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 March 31, 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. 16,819,961 shares of Common Stock, $0.001 Par
Value.
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1998 1997
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $1,188,333 $1,458,281
Investments available for sale 2,497,096 1,955,961
Accounts receivable - trade 2,311,683 2,225,183
Prepaid expenses 52,696 60,165
Total current assets 6,049,808 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 3,795,460 3,789,419
Equipment and furniture 832,553 827,302
Oil and gas properties (successful
effort method of accounting) 502,206 477,276
5,321,661 5,285,439
Less accumulated depreciation 1,849,029 1,779,239
3,472,632 3,506,200
OTHER ASSETS
Cash escrow accounts 20,494 17,293
Deferred financing costs, net 411,944 265,583
432,438 282,876
TOTAL ASSETS $9,968,311 $9,522,248
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 15,418 $ 15,418
Accounts payable 1,135,576 1,196,289
Accrued liabilities 658,865 775,163
Total current liabilities 1,809,859 1,986,870
LONG-TERM DEBT 4,498,735 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 ( 648,248) ( 1,297,316)
Accumulated other comprehensive income ( 141,685) ( 147,190)
4,028,812 3,374,239
Less shares held in the treasury,
1998 and 1997 - 3,180,039 369,095 369,095
3,659,717 3,005,144
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,968,311 $9,522,248
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
March 31, 1998 1997
Net patient service revenue $2,898,459 $2,333,603
Other revenue 30,664 138,551
Total revenue 2,929,123 2,472,154
Costs and expenses
Professional care
of patients 1,419,361 1,325,940
General services 483,060 432,405
Administrative services 460,924 312,493
Other costs 10,202 113,124
Depreciation, depletion
and amortization 69,790 130,619
Income from operations 485,786 157,573
Other income (expenses)
Interest income 6,549 20,465
Interest expense ( 95,668) ( 125,355)
Gain on sale of investments 252,401 -
Income before
taxes on income 649,068 52,683
Provision for income taxes - -
Net income 649,068 52,683
Other comprehensive income
Unrealized losses on securities 5,505 -
Comprehensive income $ 643,563 $ 52,683
Per share of common stock:
Weighted average
number of shares outstanding 16,819,961 17,098,748
Net income per share $ 0.04 $ 0.00
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31, 1997 1996
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES $ 207,215 $ 64,761
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition of property ( 36,222) ( 29,422)
Advances to employees - ( 22,000)
Purchase of investments ( 1,271,289) -
Proceeds from sale of investments 1,008,208 -
Net cash used in
investing activities ( 299,303) ( 51,422)
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock - ( 4,680)
Payments on borrowings ( 31,499) ( 3,314)
Financing costs paid ( 146,361) -
Net cash used in
financing activities ( 177,860) ( 7,994)
Net increase (decrease) in cash ( 269,948) 5,345
CASH, beginning of period 1,458,281 2,094,563
CASH, end of period $1,188,333 $2,099,908
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 March 31, 1998, and its results of operations for
the three months ended March 31, 1998 and 1997, and cash flows
for the three months ended March 31, 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.
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 March 31, 1998 and the condensed
consolidated statements of operations and comprehensive income
for the three months ended March 31, 1998 and 1997, and cash
flows for the three months ended March 31, 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.
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 March 31,
1998, and the related condensed consolidated statements
of operations and comprehensive income for the three
month periods ended March 31, 1998 and 1997, and cash
flows for the three months ended March 31, 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
May 13, 1998
549 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 $6,049,808 and total assets were $9,968,311
at March 31, 1998 as compared to $5,699,590 current assets and
$9,522,248 total assets at December 31, 1997. Current
liabilities were $1,809,859 at March 31 1998 as compared to
$1,986,870 at December 31, 1997.
Results of Operations
For the Three Months Ended March 31, 1998, operating revenue was
$2,929,123; costs and expenses were $2,443,337, net income was
$649,068 and interest income was $6,549, as compared to the Three
Months Ended March 31, 1997, operating revenue of $2,472,154,
costs and expenses of $2,314,581, net income of $52,683 and
interest income of $20,465.
Cash Flows
For the Three Months Ended March 31, 1998, cash flows from
operating activities were $207,215, cash flows from investing
activities were ($299,303), cash flows from financing activities
were ($177,860), net decrease in cash was ($269,948), cash at the
beginning of the period was $1,458,281, and cash at the end of
the period was $1,188,333 as compared to the Three Months Ended
March 31, 1997, to cash flows from operating activities of
$64,761, cash flows from investing activities of ($51,422), cash
flows from financing activities of ($7,994), net increase in cash
of $5,345, cash at the beginning of the period of $2,094,563 and
cash at the end of the period of $2,099,908.
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: May 15, 1998
See Accompanying Notes to Condensed
Consolidated Financial Statements.
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