<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported)
SEPTEMBER 15, 1997
GISH BIOMEDICAL, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation or organization)
0-10728 95-3046028
(Commission File Number) (I.R.S. Employer Identification Number)
2681 KELVIN AVENUE
IRVINE, CALIFORNIA 92614
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(714) 756-5485
1
<PAGE> 2
ITEM 5. OTHER EVENTS
On September 15, 1997, the Company was notified by CardioVascualar Concepts,
"CVC", its distributor in the Southwestern United States, that CVC was electing
to terminate its distributor relationship with the Company effective December
1997.
On September 17, 1997, the Company was notified by Specialized Medical Systems,
"SMS", the Company's distributor in the Great Lakes Region of the United States,
that SMS was electing to terminate its distributor relationship with the Company
effective December 1997.
On September 19, 1997, the Company was informed that both of these distributors
had accepted offers from Medtronic, a direct competitor of the Company, to
become manufacturers representatives.
For the fiscal year ended June 30, 1997, SMS and CVC accounted for 15% and 7% of
the Company's total sales, respectively. However, the two distributors only
accounted for 12% and 5%, respectively, of the Company's gross profit for the
same period.
The Company intends to engage, during the second quarter of fiscal 1998, a
direct sales force of approximately seven persons to replace the two distributor
sales organizations. The Company expects to retain a substantial portion of the
existing business at higher margins and expects improved market penetration for
its non-cardiovascular products.
The conversion of these territories to direct sales representation should afford
the Company better marketing opportunities with respect to its new oxygenator.
Gish had previously excluded these two territories from its initial marketing
plan for the launch of its new Vision(TM) oxygenator, scheduled for October
1997, because these distributors represented a competing oxygenator product.
With the conversion of these territories to a direct sales force, the Company
will be able to sell the Vision(TM) oxygenator in conjunction with custom tubing
packs, cardioplegia systems, cardiotomy reservoirs and oxygen saturation
monitors without limitations.
There of course, can be no assurance of the Company's success in retaining
existing business, realizing higher margins, or of improving market penetration.
This Report on Form 8-K contains certain forward-looking statements that are
based on current expectations. In light of the important factors that can
materially affect results, including those set forth in this paragraph, the
inclusion of forward-looking information herein should not be regarded as a
representation by the Company or any other person that the objectives or plans
of the Company will be achieved. The Company may encounter competitive,
technological, financial and business challenges making it more difficult than
expected to continue to develop and market its products; the market may not
accept the Company's existing and future products; the Company may be unable to
retain existing key management personnel; and there may be other material
adverse changes in the Company's operations or business. Certain important
factors affecting the forward-looking
2
<PAGE> 3
statements made herein include, but are not limited to (i) failure of the
Company's Vision(TM) oxygenator in ongoing field trials, (ii) continued downward
pricing pressures in the Company's targeted markets, (iii) the continued
acquisition of the Company's customers by certain of its competitors, and (iv)
the success of the Company's direct sales force in certain geographic
territories. Assumptions relating to budgeting, marketing, product development
and other management decisions are subjective in many respects and thus
susceptible to interpretations and periodic revisions based on actual experience
and business developments, the impact of which may cause the Company to alter
its marketing, capital expenditure or other budgets, which may in turn affect
the Company's financial position and results of operations. The reader is
therefore cautioned not to place undue reliance on forward-looking statements
contained herein, which speak as of the date of this Form 8-K.
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 hereunto duly authorized.
Gish Biomedical, Inc.
---------------------------------
(Registrant)
By /s/ JEANNE M. MILLER
---------------------------------
Jeanne M. Miller
Vice President/CFO
Date September 26, 1997
---------------------------------
3
