<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ---
EXCHANGE ACT OF 1934
For the quarterly period ended December 27, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- ----
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
_______ TO _______
Commission File No. 0-12744
SUNRISE MEDICAL INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3836867
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2382 FARADAY AVENUE, SUITE 200
CARLSBAD, CA 92008
(Address of principal executive offices)
Registrant's telephone number, including area code: (619) 930-1500
Indicate by check mark whether 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 and (2) has been subject to such filing requirements for
the past 90 days. Yes x No
--- ---
Number of shares of common stock outstanding at January 31, 1997: 19,287,024
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 27, June 28,
1996 1996
---------------------------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 2,339 $ 1,785
Trade receivables, net 123,825 123,924
Installment receivables, net 11,622 10,312
Inventories 88,841 80,937
Income tax refunds receivable 4,868 12,535
Deferred income taxes 17,908 17,802
Other current assets 6,697 5,016
-------- --------
Total current assets 256,100 252,311
Property and equipment, net of
accumulated depreciation of $81,271 and
$75,151, respectively 83,580 82,246
Goodwill and other intangible assets,
net 285,239 278,857
Other assets, net 6,024 7,002
-------- --------
Total assets $630,943 $620,416
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Current installments of long-term debt $ 5,291 $ 5,748
Trade accounts payable 50,226 42,861
Accrued compensation and other expenses 99,978 88,331
Income taxes 13,470 10,380
-------- --------
Total current liabilities 168,965 147,320
Long-term debt, less current
installments 180,870 207,446
Deferred income taxes 5,473 5,096
Stockholders' equity:
Preferred stock, $1 par. Authorized
5,000 shares; none issued - -
Common stock, $1 par. Authorized
40,000 shares; 19,284 and 18,847
shares, respectively, issued and
outstanding 19,284 18,847
Additional paid-in capital 202,154 195,906
Retained earnings 50,921 45,409
Cumulative foreign currency
translation adjustment 3,276 392
-------- --------
Total stockholders' equity 275,635 260,554
-------- --------
Total liabilities and stockholders'
equity $630,943 $620,416
======== ========
</TABLE>
(See accompanying notes to condensed consolidated financial statements)
2
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
<TABLE>
<CAPTION>
Thirteen Thirteen Twenty-six Twenty-six
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
December 27, December 29, December 27, December 29,
1996 1995 1996 1995
------------- ------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $169,710 $173,710 $335,063 $330,882
Cost of sales 115,098 119,553 225,997 222,025
-------- -------- -------- --------
Gross profit 54,612 54,157 109,066 108,857
Marketing, selling and administrative
expenses 36,982 43,271 74,705 80,281
Research and development 3,742 3,969 7,048 7,693
Corporate expenses 3,960 2,254 6,954 4,617
Amortization of goodwill and other
intangibles 2,117 2,223 4,157 4,264
Unusual items -- 34,771 -- 34,771
-------- -------- -------- --------
46,801 86,488 92,864 131,626
-------- -------- -------- --------
Corporate operating income (loss) 7,811 (32,331) 16,202 (22,769)
-------- -------- -------- --------
Other (expense) income:
Interest expense (3,872) (4,136) (7,874) (7,666)
Other income and expense, net 777 414 2,271 1,072
-------- -------- -------- --------
(3,095) (3,722) (5,603) (6,594)
-------- -------- -------- --------
Income (loss) before income taxes 4,716 (36,053) 10,599 (29,363)
Income taxes (benefit) 2,264 (11,961) 5,087 (9,065)
-------- -------- -------- --------
Net income (loss) $ 2,452 $(24,092) $ 5,512 $(20,298)
======== ======== ======== ========
Net income (loss) per share $0.13 $(1.28) $0.29 $(1.08)
======== ======== ======== ========
Weighted average number of shares
outstanding 18,983 18,825 18,999 18,786
======== ======== ======== ========
</TABLE>
(See accompanying notes to condensed consolidated financial statements)
3
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Twenty-six Twenty-six
Weeks Ended Weeks Ended
December 27, December 29,
1996 1995
-------------------------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 5,512 $(20,298)
Non-cash charges 13,887 17,954
Changes in assets and liabilities, net
of effect of acquisitions/divestitures:
Receivables, net (9,732) 990
Inventories (8,574) 3,089
Other current assets (1,816) (16,714)
Income taxes 10,757 5,997
Accounts payable and other liabilities 19,067 12,962
-------- --------
Net cash provided by operating
activities 29,101 3,980
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (13,492) (11,995)
Proceeds from sale of business 14,000 --
Net cash invested in acquisition of
businesses (856) (23,072)
-------- --------
Net cash used for investing activities (348) (35,067)
-------- --------
Cash flows from financing activities:
Borrowings of long-term debt 55,900 111,519
Repayments of long-term debt (84,231) (76,747)
Proceeds from issuance of common stock 201 108
-------- --------
Net cash (used for) provided by
financing activities (28,130) 34,880
-------- --------
Effect of exchange rate changes on cash (69) 11
-------- --------
Net increase in cash and cash
equivalents 554 3,804
Cash and cash equivalents at beginning
of period 1,785 1,740
-------- --------
Cash and cash equivalents at end of
period $ 2,339 $ 5,544
======== ========
</TABLE>
(See accompanying notes to condensed consolidated financial statements)
4
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The information contained in the consolidated financial statements and footnotes
is condensed from that which would appear in the annual consolidated financial
statements. Accordingly, the condensed consolidated financial statements
included herein should be reviewed in conjunction with the consolidated
financial statements and related notes thereto contained in the Annual Report on
Form 10-K for the fiscal year ended June 28, 1996, filed by Sunrise Medical Inc.
(the "company") with the Securities and Exchange Commission. The unaudited
condensed consolidated financial statements as of December 27, 1996 and for the
thirteen-week and twenty-six week periods ended December 27, 1996 and December
29, 1995 include all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation. The results of operations for
interim periods are not necessarily indicative of the results which may be
expected for the entire year. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
2. Inventories
Certain inventories are stated at the lower of last-in, first-out (LIFO) cost or
market value. All other inventories are stated at the lower of the first-in,
first-out (FIFO) cost or market value. Inventories consist of the following (in
thousands):
<TABLE>
<CAPTION>
December 27, June 28,
1996 1996
------------ --------
<S> <C> <C>
Raw material $35,925 $33,980
Work-in-progress 11,942 9,629
Finished goods 40,974 37,328
------- -------
$88,841 $80,937
======= =======
</TABLE>
Interim period inventory classifications involve a degree of estimation due to
the timing of physical inventories throughout the fiscal year.
3. Sale of Comfort Clinic
On October 18, 1996 the company sold its Comfort Clinic division for cash of $14
million. The sales price is subject to post-closing adjustment based on changes
in book value as of the closing date. The company had previously decided to
focus on the homecare and extended care markets and to sell this consumer
products-oriented division. Comfort Clinic had sales of $13.9 million through
the date of sale, or 4% of total sales for the twenty-six week period ended
December 27,
5
<PAGE>
1996, compared to sales of $24.7 million or 7% of sales in the first half of
fiscal 1996. The proceeds from the sale were used to reduce borrowings on the
company's bank credit facility.
4. Acquisition of Kid-Kart, Inc.
On December 27, 1996 the company acquired Kid-Kart, Inc., a manufacturer of
pediatric positioning strollers and other dependent mobility products, for
416,000 shares of common stock valued at $6.5 million and cash of $.5 million.
The transaction has been accounted for as a purchase. Pro forma results of
operations giving effect to the acquisition as though it had occurred on July 1,
1995 would not differ materially from amounts reported.
5. Consolidation of U.S. Homecare Divisions
In January 1997 the company announced the merger of its five U.S. homecare
divisions into a new business unit, with headquarters at the company's existing
facility in Boulder, Colorado. The consolidation of administrative functions is
expected to be completed by the end of the 1998 fiscal year. Management
estimates at present that the one-time costs of consolidation and relocation
will be approximately $4 million incurred over the next six quarters.
6. Litigation
The company announced in October 1995 that it had commenced an internal
investigation of its financial controls and financial statements for previously
reported periods. The investigation determined that net sales, operating income
and assets at its Bio Clinic division had been overstated and liabilities had
been understated as a result of actions by a small number of personnel in the
division's finance and management information systems departments. As a result,
the company restated its financial statements for the years ended June 30, 1995
and July 1, 1994. Following the October 1995 announcement, the company and
certain of its current and former officers, directors and employees were named
as defendants in a number of stockholder class action lawsuits, each alleging
violations of the federal securities laws and seeking unspecified damages. These
lawsuits were consolidated in the U.S. District Court for the Southern District
of California. In June 1996 the company reached an agreement in principle to
settle the actions for $20 million. The company's share of the settlement was
approximately $7 million, with the balance paid by the company's insurance
carriers. The agreement also included settlement of a stockholder derivative
action filed in San Diego Superior Court. Two derivative actions filed in
Delaware state courts against many of the same defendants were dismissed in
November 1996.
The Securities and Exchange Commission ("SEC") has entered a formal order of
private investigation into the circumstances underlying the restatement of the
company's 1995 and 1994 financial results. The company is cooperating fully
with the SEC in its investigation.
6
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Thirteen weeks ended December 27, 1996 compared to thirteen weeks ended December
- --------------------------------------------------------------------------------
29, 1995
- --------
Net sales for the second quarter of fiscal 1997 were $169.7 million compared to
$173.7 million in the comparable period of fiscal 1996, a decrease of 2%.
Excluding the effect of the company's divested support surfaces rental and
consumer businesses, internal sales growth was 6% and foreign currency
translation reduced sales by 1%.
The company reports operating results under three groupings, which follow its
operating management structure: Homecare, Extended Care (both based in North
America) and Europe (which includes both homecare and extended care products).
The North American Homecare Products group's sales increased 3% in the second
quarter of fiscal 1997 to $72.4 million, compared to $70.3 million in the second
quarter of fiscal 1996. This group was led by 5% growth in wheelchairs. Sales
growth of respiratory products was at a lower rate, while sales of patient aids
declined slightly.
The North American Extended Care Products group recorded sales of $24.5 million
in the second quarter of fiscal 1997, a decline of 11% from sales of $27.5
million in the comparable period of fiscal 1996. A significant decline in sales
of healthcare support surfaces (in part reflecting the sale of the company's air
therapy rental business in January 1996) more than offset solid sales growth in
nursing home beds.
In Europe, sales increased 8% to $69.6 million in the second quarter of fiscal
1997, compared to $64.7 million in the second quarter of fiscal 1996. The
company's businesses in Germany, Spain, the U.K. and its European distribution
group all had solid sales growth, while sales in France declined slightly.
Key items as a percentage of net sales (excluding unusual items) were:
<TABLE>
<CAPTION>
Thirteen Weeks Ended
-----------------------------
December 27, December 29,
1996 1995
------------- -------------
<S> <C> <C>
Gross profit 32.2% 31.2 %
Corporate operating income 4.6% 1.4 %
Interest expense 2.3% 2.4 %
Net income (loss) 1.4% (1.1)%
</TABLE>
7
<PAGE>
Gross profit of $54.6 million in the second quarter of fiscal 1997 was $.4
million above the $54.2 million recorded in the comparable quarter of fiscal
1996. The gross margin, or gross profit as a percentage of net sales, increased
by 1.0% to 32.2%. Although gross margins in a number of domestic homecare
product lines were adversely affected by pricing pressures induced by managed
health care, this decline was more than offset by improved margins in other
product lines, in particular in the restructured support surfaces business.
Marketing, selling and administrative expenses decreased 15% in the second
quarter of fiscal 1997 compared to the prior year period, declining as a
percentage of net sales to 21.8% from 24.9% in the second quarter of fiscal
1996. Excluding the sold businesses, marketing, selling and administrative
expenses declined 3%, reflecting results of a company-wide cost reduction
program.
Corporate expenses were $4.0 million in the second quarter of fiscal 1997, an
increase of $1.7 million or 76% compared to the second quarter of fiscal 1996.
A new European corporate office, together with higher internal audit and
insurance costs pushed corporate expenses upward.
Interest expense for the second quarter of fiscal 1997 was $3.9 million or 6%
lower than interest expense of $4.1 million in the second quarter of the prior
year, as lower average borrowings more than offset increased interest rates.
In the second quarter of fiscal year 1996 the company reported unusual charges
of $34.8 million. These charges included $13.1 million for an internal
investigation and restatement of historical financial statements, including
estimated attorneys' fees for defending litigation; $10.7 million for the write-
down of support surfaces business assets (including goodwill of $2.0 million,
loss on the sale of business of $2.1 million, and other asset adjustments of
$6.6 million to reflect revised estimates of net asset realizations); and $11.0
million related to a company-wide reorganization and cost reduction program,
including severance costs ($1.5 million), facility closing costs ($0.3 million),
and product line discontinuance and other costs ($9.2 million).
The effective tax rate of 48.0% in the second quarter of fiscal 1997 compares to
a rate of 33.2% used in determining the tax benefit in the second quarter of
fiscal 1996. Non-deductible goodwill amortization causes the effective rate to
differ from the statutory tax rate of 35%.
Net income in the second quarter of fiscal 1997 was $2.5 million, or $0.13 per
share, compared to a net loss of $(24.1) million or $(1.28) per share in the
second quarter of fiscal 1996. Excluding unusual items, the net loss in the
prior year quarter was $(1.9) million or $(.10) per share.
8
<PAGE>
Twenty-six weeks ended December 27, 1996 compared to twenty-six weeks ended
- ---------------------------------------------------------------------------
December 29, 1995
- -----------------
Net sales for the first half of the company's 1997 fiscal year were $335.1
million, an increase of 1% over net sales of $330.9 million in the corresponding
period of fiscal 1996. Sales growth was offset by divestitures; excluding
businesses sold, sales increased 7%, with 6% internal growth and 2% from
acquisitions, less 1% from foreign currency translation.
North American Homecare sales increased 3% to $137.5 million from $133.5 million
in the first half of fiscal 1996, with modest growth in wheelchairs and
respiratory products and a slight decrease in patient aid sales. The North
American Extended Care group had sales of $48.5 million for the twenty-six week
period ended December 27, 1996, a 9% decline from sales of $53.5 million
in the corresponding 1996 period. This decline is from the divestiture in
January 1996 of the company's support surfaces rental business, as well as a
decline in sales of foam and air mattress products. Sales of nursing home beds
increased significantly compared to the prior year period.
In Europe, sales increased 13% in the first half of fiscal 1997 to $136.6
million from sales of $120.7 million in 1996. Sales growth was particularly
strong in the U.K., and sales in Germany and Spain also showed solid growth.
Sales in France declined slightly.
Key items as a percentage of net sales (excluding unusual items) were:
<TABLE>
<CAPTION>
Twenty-six Weeks Ended
-----------------------------
December 27, December 29,
1996 1995
------------- -------------
<S> <C> <C>
Gross profit 32.6% 32.9%
Corporate operating income 4.8% 3.6%
Interest expense 2.4% 2.3%
Net income 1.6% 0.6%
</TABLE>
Gross profit of $109.1 million in the first half of fiscal 1997 was similar to
the $108.9 million recorded in the corresponding period of fiscal 1996. A
decline in gross margin (gross profit as a percentage of net sales) from 32.9%
to 32.6% resulted primarily from pricing pressures in the North American
homecare business, which more than offset the gross margin increase resulting
from the sale of Comfort Clinic in October 1996 and improved performance of the
remaining support surfaces business.
Marketing, selling and administrative expenses declined 7% in the first half of
1997, from $80.3 million to $74.7 million. Adjusting for businesses sold, these
expenses increased 3%, a lesser rate than the similarly adjusted sales increase
of 7%, reflecting the results of a company-wide profit improvement program
instituted early in the 1996 calendar year. Included in marketing, selling and
administrative expenses for 1997 are one-time costs of $1.4 million for the
company's sponsorship of the 1996 Atlanta Paralympic Games. Without these costs,
marketing, selling and administrative expenses were 21.9% of sales in the first
half of 1997 compared to 24.3% in 1996.
9
<PAGE>
Corporate expenses of $7.0 million in the first half of fiscal 1997 were 51%
above the $4.6 million recorded in the first half of fiscal 1996. A new
European corporate office and higher internal audit and insurance costs
contributed to this increase.
Interest expense increased 3% in the fiscal 1997 period compared to $7.9 million
in the prior year period. Average borrowings were 8% lower in the first half of
fiscal 1997, but savings were offset by higher interest rates. Interest and
other income increased 112% to $2.3 million, including higher interest income
earned on installment receivables and $.9 million from the favorable settlement
of a legal dispute.
For the first six months of fiscal 1997, net income was $5.5 million or $.29 per
share. The company recognized unusual charges of $34.8 million in the first
half of fiscal 1996, resulting in a net loss of $(20.3) million or $(1.08) per
share. Net income excluding the unusual items was $1.9 million or $.10 per
share.
LIQUIDITY AND CAPITAL RESOURCES
Cash of $29.1 million was provided by operating activities during the six months
ended December 27, 1996, compared to $4.0 million in the first half of fiscal
1996. Property and equipment purchases were $13.5 million, an increase of $1.5
million over the 1996 period. Long-term debt was reduced by $28.3 million in
the first half of fiscal 1997, bringing the total debt reduction for calendar
year 1996 to $46 million. The latter amount includes $20 million from the sale
of businesses, $15 million from income tax refunds, and $31 million from ongoing
operations, less $20 million paid for unusual items. Working capital
decreased by $17.9 million to $87.1 million at December 27, 1996 compared to the
June 28, 1996 level, caused largely by the sale of Comfort Clinic and use of the
proceeds to reduce debt.
In November 1996 the company purchased a 370,000 square foot facility for $3
million to consolidate four U.K.-based manufacturing divisions into a combined
Sunrise Medical Ltd. facility. The consolidation is expected to be completed by
October 1997.
In January 1997 a merger was announced of the company's five U.S. homecare
divisions into a new business unit, with headquarters at an existing facility in
Boulder, Colorado. The consolidation of administrative functions is expected to
be completed by the end of the 1998 fiscal year. Severance, relocation and other
costs of the consolidation are currently estimated at approximately $4 million.
The company recorded pre-tax charges from unusual items of $65.2 million in
fiscal 1996. These charges included: $18.6 million for costs of an internal
investigation and restatement of historical financial statements and the
settlement of litigation, including attorneys' fees; $27.6 million related to
the support surfaces business, consisting of loss on the sale of businesses of
$5.8 million, goodwill writedowns of $13.8 million and other asset adjustments
of $8.0 million to reflect revised estimates of net asset realizations; and
$19.0 million related to the company's reorganization and cost reduction
program, including severance costs ($3.2 million), facility closing costs ($5.4
million), and product discontinuance and other expenses ($10.4 million). Of
10
<PAGE>
the total charges of $65.2 million, approximately $36.2 million involve cash
payments and $29.0 million represent non-cash charges. Cash payments of $18.8
million were made through June 28, 1996, and an additional $2.9 million was paid
during the first half of fiscal 1997. Substantially all of the $14.5 million
balance of cash charges is expected to be paid over the next nine months.
In December 1996 the company acquired Kid-Kart, Inc. for common stock valued at
$6.5 million and cash of $.5 million. The transaction was accounted for as a
purchase. Pro forma results of operations assuming the acquisition had occurred
at the beginning of fiscal 1996 would not differ materially from those reported.
In October 1996 the company sold its Comfort Clinic division for $14 million.
See Note 3 of Notes to Condensed Consolidated Financial Statements. The proceeds
were used to repay borrowings on the company's bank credit facility. Funds
available as of December 27, 1996 under the credit facility were approximately
$84 million.
The company adopted Financial Accounting Standards Board (FASB) Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of," in the first quarter of its 1997 fiscal year. The
effect of such adoption was not material. The company has elected to continue
to account for stock options in accordance with Opinion No. 25 of the Accounting
Principles Board and will adopt the disclosure provisions of FASB Statement No.
123 in its fiscal 1997 financial statements.
IMPACT OF INFLATION
Inflation did not have any significant effect on the company's operating results
in the first half of fiscal 1997.
FORWARD-LOOKING STATEMENTS
The statements contained in this Form 10-Q which are not statements of
historical fact constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The company has made
forward-looking statements in this Form 10-Q concerning, among other things, the
timing of the consolidation and reorganization of various company divisions and
activities. These statements are only predictions, however, and actual events
or results may differ materially as a result of risks facing the company.
These risks include, but are not limited to: the impact of competitive products;
pricing pressures caused by changes in Medicare and Medicaid policies and other
factors; the costs of raw materials; future product demand and market acceptance
risks; product development; commercialization and technological difficulties,
shifts in industry distribution channels; acceleration of the current trend of
consolidation of the company's customer base; governmental
11
<PAGE>
regulation of medical device design and manufacturing (such as by the F.D.A. in
the U.S.); and other factors. Given these uncertainties, investors are cautioned
not to place undue reliance on such forward-looking statements. The company
disclaims any obligation to update any such factors, to announce publicly the
result of any revisions to any of the forward-looking statements contained in
this and other Securities and Exchange Commission filings of the company, or to
make corrections to reflect future events or developments.
12
<PAGE>
SUNRISE MEDICAL INC.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Number Description
- ------ -------------------------
<S> <C>
10.1 Amended and Restated Stock Option Plan for Key Associates. (Incorporated
herein by reference to the 1990 Definitive Proxy Statement of the company)
10.2 1993 Stock Option Plan. (Incorporated herein by reference to the 1993
Definitive Proxy Statement of the company)
10.3 Management Incentive Bonus Plan. (Incorporated herein by reference to the
company's Registration Statement No. 2-86314 filed with the Securities and
Exchange Commission)
10.4 Special Bonus Plan. (Incorporated herein by reference to the company's
fiscal 1992 Form 10-K)
10.5 Second Amended and Restated Credit Agreement dated as of September 29,
1995 among Sunrise Medical Inc. and certain subsidiary borrowers and
guarantors, Bank of America as agent and other lenders. (Incorporated
herein by reference to the company's Form 10-K/A for the year ended June
30, 1995)
10.6 First Amendment to Second Amended and Restated Credit Agreement and Waiver
dated as of May 2, 1996 among Sunrise Medical Inc. and certain subsidiary
borrowers and guarantors, Bank of America as agent and other lenders.
(Incorporated herein by reference to the company's Form 10-Q for the
quarter ended March 29, 1996)
10.7 Second Amendment to Second Amended and Restated Credit Agreement and
Waiver dated as of August 22, 1996 among Sunrise Medical Inc. and certain
subsidiary borrowers and guarantors, Bank of America as agent and other
lenders. (Incorporated herein by reference to the company's Form 10-K for
the year ended June 28, 1996)
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended December 27,
1996.
13
<PAGE>
SUNRISE MEDICAL INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUNRISE MEDICAL INC.
Date: February 7, 1997 /s/ Ted N. Tarbet
----------------------------
Ted N. Tarbet
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: February 7, 1997 /s/ John M. Radak
-----------------------------
John M. Radak
Vice President and Controller
(Principal Accounting Officer)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 27, 1996 AND THE CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 27, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-27-1997
<PERIOD-END> DEC-27-1996
<CASH> 2,339
<SECURITIES> 0
<RECEIVABLES> 144,735
<ALLOWANCES> 9,288
<INVENTORY> 88,841
<CURRENT-ASSETS> 256,100
<PP&E> 164,851
<DEPRECIATION> 81,271
<TOTAL-ASSETS> 630,943
<CURRENT-LIABILITIES> 168,965
<BONDS> 180,870
0
0
<COMMON> 19,284
<OTHER-SE> 256,351
<TOTAL-LIABILITY-AND-EQUITY> 630,943
<SALES> 335,063
<TOTAL-REVENUES> 335,063
<CGS> 225,997
<TOTAL-COSTS> 225,997
<OTHER-EXPENSES> 92,864
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,874
<INCOME-PRETAX> 10,599
<INCOME-TAX> 5,087
<INCOME-CONTINUING> 5,512
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,512
<EPS-PRIMARY> 0.29
<EPS-DILUTED> 0.29
</TABLE>
