FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from .................to.................
Commission file number 001-1296
ZEVEX INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
DELAWARE 87-0462807
(State or other jurisdiction (I.R.S.Employer
of incorporation or organization) Identification No.)
4314 ZEVEX Park Lane, Salt Lake City,
Utah 84123 (Address of principal
executive offices and zip code)
(801) 264-1001
--------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address, and former fiscal year, if changed since
last report)
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ] Not Applicable [ X ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As of May 12, 2000, the Company
had outstanding 3,433,925 shares of common stock, par value $0.001 per share.
<PAGE>
PART I
FINANCIAL INFORMATION
------------------------------------------------------------------------------
ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-Q
------------------------------------------------------------------------------
ZEVEX International, Inc. (the "Company") files herewith balance sheets of the
Company as of March 31, 2000, and December 31, 1999, and the related statements
of operations and cash flows for the respective three month periods ended March
31, 2000 and 1999. In the opinion of the Company's management, the financial
statements reflect all adjustments, all of which are normal recurring
adjustments, necessary to fairly present the financial condition of the Company
for the interim periods presented. The financial statements included in this
report on Form 10-Q should be read in conjunction with the audited financial
statements of the Company and the notes thereto included in the annual report of
the Company on Form 10-K for the year ended December 31, 1999.
<PAGE>
ZEVEX INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
March 31 December 31
2000 1999
----- ----
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 3,036,164 $ 3,383,544
Restricted cash for sinking
Fund payment on IDB 112,728 86,549
Accounts receivable 5,987,527 5,843,229
Inventories 6,243,178 5,119,291
Marketable securities 2,839,505 3,224,817
Other current assets 16,648 26,859
Prepaid expenses
29,694 33,554
------ ------
Total current assets 18,265,444 17,717,843
Property and equipment, net 5,302,080 5,333,577
Patents, trademarks and acquisition costs, net 351,229 349,354
Goodwill, net 10,459,923 10,642,304
Other assets
16,285 6,611
------ -----
$ 34,394,961 $ 34,049,689
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,095,341 $ 1,134,946
Other accrued expenses 538,126 731,852
Income taxes payable 445,187 957,309
Bank lines of credit 1,214,134 1,613,453
Current portion of long-term debt 1,204,758 1,234,483
Deferred income taxes 110,276
---------- --------------
128,771
Total current liabilities 5,626,317 5,782,319
Deferred income taxes -- 6,648
Industrial development bond 1,700,000 1,700,000
Convertible debt, long-term 5,440,275 5,470,000
Other long-term liabilities 77,724 --
Stockholders' equity:
Common stock, $.001 par value: authorized
10,000,000 shares, issued 3,433,925 and 3,420,726
respectively at March 31, 2000 and December 31,1999 3,434 3,421
Additional paid in capital 16,265,798 16,212,966
Unrealized gain on marketable securities, net 418,546 331,484
Retained earnings
4,862,867 4,542,851
--------- ---------
Total
stockholders' equity 21,550,645 21,090,722
---------- ----------
$ 34,394,961 $ 34,049,689
============ ============
See accompanying notes.
</TABLE>
<PAGE>
ZEVEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three months ended
March 31,
2000 1999
----------------- ----------------
(unaudited) (unaudited)
Revenue:
Product sales $ 5,415,772 $ 4,298,226
Engineering services 242,275 363,227
----------------- ----------------
5,658,047 4,661,453
Cost of sales 3,128,614 2,387,107
----------------- ----------------
Gross profit 2,529,433 2,274,346
Operating expenses:
General and administrative 1,223,007 1,050,827
Selling and marketing 582,027 529,443
Goodwill amortization 126,785 147,331
Research and development 215,983 129,062
----------------- ----------------
Total operating expenses 2,147,802 1,856,663
Operating income 381,631 417,683
Other income (expense)
Interest income 37,969 54,769
Interest expense (141,713) (105,030)
Gain on sale of
marketable securities 298,048 --
Unrealized gain on
marketable securities -- 87,903
----------------- ----------------
Income before provision for
income taxes 575,935 455,325
Provision for income taxes (255,920) (167,557)
----------------- ----------------
Net income $ 320,015 $ 287,768
================= ================
Basic net income per share $ .09 $ .08
================= ================
Weighted average shares
outstanding 3,422,767 3,412,176
================= ================
Diluted net income per share
$ .09 $ .08
================= ================
Diluted weighted average shares
outstanding 3,766,946 3,624,475
================= ================
See accompanying notes.
</TABLE>
ZEVEX INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Three months ended
March 31,
2000 1999
--------------- ---------------
(unaudited) (unaudited)
Cash flows from operating activities
Net income $ 320,015 $ 287,768
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization 318,656 328,567
Deferred income taxes (39,946) 81,395
Realized gain on marketable securities (298,048) --
Changes in operating assets and liabilities:
Increase in restricted cash for sinking fund payment
on industrial development bond (26,179) (27,092)
Increase in accounts receivable (144,298) (808,590)
Decrease in trading securities 313,993 --
Increase in inventories (1,123,887) (217,788)
Decrease (increase) in prepaid expenses 3,860 (14,567)
Decrease in other assets 537 12,238
Increase in accounts payable 960,395 57,046
(Decrease) increase in accrued and other liabilities (116,002) 20,770
(Decrease) increase in income taxes payable (512,122) 49,701
--------------- ---------------
Net cash used in operating activities (343,026) (230,552)
Cash flows from investing activities
Purchase of property and equipment (157,646) (191,214)
Additions of patents and trademarks (8,457) (660)
Redemption of available-for-sale marketable securities 508,223 1,068,451
--------------- ---------------
Net cash provided by investing activities 342,120 876,557
Cash flows from financing activities
Payments on debt related to business acquisitions -- (4,204,500)
Proceeds from bank line of credit -- 492,839
Repayment of bank line of credit (399,319) (541,993)
Proceeds from exercise of stock options 52,845 --
--------------- --- ---------------
Net cash used in financing activities (346,474) (4,253,654)
--------------- ---------------
Net decrease in cash and cash equivalents (347,380) (3,607,629)
Cash and cash equivalents at beginning of period 3,383,544 7,960,511
--------------- ---------------
Cash and cash equivalents at end of period $ 3,036,164 $ 4,352,882
=============== ===============
Supplemental disclosure:
Non-cash activities
Unrealized gain on available-for-sale marketable securities $ 138,855 --
See accompanying notes.
</TABLE>
<PAGE>
ZEVEX INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000
1. Summary of Significant Accounting Policies
Description of Organization and Business
The Company was incorporated under the laws of the State of Nevada on December
30, 1987. The Company was originally incorporated as Downey Industries, Inc. and
changed its name to ZEVEX International, Inc. on August 15, 1988. In November
1997 the Company reincorporated into Delaware. During 1998, the Company's
operations consisted of the business of its wholly-owned subsidiary, ZEVEX, Inc.
In December 1998, the Company acquired an additional product line and completed
the acquisition of two additional subsidiaries, Aborn Electronics, Inc. and
JTech Medical Industries, Inc. In April 2000, the Company completed a
transaction with Nestle Clinical Nutrition, a division of Nestle USA, to acquire
Nestle USA's installed base of approximately 20,000 stationary enteral pumps and
will replace Nestle as the supplier of disposable sets, feeding tubes, and
accessories. The Company and its subsidiaries design and manufacture advanced
medical devices, including surgical systems, device components, and sensors for
other companies. The Company's design and manufacturing service customers are
primarily medical technology companies, which sell the Company's systems and
devices under private labels or incorporate the Company's devices into their
products. The Company and its subsidiaries also design, manufacture, and market
their own medical devices using proprietary technologies.
Principles of Consolidation
The consolidated balance sheet at March 31, 2000 and December 31, 1999 include
the accounts of ZEVEX International, Inc. (Company) and its wholly-owned
operating subsidiaries, ZEVEX, Inc., Aborn Electronics, Inc., and JTech Medical
Industries, Inc. All significant intercompany balances and transactions have
been eliminated in consolidation.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information along
with the instructions to Form 10-Q of Regulation S-X. Accordingly, certain
information and footnote disclosures normally included in complete financial
statements have been condensed or omitted. These financial statements should be
read in conjunction with the financial statements and footnotes thereto included
in the Company's 1999 Annual Report on SEC Form 10-K.
In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary for a fair presentation have been
included. The results of operations for interim periods are not indicative of
the results of operations to be expected for a full year.
New Accounting Pronouncements
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) 101, Revenue Recognition in Financial Statements. The effective
date of SAB 101 is the second quarter of the fiscal year ending after December
15, 1999. The SAB clarifies proper methods of revenue recognition given certain
circumstances surrounding sales transactions. The Company continues to evaluate
the impact of SAB 101, but believes it is in compliance with the provision of
the SAB and accordingly, does not expect SAB 101 to have a material effect on
its financial statements.
2. Bank Line of Credit
The Company renewed its line of credit arrangement with a financial institution
with availability of $5 million. The line matures on May 31, 2000. The line of
credit is collateralized by accounts receivable and inventory and bears interest
at the prime rate, 9.0% at March 31, 2000 and 8.5% at December 31, 1999. The
Company's balance on its line of credit was $1,214,134 at March 31, 2000 and
$1,613,453 at December 31, 1999. Under the line of credit agreement, the Company
is restricted from declaring cash dividends. In addition, the Company's line of
credit contains certain financial covenants. As of March 31, 2000, the Company
was in compliance with these financial covenants.
3. Repurchase of Common Stock
On June 14, 1999, the Company repurchased 470,0000 outstanding Common Stock
Warrants for $1,175,000. In December 1999, the Company repurchased 10,000 shares
of outstanding Common Stock for $45,731 which the Company contributed to the
Employees' Stock Ownership Plan.
4. Related Party Transactions
On December 31, 1998, the Company acquired JTech pursuant to a Stock Purchase
Agreement among the Company and the four shareholders of JTech (the "JTech Stock
Purchase"). Leonard C. Smith, one of the selling JTech shareholders, received
$1,257,900 in cash and a convertible debenture in connection with the JTech
Stock Purchase. The convertible debenture, in the principal amount of
$1,290,000, is due January 6, 2002 and is convertible at Mr. Smith's option
during the period from January 6, 2000 to January 6, 2002 at $11 per share. On
April 3, 2000 Mr. Smith received $73,594 in cash and a convertible debenture in
connection with the earn-out portion of the JTech Stock Purchase. The
convertible debenture, in the principal amount of $73,594, is due March 31, 2002
and is convertible at Mr. Smith's option during the period from March 31, 2000
to March 31, 2002 at $11 per share
JTech also entered into an Employment Agreement with Leonard C. Smith, dated
December 31, 1998, which provides that Mr. Smith serve as President of JTech for
three years at a salary of $100,000 per year. Pursuant to the employment
agreement, Mr. Smith also received an option to purchase 40,000 shares of the
Company's common stock, vesting over four years, at $4.875 per share, the
closing price of such stock on Nasdaq on the date of the JTech Stock Purchase.
Mr. Smith was appointed to fill a vacancy on the Company's Board of Directors,
effective April 26, 1999. Mr. Smith's term on the Board will expire at the 2001
annual meeting of shareholders.
On April 15, 1997, the Company entered into a consulting agreement with another
company owned by certain stockholders to provide services related to strategic
planning, public relations, financing and potential acquisition of new products
or companies. Under the consulting agreement, the Company paid an initial fee of
$50,000, and paid $10,000 per month for two years. The agreement expired in
April 1999. In addition, these certain stockholders have the right to nominate
one director to the Company's Board of Directors. The certain stockholders
exercised this right with its nomination of Kirk Blosch in June 1998. Mr. Blosch
is serving a 3-year term as a director, which term expires at the annual meeting
of shareholders in June 2002.
5. Comprehensive Income
Effective January 1, 1998, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 130, "Reporting Comprehensive Income". SFAS No. 130
requires that all items recognized under accounting standards as components of
comprehensive income be reported in an annual financial statement that is
displayed with the same prominence as other annual financial statements. This
statement also requires that an entity classify items of other comprehensive
income by their nature in an annual financial statement. Other comprehensive
income may include foreign currency translation adjustments, and unrealized
gains and losses on marketable securities classified as available-for-sale. For
the three months ending March 31, 2000 and 1999, the Company's comprehensive
income is $87,062 and $77,346 (net of tax effect) higher than net income
reported on the Company's financial statements.
6. Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
March 31, 2000 December 31, 1999
------------------------------------------
Materials $ 3,198,398 $ 2,228,174
Work in Progress 2,343,846 1,867,894
Finished goods, including completed subassemblies
700,934 1,023,223
------------------------------------------
$ 6,243,178 $ 5,119,291
==========================================
</TABLE>
7. Net Income Per Common Share
Basic net income per common share is calculated by dividing net income for the
period by the weighted-average number of the Company's common shares
outstanding.
Diluted net income per common share includes the dilutive effect of options in
the weighted-average number of the Company's common shares outstanding as
calculated using the treasury stock method.
<PAGE>
- -------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- -------------------------------------------------------------------------------
Results of Operations
The Company's revenues for the first quarter of 2000 increased to $5,658,047
from $4,661,453 for the first quarter of 1999, an increase of approximately 21%
for the three months ended March 31, 2000. Sales of the Company's proprietary
enteral feeding products line accounted for approximately 26% of the total
revenues for the first quarter of 2000, compared to 34% for the first quarter of
1999. The decline was in large part due to the termination of enteral pump sales
to Nestle Clinical Nutrition in anticipation of the Company's purchase of
Nestle's enteral nutrition delivery device business, which was completed on
April 6, 2000. Prior quarterly sales to Nestle have accounted for as much as $1
million of the Company's enteral product line revenues in prior quarters. Sales
of the Company's proprietary JTech product line, accounted for approximately 16%
of the total revenues for the first quarter of 2000. Fifty-eight percent of the
Company's revenues in the first quarter 2000 were from products manufactured for
and sold to OEM customers, who market the final product. During the first three
months of 2000, 30% of total revenues resulted from sales to two OEM customers,
one of which was a major customer in 1999, compared to 14% of total revenues for
the first three months of 1999, from sales to one customer. The Company's
manufacturing revenue growth depends upon growth in demand for systems, devices,
and instruments manufactured by ZEVEX, and ZEVEX's ability to acquire additional
manufacturing service contracts from medical technology companies. ZEVEX's
contract manufacturing customers have complete control over the marketing and
sales of products that ZEVEX manufactures for them. ZEVEX has no ability to
increase demand for instruments that it manufactures for its
contract-manufacturing customers. No assurances can be given that orders from
any customer will increase or remain at current levels or that they will not
decline.
Now that the Company has acquired Nestle enteral delivery device business, the
Company will no longer sell stationary feeding pumps to Nestle. Instead, the
Company anticipates that is will generate more revenue that that expected from
pump sales to Nestle from the sale of disposable device sales to users of the
approximately 20,000 feeding pumps acquired from Nestle. The pumps acquired from
Nestle are being used by persons and businesses that have an obligation to buy
disposable products from the Company while they are using the pumps.
Additionally, the Company plans to place more stationary feeding pumps with new
users (at little or no cost to the user) under similar arrangements where the
pump users commit to buy disposable products from the Company while using the
pumps.
The Company's gross profit as a percentage of revenues was approximately 45% for
the three months ended March 31, 2000 as compared to 49% for 1999. Management
attributes the decrease in gross profit percentage year over year to several
matters, including startup costs related to bringing in house the manufacturing
of the Enteral EZ enteral feeding pump, which included labor, tooling and setup
costs for non-recurring engineering (NRE), and a shift in the revenue mix of its
products to lower margin complete system instrumentation shipped during the
first quarter 2000.
Selling, general and administrative expenses for the three months ended March
31, 2000 increased $224,764, from $1,580,270 in 1999 to $1,805,034 in 2000.
Increased expenses resulted from the Company's continuing growth, which includes
the acquisitions of JTech and Aborn. An expanded sales and marketing effort
increased staffing, travel, advertising and administrative expenses related to
the Company's proprietary clinical nutrition delivery product line and JTech
product lines. The Company also had an increase in expenses related to
employees, such as insurance, taxes, and pension benefits. The Company also
incurred expenses related to the acquisition of the Nestle enteral feeding
delivery business which closed April 6, 2000. Expenses included increasing the
number of customer service personnel needed by the Company to handle the
increased volume of orders from the Nestle transaction. The Company believes
that general and administrative expenses in 2000 as related to sales will
continue at approximately the same percentage as in the previous two years.
Research and development expenses vary from quarter to quarter depending on the
number and nature of pending research and development projects and their various
stages of completion. For the three months ended March 31, 2000, research and
development expenses were $215,983 compared to $129,062 in 1999. Expenses
incurred during the first quarter were for the continued development of new
applications of the Company's ultrasound technology, clinical nutrition and
JTech proprietary products. Management believes investing in research and
development will serve the Company's future well, and intends to continue this
investment for the foreseeable future. Management currently anticipates that
research and development expenses will continue at approximately the same
percentage of revenues as in the previous two years.
For the three months ended March 31, 2000 the Company had net income of
$320,015, 5.7% of revenues compared to net income of $287,768, 6.2% of revenues
for the three months ended March 31, 1999. The increase in net income during the
first quarter of 2000, as compared to the first quarter of 1999, is principally
due to the gain on the sale of securities that were received as payment from
customers on previous system design contracts.
As of March 31, 2000,the Company's backlog of customer orders was $5,666,000, as
compared to $5,247,000 on March 31, 1999. Management estimates that
approximately 90% of the backlog will be shipped before December 31, 2000. The
Company's backlog is for contract manufacturing only and can be drastically
affected by the timing of annual or semi-annual purchase orders placed by its
customers.
Liquidity and Capital Resources
During the three months ended March 31, 2000, the Company produced net income of
$320,015, compared to net income of $287,768, for the three months ended March
31, 1999. Cash decreased by $ 347,380 for the three months ending March 31,
2000, as the Company made necessary tax payments, continued to fund an increase
in accounts receivable and inventories, as well as purchases of plant and
equipment.
The Company's investment in property, patents from new research, production,
test equipment and tooling was $166,103 for the three months ended March 31,
2000, compared to $191,874 for the first quarter of 1999. Total expenditures for
equipment of $157,646 in the first quarter of 2000 were primarily due to
upgrading and providing the Company with new research, design, and engineering
equipment. The Company expects to spend approximately $300,000 for the remainder
of 2000 for additional manufacturing equipment and software, as well as for
normal replacement of old equipment. The Company also anticipates approximately
$450,000 of additional research and development expenses during 2000. [Is this
consistent with prior statements about R&D expenses?]
On March 29, 2000, the Company entered into an agreement to acquire certain
assets from Nestle USA, Inc. relating to Nestle's enteral nutrition delivery
devices. The purchase was completed on April 6, 2000 for a purchase price that
will range from $1.5 million to approximately $2.7 million, depending upon sales
generated by the acquired assets during the 12 months following the closing of
the purchase, plus the actual cost of inventory acquired by the Company which is
estimated to be approximately $700,000. Upon closing, cash of $500,000 was paid,
with an additional $1 million due six months from closing. The remainder of the
purchase price will be settled upon resolution of contingencies within the
purchase agreement. The Company also anticipates spending approximately $500,000
for the manufacturing of stationary enteral feeding pumps during the remainder
of 2000. These pumps will be leased, rented or placed as part of arrangements in
which pump users will agree to periodically purchase related disposable products
from the Company for use with the pumps.
The Company's working capital at March 31, 2000 was $12,639,127, compared to
$12,212,685 at March 31, 1999. The portion of working capital represented by
cash at such dates was $3,036,164 and $4,352,882 respectively. The Company uses
substantial portions of its cash from time to time to fund its operations,
including increases in inventories, accounts receivable and work in process in
connection with various customer orders. The Company feels its working capital
is sufficient for operations for the next twelve months.
<PAGE>
Cautionary Statement for Purposes of "Safe Harbor Provisions" of the Private
Securities Litigation Reform Act of 1995
When used in this report, the words "estimate," "believe," "project" and similar
expressions, together with other discussion of future trends or results, are
intended to identify forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities Act") and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Such statements are subject to certain risks and uncertainties, including those
discussed below, that could cause actual results to differ materially from those
projected. These forward-looking statements speak only as of the date hereof.
All of these forward-looking statements are based on estimates and assumptions
made by management of the Company, which although believed to be reasonable, are
inherently uncertain and difficult to predict. Therefore, undue reliance should
not be placed upon such estimates. There can be no assurance that the benefits
anticipated in these forward-looking statements will be achieved. The following
important factors, among others, could cause the Company not to achieve the
benefits contemplated herein, or otherwise cause the Company's results of
operations to be adversely affected in future periods: (i) continued or
increased competitive pressures from existing competitors and new entrants; (ii)
unanticipated costs related to the Company's growth and operating strategies;
(iii) loss or retirement of key members of management; (iv) increase in interest
rates of the Company's cost of borrowing, or a default under any material debt
agreement; (v) prolonged labor disruption; (vi) deterioration in general of
regional economic conditions; (vii) adverse state or federal legislation or
regulation that increases the cost of compliance, or adverse findings by a
regulator with respect to existing operations; (viii) loss of customers;(ix)
adverse determinations in connection with pending or future litigation or other
material claims and judgments against the Company; (x) inability to achieve
future sales; and (xi) the unavailability of funds for capital expenditures.
Many of such factors are beyond the control of the Company. Please refer to the
Company's SEC Form 10-K for its fiscal year ended December 31, 1999 for
additional cautionary statements.
- -------------------------------------------------------------------------------
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK
- -------------------------------------------------------------------------------
No significant changes in market risk have occurred since December 31, 1999.
Please refer to the Company's SEC Form 10-K for its fiscal year ended December
31, 1999 for additional discussions on market risks.
<PAGE>
PART II
Item 1. Legal Proceedings - None.
Item 2. Changes in Securities and Use of Proceeds.
During the period ending March 31, 2000, there were 13,199 shares of
Common Stock issued pursuant to exercise of stock options by employees of the
Company. The exercise price on such shares ranges from $2.50 to $5.00 per share.
The shares issued upon exercise of the options were issued pursuant to the
exemption form registration under SEC Rule 505.
Item 3. Defaults upon 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
The following exhibits are attached hereto or are incorporated herein
by reference as indicated in the table below:
Exhibit Location if other
No. Title of Document than attached hereto
------ ----------------- --------------------
3.01* Certificate of Incorporation Amendment No. 1 to Form S-1,
filed October 24, 1997
3.02* Bylaws 1997 Form 10-K
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 2000.
* Denotes exhibits specifically incorporated in this Form 10-Q by reference to
other filings of the Company pursuant to the provisions of Securities and
Exchange Commission rule 12b-32 and Regulation S-B, Item 10(f)(2). These
documents are located under File No. 001-10287 at, among other locations, the
Securities and Exchange Commission, Public Reference Branch, 450 5th St., N.W.,
Washington, D.C. 20549.
- -------------------------------------------------------------------------------
SIGNATURES
- -------------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ZEVEX INTERNATIONAL, INC.
Dated: May 12, 2000
By /s/ Dean G. Constantine
Dean G. Constantine, President
(Chief Executive Officer)
By /s/ Phillip L. McStotts
Phillip L. McStotts, Secretary
(Principal Financial Officer)
<TABLE> <S> <C>
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<NAME> ZEVEX International, Inc
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<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
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<SECURITIES> 2839505
<RECEIVABLES> 6162527
<ALLOWANCES> 175000
<INVENTORY> 6243178
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