<PAGE> 1
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 1-10927
VSI ENTERPRISES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 84-1104448
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
5801 GOSHEN SPRINGS ROAD
NORCROSS, GEORGIA 30071
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(770) 242-7566
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
(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, 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.
OUTSTANDING AT
CLASS OF SECURITIES MAY 8, 2000
COMMON STOCK, $.001 PAR VALUE 14,968,040
===============================================================================
<PAGE> 2
VSI ENTERPRISES, INC. AND SUBSIDIARIES
Index
<TABLE>
<CAPTION>
FINANCIAL INFORMATION Page No.
--------
<S> <C> <C>
PART I. Item 1. Financial Statements:
Condensed Consolidated Balance Sheets
March 31, 2000 and December 31, 1999............................................ 3
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2000 and 1999...................................... 4
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2000 and 1999...................................... 5
Notes to Condensed Consolidated Financial Statements............................ 6
Item 2. Management's Discussion and Analysis of Financial 8
Condition and Results of Operations:
Financial Condition............................................................. 8
Results of Operations........................................................... 8
Liquidity and Sources of Capital................................................ 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk............. 10
PART II. Item 2. Changes in Securities and Use of Proceeds.............................. 11
Item 5. Other Information ..................................................... 11
Item 6. Exhibits and Reports on Form 8-K....................................... 11
</TABLE>
2
<PAGE> 3
PART I
ITEM 1. FINANCIAL STATEMENTS
VSI ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 31,
2000 DECEMBER 31,
(UNAUDITED) 1999
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,704,119 $ 798,826
Accounts Receivable, net 1,266,680 986,754
Inventories, net 622,200 760,082
Demo inventory 13,256 16,258
Prepaid expenses and other assets 5,008 --
Net current assets of discontinued operations 492,998 476,153
------------ ------------
TOTAL CURRENT ASSETS 5,104,261 3,038,073
PROPERTY AND EQUIPMENT, NET
Continuing Operations 152,501 166,572
Discontinued Operations 559,763 577,676
OTHER ASSETS
Software development costs, net 313,145 205,295
Investments 2,302,000 --
Other long term assets 14,614 14,614
Other assets of discontinued operations 858,897 908,303
------------ ------------
$ 9,305,181 $ 4,910,533
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Current portion of notes payable and short term borrowings $ -- $ 105,907
Convertible debentures -- 939,750
Accounts Payable 695,985 941,301
Accrued Expenses 754,058 1,001,837
Deferred Revenues 872,417 1,000,512
------------ ------------
TOTAL CURRENT LIABILITIES 2,322,460 3,989,307
COMMITMENTS AND CONTINGENCIES
REDEEMABLE MINORITY INTEREST 703,047 2,118,293
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, authorized 40,000,000 shares of
$.001 par value; issued and outstanding, 14,899,280 at
March 31, 2000 and 12,300,144 at December 31, 1999 14,899 12,300
Additional paid in capital 56,445,844 48,508,074
Accumulated deficit (50,181,069) (49,717,441)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 6,279,674 (1,197,067)
------------ ------------
$ 9,305,181 $ 4,910,533
============ ============
</TABLE>
The accompanying notes are an integral part of these statements
3
<PAGE> 4
VSI ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
2000 1999
(UNAUDITED) (UNAUDITED)
------------ ------------
<S> <C> <C>
REVENUES $ 1,653,788 $ 1,705,454
COSTS AND EXPENSES
Cost of sales 913,412 869,249
Selling, general and administrative 828,354 1,287,839
Research and development 137,354 132,861
------------ ------------
1,879,120 2,289,949
------------ ------------
LOSS FROM OPERATIONS (225,332) (584,495)
Other expenses, primarily financing charges (205,740) (201,511)
------------ ------------
LOSS FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES (431,072) (786,006)
Income taxes -- --
------------ ------------
LOSS FROM CONTINUING OPERATIONS (431,072) (786,006)
Loss from discontinued operations, net of taxes (nil) (32,556) (449,523)
------------ ------------
NET LOSS $ (463,628) $ (1,235,529)
============ ============
Net loss per common share
Loss from continuing operations $ (0.03) $ (0.06)
Loss from discontinued operations (0.01) (0.04)
------------ ------------
$ (0.04) $ (0.10)
============ ============
Weighted average shares outstanding 13,111,276 12,300,144
============ ============
</TABLE>
The accompanying notes are an integral part of these statements
4
<PAGE> 5
VSI ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
2000 1999
(UNAUDITED) (UNAUDITED)
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (463,628) $ (1,235,529)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization 221,880 157,765
Allowance to reduce inventory to lower of cost or market 12,000 20,000
Allowance for doubtful accounts 18,750 53,000
Changes in operating assets and liabilities:
Accounts receivable (298,676) 1,156,205
Inventories 125,882 32,986
Prepaid expenses and other assets (101,359) 8,050
Accounts payable (245,316) (750,469)
Accrued expenses (243,347) 22,347
Deferred revenues (128,095) (70,213)
Effect of operating activities of discontinued operations (28,623) 227,357
------------ ------------
Net cash provided (used) by operating activities (1,130,532) (378,501)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, continuing operations (8,803) (17,377)
Purchases of property and equipment, discontinued operations (27,087) (38,491)
Change in other assets, continuing operations (166,207) (12,293)
Change in other assets, discontinued operations 25,514 8,420
------------ ------------
Net cash provided (used) by investing activities (176,583) (59,741)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) on notes payable
and short term credit facilities (894,696) (146,732)
Proceeds from exercise of stock options 13,368 --
Proceeds from private placement, net of issuance costs 4,054,876 --
------------ ------------
Net cash provided (used) by financing activities 3,173,548 (146,732)
------------ ------------
Effect of exchange rate changes on cash -- (65,252)
Increase (decrease) in cash and cash and cash equivalents 1,866,433 (650,226)
Cash provided (used) by discontinued operations 38,860 (68,893)
Cash and cash equivalents at beginning of the period 798,826 1,099,718
------------ ------------
Cash and cash equivalents at end of the period $ 2,704,119 $ 380,599
============ ============
</TABLE>
The accompanying notes are an integral part of these statements
5
<PAGE> 6
VSI ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements are unaudited and
have been prepared by the management of VSI Enterprises, Inc. and subsidiaries
(the "Company" or "VSI") in accordance with the rules and regulations of the
Securities and Exchange Commission ("SEC"). Accordingly, certain information
and footnote disclosures usually found in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. In the opinion of management of the Company, all adjustments
(consisting only of normal recurring adjustments) considered necessary for fair
presentation of the condensed consolidated financial statements have been
included, and the accompanying condensed consolidated financial statements
present fairly the financial position and the results of operations for the
interim periods presented. Operating results for the three month period ended
March 31, 2000 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000. The condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and related footnotes included in the Company's 1999
Annual Report on Form 10-K, as filed with the SEC on March 30, 2000.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The condensed consolidated financial statements include the accounts of the
Company and its wholly-owned and majority-owned subsidiaries. All significant
intercompany transactions and balances have been eliminated in consolidation.
NOTE 3 - DISCONTINUED OPERATIONS
On February 18, 2000, the Company and its network reselling subsidiary, VSI
Network Solutions Inc., doing business as Eastern Telecom, entered into a
definitive agreement to sell substantially all of the assets of Eastern Telecom
to PentaStar Communications, Inc., a Denver, Colorado based communications
services agent. The definitive agreement is subject to, among other things,
approval by the stockholders of VSI Enterprises at the Annual Meeting to be
held on May 18, 2000. As a result of the decision to discontinue the Company's
network reselling business, operating results for Eastern Telecom have been
reclassified and reported as discontinued operations in accordance with
Accounting Principles Board Opinion No. 30 for all periods presented.
NOTE 4 - NET INCOME (LOSS) PER SHARE
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share" requires the disclosure of basic net income (loss) per share and diluted
net income (loss) per share. Basic net income (loss) per share is computed by
dividing net income (loss) available to common shareholders by the
weighted-average number of common shares outstanding during the period and does
not include any other potentially dilutive securities. Diluted net income
(loss) per share gives effect to all potentially dilutive securities. Basic and
diluted net income (loss) are the same for the three month periods ended March
31, 2000 and 1999 because the Company's potentially dilutive securities,
convertible debentures and stock options, are antidilutive in all periods
presented.
6
<PAGE> 7
NOTE 5 - ACCOUNTING FOR IMPAIRMENTS IN LONG-LIVED ASSETS
Long-lived assets and identifiable intangibles are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amounts
of assets may not be recoverable. Management periodically evaluates the
carrying value and the economic useful life of its long-lived assets based on
the Company's operating performance and the expected future undiscounted cash
flows and will adjust the carrying amount of assets which may not be
recoverable in accordance with SFAS No. 121, " Accounting for the Impairment of
Long-lived Assets and Long-lived Assets to be disposed of", which requires that
the impairment loss be measured as the amount by which the carrying value of
the asset exceeds the fair value of the asset. Management believes long-lived
assets in the accompanying condensed consolidated balance sheets are
appropriately valued in accordance with SFAS No. 121.
NOTE 6 - REVENUE RECOGNITION
Revenue from sales of videoconferencing systems and related maintenance
contracts on these systems are included in videoconferencing systems revenues.
Revenues on systems sales are recognized upon shipment. If installation costs
relating to the systems sold are significant, revenue is only recognized for
the installation as the costs associated with the installation are incurred.
Revenue on maintenance contracts are recognized over the term of the related
contract.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's financial position or results of operations.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FINANCIAL CONDITION
During the quarter ended March 31, 2000, total assets increased approximately
89% to $9,305,181 from $4,910,533, primarily as a result of a $1,905,293
increase in cash and cash equivalents and a $2,302,000 increase in long term
investments. In March 2000, we raised $4,054,876 through the sale of 1,351,625
shares of common stock at $3.00 per share to 38 accredited investors.
Approximately $826,668 of the proceeds were used to repay the remaining balance
of the 7% Secured Convertible Debenture held by Thompson Kernaghan & Co. Ltd.
("Kernaghan). The increase in long term investments results from an equity
transaction whereby we issued to ACIS, Inc., a Texas based, privately-held
software technology company 500,000 shares of our common stock in exchange for
250,000 shares of the common stock of ACIS. The transaction was valued at the
closing price of our common stock on the date of the transaction, February 29,
2000. In addition, we received 50,000 additional shares in ACIS for the
development of an advanced operating kernel to support our new product
architecture for PC-based device control, which was valued based on the
estimated fair value of the services provided.
Current liabilities decreased by $1,666,847 or 42% principally due to:
- - the repayment of the Kernaghan debt and other borrowings; and
- - a $493,095 decrease in accounts payable and accrued expenses resulting
from on-going efforts to pay down amounts owed to vendors; and
- - a $128,095 decrease in deferred revenue.
Additionally, we exchanged 524,126 of our common shares for 240,265 (24%) of
the Eastern Telecom shares held by its minority shareholders. By this
transaction, we retired 68% of our put obligations under a shareholders
agreement that gave Eastern Telecom's minority shareholders the right to put
their shares to VSI at $6.50 per share. The remaining minority interest shares
will be repurchased pursuant to the terms of a shareholders agreement upon the
sale of Eastern Telecom.
RESULTS OF OPERATIONS
Results for the three months ended March 31, 1999 have been restated to reflect
the discontinuance of operations of Eastern Telecom.
REVENUES
Revenues were $1,653,788 and $1,705,454 for the three months ended March 31,
2000 and 1999, respectively. The 3% decrease from 1999 to 2000 was primarily
due to our continuing efforts to only pursue profitable sales and to become
smaller and more efficient, as we reduced our losses and began to pursue
strategies more consistent with our mission.
GROSS MARGIN
Gross margin as a percentage of revenues was approximately 45% and 49% for the
three months ended March 31, 2000 and 1999, respectively. The decrease results
from variations in the product mix between comparable periods.
8
<PAGE> 9
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses were $828,354 and $1,287,839 for
the three months ended March 31, 2000 and 1999, respectively. The 36% decrease
from the first quarter of 1999 to the first quarter of 2000 results from the
consolidation of operations, reductions in personnel and ongoing efforts to cut
costs.
RESEARCH AND DEVELOPMENT EXPENSES
We charge research and development costs to expense as incurred until
technological feasibility of a software product has been established. Software
development costs incurred after technological feasibility has been established
are capitalized and amortized over the useful life of the product. These
expensed costs were $137,354 and $132,861 for the three months ended March 31,
2000 and 1999, respectively. During the three months ended March 31, 2000, we
capitalized $115,560 in software development costs related to new products
under development.
OTHER EXPENSES
Other expenses, primarily finance charges, were $205,740 and $201,511 for three
months ended March 31, 2000 and 1999, respectively. The increase is primarily
related to an increase in the amortization of warrant values, offset by a
decrease in interest expense, debt discount costs, and foreign currency
exchange losses.
DISCONTINUED OPERATIONS
We discontinued operations of our system integration subsidiary, VSI Network
Services, Inc. on December 31, 1998. Also, On February 18, 2000, we entered
into a definitive agreement to sell Eastern Telecom, our network reselling
subsidiary, and, as a result have accounted for Eastern Telecom as discontinued
operations. Accordingly, operating results for both subsidiaries have been
reclassified and reported as discontinued operations. Operating loss from
discontinued operations was ($32,566) for the three months ended March 31, 2000
and $(449,523) for the three months ended March 31, 1999.
NET LOSS
Net loss for the three months ended March 31, 2000 was $463,628; a decrease of
62% from the net loss of $1,235,529 for the three months ended March 31, 1999.
The decrease in net loss for the periods was due primarily to decreases in
overhead expenses and losses from discontinued operations.
LIQUIDITY AND SOURCES OF CAPITAL
GENERAL
As of March 31, 2000, we had cash and cash equivalents of $2,704,119. Our
liquidity sources include existing cash and credit facilities. VSI is also
entitled to retain approximately $1.3 million of the initial cash proceeds
($2.1 million less the cash required to repurchase the remaining minority
shares) and $950,000 of the stock proceeds which will be paid by PentaStar
Communications, Inc. upon the closing of the pending sale of Eastern Telecom;
there can be no assurances, however, that such closing will occur.
The Eastern Telecom assets will be combined with the assets of USTeleCenters,
Inc. and Vermont Network Services Corporation, which were acquired by PentaStar
on February 18, 2000. Under an earn-out provision in the sales agreement, VSI
is entitled to additional compensation based on the combined financial results
of the combined Eastern Telecom, USTeleCenters and Vermont Network Services
acquired operations for calendar year 2000.
9
<PAGE> 10
We believe that existing cash and the funds to be received from the sale of
Eastern Telecom will be sufficient to meet our cash flow requirements for at
least the end of 2000. We may require additional funding in fiscal 2001 to fund
our development activities. This additional funding could be in the form of the
sale of assets, debt, equity, or a combination of these financing methods.
However, there can be no assurance that we will be able to obtain such
financing if and when needed, or that if obtained, such financing will be
sufficient or on terms and conditions acceptable to the Company.
We expect to spend approximately $440,000 for capital expenditures in the
remainder of fiscal 2000.
CREDIT FACILITIES
VSI
Since June 1995, Videoconferencing Systems, Inc., a wholly-owned subsidiary,
has had a revolving credit and security agreement with Fidelity Funding of
California Inc. This credit facility provides up to $4,000,000 at an interest
rate of prime plus 2% per annum. Funds available under the credit facility are
based on 80% of eligible VSI accounts receivable invoices, with certain
restrictions. The credit facility is secured by the accounts receivable,
inventory and certain fixed assets of Videoconferencing Systems. At March 31,
2000, we were due $41,000 from reserves Fidelity Funding was holding for its
account. There are no balances owed under this credit facility as of March 31,
2000. On April 4, 2000, we were notified that Fidelity Funding of the
termination of this credit facility effective June 7, 2000.
ETI
On October 8, 1998, Eastern Telecom entered into a financing agreement with RFC
Capital, Inc., whereby RFC Capital, Inc. purchases eligible accounts receivable
for 90% of the accounts receivable amount, up to $1,500,000, at an interest
rate of prime plus 2.75% per annum. This amount may be increased, subject to
the payment of additional commitment fees by Eastern Telecom, to $5,000,000. If
any account receivable is not paid within 90 days, Eastern Telecom is required
to buy back the account receivable for the full purchase price. The credit
facility is secured by eligible accounts receivable. As of March 31, 2000,
$783,719 was owed to RFC Capital, Inc.
FORWARD-LOOKING STATEMENTS
Certain statements contained herein are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, such as
statements relating to financial results and plans for future sales and
business development activities, and are thus prospective. Such forward-looking
statements are subject to risks, uncertainties and other factors, which could
cause actual results to differ materially from future results expressed or
implied by such forward-looking statements. Potential risks and uncertainties
include, but are not limited to, economic conditions, competition, our ability
to complete the development and launch of the Company's new PC-based device
control product, code named "Voyager" and other uncertainties detailed from
time to time in the Company's Securities and Exchange Commission filings,
including our Annual Report on Form 10-K and our quarterly reports on Form
10-Q.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company has minimal exposure to market risks such as changes in foreign
currency exchange rates and interest rates. The value of the Company's
financial instruments is generally not significantly impacted by changes in the
interest rates and the Company has no investments in derivatives. Fluctuations
in interest rates are not expected to have a material impact on interest
expense incurred under the Company's credit facilities. Changes in foreign
currency exchange rates have no effect on financial statements subsequent to
September 1999, based on the sale of the Company's European Subsidiary.
10
<PAGE> 11
PART II
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On March 10, 2000, we raised $4,054,876 through the private sale of 1,351,625
common shares at $3.00 per share to 38 accredited investors. Additionally,
certain Eastern Telecom minority interest holders exchanged 240,265 shares of
Eastern Telecom for 524,126 shares of our common stock.
All issuance's of securities described above were made in reliance on the
exemption from registration provided by Section 4(2) and/or 3 (b) of the
Securities Act of 1933 as transactions by an issuer not involving a public
offering. All of the securities were acquired by the recipients thereof for
investment and with no view toward the resale or distribution thereof. In each
instance, the offers and sales were made without any public solicitation and
the stock certificates bear restrictive legends. No underwriter was involved in
the transactions and no commissions were paid.
ITEM 5. OTHER INFORMATION
Nasdaq Listing
On September 22, 1999 the Company was notified by the Nasdaq Stock Market, Inc.
that the Company's common stock had been delisted from trading on the Nasdaq
SmallCap Market, effective as of the close of business on September 22, 1999.
The delisting occurred as a result of the Company's lack of a minimum bid price
per share of $1.00 and net tangible assets of not less than $2.0 million.
Nasdaq also notified the Company that its securities were immediately eligible
for trading on the OTC Bulletin Board commencing September 23, 1999. The
Company's stock symbol, "VSIN", remained unchanged.
The Company has filed a request for the Nasdaq Listing and Hearing Review
Council to review the Nasdaq Listing Qualifications Panel's decision to move
the Company from NASDAQ SmallCap to the OTC Bulletin Board. The Company had
been notified that a likely decision will be issued in April 2000; however, as
of May 11, 2000 the Company has not been notified of such decision.
Management and Board changes
Effective May 31, 2000, Richard W. Egan, currently President of
Videoconferencing Systems, Inc., has been named Chief Executive Officer of VSI
Enterprises, Inc., to replace Richard Harrison. Mr. Egan, age 34, is an
engineering graduate of Georgia Institute of Technology. Mr. Egan joined the
Company in June 1995 and, since June 11, 1999 had served as President of the
Videoconferencing Systems subsidiary. From February 1, 1998 through June 11,
1999 he served as Executive Vice President - Global Sales. From July 1996 until
February 1998 he served as National Account Manager, and from June 1995 until
July 1996 as Regional Sales Director.
On May 5, 2000, Harlan D. Platt, Professor of Finance at Northeastern
University, resigned his position on VSI's Board of Directors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
The following exhibits are filed with this report:
27.1 Financial Data Schedule (for SEC use only)
27.2 Restated Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended March 31,
2000.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VSI ENTERPRISES, INC.
Date: May 11, 2000 /s/ Richard E. Harrison
-----------------------------------
Chief Executive Officer
/s/ Karen T. Franklin
-----------------------------------
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VSI ENTERPRISES, INC. FOR THE THREE MONTHS ENDED MARCH
31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,704
<SECURITIES> 0
<RECEIVABLES> 1,420
<ALLOWANCES> (154)
<INVENTORY> 622
<CURRENT-ASSETS> 5,104
<PP&E> 3,618
<DEPRECIATION> (2,906)
<TOTAL-ASSETS> 9,305
<CURRENT-LIABILITIES> 2,322
<BONDS> 0
0
0
<COMMON> 15
<OTHER-SE> 6,265
<TOTAL-LIABILITY-AND-EQUITY> 9,305
<SALES> 1,654
<TOTAL-REVENUES> 1,654
<CGS> 913
<TOTAL-COSTS> 1,879
<OTHER-EXPENSES> 206
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (431)
<INCOME-TAX> 0
<INCOME-CONTINUING> (431)
<DISCONTINUED> (33)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (464)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VSI ENTERPRISES, INC. FOR THE THREE MONTHS ENDED MARCH
31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 381
<SECURITIES> 0
<RECEIVABLES> 2,488
<ALLOWANCES> (413)
<INVENTORY> 1,006
<CURRENT-ASSETS> 3,958
<PP&E> 2,823
<DEPRECIATION> (1,839)
<TOTAL-ASSETS> 6,029
<CURRENT-LIABILITIES> 6,352
<BONDS> 0
0
0
<COMMON> 12
<OTHER-SE> (336)
<TOTAL-LIABILITY-AND-EQUITY> 6,029
<SALES> 1,705
<TOTAL-REVENUES> 1,705
<CGS> 869
<TOTAL-COSTS> 2,290
<OTHER-EXPENSES> 202
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (786)
<INCOME-TAX> 0
<INCOME-CONTINUING> (786)
<DISCONTINUED> (449)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,235)
<EPS-BASIC> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
