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United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark one)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1995
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________________ to ________________
Commission File Number 0-13316
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LASER CORPORATION
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(Exact name of small business issuer as specified in its charter)
Utah 87-0395567
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(State of Incorporation) (I.R.S. Employer
Identification No.)
1832 South 3850 West
Salt Lake City, UT 84104
--------------------- ----------
(Address of principal (Zip Code)
executive office)
(801) 972-1311
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(Issuer's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (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 [ ]
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, .05 Par Value -- 672,098 shares as of June 30, 1995
Page 1 of 13
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INDEX
LASER CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - June 30, 1995 and December 31, 1994.
Consolidated Statements of Operations - Three months ended June 30,
1995 and 1994; Six months ended June 30, 1995 and 1994
Consolidated Statements of Cash Flows - Six months ended June 30,
1995 and 1994.
Notes to Consolidated Financial Statements - June 30, 1995.
Item 2. Management's Discussion and Analysis or Plan of Operation.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
SIGNATURES
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<TABLE>
PART I. FINANCIAL INFORMATION
Item 1.
LASER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
ASSETS 1995 1994
Unaudited
------------ ------------
CURRENT ASSETS <C> <C>
Cash and cash equivalents $ 948,762 $ 70,500
Receivables:
Trade accounts, less allowances of
$41,191 in 1995 and $25,000 in 1994 635,890 572,418
Notes Receivable (Current Portion) 142,142 ---
------------ ------------
778,032 572,418
Inventories:
Raw materials 622,161 528,987
Work in process 481,188 414,648
Finished Goods 69,362 53,203
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1,172,711 996,838
Other current assets 39,268 12,459
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Total Current Assets 2,938,773 1,652,215
NOTES RECEIVABLE LESS CURRENT PORTION 768,476 ---
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment 1,347,823 1,336,194
Leasehold improvements 580,351 580,351
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1,928,174 1,916,545
Less accumulated depreciation
and amortization (1,624,289) (1,570,095)
------------ ------------
303,885 346,450
NET ASSETS OF DISCONTINUED OPERATIONS --- 1,912,867
OTHER ASSETS 4,299 4,299
------------ ------------
$ 4,015,433 $ 3,915,831
============ ============
See accompanying notes to consolidated financial statements
</TABLE>
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<TABLE>
LASER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1995 1994
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
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CURRENT LIABILITIES <C> <C>
Trade accounts payable $ 415,525 $ 398,409
Accrued expenses 185,302 171,044
Accrued warranty expense 190,000 180,000
Income taxes payable --- 10,000
Current portion of capital lease
obligations 38,017 38,510
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Total Current Liabilities 828,844 797,963
CAPITAL LEASE OBLIGATIONS, less
current portion 3,508 23,410
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common Stock, $.05 par value;
Authorized Shares - 2,000,000 shares
in 1995 and 1994;
Issued Shares - 682,098 shares in 1995
and 1994;
Outstanding Shares - 672,098 in 1995
and 1994; 34,105 34,105
Additional paid-in capital 701,537 701,537
Retained earnings 2,547,439 2,458,816
Treasury stock, at cost (100,000) (100,000)
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Total Stockholders' Equity 3,183,081 3,094,458
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$ 4,015,433 $ 3,915,831
============ ============
See accompanying notes to consolidated financial statements
</TABLE>
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<TABLE>
LASER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
---------- ---------- ---------- ----------
REVENUES: <C> <C> <C> <C>
Net sales $1,122,938 $ 908,744 $2,132,052 $1,740,526
Interest and other income 29,206 4,319 53,890 7,107
---------- ---------- ---------- ----------
1,152,144 913,063 2,185,942 1,747,633
COSTS AND EXPENSES:
Cost of products sold 846,034 700,580 1,606,941 1,329,078
Selling, general and
administrative 164,995 155,065 324,772 336,826
Research and development 91,249 65,542 180,563 137,903
Royalties 18,177 14,692 32,622 26,935
Interest 2,473 3,986 5,332 8,327
---------- ---------- ---------- ----------
1,122,928 939,865 2,150,230 1,839,069
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES 29,216 (26,802) 35,712 (91,436)
INCOME TAX BENEFIT
(EXPENSE) - CURRENT (1,000) --- (1,000) (500)
---------- ---------- ---------- ----------
INCOME (LOSS) FROM
CONTINUING OPERATIONS 28,216 (26,802) 34,712 (91,936)
========== ========== ========== ==========
INCOME FROM
DISCONTINUED OPERATIONS --- 132,195 --- 200,523
INCOME ON DISPOSAL OF
DISCONTINUED OPERATIONS --- --- 53,911 ---
---------- ----------- ---------- ---------
NET INCOME (LOSS) $ 28,216 $ 105,393 $ 88,623 $ 108,587
========== =========== ========== =========
NET INCOME (LOSS) PER SHARE
CONTINUING OPERATIONS $ .04 $ ( .04) $ .05 $ (.14)
NET INCOME PER SHARE
DISCONTINUED OPERATIONS $ --- $ .20 $ .08 $ .30
---------- ----------- ---------- ---------
NET INCOME PER SHARE $ .04 $ .16 $ .13 $ .16
========== =========== ========== =========
Average number of shares of
Common Stock outstanding 685,000 672,000 685,000 672,000
See accompanying notes to consolidated financial statements
</TABLE>
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<TABLE>
LASER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(Unaudited)
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES: ----------- -----------
<C> <C>
Net income (loss) $ 88,623 $ 108,587
Less income from discontinued operations --- (200,523)
Less income from disposal of
discontinued operations (53,911)
Adjustments to reconcile net income (loss)
to net cash provided from (used in)
operating activities:
Depreciation and amortization 54,194 64,660
(Increase) decrease in assets:
Trade accounts receivable (63,472) (147,794)
Refundable income and value-added taxes --- 71,691
Inventories (175,873) 61,501
Other current assets (26,809) (57,992)
Other assets --- 26,505
Increase (decrease) in liabilities:
Trade accounts payable and
accrued expenses 41,374 (10,140)
Income taxes payable (10,000) ---
Net Cash Provided from (Used in) ----------- -----------
Operating Activities (145,874) (83,505)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (11,629) (1,004)
Payments received on long term notes 56,160 ---
Proceeds from sale of Pro Med Co. 1,000,000 ---
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Net Cash Used in Investing Activities 1,044,531 (1,004)
See accompanying notes to consolidated financial statements
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<TABLE>
CASH FLOW (CONTINUED)
CASH FLOWS FROM FINANCING ACTIVITIES: <C> <C>
Payments on long-term debt and
capital lease obligations (20,395) (17,250)
Change in net assets of
discontinued operation --- (266,450)
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Net Cash Provided by (Used in)
Financing Activities (20,395) (283,700)
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 878,262 (368,209)
CASH AND CASH EQUIVALENTS, BEG. OF PERIOD 70,500 460,272
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 948,762 $ 92,063
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SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES
On January 1, 1995, the Company entered into agreements where it sold its
80 percent ownership in Pro Med. In return for the $1,912,867 in net assets
that were on the books at December 31, 1994, the Company received $1,000,000 in
cash and the remaining $966,778 was represented by notes receivable from Pro Med
and its shareholders. A gain on the sale of $53,911 was recognized by the
Company.
See accompanying notes to consolidated financial statements
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LASER CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
June 30, 1995
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-QSB and Rule 10-01
of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the six months ended June 30, 1995 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1995. For further information, refer to the consolidated
financial statements and footnotes thereto for the year ended December 31, 1994
included in the Company's Annual Report on Form 10-KSB (file number 0-13316).
NOTE B - RECLASSIFICATIONS
The financial information included in this Quarterly Report on Form 10-QSB
including the Consolidated Financial Statements and accompanying Notes to
Consolidated Financial Statements, have been restated to reflect the
discontinued emergency medical equipment and supplies operations. All
significant intercompany balances and transactions have been eliminated in
consolidation. Other certain 1994 amounts have been reclassified to conform to
the 1995 presentation. These amounts were not material reclassifications.
NOTE C - INVESTMENT IN PRO MED CO.
On January 1, 1995, the Company entered into two agreements where it
sold its 80 percent ownership in Pro Med Co.("Pro Med"). One agreement is with
the minority shareholders wherein the Company sold 31,726 shares of Pro Med
stock (approximately 40 percent of the Company's ownership) to the minority
shareholders of Pro Med. The sales price was for $1,095,496 and consisted of a
cash payment of $300,000 and cancellation of the note payable to the minority
shareholders which had a balance of $795,496 at December 31, 1994. The Company
sold its remaining 48,274 shares of Pro Med stock (approximately 60 percent of
the Company's ownership) and forgiveness of an intercompany note for total
proceeds of $1,666,778 to Pro Med. The proceeds consisted of a $700,000 cash
payment and notes receivable aggregating in a balance of $966,778. Both notes
receivable are secured by the common stock of Pro Med and the personal
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guarantees of the minority shareholders. The first note of $804,504 requires
monthly payments of $16,121 including interest at 7.5%. The entire remaining
unpaid balance is due February 1, 1998. The second note of $162,274 does not
bear interest and is due January 1, 1998. The sale of Pro Med resulted in a
gain of $53,911.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere herein.
RESULTS OF OPERATIONS
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Three months ended June 30, 1995.
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Net sales for the three months ended June 30, 1995 were $1,122,938
compared to $908,744 for the comparable period in 1994, an increase of $214,194
or 24%. This increase in net sales resulted from increased product sales to
Carl Zeiss of $98,944 and to increased product and service sales to all other
customers of $115,250.
Cost of products sold as a percent of Company net sales decreased from
77.1% in 1994 to 75.3% for the three months ending June 30, 1995. This decrease
resulted from a more efficient use of manufacturing labor.
Selling, general, and administrative expenses for the three month period
ending June 30, 1995, increased by $9,930 or 6% when compared to the same period
in 1994. This increase was primarily due to increased administrative salary
expenses.
Research and development expenditures for the period increased by $25,707
or 39% in 1995 as compared to 1994. This increase resulted from the Company's
efforts to broaden and modernize its laser product lines.
As a result of the increased sales and lower cost of goods sold, the
Company experienced a $55,018 positive swing in net income from continuing
operations for the three month period ending June 30, 1995 compared to the same
period in 1994. The Company turned a loss of $26,802 or $.04 per share in 1994
to net income of $28,216 or $.04 per share for the same period in 1995.
Net income, inclusive of the 1994 discontinued operations, for the period
ending June 30, 1995 was $28,216 or $.04 per share compared to $105,393 or $.16
per share for the same period in 1994. Discontinued operations account for the
$132,195 difference in net income reported for the three month period ending
June 30, 1994.
Six months ended June 30, 1995.
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Net sales for the six months ended June 30, 1995 were $2,132,052
compared to $1,740,526 for the comparable period in 1994, an increase of
$391,526 or 22%. This increase in net sales resulted from a $178,679 increase
in product sales to Carl Zeiss, a $155,627 increase in service sales to Xerox in
Europe and a $57,220 increase in product and service sales to all other
customers.
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Cost of products sold as a percent of Company net sales decreased from
76.4% in 1994 to 75.4% for the six months ending June 30, 1995. This decrease
resulted from a more efficient use of manufacturing labor.
Selling, general, and administrative expenses for the six month period
ending June 30, 1995, decreased by $12,054 or 4% when compared to the same
period in 1994. This decrease was primarily the result of reduced legal costs
in 1995 compared to that experienced in 1994.
Research and development expenditures for the period increased by
$42,660 or 31% in 1995 as compared to 1994. This increase resulted from the
Company's efforts to broaden and modernize its laser product lines.
As a result of the increased sales, lower selling, general and
administrative expenses and lower cost of goods sold, the Company experienced a
$126,648 positive swing in net income from continuing operations for the six
month period ending June 30, 1995 compared to the same period in 1994. The
Company turned a loss of $91,936 or $.14 per share in 1994 to net income of
$34,712 or $.05 per share for the same period in 1995.
Net income, inclusive of the 1994 discontinued operations, for the
period ending June 30, 1995 was $88,623 or $.13 per share compared to $108,587
or $.16 per share for the same period in 1994. Discontinued operations account
for the differences in the net income reported for the six month periods.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
As a result of the sale of ProMed and the positive swing in net income
from continuing operations, the Company has recognized a significant improvement
in both working capital and cash equivalents during the past six months. On
June 30, 1995, the Company had working capital of $2,109,929 compared to
$854,252 at December 31, 1994, an increase of $1,255,677, a 147% increase. Cash
equivalents at June 30, 1995 were $948,762 compared to a December 31, 1994
balance of $70,500, an increase of $878,262 or 1,246%.
Page 11 of 13
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Shareholders was held May 19, 1995.
Proxies for the meeting were solicited pursuant to Regulation 14A under the
Securities Exchange Act of 1934. At the meeting, the following matters were
submitted to a vote of the Company's shareholders:
(1) Election of three (3) directors
(2) Approve the selection of Tanner + Co. as the independent certified
public accountants of the Company for the fiscal year ending
December 31, 1995.
The votes cast for or withheld, as well as the number of abstentions
and broker non-votes, as to each such matter, including a separate tabulation
with respect to each nominee for office, were as follows:
<TABLE>
PROPOSAL 1: ELECTION OF DIRECTORS:
Withhold Broker
For Authority Abstention Non-Voters
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<C> <C> <C> <C>
B. Joyce Wickham 588,377 2,402 40 ---
Rod O. Julander 588,377 2,402 40 ---
Mark L. Ballard 588,379 2,400 40 ---
PROPOSAL 2: APPROVE SELECTION OF TANNER + CO.:
588,179 2,850 742 ---
</TABLE>
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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.
LASER CORPORATION
Date: August 11, 1995 /s/ B. Joyce Wickham
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B. Joyce Wickham
President, Chief Executive Officer
Treasurer and Director
Date: August 11, 1995 /s/ Reo K Larsen
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Reo K Larsen
General Accounting Manager
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