<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 March 31, 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 organi-
zation)
Arlington Heights Professional Office Building
3221 Hulen Street, Suite C, Fort Worth, TX 76107-6193
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(Address of principal executive
offices, zip code)
Registrant's telephone number, including area code: (817)731-2743
Not Applicable
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(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. 16,182,861
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 March 31, 2000, and
its results of operations for the three months ended March 31, 2000 and
1999, and cash flows for the three months ended March 31, 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 March 31,
2000 and the condensed consolidated statements of operations and comprehensive
income for the three months ended March 31, 2000 and 1999, and cash flows for
the three months ended March 31, 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 March 31, 2000, and the related condensed consolidated
statements of operations and comprehensive income for the three month periods
ended March 31, 2000 and 1999, and cash flows for the three months ended March
31, 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 3, 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.
- ------------------------------
WEAVER AND TIDWELL, L.L.P.
Fort Worth, Texas
May 9, 2000
583
<PAGE> 5
PART I - EXHIBIT I
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 209,932 $ 947,420
Accounts receivable - trade 2,422,776 2,436,376
Investments - trading 5,685,899 5,667,540
Prepaid expenses and other receivables 70,311 65,006
------------- -------------
Total current assets 8,388,918 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 1,045,429 1,040,724
Oil and gas properties
(successful efforts method of accounting) 441,235 414,150
------------- -------------
5,739,942 5,708,152
Less accumulated depreciation and depletion 2,070,535 2,009,519
------------- -------------
3,669,407 3,698,633
OTHER ASSETS
Cash escrow accounts 48,538 45,337
Deferred financing costs, net 387,345 387,345
------------- -------------
435,883 432,682
------------- -------------
TOTAL ASSETS $ 12,494,208 $ 13,247,657
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 95,811 $ 123,544
Accounts payable 1,217,446 1,368,813
Accrued salaries 494,818 672,640
Income taxes payable 66,827 774,346
Deferred tax liability - current -- 70,540
------------- -------------
Total current liabilities 1,874,902 3,009,883
DEFERRED TAX LIABILITY 15,590 37,626
LONG-TERM DEBT 4,428,515 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 2,078,555 1,665,267
Notes receivable officer (162,500) (160,000)
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7,034,800 6,624,012
Less cost of shares held in the treasury,
2000 - 5,817,139 shares ; 1999 - 5,816,139 shares 859,599 859,424
------------- -------------
6,175,201 5,764,588
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,494,208 $ 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
March 31,
2000 1999
------------ ------------
<S> <C> <C>
REVENUES
Patient service revenue $ 3,173,602 $ 2,770,073
Other revenue 22,722 27,426
------------ ------------
Total revenue 3,196,324 2,797,499
COSTS AND EXPENSES
Professional care of patients 1,729,566 1,468,314
General services 510,497 523,286
Administrative services 740,494 399,461
Other costs 15,713 6,696
Depreciation, depletion and amortization 61,015 80,138
------------ ------------
Income from operations 139,039 319,604
OTHER INCOME (EXPENSES)
Investment income 541,626 735,771
Interest income 22,799 3,126
Interest expense (94,909) (91,650)
------------ ------------
Income before taxes on income 608,555 966,851
Provision for income taxes 195,317 328,729
------------ ------------
Net income 413,238 638,122
Other comprehensive income, net of tax
Unrealized losses on securities -- (388,611)
------------ ------------
Comprehensive income $ 413,238 $ 249,511
============ ============
Weighted averages shares outstanding 16,183,611 14,194,728
============ ============
Earnings per common share - basic and diluted $ 0.03 $ 0.04
============ ============
</TABLE>
See Accompanying Notes to Condensed
Consolidated Financial Statements
<PAGE> 7
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES $ (671,045) $ 15,399
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition of property (31,790) (50,146)
Purchase of investments -- (4,408,404)
Proceeds from sale of investments -- 4,397,324
----------- -----------
Net cash used in investing activities (31,790) (61,226)
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock (175) (420)
Payments on borrowings (34,478) (15,555)
----------- -----------
Net cash used in financing activities (34,653) (15,975)
----------- -----------
Net increase (decrease) in cash (737,488) (61,802)
CASH, beginning of period 947,420 460,329
----------- -----------
CASH, end of period $ 209,932 $ 398,527
=========== ===========
</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 $8,388,918 and total assets were $12,494,208 at March 31,
2000 as compared to $9,116,342 current assets and $13,247,657 total assets at
December 31, 1999. Current liabilities were $1,874,902 at March 31, 2000 as
compared to $3,009,883 at December 31, 1999.
Results of Operations
For the Three Months Ended March 31, 2000, operating revenue was $3,196,324;
costs and expenses were $3,057,285, net income was $413,238 and interest income
was $22,799, as compared to the Three Months Ended March 31, 1999, operating
revenue of $2,797,499, costs and expenses of $2,477,895, net income of $638,122
and interest income of $3,126.
Cash Flows
For the Three Months Ended March 31, 2000, cash flows from operating activities
were ($671,045), cash flows from investing activities were ($31,790), cash flows
from financing activities were ($34,653), net decrease in cash was ($737,488),
cash at the beginning of the period was $947,420, and cash at the end of the
period was $209,932 as compared to the Three Months Ended March 31, 1999, to
cash flows from operating activities of $15,399, cash flows from investing
activities of ($61,266), cash flows from financing activities of ($15,975), net
decrease in cash of ($61,802), cash at the beginning of the period of $460,329
and cash at the end of the period of $398,527.
<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) Bonus to officer reported on Form 8-K dated March 24, 2000.
<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
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Arch B. Gilbert, President,
Chief Executive Officer,
Chief Financial Officer, and
Chief Accounting Officer
Date: May 10, 2000
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 209,932
<SECURITIES> 5,685,899
<RECEIVABLES> 2,481,885
<ALLOWANCES> 59,109
<INVENTORY> 0
<CURRENT-ASSETS> 8,388,918
<PP&E> 5,739,942
<DEPRECIATION> 2,070,535
<TOTAL-ASSETS> 12,494,208
<CURRENT-LIABILITIES> 1,874,902
<BONDS> 0
0
0
<COMMON> 22,000
<OTHER-SE> 6,153,201
<TOTAL-LIABILITY-AND-EQUITY> 12,494,208
<SALES> 3,173,602
<TOTAL-REVENUES> 3,196,324
<CGS> 2,316,791
<TOTAL-COSTS> 3,057,285
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 94,909
<INCOME-PRETAX> 608,555
<INCOME-TAX> 195,317
<INCOME-CONTINUING> 413,238
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 413,238
<EPS-BASIC> .03
<EPS-DILUTED> .03
</TABLE>
