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, 1997 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, 1997
INDEX
MEDICAL ADVISORY SYSTEMS, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Balance Sheet - January 31, 1997 and October 31, 1996
Statement of Operations - Three months ended January 31, 1997 and 1996
Statement of Cash Flow - Three months ended January 31, 1997 and 1996
Notes of Condensed Financial Statements: January 31, 1997
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
1997 1996
UNAUDITED
(NOTE-A)
ASSETS
CURRENT ASSETS
Cash $ 792,447 $ 717,678
Receivables, net 656,884 842,439
Inventory 15,755 20,133
Prepaid expenses and other 544
Current deferred tax asset 24,861 24,862
TOTAL CURRENT ASSETS 1,489,947 1,605,656
PROPERTY AND EQUIPMENT, NET 911,052 781,829
OTHER ASSETS
Investments 364,969 364,969
Deferred assets 309,041 306,167
TOTAL OTHER ASSETS $ 674,010 $ 671,136
TOTAL ASSETS $3,075,009 $3,058,621
MEDICAL ADVISORY SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET - CONTINUED
January 31 October 31
1997 1996
UNAUDITED
(NOTE-A)
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Current Maturities LT Debt $ 22,822 $ 25,392
Accounts payable & accrued expenses 402,594 607,728
Deferred income 344,533 241,797
TOTAL CURRENT LIABILITIES 769,949 874,917
Long-term liabilities to Banks and Other 611,875 616,149
TOTAL LIABILITIES $1,381,824 $1,491,066
JOINT VENTURER'S INTEREST 64,118 24,508
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 (2,171,543) (2,257,563)
Treasury Stock at Cost - 65,940 shares (43,583) (43,583)
NET SHAREHOLDER EQUITY $ 1,629,067 $ 1,543,047
TOTAL LIABILITIES AND EQUITY $ 3,075,009 $ 3,058,621
MEDICAL ADVISORY SYSTEMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months
Ended January 31
1997 1996
Revenues:
Maritime Program Services $174,327 $175,819
Assistance Services 280,646 190,783
Pharmaceutical Sales 77,899 90,970
Training Services 48,014 32,418
Clinic Program 17,550 33,239
Other revenue 11,113
Interest Revenue 10,349 7,703
Total revenue 608,785 542,045
Costs and expenses:
Pharmaceutical cost of goods $ 32,773 $ 49,218
Medical professional services 75,380 73,200
Cost of clinic services 13,066 18,115
Cost of training services 5,848 5,947
Salaries and wages 207,636 144,358
Other selling, general and
administrative expenses 130,399 146,824
Depreciation and amortization 11,753 9,119
Interest expense 6,301 3,738
Total costs and expenses 483,156 450,519
Profit (loss) before joint venturer's interest 125,629 91,526
Joint venturer's interest ( 39,610) ( 40,380)
Net profit $86,019 $51,146
Earnings per share $.02 $.01
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
1997 1996
Cash flows from operating activities:
Net earnings for the period $ 86,019 $ 51,146
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 11,753 9,119
Equity interest in joint venture 39,610 40,380
(Increase) decrease in:
Accounts Receivable 185,555 (364,055)
Inventory - Pharmaceuticals 4,378 1,948
Prepaid expenses and other 544 (2,988)
Increase (decrease) in:
Accounts payable and accrued expenses ( 205,134) 305,034
Deferred income 102,736 (79,689)
Net cash provided by (used for) operating activities $ 225,461 $ (39,105)
Cash flow from investing activities:
Purchase of Investments Securities
Capital expenditures (140,976) (30,734)
Net cash provided by (used in) investing activities (140,976) (30,734)
Cash flows from financing activities
Repayments of loans to banks and related parties (9,716) (13,852)
Net cash provided by (used in) financing activities (9,716) (13,852)
Net increase (decrease) in cash 74,769 (83,691)
Cash at beginning of the period 717,678 402,768
Cash at end of the period $792,447 $319,077
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
The Company's consolidated net income from operations for the
first quarter of fiscal year 1997 was $86,019 as compared to $51,146 for
1996, an increase of 68% primarily due to an increase in assistance
revenues.
The Company had $280,646 in revenues from sales of assistance
services during the first three months of FY 1997, a 47% increase
compared to $190,783 reported for the same period in FY 1996. The
increase is primarily a result of the growth of existing contracts and new
contracts obtained by the Company's subsidiary Assistance Services of
America (ASA), Inc. Revenues from the sale of assistance products are
expected to continue to increase during FY 1997.
Revenues from maritime response services were $174,327 for the
first three months of FY 1997 compared to $175,819 for the same period
in FY 1996. This stabilization of revenues after several periods of
declining revenues, is the result of stabilization in the size of the U.S.
merchant marine fleet plus expanded marketing efforts.
Revenues from pharmaceutical sales were $77,899 for the first
quarter of FY 1997, a 14% decrease compared to the same period in FY
1996. The decrease is primarily the result of market competition for
pharmaceutical sales to a major client. Management expects
pharmaceutical sales to stabilize through the remainder of FY 1997 as a result
of continuing marketing efforts.
The Company's training program provided revenues of $48,014
for the period, a 32% increase compared to training revenues of $ 32,418
in the first quarter of FY 1996. First quarter FY 1996 training revenues
were reduced due to the postponement of several major training sessions
and revenues have now returned to expected levels.
Clinic services revenues were $17,550 for the first three months
of FY 1997, a 47% decrease compared to $33,239 for the same period of
1996. The change primarily reflects the impact of a large short-term
contract during the first quarter of 1996. Revenues from long-term users
of the program have remained stable and this is expected to continue.
MEDICAL ADVISORY SYSTEMS, INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults from Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
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 17, 1997 __________\S\________________
Thomas M. Hall, M.D.
Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Oct-31-1997
<PERIOD-START> Nov-01-1996
<PERIOD-END> Jan-31-1997
<CASH> 792447
<SECURITIES> 364969
<RECEIVABLES> 656884
<ALLOWANCES> 0
<INVENTORY> 15755
<CURRENT-ASSETS> 1489947
<PP&E> 1411235
<DEPRECIATION> 500183
<TOTAL-ASSETS> 3075009
<CURRENT-LIABILITIES> 769949
<BONDS> 0
<COMMON> 19415
0
0
<OTHER-SE> 1609652
<TOTAL-LIABILITY-AND-EQUITY> 3075009
<SALES> 598436
<TOTAL-REVENUES> 608785
<CGS> 218025
<TOTAL-COSTS> 218025
<OTHER-EXPENSES> 294392
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6301
<INCOME-PRETAX> 86019
<INCOME-TAX> 0
<INCOME-CONTINUING> 86019
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 86019
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
