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 January 31, 1996 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 Identification No.)
incorporated or organization)
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 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 ( )
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 January 31, 1996
INDEX
MEDICAL ADVISORY SYSTEMS, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet - January 31, 1996 and October 31, 1995
Statement of Operations - Three months ended January 31, 1996 and 1995
Statement of Cash Flow - Three months ended January 31, 1996 and 1995
Notes of Condensed Financial Statements: January 31, 1996
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
MEDICAL ADVISORY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
January 31 October 31
1996 1995
UNAUDITED
(NOTE-A)
ASSETS
CURRENT ASSETS
Cash $ 319,077 $ 402,768
Receivables, net 794,529 430,474
Prepaid expenses and other 15,686 12,698
TOTAL CURRENT ASSETS 1,129,292 845,940
PROPERTY AND EQUIPMENT, NET 291,490 269,873
OTHER ASSETS
Investments 427,468 427,468
Inventory - Pharmaceuticals 21,347 23,295
Deferred income taxes 333,625 333,625
--------- ---------
TOTAL OTHER ASSETS $ 782,440 $ 784,388
TOTAL ASSETS $2,203,222 $1,900,201
MEDICAL ADVISORY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET - CONTINUED
January 31 October 31
1996 1995
UNAUDITED
(NOTE-A)
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Current Maturities LT Debt $ 34,800 $ 39,660
Accounts payable & accrued expenses 608,779 303,745
Deferred income 79,689
-------- --------
TOTAL CURRENT LIABILITIES 643,579 423,094
Long-term liabilities to Banks and Others 137,764 146,756
TOTAL LIABILITIES $ 781,343 $569,850
JOINT VENTURER'S INTEREST 64,888 24,507
SHAREHOLDERS' EQUITY
Common Stock, $0.005 par value -
Authorized: 6,000,000 shares
Issued: 3,869,938 shares 19,415 19,415
Convertible Preferred Stock, $1.75 par value
Authorized: 1,000,000 shares
Issued: none 0 0
Additional capital $3,824,778 $3,824,778
Accumulated deficit (2,443,621) (2,494,766)
Treasury Stock at Cost - 65,940 shares (43,583) (43,583)
NET SHAREHOLDER EQUITY $ 1,356,989 $ 1,305,844
TOTAL LIABILITIES AND EQUITY $2,203,220 $1,900,201
MEDICAL ADVISORY SYSTEMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months
Ended January 31
1996 1995
Revenues:
Maritime Program Services $175,819 $208,074
Assistance Services 190,783 59,192
Pharmaceutical Sales 90,970 107,967
Training Services 32,418 45,571
Clinic Program 33,239 8,436
Other revenue 11,113 17,457
Interest Revenue 7,703 6,432
-------- -------
Total revenue 542,045 453,128
Costs and expenses:
Pharmaceutical cost of goods $ 49,218 $ 58,889
Medical professional services 73,200 70,582
Cost of clinic services 18,115 6,150
Cost of training services 5,947 10,640
Salaries and wages 144,358 115,333
Other selling, general and
administrative expenses 146,824 104,135
Depreciation and amortization 9,119 13,317
Interest, net 3,738 6,273
------- -------
Total costs and expenses 450,519 385,319
Profit (loss) before joint venturer's interest $91,526 67,809
Joint venturer's interest ($40,380) 4,861
Net profit $51,146 $72,670
Earnings per share $.01 $.02
Outstanding shares used to calculate
earnings per share 3,882,873 3,882,873
MEDICAL ADVISORY SYSTEMS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three Months Ended January 31
1996 1995
Cash flows from operating activities:
Net earnings for the period $ 51,146 $ 72,670
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 9,119 13,317
Equity interest in joint venture losses 40,380 (4,861)
(Increase) decrease in:
Accounts Receivable (364,055) 144,269
Inventory - Pharmaceuticals 1,948 (18,472)
Prepaid expenses and other (2,988) 153
Increase (decrease) in:
Accounts payable and accrued expenses 305,034 (94,236)
Deferred income (79,689) (63,285)
----------- -----------
Net cash provided by (used for)
operating activities $ (39,105) $ 49,555
Cash flow from investing activities:
Purchase of Investments Securities (100,000)
Capital expenditures (30,734) (7,115)
Net cash provided by (used in)
investing activities ($30,734) ($107,114)
Cash flows from financing activities
Repayments of loans to banks
and related parties (13,852) (14,056)
Net cash provided by (used in)
financing activities ($13,852) ($14,056)
Net increase (decrease) in cash (83,691) (71,615)
Cash at beginning of the period 402,768 280,668
Cash at end of the period $ 319,077 $ 209,053
MEDICAL ADVISORY SYSTEMS, INC.
NOTES OF 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.
MEDICAL ADVISORY SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Revenues from maritime program services were $175,819 for the first
three months of FY 1996 compared to $208,074 for the same period in
FY 1995. This reflects a decline in revenue due to
reductions in the size of the US merchant marine deep-draft fleet.
Fleet reductions by US vessel owners are expected to continue as
government subsidies for merchant vessels decline. Management is
making efforts to stabilize revenues from this core program by
expanding marketing efforts in other maritime sectors.
The Company earned $190,783 in revenues from sales of assistance
services during the first three months of FY 1996, a 68%
increase compared to $59,192 for the same period of FY 1995. The
increase is primarily a result of new contracts obtained by the
Company's subsidiary Assistance Services of America (ASA), Inc.
ASA is a joint venture between the Company and the French Company
SACNAS International, SA. The joint venture was formed in
November 1993 to market specialized travelers' assistance and
insurance claims handling services to companies in North
America. Revenues from the sale of assistance products are
expected to continue to increase during FY 1996.
Revenues from pharmaceutical sales were $90,970 for the
first quarter of FY 1996, a 16% decrease compared to the same period
in FY 1995.
This decrease parallels the decrease in maritime program services
caused by a reduction in the size of the US merchant marine deep-
draft fleet. Management expects pharmaceutical sales to increase
through FY 1996 as a result of continuing marketing efforts in other
maritime sectors.
The Company's Response to Illness at Sea Training Program provided
revenues of $32,418 for the period, a 29% decrease compared
to training revenues of $ 45,571 in the first quarter of FY 1995.
The decrease occurred due to postponement of a major training class
from the first quarter to the second quarter. Management
anticipates that increased revenues from this program in
the second quarter will offset the first quarter decrease.
Clinic services revenues were $33,239 for the first three months
of FY 1996, a 290% increase compared to $8,436 for the same period of
1995. The increase primarily reflects revenues from a large short
term contract. Management therefore anticipates revenues will return
to FY 1995 levels.
MEDICAL ADVISORY SYSTEMS, INC.
PART III - OTHER INFORMATION
Item I. Legal Proceedings
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. None
(b) Reports on Form 8-K. None
MEDICAL ADVISORY SYSTEMS, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, and the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MEDICAL ADVISORY SYSTEMS, INC.
Registrant)
Date: March 18, 1996 _________________________________
Thomas M. Hall, M.D.
Chief Executive Officer
10
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