ADVANCED MEDICAL PRODUCTS, INC.
111Research Drive
Columbia, SC 29203
Securities and Exchange
Commission
Washington, D.C. 20549
Gentlemen:
Pursuant to the requirements of the Securities Exchange Act of
1934, we are
transmitting herewith the attached Form 10-QSB/A.
Sincerely,
Advanced Medical Products, Inc.
Pat Mack
Controller
U.S. 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 September 29, 1995
Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act
For the transition period from to
Commission file number 0-16341
Advanced Medical Products Inc.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 16-1284228
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
111 Research Drive, Columbia, South Carolina 29203
(Address of Principal Executive Offices) (Zip Code)
(803) 935-0906
Issuer's Telephone Number, Including Area Code
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be
filed
by Section 13 or 15(d) of the Exchange Act during the past 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
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes
of common equity, as of the latest practicable date: 2,688,575
shares as
of November 1, 1995.
(1)
<PAGE>
<TABLE>
PART 1 - FINANCIAL INFORMATION
Item 1 - Financial Statements
ADVANCED MEDICAL PRODUCTS INC.
BALANCE SHEET
<CAPTION>
Sept. 29, 1995 June
30, 1995
(unaudited)
(audited)
ASSETS
<S> <C> <C>
Current Assets:
Cash $ 3,473 $
32,111
Accounts receivable
(net of allowance for doubtful
accounts of $42,020 and
$66,525 respectively) 689,738
643,153
Refundable income taxes 48,089
48,089
Inventory 1,073,456
1,208,359
Other current assets 284,760
208,589
Total current assets 2,099,516
2,140,301
Furniture and equipment, net 304,787
301,684
Product software costs, net 91,787
89,494
Other Assets 6,926
6,926
Total Assets $2,503,016
$2,538,405
==========
==========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 49,604 $
64,402
Accounts payable 998,384
1,053,946
Accrued wages and commissions 58,088
93,287
Other current liabilities 254,487
237,773
Total current liabilities 1,360,563
1,449,408
Dividend payable 100,000
100,000
Class A preferred stock, no par value;
authorized 4,000 shares; issued and
outstanding 2,000 shares; subject to
mandatory redemption in the amount
of $2,000,000 by October 2002 1,906,764
1,903,524
Total long-term liabilities 2,006,764
2,003,524
Total liabilities 3,367,327
3,452,932
Stockholders' deficit:
Common stock, $.01 par value;
authorized 5,000,000 shares, issued
2,704,195 shares, outstanding
2,688,575 at September 29, 1995 and
June 30, 1995. 27,042
27,042
Additional paid in capital 2,194,415
2,194,415
Accumulated deficit (2,990,419)
(3,040,635)
(2)
<PAGE>
ADVANCED MEDICAL PRODUCTS INC.
BALANCE SHEET CONTINUED
<CAPTION>
Sept. 29, 1995 June
30 1995
(unaudited)
(audited)
<S> <C> <C>
Less notes receivable for common stock $( 67,598) $(
67,598)
Less treasury stock, at cost, 15,615
shares at September 29, 1995 and
June 30, 1995. ( 27,751) (
27,751)
Total stockholders' deficit ( 864,311) (
914,527)
Total liabilities and stockholders'
deficit $2,503,016
$2,538,405
==========
==========
<FN>
The accompanying notes are an integral part of these financial
statements.
</TABLE>
(3)
<PAGE>
<TABLE>
ADVANCED MEDICAL PRODUCTS INC.
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
<CAPTION>
Three Months Ended
Sept. 29, 1995 Sept.
30 , 1994
(unaudited)
(unaudited)
<S> <C> <C>
Net sales $1,312,879
$1,371,266
Cost of sales 623,855
680,002
Gross profit 689,024
691,264
Selling, general and
administrative 567,266
740,276
Research and development 66,429
111,598
Interest expenses 1,872
23,268
Income (loss) before income taxes 53,457
(183,878)
Provision for income taxes 0
0
Net income (loss) 53,457
(183,878)
Retained deficit - beginning of period ( 914,527)
(1,038,946)
Accretion of redeemable preferred
stock ( 3,241) (
3,218)
Accumulated deficit - end of period $( 864,311)
$(1,226,042)
==========
==========
Net income (loss) applicable to
common shares $ 25,216 $(
212,096)
===========
==========
Earings per common share data:
Net income (loss) $ .01
(.08)
===========
==========
Weighted average number of common
shares outstanding 2,688,575
2,646,076
<FN>
The accompanying notes are an integral part of these financial
statements.
</TABLE>
(4)
<PAGE>
<TABLE>
ADVANCED MEDICAL PRODUCTS INC.
STATEMENT OF CASH FLOWS
<CAPITION>
Three Months Ended
Sept. 29, 1995 Sept.
30, 1994
(unaudited)
(unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 53,457 $
(183,878)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 24,969
25,343
Provision for doubtful accounts ( 24,505)
81,665
Change in assets and liabilities:
Accounts receivable ( 26,062) (
19,801)
Inventory 134,903
100,319
Other assets ( 72,190)
(32,665)
Accounts payable ( 55,562)
118,867
Other current liabilities ( 18,485) (
54,402)
Total adjustments ( 36,932)
219,326
Net cash provided by operating activities 16,525
35,448
Cash flows used by investing activities:
Capital expenditures ( 22,867) (
6,012)
Capitalization of software costs ( 7,500) (
7,800)
Net cash used by investing activities ( 30,367) (
13,812)
Cash flow used by financing activities:
Payments on long-term debt ( 14,796) (
14,166)
Purchases of common stock 0
0
Issuance of notes receivable for
common stock 0
0
Net cash used by financing activities ( 14,796)
14,166
Net (decrease) increase in cash and
cash equivalents ( 28,638)
7,470
Cash and cash equivalents at
beginning of period 32,111
1,196,951
Cash and cash equivalents at
end of period $ 3,473
$1,204,421
==========
==========
Supplemental disclosures of cash
flow information:
Cash paid during the period for:
Interest $ 1,872 $
23,268
Income taxes 0
0
<FN>
The accompanying notes are an integral part of these financial
statements.
</TABLE>
(5)
<PAGE>
ADVANCED MEDICAL PRODUCTS INC.
NOTES TO FINANCIAL STATEMENTS
1. 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 to Form 10-QSB and Article 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. Operating results for the
three month period ended September 29, 1995 are not
necessarily indicative of the results that may be expected
for fiscal year 1996. The unaudited condensed financial
statements should be read in conjunction with the financial
statements and footnotes thereto included in the Company's
annual report on Form 10-KSB for the year ended June 30,
1995.
2. Inventory
Inventory consisted of:
Sept. 29, 1995 June 30, 1995
(unaudited) (audited)
Raw Material and
work in process $ 554,877 $ 579,902
Finished Goods 518,579 628,456
$1,073,456 $1,208,358
========== ==========
3. Earnings Per Share
Earnings per common share were computed by dividing net
income (loss) by the weighted average number of common
shares outstanding during the period. Earnings per share
did not include the impact of the outstanding options since
it was not significant.
(6)
<PAGE>
ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net sales of $1,312,879 for the three months ended September 29,
1995 represent a 5% decrease from sales of $1,371,266 in the
comparable quarter in 1994. This decrease is primarily due to
decreases in the Company's OEM/International distribution
network. Current efforts to expand the network are in process
and it is expected that these efforts will result in increased
future sales.
The Company's gross profit margin increased from 50% of net sales
in the comparable quarter of fiscal 1995 to 58% of net sales for
the three months ended September 29, 1995. This increase is a
result of efforts to reduce cost of sales.
Selling, general and administrative expenses of $567,266 for the
three months ended September 29, 1995 were 43% of net sales for
the period as compared to expenses of $740,276 or 54% of net
sales for the same period last year. The decrease is a result of
efforts to reduce operating expenses.
Research and development costs during the first quarter of fiscal
1996 decreased 41% from last year as the phase in of the Spectra
ECG and development of the Ultra PCI were completed.
Net income (loss) for the quarter ended September 29, 1995
increased to $53,457 from $(183,878) for the same period last
year. The net income for the first quarter of fiscal 1996 is
primarily a result of the increase in gross margin and decrease
in operating expenses.
During the first three months of fiscal 1996, accounts receivable
increased from $643,153 to $689,738.
LIQUIDITY AND CAPITAL RESOURCES
Operating activities provided $16,525 of cash during the quarter
ended September 29, 1995 compared with $35,433 provided during
the first quarter of fiscal 1995. In the first quarter of fiscal
1996, $30,367 was used for capital expenditures, compared to
$13,812 for the same period last year.
The Company is a party to a loan agreement, pursuant to which a
Syracuse, New York bank has extended credit and loaned funds to
the Company. The bank loaned the Company $250,000 with interest
at 11%, $49,604 of which was outstanding as of September 29,
1995. The loan is subject to the provisions of a five year term
(7)
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES - Continued
loan agreement.
The Company has been discussing a new banking relationship with
lenders in South Carolina; however, no new agreements have yet
been entered into. The company has entered into a factoring
agreement with Cambridge Capital Management, Inc. of Boca Raton,
Florida ("Cambridge"), pursuant to which Cambridge has agreed to
factor 70% of the company's eligible accounts receivable.
Cambridge will receive a discount as to each receivable [ranging
from 3.75% to 15% (subject to a $25 minimum)] depending upon the
number of days that elapse between the date the receivable is
factored and the date Cambridge collects the receivable. The
company's obligations under the factoring agreement have been
personally guaranteed by Clarence P. Groff, President of the
company.
The Company believes that internally generated funds and existing
borrowing resources should provide sufficient working capital to
meet present commitments. However, in order to improve its
current cash flow position, the Company has undertaken steps,
both internally and externally. Internal initiatives include
steps to improve gross margins, reduce inventory levels, reduce
accounts receivable, expand the distribution network and reduce
fixed costs. External steps include seeking new banking
relationships, investigating alternate sources of financing and
discussing relationships in the investment banking community, as
well as, the above mentioned factoring arrangement.
The Company does not currently have specific plans for major
capital expenditures in fiscal 1996. Should needs arise, the
Company may consider additional capital sources to obtain
funding. There is no assurance any additional financing, if
required, will be available on terms acceptable to the Company.
(8)
<PAGE>
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits - EX-27
(b) Reports on Form 8-K - No Reports on Form 8-K have been
filed during the quarter for which this report is
filed, except that a report on Form 8-K dated July 24,
1995 was filed to disclose a change in the Company's
fiscal year end.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADVANCED MEDICAL PRODUCTS, INC.
(REGISTRANT)
BY:S/JAMES H. BROWN
JAMES H. BROWN
VICE PRESIDENT
DATED: FEBRUARY 9, 1996
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADVANCED MEDICAL PRODUCTS, INC.
(REGISTRANT)
BY:
JAMES H. BROWN
VICE PRESIDENT
DATED: FEBRUARY 9, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> SEP-29-1995
<CASH> 3,473
<SECURITIES> 0
<RECEIVABLES> 731,758
<ALLOWANCES> 42,020
<INVENTORY> 1,073,456
<CURRENT-ASSETS> 2,099,516
<PP&E> 1,064,872
<DEPRECIATION> 760,085
<TOTAL-ASSETS> 2,503,016
<CURRENT-LIABILITIES> 1,360,563
<BONDS> 0
<COMMON> 27,042
1,906,764
0
<OTHER-SE> (891,353)
<TOTAL-LIABILITY-AND-EQUITY> 2,503,016
<SALES> 1,312,879
<TOTAL-REVENUES> 1,312,879
<CGS> 623,855
<TOTAL-COSTS> 623,855
<OTHER-EXPENSES> 635,567
<LOSS-PROVISION> 65,487
<INTEREST-EXPENSE> 1,872
<INCOME-PRETAX> 53,457
<INCOME-TAX> 0
<INCOME-CONTINUING> 53,457
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,457
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
