<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
[ ] 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 0-1561
REUTER MANUFACTURING, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0780999
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
410 - 11TH AVENUE SOUTH, HOPKINS, MINNESOTA 55343
(Address of principal executive offices) (Zip Code)
612/935-6921
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during 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. .
As of May 14, 1999, there were 4,898,885 shares of the registrant's $.1875 par
value Common Stock outstanding.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
REUTER MANUFACTURING, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31,
1999 December 31,
(Unaudited) 1998
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 2,109 $ 179,875
Receivables, net of allowances of $25,000
at March 31, 1999 and December 31, 1998 1,758,740 1,432,723
Inventories 1,968,665 2,027,040
Other current assets 13,972 44,685
------------ ------------
Total current assets 3,743,486 3,684,323
Property, plant and equipment, net 3,981,039 4,027,404
------------ ------------
Total assets $ 7,724,525 $ 7,711,727
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Asset-based line of credit and term obligations, bank $ 5,718,657 $ 5,610,405
Current maturities of long-term equipment financing 396,410 240,483
Accounts payable, trade 1,227,217 1,198,469
Accrued expenses 728,079 792,260
------------ ------------
Total current liabilities 8,070,363 7,841,617
Long-term equipment financing, less current maturities 637,297 657,045
Debentures payable 339,280 292,040
Other liabilities 36,078 50,160
Commitments and contingencies
Stockholders' equity (deficiency):
Preferred stock, par value $.01 per share;
authorized 2,500,000 shares; none issued
Common stock, par value $.1875 per share;
authorized 9,000,000 shares; issued and
outstanding 4,898,885 shares at
March 31, 1999 and December 31, 1998 918,541 918,541
Additional paid-in capital 17,840,393 17,832,113
Accumulated deficit (20,117,427) (19,879,789)
------------ ------------
Total stockholders' equity (deficiency) (1,358,493) (1,129,135)
------------ ------------
Total liabilities and stockholders' equity (deficiency) $ 7,724,525 $ 7,711,727
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
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REUTER MANUFACTURING, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Unaudited)
For the three months ended
March 31,
1999 1998
----------- -----------
<S> <C> <C>
Net sales $ 2,946,155 $ 3,658,120
Cost of sales 2,513,457 3,279,858
----------- -----------
Gross profit 432,698 378,262
Selling, general and administrative expenses 470,147 673,590
----------- -----------
Operating loss (37,449) (295,328)
----------- -----------
Other (expense) income:
Interest expense (185,392) (157,323)
Other, net (14,797) 13,698
----------- -----------
Total other expense, net (200,189) (143,625)
----------- -----------
Net loss $ (237,638) $ (438,953)
----------- -----------
----------- -----------
Net loss per share (basic and diluted) $ (0.05) $ (0.09)
----------- -----------
----------- -----------
Weighted average common shares outstanding
(basic and diluted): 4,898,885 4,863,557
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
REUTER MANUFACTURING, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
For the three months ended March 31,
- -------------------------------------------------------------------------------------------------------------
1999 1998
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (237,638) $ (438,953)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 199,795 218,575
Amortization of intangible assets 20,492
Stock compensation 5,520
Provision for write-down of inventories (30,000) (30,000)
Changes in operating assets and liabilities:
Receivables (326,017) (461,234)
Inventories 88,375 126,826
Other current assets 30,713 (2,397)
Accounts payable, trade 28,748 156,137
Accrued expenses (64,181) 133,999
Other liabilities (14,082) (13,875)
----------- -----------
Net cash used in operating activities (318,767) (290,430)
----------- -----------
Cash flows from investing activities:
Additions to property, plant and equipment (13,157) (72,250)
----------- -----------
Net cash used in investing activities (13,157) (72,250)
----------- -----------
Cash flows from financing activities:
Repayment of long-term equipment financing (4,094) (50,154)
Proceeds from asset-based line of credit and term obligations, bank 2,795,988 3,714,793
Repayment of asset-based line of credit (2,687,736) (3,219,417)
Proceeds from private placement of debentures 50,000
Proceeds from exercise of stock options 210
----------- -----------
Net cash provided by financing activities 154,158 445,432
----------- -----------
Net (decrease) increase in cash (177,766) 82,752
Cash, beginning of year 179,875 113,234
----------- -----------
Cash, end of period $ 2,109 $ 195,986
----------- -----------
----------- -----------
Supplemental disclosures of cash flow information:
Cash paid for interest $ 185,996 $ 151,439
Noncash investing and financing activities:
Purchase of equipment in exchange for notes payable 140,273 71,284
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
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Reuter Manufacturing, Inc.
Notes to Financial Statements
(Unaudited)
1. FINANCIAL STATEMENTS:
The unaudited financial statements of Reuter Manufacturing, Inc. (the
"Company") for the three month periods ended March 31, 1999 and March
31, 1998, reflect, in the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to fairly state
the financial position at March 31, 1999, and the results of operations
and cash flows for the reported periods. The results of operations for
any interim period are not necessarily indicative of results expected
for the full year. The December 31, 1998, balance sheet data was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles. These
unaudited interim financial statements should be read in conjunction
with the financial statements and related notes for the year ended
December 31, 1998, which were included in the Company's 1998 Annual
Report on Form 10-KSB.
EARNINGS PER SHARE:
Basic earnings per common share is computed using the weighted average
number of shares outstanding for the period. Diluted earnings per
common share is computed using the weighted average number of shares
outstanding per common share adjusted for the incremental shares
attributed to outstanding stock options under the Company's stock
option plans and stock purchase warrants.
The Company incurred a loss for the three month periods ended March 31,
1999 and March 31, 1998, and as a result, incremental shares
attributable to the assumed exercise of stock options and warrants were
excluded from the computation of diluted earnings per share as the
effect would be antidilutive. At March 31, 1999, the Company had
395,275 stock options and 450,000 stock purchase warrants outstanding,
which may be dilutive in future periods.
5
<PAGE>
2. SIGNIFICANT CUSTOMERS:
The Company has certain customers which comprise a significant
percentage of net sales as follows:
<TABLE>
<CAPTION>
(Unaudited)
Net sales for the three months
ended March 31,
1999 1998
-------------- ---------------
Amount % Amount %
<S> <C> <C> <C> <C>
Customer A $1,642,484 55.8% $1,537,993 42.0%
Customer B -- -- 683,536 18.7%
Customer C 333,295 11.3% 147,426 4.0%
</TABLE>
Accounts receivable credit concentrations associated with customers A
and C at March 31, 1999, totaled $1,023,738. Inventory related to
production in process according to customers' specifications for
customers A and C at March 31, 1999, was $793,500.
3. ASSET-BASED LINE OF CREDIT:
The Company has an asset-based line of credit agreement with US
Bancorp. Starting in December 1998, the Company began deferring
principal payments of approximately $46,166 per month under its
asset-based line of credit and approximately $18,500 per month in
principal payments to its machine tool vendors through March 1999. The
Company began making regular monthly principal payments under its
asset-based line of credit and machine tool notes in April 1999, and is
required under the asset-based line of credit agreement with US Bancorp
to make double the monthly principal payments, in the amount of
$92,333, beginning November 1, 1999, for four months until the deferred
principal payments are repaid. The Company has a similar commitment to
make double the monthly principal payments, of approximately $37,000
per month, to its machine tool vendors for four months also beginning
November 1, 1999. The Company paid US Bancorp a fee of $2,500 for each
of the four months that the Company deferred principal payments. The
Company also agreed to extend its lending arrangement with US Bancorp
until December 3, 2000. At March 31, 1999, the Company had borrowed
approximately $5,719,000 and had additional availability of
approximately $65,000 under its line of credit facilities. There can be
no
6
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assurance that the Company would be able to obtain such financing on
terms acceptable to the Company or at all.
4. PRIVATE PLACEMENT OF DEBENTURES WITH WARRANTS
US Bancorp agreed to defer principal payments of approximately $46,166
per month through March 1999 contingent upon the Company raising a minimum of
$350,000 through an equity/debt offering and contingent upon the Company
successfully negotiating with its other machine tool vendors, with whom the
Company has financing with, for the Company to defer making principal repayments
for the same amount of time as US Bancorp. At December 31, 1998, the Company had
raised $350,000 through a private offering of debentures with warrants. In
February 1999, the Company received an additional $50,000 investment in the
private offering of debentures. The debentures bear interest at 13% per annum
and are due on December 31, 2001. In connection with the private placement of
debentures, the Company granted five-year warrants to purchase 400,000 shares of
the Company's common stock at an exercise price of $0.6625 per share,
exercisable immediately. The Company is using the proceeds from the private
offering to fund operations.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The Company is principally a contract manufacturer of precision
machined products and assemblies for medical and industrial original equipment
manufacturers ("OEM"). The Company manufactures on a contract basis, among other
items, close tolerance bearing-related assemblies for the medical device
industry. In order to differentiate itself from its competitors, the Company
emphasizes its design engineering and manufacturing engineering capability and
support. The Company continues to manufacture and sell, under the Reuter name,
self-powered oil centrifuges and laboratory centrifuges, which are sold by the
Company's sales force to OEM's, end users, and to distributors. Late in 1998,
the Company began to manufacture and ship specialized cryogenic parts that work
in temperature sensitive environments. During 1999, management is exploring
several opportunities to expand its high-speed spinning capabilities in the
industries of wastewater treatment, cooking oil extension and machine coolant
cleaning. Management is also expanding its manufacturing of custom high-speed
spindles and associated components, such as motors, bearings and customized
machine parts.
Throughout 1998, the Company experienced a decrease in sales for one of
its blood centrifuge models to the Company's largest customer. Until August
1997, this product was being produced and shipped in large quantities to that
customer. Beginning mid-February 1999, sales of this particular blood centrifuge
model began to increase. In addition, this customer continues to order and take
delivery of other products manufactured by the Company. The Company's efforts to
attract industrial and cryogenic product customers resulted in some improvement
in sales during the first quarter of 1999. There can be no assurance that sales
to the Company's largest customer will return to expected or previous levels or
that sales of other products will be sufficient to achieve positive cash flow or
profitability. The Company's ability to continue operations is dependent on its
ability to increase sales and maintain adequate margins on sales and the ability
to continue borrowing under its credit facilities with US Bancorp. If the
Company is unable to increase sales from current levels and generate positive
cash flows from operations, it would be unable to meet its debt service
requirements and may be forced to cease operations or may need to seek
protection under U.S. bankruptcy laws. Due to the lower sales and the resulting
impact on cash, the Company continues to explore additional cash conservation
and generation strategies.
RESULTS OF OPERATIONS
The Company's net sales of $2,946,155 for the first quarter ended March
31, 1999 decreased by approximately 19.5% or $711,965 from $3,658,120 for the
same period in 1998. Net sales from the medical, industrial, and proprietary
products were $2,247,627, $573,625, and $124,903, respectively, for the first
quarter ended March 31, 1999, compared to $2,232,197, $1,179,408, and $246,515,
respectively, for the comparable period in 1998. The decrease in net
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<PAGE>
sales was due primarily to decreased sales of industrial products (automotive
fuel pump bushing and refurbished spindles) and engine products (oil
centrifuges). The decrease in net sales was partially offset by increased sales
of cryogenic parts. Sales to the Company's largest medical product customer were
$1,642,484 or 55.8% of net sales for the first quarter of 1999, compared to
$1,538,035 or 42.0% of net sales for the same period in 1998.
Gross profit was 14.7% in the first quarter of 1999, compared to 10.3%
for the same period in 1998. The improvement in gross profit for the first
quarter of 1999 from 1998 was primarily due to lower wages and related lower
benefit costs resulting from a reduction of 44 direct and indirect manufacturing
employees and tighter cost control. Management has downsized the Company to a
level commensurate with current sales volume.
Selling, general and administrative expenses were $470,147 or 16.0% of
net sales for the first quarter of 1999, compared to $673,590 or 18.4% of net
sales for the same period in 1998. The decrease in selling, general and
administrative expenses of $203,443 includes a reduction of $65,150, due to
lower wages and related lower benefit costs resulting from the reduction of two
employees and a reduction in travel-related expenses. Administrative expenses
decreased approximately $138,293 in the first quarter of 1999, compared to the
same quarter of 1998, primarily due to lower wages and related benefits
resulting from a reduction of six employees from the March 31, 1998 level, a
decrease in legal and accounting expenses, and lower expenses in general due to
increased cost control and lower sales volume.
In the first quarter of 1999, the Company had an operating loss of
$37,449, compared to an operating loss of $295,328 in the same period of 1998.
The improvement in the operating results for the first quarter of 1999 compared
to 1998, was due principally to the aforementioned headcount reductions and
lower benefit costs. In addition, the Company has improved operational
efficiencies as a result of a better matching of its workforce requirements with
sales volume.
Other expenses, net, increased $56,564 for the first quarter of 1999
compared to the same period in 1998. The increase resulted primarily from higher
interest expense of approximately $28,000, due to increased utilization of the
Company's asset-based financing arrangement during the first quarter of 1999,
and a gain of approximately $29,000 resulting from the sale of assets during the
first quarter of 1998.
The Company incurred a net loss during the first quarters of 1999 and
1998, and consequently did not record a provision for income taxes for these
periods. The Company generally does not pay regular income taxes because of the
availability of its net operating loss carryforwards. The Company is, however,
generally subject to the alternative minimum tax under the Internal Revenue Code
of 1986, as amended (the "Code"), because only 90% of the net operating loss
carryforward is allowed as a deduction before arriving at the alternative
minimum taxable income. Therefore, 10% of the Company's taxable income is
generally subject to the flat alternative minimum tax rate of 21%. Because the
Company did not generate taxable income during the first quarters of 1999 and
1998, no provision for income taxes was recorded.
9
<PAGE>
The effect of inflation on the Company's results has not been
significant.
The net loss for the first quarter of 1999 was $237,638 or $0.05 per
basic and diluted share, compared to a net loss of $438,953 or $0.09 per basic
and diluted share for the first quarter of 1998. The net loss for the first
quarter of 1999 compared to the net loss for the same period in 1998 was due to
the factors discussed above.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999, the Company had a working capital deficiency of
$4,326,877, compared to a working capital deficiency of $4,157,294 at December
31, 1998. The current ratio was .46 at March 31, 1999, compared to .47 at
December 31, 1998. The increase in the working capital deficiency and the slight
decrease in the current ratio are principally due to a decrease in cash
generated from operations and an increase in borrowing under the Company's
asset-based line of credit and term obligations. Although the term notes under
the Company's asset-based line of credit have scheduled repayment dates, the
term notes may be due upon demand in the event that the asset-based lender
demands repayment. Accordingly, the Company has classified all of the amounts
owing under the credit facilities at March 31, 1999 and December 31, 1998, as
current liabilities. The credit facilities agreement includes a subjective
material adverse change clause under which the borrowings could become due and
payable.
Net cash used in operating activities was $318,767 for the quarter
ended March 31, 1999, compared to net cash used in operating activities of
$290,430 for the quarter ended March 31, 1998. The decrease in cash flows from
operating activities for the first quarter of 1999 from the first quarter of
1998 was due primarily to lower sales volume. The Company's ability to meet its
continuing cash flow requirements in the future is dependent on achieving
adequate sales and margins from its manufacturing operations.
Net cash used in investing activities was $13,157 for the first quarter
of 1999, compared to cash used in investing activities of $72,250 for the same
period in 1998. The decrease was due to a reduction in capital expenditures
during the first quarter of 1999.
Net cash provided by financing activities was $154,158 for the first
quarter of 1999, compared to cash provided by financing activities of $445,432
for the same period in 1998. The decrease was primarily due to decreased
borrowings under the Company's asset-based line of credit to fund operating
activities. The Company made principal payments of $4,094 toward financed
equipment debt and did not make any principal repayments toward the term debt
under the Company's asset-based line of credit for the first quarter of 1999. In
October 1998, US Bancorp agreed to defer principal payments of approximately
$46,166 per month through March 1999. The Company is required to resume regular
monthly principal payments on April 1, 1999, and make double the monthly
principal payment, or $92,333, beginning November 1, 1999, until the deferred
principal payments are paid. The Company also paid US Bancorp a fee of $2,500
for the four months that the Company elected to defer principal payments. There
can be no
10
<PAGE>
assurance that the lender will continue to provide credit to the Company. If US
Bancorp demanded full payment of the credit facilities, the Company would need
to obtain financing from another source. There can be no assurance that the
Company would be able to obtain such financing on terms acceptable to the
Company or at all. As of March 31, 1999, the Company had borrowed approximately
$5,719,000 and had additional availability of approximately $65,000 under the
credit facilities. In February 1999, the Company received the final investment
of $50,000 from the private placement offering of debentures with warrants. The
total liability relating to the debentures issued in this offering was $339,280
as of March 31, 1999. These debentures are due on December 31, 2001, although
the Company has the right to prepay the debentures before this time. The
proceeds are being used to fund operating activities.
GOING CONCERN UNCERTAINTY
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. As shown in the financial
statements, the Company incurred a net loss of $237,638 for the three months
ended March 31, 1999 and has a working capital deficit and stockholders'
deficiency of $4,326,877 and $1,358,493, respectively, at March 31, 1999. These
factors, among others, indicate the Company may not be able to continue as a
going concern for a reasonable period of time.
Management's plans and objectives include the following:
- - Continue to control costs and expenses commensurate with the Company's
current sales levels in an effort to generate cash flows from
operations.
- - Expand the Company's precision manufacturing medical device customer
base and related sales.
- - Expand the Company's product offerings to include spinning devices,
rotary assemblies and motion control devices.
- - Expand the market for the Company's trade name products.
- - Diversify selectively into industrial parts and components markets.
The Company's ability to continue operations is dependent on its
ability to increase sales and maintain adequate margins on sales, as well as its
ability to maintain its current credit facilities with US Bancorp. In
addition, if the Company is unable to increase sales from current levels and
generate positive cash flows from operations, it would be unable to meet its
debt service requirements and may be forced to cease operations or seek
protection under U.S. bankruptcy laws. Accordingly, there can be no assurance
that the Company will continue as a going concern in its current form. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
11
<PAGE>
YEAR 2000 ISSUE
STATE OF READINESS The Company has been addressing the Year 2000 issue
since May 1997. In the ordinary course of business, the Company has replaced, or
is in the process of replacing, many of its major computer systems with new
systems that have been designated to be Year 2000 compliant. The Company's plan
for Year 2000 readiness involves four phases: inventory, evaluation,
remediation, and contingency planning. Testing is an ongoing and integral part
of the evaluation, remediation and contingency planning phases.
Inventory - The Company has performed an extensive inventory of its
information technology systems and other systems that use embedded
microprocessors (collectively, "Systems"). The business processes
supported by each System have been prioritized based on the degree of
impact business operations would encounter if the Systems were
disrupted.
The inventory phase also includes identifying third parties with whom
the Company has material relationships. Where a third party is critical
to a business process, efforts have been initiated to obtain Year 2000
compliance information to identify the degree of risk exposure the
Company may encounter. During the quarter ended June 30, 1998, the
Company sent a Year 2000 compliance survey to critical business
partners. A follow-up survey is being sent during the second quarter of
1999 to all critical business partners who did not respond to the first
survey or whose responses were not adequate. The Company is working
with its significant customers to share Year 2000 information and
determine their readiness. In addition, the Company is working with its
suppliers in an effort to ensure adequate supplies of raw materials.
The internal inventory phase was substantially completed in December
1998. Regular contact with third parties with whom the Company has
material relationships will continue through 1999.
Evaluation - This phase involves computer program code review and
testing, vendor contacts and System testing. Some Systems, upon
inspection, are determined to be non-compliant and are immediately
placed on the remediation schedule. Some Systems require testing to
determine compliance status. As of May 4, 1999, the evaluation phase
was approximately 85% complete.
Remediation - In this phase each System is either fixed, replaced or
removed. The Company's financial and manufacturing software has been
tested and found to be Year 2000 compliant. The Company's operating
system and office product software is not compliant and the Company
plans to replace these systems when it is available and deemed
compliant by the manufacturer. This compliant software is anticipated
to be available in the second or third quarter of 1999. The Company
estimates that as of May 4, 1999, the remediation planning phase was
approximately 75% complete.
12
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Contingency Planning - The Company is currently developing a
contingency and disaster recovery program designed to continue critical
processes in the event the Company experiences Year 2000 disruptions
despite remediation and testing. Contingency plans are expected to be
completed during the quarter ending September 30, 1999. The Company
estimates that as of May 4, 1999, the contingency planning phase is
approximately 25% complete. Management expects this plan to be
completed by the fourth quarter of 1999.
Costs - Preliminary cost estimates for achieving Year 2000 compliance
of the Company are approximately $50,000, including $40,000 in capital
costs and $10,000 of operating expense, with approximately $7,000 of
expenses having been incurred to date. A majority of the remaining
costs are anticipated to be incurred in 1999. No material resource
constraints have been encountered to date. Although management believes
this estimate to be reasonable, there can be no assurance that this
amount will be adequate to address the matter on a timely basis.
The Company believes that the most likely worst case scenario is that
the Company will have to add additional staff and/or reassign existing
staff and/or acquire additional equipment or software during the time
period leading up to and immediately following December 31, 1999, in
order to address Year 2000 issues that unexpectedly arise. Year 2000
could result in abnormal operating conditions, such as short-term
interruption in the manufacturing process and system monitor and
control functions. These conditions could result in the temporary delay
in the manufacturing and delivery of finished products. Management
believes that failure of the Company's and/or third parties'
information technology systems could have a material adverse impact on
the operations of the Company.
SUMMARY
In summary, the Company had a disappointing first quarter ending March
31, 1999. However, the Company incurred a smaller loss on lower sales volume,
compared to the first quarter of 1998. Also, previous interrupted shipments of
one blood centrifuge model to the Company's largest customer began to resume
mid-February 1999. The Company has taken action to control its operating
expenses, reduce overhead, restructure payment terms with its asset-based lender
and other equipment vendors, and has secured an infusion of $400,000 ($350,000
during 1998 and $50,000 during 1999) in proceeds from a private placement of
debentures with warrants to fund operating activities until sales recover. There
can be no assurance that these actions and future actions, if necessary, will be
sufficient for the Company to continue to meet its continuing cash flow
requirements in the future.
Except for the historical financial information reported above, this
Form 10-QSB contains forward-looking statements that involve risk and
uncertainties, including references to anticipated sales volume, the risk
associated with establishing new or improving existing
13
<PAGE>
relationships with customers of the Company, other business development
activities, anticipated financial performance, business prospects, and similar
matters. In addition, the Company has a high concentration of business with one
major customer and reductions in scheduled shipments to this customer were
primarily responsible for the net losses in the prior year. There can be no
assurance that this customer will resume shipments to prior or expected levels.
Because of these and other uncertainties, actual results could differ materially
from those reflected in the forward-looking statements.
14
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports
a) Exhibits.
ITEM NO. ITEM METHOD OF FILING
27.1 Financial Data Schedule Filed herewith electronically
(b) Reports on Form 8-K.
There were no reports on Form 8-K which were filed during the first
quarter of 1999.
15
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REUTER MANUFACTURING, INC.
(Registrant)
Date: MAY 14, 1999 By: /S/ MICHAEL J. TATE
-------------------- --------------------------------------------
Michael J. Tate
President, Chief Executive Officer and Chief
Financial Officer (principal executive and
financial officer)
Date: MAY 14, 1999 By: /S/ WILLIAM H. JOHNSON
-------------------- --------------------------------------------
William H. Johnson
Vice President, Controller and Secretary
(principal accounting officer)
16
<PAGE>
REUTER MANUFACTURING, INC.
EXHIBIT TO QUARTERLY
REPORT ON FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
ITEM NO. ITEM METHOD OF FILING
27.1 Financial Data Schedule Filed herewith electronically
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,109
<SECURITIES> 0
<RECEIVABLES> 1,758,740
<ALLOWANCES> 0
<INVENTORY> 1,968,665
<CURRENT-ASSETS> 3,743,486
<PP&E> 13,111,372
<DEPRECIATION> 9,130,333
<TOTAL-ASSETS> 7,724,525
<CURRENT-LIABILITIES> 8,070,363
<BONDS> 0
0
0
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</TABLE>
