SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1996 Commission File No. 2-82655
INTERWEST MEDICAL CORPORATION
(Exact name of registrant as specified in its charter)
Oklahoma 75-1864474
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organi-
zation)
Arlington Heights Professional Office Building
3221 Hulen Street, Suite C, Fort Worth, TX 76107-6193
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code: (817) 731-2743
Not Applicable
(Former name, former address, and former fiscal year, if
changed since last report)
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
(Not Applicable)
Yes X No
(APPLICABLE TO CORPORATE ISSUERS)
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the close of the period
covered by this report. 17,298,036 shares of Common Stock, $0.001
Par Value.
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1996 1995
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $1,914,149 $ 2,096,886
Accounts receivable - trade 1,462,306 1,428,778
Other receivables 22,156 -
Prepaid expenses 47,468 50,334
Total current assets 3,446,079 3,575,998
REAL ESTATE DEVELOPMENT
AND CONSTRUCTION COSTS 203,113 226,659
INVESTMENTS
Investment in joint venture - 45,960
Capital stock, at cost
which approximates market 28,750 28,750
28,750 74,710
PROPERTY AND EQUIPMENT, at cost
Land 176,442 176,442
Buildings and improvements 3,784,989 3,784,989
Equipment and furniture 636,590 607,943
Oil and gas properties (successful
effort method of accounting) 1,348,647 1,231,776
5,946,668 5,801,150
Less accumulated depreciation 1,700,911 1,415,395
4,245,757 4,385,755
OTHER ASSETS
Cash escrow accounts 42,231 35,829
Deferred financing costs, net 281,927 281,927
324,158 317,756
TOTAL ASSETS $8,247,857 $8,580,878
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 12,385 $ 12,385
Accounts payable 546,647 617,874
Accrued liabilities 420,217 607,630
Total current liabilities 979,249 1,237,889
LONG-TERM DEBT 4,553,448 4,559,472
STOCKHOLDERS' EQUITY
Common stock, par value $0.001,
authorized 50,000,000 shares;
issued 20,000,000 shares 20,000 20,000
Additional paid-in capital 4,798,745 4,798,745
Retained deficit ( 1,794,316) ( 1,857,146)
3,024,429 2,961,599
Less shares held in the treasury,
1996 2,701,964; 1995 1,645,964 309,269 178,082
2,715,160 2,783,517
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $8,247,857 $8,580,878
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Net patient
service revenue $2,215,633 $2,238,630 $4,542,339 $4,378,418
Other revenue 72,520 75,014 117,104 174,024
Total revenue 2,288,153 2,313,644 4,659,443 4,552,442
Costs and expenses
Professional care
of patients 1,205,646 1,100,367 2,405,213 2,140,842
General services 460,734 404,392 911,407 779,321
Administrative
services 287,313 281,961 654,670 558,853
Other costs 66,403 79,637 121,075 178,584
Depreciation,
depletion and
amortization 144,707 128,801 285,516 255,017
Income from
operations 123,350 318,486 281,562 639,825
Other income (expenses)
Interest income 16,175 18,701 32,584 35,706
Interest expense( 125,514)( 125,934) ( 251,316) ( 251,941)
Income before
taxes on income 14,011 211,253 62,830 423,590
Provision for
income taxes - - - -
Net income $ 14,011 $ 211,253 $ 62,830 $ 423,590
Per share of
common stock:
Weighted average
number of shares
outstanding 17,313,036 18,523,036 17,526,213 18,542,369
Income per share $ .00 $ .01 $ 0.00 $ 0.02
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES $ 48,394 $ 438,967
CASH FLOWS FROM INVESTING ACTIVITIES
Distributions received
from joint venture 80,000 57,800
Payments for acquisition of property ( 145,518) ( 274,405)
Net changes in escrow accounts ( 6,402) ( 6,402)
Advances to employees ( 22,000) ( 22,000)
Net cash used in
investing activities ( 93,920) ( 245,007)
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of Treasury stock ( 131,187) ( 8,094)
Payments on borrowings ( 6,024) ( 5,398)
Net cash used in
financing activities ( 137,211) ( 13,492)
Net increase (decrease) in cash ( 182,737) 180,468
Cash, beginning of period 2,096,886 1,807,951
Cash, end of period $1,914,149 $1,988,419
INTERWEST MEDICAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited
condensed consolidated financial statements contain all
adjustments necessary to present fairly the Company's financial
position as of June 30, 1996, and its results of operations
for the three and six months ended June 30, 1996 and 1995 and
cash flows for the six months ended June 30, 1995 and 1994.
The results of operations for the period presented are not
necessarily indicative of the results to be expected for a full
year.
2. Income (loss) per share was computed by dividing the net income
(loss) by the weighted average number of shares outstanding.
REVIEW BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Weaver and Tidwell, L.L.P., Independent Certified Public
Accountants, have performed a review of the condensed consolidated
balance sheet as of June 30, 1996 and the condensed consolidated
statements of operations for the three and six months ended June
30, 1996 and 1995, and cash flows for the three and six months
ended June 30, 1996 and 1995, in accordance with established
professional standards and procedures for such a review. All
adjustments or additional disclosures proposed by Weaver and
Tidwell, L.L.P. have been reflected in the data presented.
The report of Weaver and Tidwell, L.L.P. commenting upon their
review is included as Part I - Exhibit I.
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
To the Board of Directors
InterWest Medical Corporation
We have reviewed the condensed consolidated balance sheet of
InterWest Medical Corporation as of June 30, 1996, and the related
condensed consolidated statements of operations for the three and
six month periods ended June 30, 1996 and 1995, and cash flows for
the six months ended June 30, 1996 and 1995. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists of
obtaining an understanding of the system for the preparation of
interim financial information, applying analytical review
procedures to financial data and making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying condensed
consolidated statements referred to above, for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally
accepted auditing standards, the consolidated balance sheet as of
December 31, 1995, and the related consolidated statements of
operations, stockholders' equity and cash flows for the year then
ended (not presented herein); and in our report dated March 1,
1996, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of
December 31, 1995, is fairly stated in all material respects in
relation to the consolidated balance sheet from which it has been
derived.
WEAVER AND TIDWELL, L.L.P.
Fort Worth, Texas
August 2, 1996
505
PART I - EXHIBIT I
Item 2. Management's Discussion and Analysis of Financial
Position and Results of Operations.
Changes in Balance Sheet Accounts
Current assets were $3,446,079 and total assets were
$8,247,857 at June 30, 1996 as compared to $3,575,998 current
assets and $8,580,878 total assets at December 31, 1995. Current
liabilities were $979,249 at June 30, 1996 as compared to
$1,237,889 at December 31, 1995.
Results of Operations
For the Three Months Ended June 30, 1996, operating revenue
was $2,288,153; costs and expenses were $2,164,803, and net income
was $14,011 and interest income was $16,175, as compared to the
Three Months Ended June 30, 1995 operating revenues of $2,313,644,
costs and expenses of $1,995,158, net income of $211,253 and
interest income of $18,701.
For the Six Months Ended June 30, 1996, operating revenue was
$4,659,443, costs and expenses were $4,377,881, interest income was
$32,584 and net income was $62,830, as compared, for the Six Months
Ended June 30, 1995, to operating revenue of $4,552,442, costs and
expenses of $3,912,617, interest income of $35,706, and net income
of $423,590.
Cash Flows
For the Six Months Ended June 30, 1996, cash flows from
operating activities were $48,394, cash flows from investing
activities were ($93,920), cash flows from financing activities
were ($137,211), net decrease in cash was ($182,737), cash at the
beginning of the period was $2,096,886, and cash at the end of the
period was $1,914,149 as compared to the Six Months Ended June 30,
1995, to cash flows from operating activities of $438,967, cash
flows from investing activities of ($245,007), cash flows from
financing activities of ($13,492), net increase in cash of
$180,468, cash at the beginning of the period of $1,807,951 and
cash at the end of the period of $1,988,419.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) None.
(b) None.
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.
INTERWEST MEDICAL CORPORATION
By:
Arch B. Gilbert, President
Chief Executive Officer,
Chief Financial Officer and
Chief Accounting Officer
Date: August 9, 1996
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