UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended July 31, 1995
Commission File No. 2-98314-W
MEDICAL ADVISORY SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1233960
(State of other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8050 Southern Maryland Boulevard, Owings, Maryland 20736
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(301) 855-8070
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 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 ( )
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
3,882,873 shares of Common Stock ($0.005 par value per share)
outstanding at July 31, 1995
<PAGE>
INDEX
MEDICAL ADVISORY SYSTEMS, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet - July 31, 1995 and October 31, 1994
Statement of Operations - Nine months and three months ended July 31, 1995
and 1994 Statement of Cash Flows - Nine months ended July 31, 1995 and 1994
Notes to Condensed Financial Statements: July 31, 1995
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults from Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Reports on Form 8-K and Exhibits.
SIGNATURES
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<TABLE>
MEDICAL ADVISORY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
<CAPTION>
July 31, 1995 October 31, 1994
______________ ________________
<S> <C> <C>
ASSETS
Current Assets
Cash $ 389,097 $ 280,668
Receivables, net 318,488 436,466
Prepaid expenses and other 23,724 28,198
_________ ________
Total Current Assets 731,309 745,332
Property, Plant and Equipment
less accumulated depreciation
of $433,042 and $396,121 282,662 270,423
Other Assets
Investments, at cost 427,468 327,468
Inventory - Pharmaceuticals 23,869 0
Deferred Income Taxes 335,454 335,454
_________ _________
Total Other Assets 786,791 662,922
TOTAL ASSETS 1,800,762 1,678,677
</TABLE>
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<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current Liabilities
Accounts Payable and Accrued Expenses $ 345,193 $ 300,590
Current Maturities of Long-Term Debt 39,800 54,800
Deferred Income 14,196 87,856
_________ _________
Total Current Liabilities 399,189 443,246
Long-Term Liabilities 160,450 186,381
TOTAL LIABILITIES 559,639 629,627
JOINT VENTURER'S INTEREST 17,749 11,349
SHAREHOLDERS' EQUITY
Common Stock, par value $0.005
Authorized: 6,000,000 shares
Issued: 3,869,938 shares 19,415 19,415
Convertible Preferred Stock, par
value $1.75
Authorized: 1,000,000 shares
Issued: None 0 0
Additional Capital 3,824,778 3,824,778
Accumulated Deficit (2,577,236) (2,762,909)
Treasury Stock, at cost: 65,940 shares (43,583) (43,583)
_____________ _____________
NET SHAREHOLDER EQUITY $1,223,374 $1,037,701
TOTAL LIABILITIES AND EQUITY $1,800,762 $1,678,677
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
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<TABLE>
MEDICAL ADVISORY SYSTEMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS
ENDED JULY 31, 1995 AND 1994
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
July 31 July 31
1995 1994 1995 1994
_________________ ________________
<S> <C> <C> <C> <C>
Revenues
Program Services $ 200,332 $ 226,419 $ 650,327 $ 668,366
Travel Assistance 109,740 67,352 255,246 157,090
Pharmaceutical Sales 111,737 96,901 331,901 255,190
Training Services 47,220 56,004 136,143 134,155
Clinic Program 11,141 21,859 26,524 47,881
Other Revenue 120 18,847 2,111 47,789
__________ _________ _________ ________
Total Revenue 480,289 487,382 1,402,253 1,310,471
Costs and Expenses
Pharmaceutical cost of
goods sold $ 66,211 $ 69,645 $ 190,313 $ 189,292
Medical professional services 79,868 79,875 218,939 221,130
Direct Assistance Expenses 25,651 0 46,509 0
Cost of clinic services 6,632 10,068 16,956 23,645
Cost of training services 8,701 15,699 31,946 28,466
Salaries and wages 138,951 124,488 368,115 343,483
Other selling, general
and administrative expenses 86,370 96,964 310,938 267,299
Depreciation and amortization 8,956 15,268 28,625 29,590
Interest, net (901) 2,591 (2,161) 20,174
_________ _________ _________ ________
Total Costs and Expenses 420,428 414,598 1,210,180 1,123,079
Profit before joint venturer's
interest $ 59,861 $ 72,784 $ 192,073 $ 187,392
Joint venturer's interest (12,383) 0 (6,400) 0
Net profit $ 47,478 $ 72,784 $ 185,673 $ 187,392
Earnings per share $ .01 $ .02 $ .05 $ .05
Outstanding shares used to
calculate earnings per share 3,882,873 3,882,873 3,882,873 3,882,873
<FN> See Accompanying Notes to Financial Statements
</TABLE>
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<TABLE>
MEDICAL ADVISORY SYSTEMS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED JULY 31, 1995 AND 1994
(Unaudited)
<CAPTION>
1995 1994
______ ______
<S> <C> <C>
Cash flows from operating activities:
Net earnings for the period $ 185,673 $ 187,392
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 28,626 29,590
0
Equity interest in joint venture losses 6,400 0
(Increase) decrease in:
Accounts receivable 117,979 (29,548)
Inventory - pharmaceuticals (23,868) 0
Prepaid expenses and other 4,473 (6,282)
Increase (decrease) in:
Accounts payable and accrued expenses 44,604 (14,780)
Deferred income (73,660) (16,262)
___________ ___________
Net Cash Provided by Operating Activities $ 290,226 $ 150,110
Cash flows from investing activities:
Purchase of investment securities (100,000) (77,435)
Capital expenditures (40,865) (50,116)
___________ ___________
Net Cash Used in Investing Activities ($140,865) ($127,551)
Cash flows from financing activities:
Repayment of loans to banks
and related parties (40,931) (513,949)
___________ ___________
Net Cash Used in Financing Activities ($40,931) ($513,949)
Net Increase (Decrease) in Cash 108,429 (491,390)
Cash at Beginning of Year $ 280,668 $ 763,672
__________ ___________
Cash at End of Period $ 389,097 $ 272,282
</TABLE>
<PAGE>
MEDICAL ADVISORY SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions for 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 of normal recurring accruals) considered necessary for a fair
presentation have been included.
<PAGE>
MEDICAL ADVISORY SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Revenues from pharmaceutical sales were $331,901 for the first nine
months of FY 1995, a 30% increase compared to $255,190 for the same period of
FY 1994. This improvement marks the successful implementation of management's
plan to bring all medical supply operations in-house. The Company had
experienced difficulties with its pharmaceutical supplier which caused an
interruption in sales during the first quarter and early in the second
quarter of FY 1994. Management expects pharmaceutical sales to increase
steadily through FY 1995 as a result of more competitive pricing and
continuing marketing effort.
Revenues from maritime program services were $650,327 for the first
nine months of FY 1995, an 8% decrease compared to $668,366 for the same
period in FY 1994. This decrease reflects a continuing gradual decline in
revenue from contracts to provide medical support for ships at sea as a
result of waivers being granted by the U.S. Maritime Administration allowing
foreign registration of vessels, plus a reduction in government subsidies to
the U.S. merchant marine.
The Company earned $255,246 in revenues from sales of travel
assistance services in the first three quarters of of FY 1995, a 62% increase
compared to $157,090 for the same period of FY 1994. The increase was
acheived by expanding marketing efforts into a growing customer base of
European travelers to the U.S. The FY 1995 travel assistance revenues
reflect the consolidated sales of the Company and its subsidiary.
A concomitant increase in Sales, General and Administrative expenses for
the current year resulted from start-up of the subsidiary.
In anticipation of increased business and leisure travel by Americans
to foreign countries, the Company, along with a partner (SACNAS
International of Paris, France), has formed a subsidiary to market travel
assistance and medical evacuation services. These products are being offered
via direct marketing to companies with employees engaged in business overseas
and to the public through American and Canadian insurance companies.
Continuing growth in travel assistance services is anticipated.
The Company's Response to Illness at Sea Training Program provided
revenues of $136,143 for the period, a 1.5% increase compared to training
revenues of $134,155 in the first nine months of FY 1994.
Clinic services revenues were $26,524 for the first nine months of
FY 1995, a 45% decrease compared to $47,881 for the same period of 1994.
Although diversification into drug-testing has been somewhat successful, the
Company expects continued falling demand for the specialized physical
examinations which constitute the core product of these services.
<PAGE>
MEDICAL ADVISORY SYSTEMS, INC.
PART III - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit 27. Financial Data Schedule.
(b) Reports on Form 8-K.
No reports have been filed on Form 8-K during this quarter.
<PAGE>
MEDICAL ADVISORY SYSTEMS, INC.
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.
MEDICAL ADVISORY SYSTEMS, INC.
______________________________
(Registrant)
August 24, 1995 Thomas M. Hall, M.D.
Date Thomas M. Hall, M.D.
Chief Executive Office
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