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 September 30, 1997 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. 16,819,961 shares of Common Stock, $0.001 Par Value.
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1997 1996
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $2,590,071 $2,094,563
Accounts receivable - trade 2,064,167 1,631,439
Other receivables 39,609 28,906
Prepaid expenses 57,284 44,429
Total current assets 4,751,131 3,799,337
REAL ESTATE DEVELOPMENT
AND CONSTRUCTION COSTS 33,582 121,582
PROPERTY AND EQUIPMENT, at cost
Land 191,442 176,442
Buildings and improvements 3,867,043 3,786,294
Equipment and furniture 680,485 645,876
Oil and gas properties (successful
effort method of accounting) 1,026,266 997,083
5,765,236 5,605,695
Less accumulated depreciation 1,869,673 1,501,730
3,895,563 4,103,965
OTHER ASSETS
Marketable Securities available for sale 361,854 -
Cash escrow accounts 44,578 34,975
Deferred financing costs, net 273,755 273,755
680,187 308,730
TOTAL ASSETS $9,360,463 $8,333,614
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 13,818 $ 13,818
Accounts payable 1,193,493 508,621
Accrued liabilities 601,908 685,729
Total current liabilities 1,809,219 1,208,168
LONG-TERM DEBT 4,535,432 4,545,653
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 ( 1,433,838) ( 1,906,428)
3,384,907 2,912,317
Less shares held in the treasury,
1997 3,180,039; 1996 2,882,964 369,095 332,524
3,015,812 2,579,793
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,360,463 $8,333,614
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Net patient service revenue $2,615,553 $2,271,679 $7,219,463
$6,814,018
Other revenue 32,429 152,593 444,342 269,697
Total revenue 2,647,982 2,424,272 7,663,805 7,083,715
Costs and expenses
Professional care
of patients 1,424,471 1,216,091 4,066,005 3,621,304
General services 481,935 500,298 1,337,179 1,411,705
Administrative services 315,257 255,486 947,130 910,156
Other costs 22,641 133,512 173,195 254,587
Depreciation, depletion
and amortization 115,954 146,226 371,738
431,742
Income from
operations 287,724 172,659 768,558 454,221
Other income (expenses)
Interest income 27,878 18,691 79,819 51,275
Interest expense ( 125,168) ( 125,531) ( 375,787)
( 376,847)
Income before
taxes on income 190,434 65,819 472,590 128,649
Provision for income taxes - - -
Net income $ 190,434 $ 65,819 $ 472,590 $ 128,649
Per share of common stock:
Weighted average
number of shares
outstanding 16,819,961 17,260,536 16,952,373 17,437,654
Income per share $ 0.01 $ 0.00 $ 0.03
$ 0.01
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES $ 856,576 $ 341,924
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of marketable securities ( 361,854) -
Distributions received
from joint venture - 81,761
Payments for
acquisition of property ( 210,491) ( 182,523)
Net changes in escrow accounts ( 9,603) ( 9,603)
Advances to employees ( 22,000) ( 22,000)
Sale of property 289,672 -
Net cash used in
investing activities ( 314,276) ( 132,365)
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of Treasury stock ( 36,571) ( 140,667)
Payments on borrowings ( 10,221) ( 9,161)
Net cash used in
financing activities ( 46,792) ( 149,828)
Net increase in cash 495,508 59,731
Cash, beginning of period 2,094,563 2,096,886
Cash, end of period $2,590,071 $2,156,617
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
September 30, 1997, and its results of operations for the three and
nine months ended September 30, 1997 and 1996 and cash flows for
the nine months ended September 30, 1997 and 1996. The results
of operations for the period presented are not necessarily indicative of
the results to be expected for a full year.
2. Income per share was computed by dividing the net income 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 September 30, 1997 and the condensed consolidated
statements of operations for the three and nine months ended
September 30, 1997 and 1996, and cash flows for the nine months
ended September 30, 1997 and 1996, 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 September 30, 1997, and the
related condensed consolidated statements of operations for the three
and nine month periods ended September 30, 1997 and 1996, and
cash flows for the nine months ended September 30, 1997 and
1996. 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, 1996, 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 7, 1997, 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, 1996, 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
November 5, 1997
534 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 $4,751,131 and total assets were $9,360,463 at
September 30, 1997 as compared to $3,799,337 current assets and
$8,333,614 total assets at December 31, 1996. Current liabilities
were $1,809,219 at September 30, 1997 as compared to
$1,208,168 at December 31, 1996.
Results of Operations
For the Three Months Ended September 30, 1997, operating revenue
was $2,647,982; costs and expenses were $2,360,258, net income
was $190,434 and interest income was $27,878, as compared to the
Three Months Ended September 30, 1996 operating revenue of
$2,424,272, costs and expenses of $2,251,613, net income of
$65,819 and interest income of $18,691.
For the Nine Months Ended September 30, 1997, operating revenue
was $7,663,805, costs and expenses were $6,895,247, interest
income was $79,819 and net income was $472,590, as compared to
the Nine Months Ended September 30, 1996, to operating revenue of
$7,083,715, costs and expenses of $6,629,494, interest income of
$51,275, and net income of $128,649.
Cash Flows
For the Nine Months Ended September 30, 1997, cash flows from
operating activities were $856,576, cash flows from investing
activities were ($314,276), cash flows from financing activities were
($46,792), net increase in cash was $495,508, cash at the beginning
of the period was $2,094,563, and cash at the end of the period was
$2,590,071 as compared to the Nine Months Ended September 30,
1996, cash flows from operating activities of $341,924, cash flows
from investing activities of ($132,365), cash flows from financing
activities of ($149,828), net increase in cash of $59,731, cash at the
beginning of the period of $2,096,886 and cash at the end of the
period of $2,156,617.
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 half 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: November 10, 1997
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