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 March 31, 1996
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: 5,708,891 shares of $.01 par
value common stock as of May 10, 1996.
<PAGE>
AMERICAN MEDICAL ALERT CORP.
INDEX PAGE
Part I Condensed Balance Sheets for March 31, 1996
and December 31, 1995 1
Condensed Statements of Income for the Three Months Ended
March 31, 1996 and 1995 2
Condensed Statements of Cash Flows for the Three Months
Ended March 31, 1996 and 1995 3 - 4
Notes to Condensed Financial Statements 5
Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
Part II Other Information 7
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
March 31, 1996 Dec. 31, 1995*
(UNAUDITED)
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 257,566 $ 319,989
Accounts and notes receivable
(net of allowance for doubtful accounts of $30,000 in '96 & '95) 1,248,032 1,236,938
Inventory 1,295,362 1,116,810
Prepaid expenses and other current assets 28,902 149,309
Deferred income tax benefit 54,000 54,000
------------ ------------
Total Current Assets 2,883,862 2,877,046
------------ ------------
FIXED ASSETS:
(Net of accumulated depreciation and amortization) 2,933,133 2,848,109
OTHER ASSETS 24,712 24,887
------------ ------------
TOTAL ASSETS $ 5,841,707 $ 5,750,042
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 309,564 467,300
Accrued expenses 178,650 214,092
Taxes payable 55,866 -0-
Current portion of long-term debt 6,520 7,351
------------ ------------
Total Current Liabilities 550,600 688,743
DEFERRED INCOME TAX LIABILITY 195,000 195,000
NOTE PAYABLE BANK 450,000 450,000
LONG-TERM DEBT - LESS CURRENT MATURITIES 7,941 8,949
------------ ------------
Total Liabilities 1,203,541 1,342,692
------------ ------------
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY
Common stock - $.01 par value; authorized --
10,000,000 shares; issued, and outstanding - 5,752,711
shares in 1996 and 5,504,741 shares in 1995 57,527 55,047
Additional paid-in capital 4,189,021 4,088,212
Retained Earnings 497,650 270,575
------------ ------------
4,744,198 4,413,834
Less 43,820 shares in 1996 & 1,995 in 1995 of treasury stock, at cost (106,032) (6,484)
------------ ------------
Total Shareholders Equity 4,638,166 4,407,350
------------ ------------
TOTAL Liabilities & Shareholers Equity $ 5,841,707 $ 5,750,042
============ ============
</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>
Three months Ended March 31,
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Services $ 1,479,256 $ 1,162,268
Product sales 171,890 108,355
----------- -----------
1,651,146 1,270,623
----------- -----------
Cost and Expenses (Income):
Costs related to services 474,713 357,833
Costs of products sold 110,451 75,835
Selling, general and
administrative expenses 645,796 533,155
Interest expense 15,111 15,067
Other income -0- (163)
----------- -----------
1,246,071 981,727
----------- -----------
Income before provision for income
taxes 405,075 288,896
Provision for income taxes 178,000 121,488
----------- -----------
NET INCOME $ 227,075 $ 167,408
=========== ===========
Net income per share $ .04 $ .03
=========== ===========
Weighted average number of
common shares outstanding (Note 3) 5,742,788 5,796,719
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements
2
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $ 227,075 $ 167,408
Adjustments to reconcile net income to
net cash provided by operating activities
Cash savings/charge equivalent to tax benefit
resulting from utilization of operating loss
carry forwards -0- 47,000
Depreciation and amortization 148,773 118,223
Change in Assets and Liabilities:
(Increase) Decrease in receivables (11,094) 160,571
(Increase) in inventory (178,552) (19,847)
Decrease (Increase) in prepaid expenses
and other assets 120,582 (8,463)
(Decrease) in accounts payable,
accrued expenses and taxes payable (137,312) (264,344)
--------- ---------
Net Cash Provided by Operating Activities 169,472 200,548
--------- ---------
Cash Flows from Investing Activities:
Expenditures for fixed assets (233,797) (221,852)
--------- ---------
Net Cash (Used In) Investing Activities (233,797) (221,852)
--------- ---------
Cash Flows from Financing Activities:
Repayment of loans payable (1,839) (2,279)
Net Proceeds upon exercise of stock options 3,741 593
--------- ---------
Net Cash (Used In) Provided by Financing Activities 1,902 (1,686)
--------- ---------
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
THREE MONTHS ENDED MARCH 31,
----------------------------
1996 1995
---- ----
Net Increase (decrease) in Cash $ (62,423) $ (22,990)
Cash, Beginning of Period 319,989 157,435
--------- ---------
Cash, End of Period $ 257,566 $ 134,445
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD
FOR INTEREST $ 15,111 $ 15,067
========= =========
CASH PAID DURING THE PERIOD
FOR INCOME TAXES $ 60,134 $ 80,284
========= =========
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 March 31, 1996, the condensed statements of income for the three month
period ended March 31, 1996 and 1995, and the statements of cash flows for
the three months ended March 31, 1996 and 1995.
The condensed statements of income for the three month period ended March
31, 1996 is 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>
AMERICAN MEDICAL ALERT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(for the Quarter Ended March 31, 1996)
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 latest
Annual Report dated 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 May 10, 1996, $400,000 was outstanding
under this note. The Company's working capital on March 31, 1996 was $2,333,262.
During 1996 the Company anticipates that it will make capital investments of
approximately $1,000,000 of which approximately $234,000 has been expended
through March 31, 1996 for the purchase and production of additional systems
which the Company intends to rent. 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 $316,988 for the three months ended March 31,
1996 as compared to the same period in 1995, an increase of 27%. 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 March
31, 1996 and 1995 were 32% and 31%, respectively. The increase in costs were due
to a write off of unrecoverable units.
Revenue from product sales increased $63,535 for the three months ended March
31, 1996 as compared to the same period in 1995, an increase of 59%. This
increase was primarily due to the increase in sales to distributors and
retirement communities. The gross profit on product sales for the three months
ended March 31, 1996 and 1995 was 36% and 30%, respectively.
Interest expense for the three months ended March 31, 1996 and 1995 was $15,111
and $15,067, respectively. Selling, general and administrative expenses as
compared as a percentage of total revenues for the three months ended March 31,
1996 and 1995 were 39% and 42% respectively. Selling , general and
administrative expenses increased 21% for the three months ended March 31, 1996
as compared to the same period in 1995. This increase was due to increases in
advertising and marketing costs, expansion of the sales and personnel
departments and the opening of a satellite office in the State of Illinois.
6
<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:
No reports on Form 8-K were 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
(Chief Financial & Accounting Officer)
Dated: May 10, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000700721
<NAME> AMERICAN MEDICAL ALERT CORP.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 257,566
<SECURITIES> 0
<RECEIVABLES> 1,278,032
<ALLOWANCES> 30,000
<INVENTORY> 1,295,362
<CURRENT-ASSETS> 2,883,862
<PP&E> 2,933,133
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,841,707
<CURRENT-LIABILITIES> 528,600
<BONDS> 457,941
0
0
<COMMON> 57,527
<OTHER-SE> 4,580,639
<TOTAL-LIABILITY-AND-EQUITY> 5,841,707
<SALES> 171,890
<TOTAL-REVENUES> 1,651,146
<CGS> 110,451
<TOTAL-COSTS> 1,246,071
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,111
<INCOME-PRETAX> 405,075
<INCOME-TAX> 178,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 227,025
<EPS-PRIMARY> .04
<EPS-DILUTED> 0
</TABLE>
