<PAGE> 1
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, 2000 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. 16,182,111
shares of Common Stock, $0.001 Par Value.
<PAGE> 2
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, 2000, and
its results of operations for the three and six months ended June 30, 2000
and 1999, and cash flows for the six months ended June 30, 2000 and 1999.
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> 3
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,
2000 and the condensed consolidated statements of operations and comprehensive
income for the three and six months ended June 30, 2000 and 1999, and cash flows
for the six months ended June 30, 2000 and 1999, 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> 4
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, 2000, and the related condensed consolidated
statements of operations and comprehensive income for the three and six month
periods ended June 30, 2000 and 1999, and cash flows for the six months ended
June 30, 2000 and 1999. 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, 1999, 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 13, 2000, 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, 1999, is fairly stated
in all material respects in relation to the consolidated balance sheet from
which it has been derived.
/s/ WEAVER AND TIDWELL, L.L.P.
Fort Worth, Texas
August 7, 2000
591
<PAGE> 5
PART I - EXHIBIT I
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 465,200 $ 947,420
Investments - trading 4,876,740 5,667,540
Accounts receivable - trade 2,332,977 2,436,376
Income taxes receivable 47,221 --
Prepaid expenses 64,412 65,006
Deferred tax asset 91,665 --
------------- -------------
Total current assets 7,878,215 9,116,342
------------- -------------
PROPERTY AND EQUIPMENT, at cost
Land 294,354 294,354
Buildings and improvements 3,958,924 3,958,924
Equipment and furniture 1,121,832 1,040,724
Oil and gas properties (successful efforts method of accounting) 304,639 414,150
------------- -------------
5,679,749 5,708,152
Less accumulated depreciation 2,012,395 2,009,519
------------- -------------
3,667,354 3,698,633
------------- -------------
OTHER ASSETS
Cash escrow accounts 51,739 45,337
Deferred financing costs, net 387,345 387,345
------------- -------------
439,084 432,682
------------- -------------
TOTAL ASSETS $ 11,984,653 $ 13,247,657
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 72,528 $ 123,544
Accounts payable 1,208,303 1,368,813
Accrued expenses 505,225 672,640
Income taxes payable -- 774,346
Deferred tax liability - current -- 70,540
------------- -------------
Total current liabilities 1,786,056 3,009,883
------------- -------------
DEFERRED TAX LIABILITY 24,135 37,626
LONG-TERM DEBT 4,416,293 4,435,560
STOCKHOLDERS' EQUITY
Common stock, par value $0.001
authorized 50,000,000 shares; issued 22,000,000 shares 22,000 22,000
Additional paid-in capital 5,096,745 5,096,745
Retained earnings 1,661,673 1,665,267
------------- -------------
6,780,418 6,784,012
Less
Cost of shares held in the treasury
2000 - 5,817,889 shares; 1999 - 5,816,139 shares 859,749 859,424
Notes receivable - officer 162,500 160,000
------------- -------------
1,022,249 1,019,424
------------- -------------
5,758,169 5,764,588
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 11,984,653 $ 13,247,657
============= =============
</TABLE>
See Accompanying Notes to Condensed
Consolidated Financial Statements.
<PAGE> 6
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------- ------------- ------------- -------------
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net patient service revenue $ 3,086,315 $ 2,778,052 $ 6,259,917 $ 5,548,125
Other revenue 94,823 19,752 117,545 47,178
------------- ------------- ------------- -------------
Total revenue 3,181,138 2,797,804 6,377,462 5,595,303
COSTS AND EXPENSES
Professional care of patients 1,714,501 1,487,116 3,444,067 2,955,430
General services 558,985 540,429 1,069,482 1,063,715
Administrative services 529,233 433,324 1,269,727 832,785
Other costs 15,685 13,105 31,398 19,801
Depreciation, depletion
and amortization 64,997 79,789 126,012 159,927
------------- ------------- ------------- -------------
Income from operations 297,737 244,041 436,776 563,645
OTHER INCOME (EXPENSES)
Interest income 27,990 8,348 50,789 11,474
Interest expense (109,843) (94,316) (204,752) (185,966)
Gain (loss) on investments (829,884) (43,007) (288,258) 692,764
------------- ------------- ------------- -------------
Income (loss) before
taxes on income (loss) (614,000) 115,066 (5,445) 1,081,917
Provision (benefit)
for income taxes (197,168) 39,123 (1,851) 367,852
------------- ------------- ------------- -------------
Net income (loss) (416,832) 75,943 (3,594) 714,065
Other comprehensive income
Unrealized losses
on securities -- 335,023 -- (53,588)
------------- ------------- ------------- -------------
COMPREHENSIVE INCOME ($ 416,832) $ 410,966 ($ 3,594) $ 660,477
============= ============= ============= =============
Weighted average number
of shares outstanding 16,182,151 14,190,861 16,182,861 14,192,795
============= ============= ============= =============
Earnings per common share -
basic and diluted ($ 0.03) $ 0.01 $ 0.00 $ 0.05
============= ============= ============= =============
</TABLE>
See Accompanying Notes to Condensed
Consolidated Financial Statements.
<PAGE> 7
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------------
2000 1999
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES ($ 370,430) ($ 218,329)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of investments -- 7,378,286
Payments for acquisition of property (114,780) (131,082)
Net changes in escrow accounts (6,402) (6,402)
Purchase of investments -- (5,796,323)
------------- -------------
Net cash provided by
(used in) investing activities (121,182) 1,444,479
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock (325) (1,220)
Payments on borrowings (70,283) (26,224)
Sale of property and equipment 80,000 --
------------- -------------
Net cash provided by
(used in) financing activities 9,392 (27,444)
------------- -------------
Net increase (decrease) in cash (482,220) 1,198,706
CASH, beginning of period 947,420 460,329
------------- -------------
CASH, end of period $ 465,200 $ 1,659,035
============= =============
</TABLE>
See Accompanying Notes to Condensed
Consolidated Financial Statements.
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial
Position and Results of Operations.
Changes in Balance Sheet Accounts
Current assets were $7,878,215 and total assets were $11,984,653 at June 30,
2000 as compared to $9,116,342 current assets and $13,247,657 total assets at
December 31, 1999. Current liabilities were $1,786,056 at June 30, 2000 as
compared to $3,009,883 at December 31, 1999.
Results of Operations
For the Three Months Ended June 30, 2000, operating revenue was $3,181,138;
costs and expenses were $2,883,401, net loss was ($416,832) and interest income
was $27,990, as compared to the Three Months Ended June 30, 1999, operating
revenue of $2,797,804, costs and expenses of $2,553,763, net income of $75,943
and interest income of $8,348.
For the Six Months Ended June 30, 2000, operating revenue was $6,377,462; costs
and expenses were $5,940,686; net loss was ($3,594) and interest income was
$50,789, as compared to the Six Months Ended June 30, 1999, operating revenue of
$5,595,303; costs and expenses of $5,031,658; net income of $714,065 and
interest income of $11,474.
Cash Flows
For the Six Months Ended June 30, 2000, cash flows from operating activities
were ($370,430), cash flows from investing activities were ($121,182), cash
flows from financing activities were $9,392, net decrease in cash was
($482,220), cash at the beginning of the period was $947,420, and cash at the
end of the period was $465,200 as compared to the Six Months Ended June 30,
1999, to cash flows from operating activities of ($218,329), cash flows from
investing activities of $1,444,479, cash flows from financing activities of
($27,444), net increase in cash of $1,198,706, cash at the beginning of the
period of $460,329, and cash at the end of the period of $1,659,035.
<PAGE> 9
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> 10
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: /s/ ARCH B. GILBERT
-----------------------------
Arch B. Gilbert, President,
Chief Executive Officer,
Chief Financial Officer, and
Chief Accounting Officer
Date: August 10, 2000
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ------------
<S> <C>
27 Financial Data Schedule
</TABLE>
