (95,699)
(Increase) in prepaid expenses
and other assets (59,929) (67,367)
Increase (Decrease) in accounts payable,
accrued expenses and taxes payable 239,151 (49,738)
--------- ---------
Net Cash Provided by Operating Activities 734,915 763,739
--------- ---------
Cash Flows from Investing Activities:
Expenditures for fixed assets (619,421) (592,604)
--------- ---------
Net Cash Used In Investing Activities (619,421) (592,604)
--------- ---------
Cash Flows from Financing Activities:
Repayment of bank borrowings (150,000) (100,000)
Net (Repayment of) loans payable 7,560 (3,723)
Net Proceeds upon exercise of stock options 45,523 18,978
--------- ---------
Net Cash Used In Financing Activities (96,917) (84,745)
--------- ---------
Net (Decrease) increase in Cash 18,577 86,390
Cash, Beginning of Period 319,989 157,435
--------- ---------
Cash, End of Period $ 338,566 $ 243,825
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD
FOR INTEREST $ 33,635 $ 42,510
========= =========
CASH PAID DURING THE PERIOD
FOR INCOME TAXES $ 400,000 $ 323,584
========= =========
See accompanying notes to condensed financial statements
4
<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, 1995.
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, 1996, the condensed statements of income
for the three and nine month periods ended September 30, 1996 and
1995, and the statements of cash flows for the nine months ended
September 30, 1996 and 1995.
The condensed statements of income for the nine and three month
periods ended September 30, 1996 are not necessarily indicative of
the results to be expected for the full year.
3. Income Per Share:
Income per share is computed using the weighted average number of
common shares and common share equivalents outstanding during each
period. In 1996 and 1995, the dilutive effect of outstanding options
and warrants was included in the weighted average number of common
shares.
5
<PAGE>
Item 2. Management's Discussion and Analysis or Plan
of Operation.
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's results
of operations and financial condition. The discussion should be read in
conjunction with the consolidated financial statements contained in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1995.
Liquidity and Capital Resources
- -------------------------------
On December 1, 1995, the Company renegotiated its $1,500,000 credit note (based
upon 75% of eligible accounts receivable and 25% of inventory, as defined) and
extended it until April 30, 1997. As of October 25, 1996, $300,000 was
outstanding under this note. The Company's working capital on September 30, 1996
was $2,413,634. During 1996 the Company anticipates that it will make capital
investments of approximately $1,000,000 of which approximately $619,000 has been
expended through September 30, 1996 for the purchase and production of
additional systems which the Company intends to rent to its customers. The
Company believes that its present cash and working capital position, its
borrowing availability and future anticipated income will be sufficient to meet
its cash and working capital needs for the foreseeable future.
Results of Operations
- ---------------------
Revenue from services increased $690,129 for the nine months ended September 30,
1996 as compared to the same period in 1995, an increase of 18%. This increase
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, 1996 and 1995 were 33% and 34%, respectively.
Revenue from services increased $185,432 for the three months ended September
30, 1996 as compared to the same period in 1995, an increase of 13%. This
increase 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, 1996 and 1995 were 33% and 39%, respectively.
Revenue from product sales increased $233,449 for the nine months ended
September 30, 1996 as compared to the same period in 1995, an increase of 35%.
This increase was primarily due to the increase in sales to distributors and
retirement communities. The gross profit on product sales for the nine months
ended September 30, 1996 and 1995 was 31% and 30%, respectively.
Revenue from product sales increased $8,623 for the three months ended September
30, 1996 as compared to the same period in 1995, an increase of 2%. This
increase was primarily due to the increase in sales to distributors and
retirement communities. The gross profit on product sales for
6
<PAGE>
the three months ended September 30, 1996 and 1995 was 30% and 44%,
respectively. Product sales gross profit decreased for the quarter as a result
of competitive pricing for distributors and retirement communities.
Interest expense for the nine months ended September 30, 1996 and 1995 was
$33,635 and $42,510, respectively. Selling, general and administrative expenses
as compared as a percentage of total revenues for the nine months ended
September 30, 1996 and 1995 were 34% and 37% respectively.
Interest expense for the three months ended September 30, 1996 and 1995 was
$8,399 and $13,114, respectively. Selling, general and administrative expenses
as compared as a percentage of total revenues for the three months ended
September 30, 1996 and 1995 were 32% and 34% respectively.
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:
No reports on Form 8-K were filed during the quarter for which this
report is filed.
7
<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
By: /S/ COREY M. ARONIN
--------------------------------------
Corey M. Aronin
Chief Financial Officer
Dated: October 29, 1996
8
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<NAME> AMERICAN MEDICAL ALERT CORP.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 338,566
<SECURITIES> 0
<RECEIVABLES> 1,437,636
<ALLOWANCES> 30,000
<INVENTORY> 1,657,604
<CURRENT-ASSETS> 3,643,789
<PP&E> 2,998,666
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,683,255
<CURRENT-LIABILITIES> 1,230,155
<BONDS> 14,248
0
0
<COMMON> 57,712
<OTHER-SE> 5,186,140
<TOTAL-LIABILITY-AND-EQUITY> 6,683,255
<SALES> 901,915
<TOTAL-REVENUES> 5,477,092
<CGS> 623,974
<TOTAL-COSTS> 4,064,112
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,635
<INCOME-PRETAX> 1,412,979
<INCOME-TAX> 622,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 790,979
<EPS-PRIMARY> .14
<EPS-DILUTED> 0
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