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, 1998 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 organization)
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. 16,541,661 shares of Common Stock, $0.001 Par
Value.
<PAGE>
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1998 1997
(unaudited)
ASSETS
CURRENT ASSETS
Cash $ 544,865 $1,458,281
Investments available for sale 2,825,164 1,955,961
Accounts receivable - trade 2,498,327 2,225,183
Prepaid expenses 38,068 60,165
Total current assets 5,906,424 5,699,590
REAL ESTATE DEVELOPMENT AND
CONSTRUCTION COSTS 13,433 33,582
PROPERTY AND EQUIPMENT, at cost
Land 191,442 191,442
Buildings and improvements 3,799,124 3,789,419
Equipment and furniture 1,019,650 827,302
Oil and gas properties (successful
effort method of accounting) 539,925 477,276
5,550,141 5,285,439
Less accumulated depreciation 1,926,755 1,779,239
3,623,386 3,506,200
OTHER ASSETS
Cash escrow accounts 23,695 17,293
Deferred financing costs, net 411,944 265,583
435,639 282,876
TOTAL ASSETS $9,978,882 $9,522,248
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 15,418 $ 15,418
Accounts payable 1,252,794 1,196,289
Accrued liabilities 617,317 775,163
Total current liabilities 1,885,529 1,986,870
LONG-TERM DEBT 4,495,135 4,530,234
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 ( 348,953) ( 1,297,316)
Accumulated other
comprehensive income ( 442,682) ( 147,190)
4,027,110 3,374,239
Less shares held in the treasury
1998, 3,458,339 shares;
1997, 3,180,039 shares 428,892 369,095
3,598,218 3,005,144
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $9,978,882 $9,522,248
<PAGE>
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Net patient
service revenue $2,685,805 $2,270,307 $5,584,264
$4,603,910
Other revenue 32,293 273,362 62,957 411,913
Total revenue 2,718,098 2,543,669 5,647,221 5,015,823
COSTS AND EXPENSES
Professional care
of patients 1,512,932 1,315,594 2,932,293
2,641,534
General services 492,846 422,839 975,906 855,244
Administrative
services 360,935 319,380 821,859 631,873
Other costs 13,403 37,430 23,605 150,554
Depreciation, depletion
and amortization 77,726 125,165 147,516 255,784
Income from
operations 260,256 323,261 746,042 480,834
OTHER INCOME (EXPENSES)
Interest income 11,979 31,476 18,528 51,941
Interest expense ( 88,734) ( 125,264) ( 184,402)
( 250,619)
Gain on sale
of investments 115,794 - 368,195 -
Income before
taxes on income 299,295 229,473 948,363 282,156
Provision for
income taxes - - - -
Net income 299,295 229,473 948,363 282,156
Other
comprehensive income
Unrealized losses
on securities ( 289,987) - ( 295,492) -
COMPREHENSIVE
INCOME $ 9,308 $ 229,473 $ 652,871 $ 282,156
Per share of common stock
Weighted average number
of shares outstanding
16,698,013 16,938,414 16,758,987 17,018,581
Net income per share $0.02 $0.01 $0.06 $0.02
<PAGE>
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES $ 395,445 $ 649,554
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of property - 289,672
Proceeds from sale of investments 1,665,368 -
Payments for acquisition of property ( 264,702) ( 143,375)
Net changes in escrow accounts ( 6,402) ( 6,402)
Advances to employees - ( 22,000)
Purchase of investments ( 2,461,868) -
Net cash provided by
(used in) investing activities ( 1,067,604) 117,895
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock ( 59,797) ( 36,571)
Payments on borrowings ( 35,099) ( 6,720)
Financing costs paid ( 146,361) -
Net cash used in
financing activities ( 241,257) ( 43,291)
Net increase (decrease) in cash ( 913,416) 724,158
CASH, beginning of period 1,458,281 2,094,563
CASH, end of period $ 544,865 $2,818,721
<PAGE>
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, 1998, and its results of operations for the three and six
months ended June 30, 1998 and 1997, and cash flows for the six
months ended June 30, 1998 and 1997. 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.
<PAGE>
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, 1998 and the condensed consolidated statements of
operations and comprehensive income for the three and six months
ended June 30, 1998 and 1997, and cash flows for the six months ended
June 30, 1998 and 1997, 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.
<PAGE>
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, 1998, and
the related condensed consolidated statements of
operations and comprehensive income for the three and six
month periods ended June 30, 1998 and 1997, and cash flows
for the six months ended June 30, 1998 and 1997. 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, 1997, 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 10, 1998,
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, 1997, 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 10, 1998
552
PART I - EXHIBIT I
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Position and Results of Operations.
Changes in Balance Sheet Accounts
Current assets were $5,906,424 and total assets were $9,978,882 at
June 30, 1998 as compared to $5,699,590 current assets and $9,522,248
total assets at December 31, 1997. Current liabilities were
$1,885,529 at June 30, 1998 as compared to $1,986,870 at December 31,
1997.
Results of Operations
For the Three Months Ended June 30, 1998, operating revenue was
$2,718,098; costs and expenses were $2,457,842, net income was
$299,295 and interest income was $11,979, as compared to the Three
Months Ended June 30, 1997, operating revenue of $2,543,669, costs
and expenses of $2,220,408, net income of $229,473 and interest
income of $31,476.
Cash Flows
For the Six Months Ended June 30, 1998, cash flows from operating
activities were $395,445, cash flows from investing activities were
($1,067,604), cash flows from financing activities were ($241,257),
net decrease in cash was ($913,416), cash at the beginning of the
period was $1,458,281, and cash at the end of the period was $544,865
as compared to the Six Months Ended June 30, 1997, to cash flows from
operating activities of $649,554, cash flows from investing
activities of $117,895, cash flows from financing activities of
($43,291), net increase in cash of $724,158, cash at the beginning of
the period of $2,094,563 and cash at the end of the period of
$2,818,721.
<PAGE>
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.
<PAGE>
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: August 14, 1998
<PAGE>
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-END] JUN-30-1998
[CASH] 544,865
[SECURITIES] 2,825,164
[RECEIVABLES] 2,498,327
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 5,906,424
[PP&E] 5,550,141
[DEPRECIATION] 1,926,755
<TOTAL ASSETS> 9,978,882
<CURRENT LIABILITIES> 1,885,529
[BONDS] 0
[COMMON] 20,000
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 1,712,689
[TOTAL-LIABILITY-AND-EQUITY] 9,978,882
[SALES] 2,685,805
[TOTAL-REVENUES] 2,718,098
[CGS] 0
[TOTAL-COSTS] 2,457,842
<OTHER EXPENSES> 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 88,734
[INCOME-PRETAX] 299,295
[INCOME-TAX] 0
[INCOME-CONTINUING] 299,295
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 299,295
[EPS-PRIMARY] .02
[EPS-DILUTED] .02
</TABLE>
