<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________
FORM 10-Q
[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 No. 0-22958
INTERPORE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3043318
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
181 Technology Drive, Irvine, California 92618-2402
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 453-3200
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 proceeding 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 9, 2000, there were 13,798,217 shares of the registrant's common
stock issued and outstanding.
<PAGE>
Interpore International, Inc.
Index
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page(s)
-------
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
December 31, 1999 and March 31, 2000 (unaudited)............. 3
Condensed Consolidated Statements of Income (unaudited)
for the three month periods ended March 31, 1999
and March 31, 2000........................................... 4
Condensed Consolidated Statements of Cash Flows
(unaudited) for the three month periods ended March 31, 1999
and March 31, 2000........................................... 5
Notes to Condensed Consolidated Financial Statements........... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 9
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K.................................... 12
</TABLE>
2
<PAGE>
Interpore International, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
---------------- ---------------
Assets (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents.................................................... $ 6,315 $ 7,598
Short-term investments....................................................... 3,459 2,000
Accounts receivable, less allowance for doubtful accounts
of $516 and $481 in 1999 and 2000, respectively............................. 8,887 10,322
Inventories.................................................................. 13,070 12,659
Prepaid expenses............................................................. 995 1,195
Deferred income taxes........................................................ 1,750 1,748
Other current assets......................................................... 129 128
---------------- ---------------
Total current assets.......................................................... 34,605 35,650
Property, plant and equipment, net............................................. 1,349 1,485
Deferred income taxes.......................................................... 2,333 2,333
Intangible assets, net......................................................... 2,274 2,246
Other assets................................................................... 232 202
---------------- ---------------
Total assets................................................................... $40,793 $41,916
================ ===============
Liabilities and stockholders' equity
Current liabilities:
Current portion of capital lease obligations................................. $ 15 $ 15
Accounts payable............................................................. 1,046 860
Accrued compensation and related expenses.................................... 1,615 1,272
Accrued royalties............................................................ 339 328
Reserve for products liability claims........................................ 183 158
Accrued disposition costs.................................................... 118 94
Accrued merger-related expenses and restructuring charges.................... 324 244
Income taxes payable......................................................... 326 725
Other accrued liabilities.................................................... 425 554
---------------- ---------------
Total current liabilities...................................................... 4,391 4,250
---------------- ---------------
Long-term obligations:
Long-term debt............................................................... 3,152 2,700
Obligations under capital leases, net........................................ 13 8
---------------- ---------------
Total long-term obligations.................................................... 3,165 2,708
---------------- ---------------
Commitments and contingencies
Stockholders' equity:
Series E convertible preferred stock, voting, par value $.01 per share:
Authorized - 594,000; issued and outstanding shares - 25,573 at
December 31, 1999 and none at March 31, 2000; aggregate liquidation
value of $192 at December 31, 1999......................................... - -
Preferred stock, par value $.01 per share: Authorized shares -
4,406,000; outstanding shares - none....................................... - -
Common stock, par value $.01 per share: Authorized shares - 50,000,000;
issued and outstanding shares - 14,272,279 at December 31, 1999 and
14,394,684 at March 31, 2000............................................... 143 144
Additional paid-in-capital................................................... 45,451 46,011
Accumulated deficit.......................................................... (9,244) (8,087)
Accumulated other comprehensive loss......................................... (4) (1)
---------------- ---------------
36,346 38,067
Less treasury stock, at cost - 605,000 shares at December 31, 1999 and
March 31, 2000 ............................................................ (3,109) (3,109)
---------------- ---------------
Total stockholders' equity..................................................... 33,237 34,958
---------------- ---------------
Total liabilities and stockholders' equity..................................... $40,793 $41,916
================ ===============
</TABLE>
See accompanying notes.
3
<PAGE>
Interpore International, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------------------
1999 2000
------------------- -------------------
<S> <C> <C>
Net sales $ 8,986 $ 11,443
Cost of goods sold 2,809 3,552
------------------- -------------------
Gross profit 6,177 7,891
------------------- -------------------
Operating expenses:
Research and development 912 1,187
Selling and marketing 3,264 3,840
General and administrative 1,015 1,123
------------------- -------------------
Total operating expenses 5,191 6,150
------------------- -------------------
Income from operations 986 1,741
------------------- -------------------
Interest income 96 136
Interest expense (85) (76)
Other income 85 95
------------------- -------------------
Total interest and other income, net 96 155
------------------- -------------------
Income before taxes 1,082 1,896
Income tax provision - 739
------------------- -------------------
Net income $ 1,082 $ 1,157
=================== ===================
Net income per share:
Basic $ .08 $ .08
Diluted $ .08 $ .08
Shares used in computing net income per share:
Basic 13,462 13,715
Diluted 14,277 15,040
</TABLE>
See accompanying notes.
4
<PAGE>
Interpore International, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------------------
1999 2000
------------------- -------------------
<S> <C> <C>
Cash flows from operating activities
Net income $1,082 $ 1,157
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 214 249
Changes in operating assets and liabilities:
Accounts receivable (860) (1,435)
Inventories 25 411
Prepaid expenses (133) (200)
Other assets 219 7
Accounts payable and accrued liabilities (49) (139)
------------------- -------------------
Net cash provided by operating activities 498 50
------------------- -------------------
Cash flows from investing activities
Sales of short-term investments - 1,464
Capital expenditures (413) (308)
Expenditures for patent rights and other intangible assets (69) (50)
------------------- -------------------
Net cash provided by (used in) investing activities (482) 1,106
------------------- -------------------
Cash flows from financing activities
Repayment of long-term debt and capital lease obligations (4) (5)
Proceeds from exercise of stock options 87 132
------------------- -------------------
Net cash provided by financing activities 83 127
------------------- -------------------
Net increase in cash and cash equivalents 99 1,283
Cash and cash equivalents at beginning of period 7,908 6,315
------------------- -------------------
Cash and cash equivalents at end of period $8,007 $ 7,598
=================== ===================
</TABLE>
See accompanying notes.
5
<PAGE>
Interpore International, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1. Organization and Description of Business
Interpore International, Inc., doing business as Interpore Cross
International ("Interpore Cross"), is a medical device company that operates in
one business segment: the design, manufacture and marketing of medical devices
for the orthopedic marketplace. The products are distributed in the United
States and internationally.
2. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared without audit, pursuant to Securities and Exchange Commission
regulations. In the opinion of management, the accompanying condensed
consolidated financial statements include all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the consolidated
financial position at March 31, 2000 and the consolidated results of operations
and cash flows for the three month periods ended March 31, 1999 and 2000.
The accompanying condensed consolidated financial statements include the
accounts of Interpore Cross and its subsidiaries after elimination of all
significant intercompany transactions.
The results of operations and cash flows for the three months ended March
31, 2000 are not necessarily indicative of results to be expected for future
quarters or the full year.
These consolidated financial statements should be read in conjunction with
the financial statements included in Interpore Cross' Annual Report on Form 10-K
for the year ended December 31, 1999, as filed with the Securities and Exchange
Commission.
6
<PAGE>
3. Per Share Information
Basic earnings per share is calculated by dividing net earnings by the
weighted average number of common shares outstanding for the period. Diluted
earnings per share reflects the assumed conversion of all dilutive securities,
consisting of employee stock options, convertible securities and warrants. The
following table presents the computation of net income per share (in thousands,
except per share data):
<TABLE>
<CAPTION>
Three months ended March 31,
-------------------------------------------
1999 2000
------------------- -------------------
<S> <C> <C>
Net income used in the calculation of basic earnings per share $ 1,082 $ 1,157
Interest on Convertible Subordinated Debentures 67 *
------------------- -------------------
Net income used in calculation of diluted earnings per share $ 1,149 $ 1,157
=================== ===================
Shares used in computing net income per share - basic:
Weighted average common shares outstanding 13,462 13,715
Effect of dilutive securities:
Weighted average convertible preferred stock 32 19
Shares issuable pursuant to stock option plans 288 1,306
Shares issuable under the Convertible Subordinated Debentures 495 *
------------------- -------------------
Shares used in computing net income per share - diluted 14,277 15,040
=================== ===================
Net income per share - basic $ .08 $ .08
Net income per share - diluted $ .08 $ .08
</TABLE>
* Shares issuable from the convertible subordinated debentures were excluded
from the calculation of diluted earnings per share for the quarter ended March
31, 2000 since their effect would have been anti-dilutive.
4. Inventories
Inventories are stated at the lower of first-in, first-out average cost or
market. Inventories are comprised of the following (in thousands):
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
------------- ------------
<S> <C> <C>
Raw materials $ 1,159 $ 1,197
Work-in-process 442 497
Finished goods 11,469 10,965
------------- ------------
$13,070 $12,659
============= ============
</TABLE>
5. Contingencies
The nature of Interpore Cross' business subjects it to products liability
and various other legal proceedings from time to time. In the opinion of
management, the amount of ultimate liability with respect to any known
proceedings or claims will not materially affect the financial position or
results of operations of Interpore Cross.
7
<PAGE>
6. Long-Term Debt
The 8.5% Convertible Subordinated Debentures (the "Debentures") due June 1,
2003 are convertible at any time before maturity, unless previously redeemed,
into shares of Interpore Cross common stock at a conversion price of $6.37 per
share. Beginning July 1, 1999 and on July 1 of each succeeding year, Interpore
Cross will be obligated to redeem any Debentures tendered by June 1, 1999 or
June 1 of any succeeding year, respectively, at 100% of the principal amount
thereof plus accrued interest, subject to an annual limitation of $25,000 per
holder and an annual aggregate limitation of $262,500. During the first three
months of 2000, $452,000 of Debentures were converted into 70,915 shares of
Interpore Cross common stock. The fair value of the Debentures was
approximately $3.9 million and $3.5 million on December 31, 1999 and March 31,
2000, respectively.
7. Comprehensive Income
Total comprehensive income represents the net change in stockholders'
equity during a period from sources other than transactions with stockholders
and as such, includes net income. The components of comprehensive income, net
of related tax, are as follows (in thousands):
<TABLE>
<CAPTION>
Three months ended March 31,
-----------------------------------------------
1999 2000
-------------------- -------------------
<S> <C> <C>
Net income $1,082 $1,157
Unrealized loss on short-term investments - (1)
-------------------- -------------------
Comprehensive income $1,082 $1,156
==================== ===================
</TABLE>
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Description of Business
Our revenues are generated from the sale of products in two principal product
categories--spinal implant products and orthobiologic products. Our spinal
implant products consist of titanium or stainless steel hooks, rods and screws
and related instruments required for the surgeon to assemble a construct which
restores the natural anatomy of the spine, keeping it immobilized while a bone
graft eventually fuses the vertebrae. Our orthobiologic products consist of
synthetic bone graft substitute materials and products used to derive AGF(TM).
AGF is used to provide faster, more complete bone growth and enhance the
performance of our bone graft products.
All of our operations are located in the United States, however, we sell our
products to customers both within and outside the United States. Within the
United States, we distribute our products primarily through independent agents.
These independent agents provide a delivery and consultative service to our
surgeon and hospital customers and receive commissions based on sales in their
territories. The commissions are reflected in our income statement within
selling and marketing expense.
For our spinal implant products, we invoice hospitals directly following a
surgical procedure in which our products are used. Our spinal implant products
are made available to hospitals from consignment inventories maintained by our
larger independent agents, or from loaner implant sets that we ship from our
facility. For our orthobiologic products, we generally ship directly to
hospitals from our facility, and we invoice hospitals upon shipment.
Outside the United States, we sell our products directly to distributors who
maintain an inventory of our products. We record revenue at the time of shipment
to the distributor at prices generally ranging from 40% to 70% of our U.S. list
prices. The distributors service the surgeons and hospitals, deliver products
and invoice hospitals directly at prices determined by the distributors.
Because our revenues from U.S. hospitals are primarily at list price, and our
revenues from international distributors are at a discount to U.S. list prices,
our gross margins are subject to fluctuation based on our domestic versus
international sales mix, with domestic gross margins being somewhat higher than
international gross margins. Additionally, the mix between spinal implant sales
and orthobiologic sales also affects our gross margins, with higher margins in
orthobiologics.
9
<PAGE>
Results of Operations
The following table presents our results of operations as percentages:
<TABLE>
<CAPTION>
Percentage of net sales Percentage
Three months ended March 31, change
-------------------------------------------- -------------------
1999 2000 2000 vs. 1999
------------------- ------------------- -------------------
<S> <C> <C> <C>
Net sales 100.0% 100.0% 27.3%
Cost of goods sold 31.3% 31.0% 26.5%
---------------- ---------------- ----------------
Gross profit 68.7% 69.0% 27.7%
---------------- ---------------- ----------------
Operating expenses:
Research and development 10.2% 10.4% 30.2%
Selling and marketing 36.3% 33.6% 17.7%
General and administrative 11.3% 9.8% 10.6%
---------------- ---------------- ----------------
Total operating expenses 57.8% 53.8% 18.5%
---------------- ---------------- ----------------
Income from operations 10.9% 15.2% 76.6%
================ ================ ================
</TABLE>
For the quarter ended March 31, 2000, sales of $11.4 million were $2.4
million or 27.3% higher than net sales of $9.0 million for the same period of
1999.
<TABLE>
<CAPTION>
Three months ended March 31, Change
----------------------------------------- -----------------------------------------
1999 2000 Amount %
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Spinal implant product sales........ $4,843 $ 6,494 $1,651 34.1%
Orthobiologic product sales......... 4,143 4,949 806 19.5%
---------------- ---------------- ---------------- ----------------
Total sales......................... $8,986 $11,443 $2,457 27.3%
================ ================ ================ ================
</TABLE>
Sales of spinal implant products increased in the quarter ended March 31,
2000 by $1.7 million or 34.1% to $6.5 million compared to $4.8 million for the
quarter ended March 31, 1999. The increase reflects continued market
penetration of the Synergy(TM) Spinal System, aided by improved distribution and
territory coverage.
Sales of orthobiologic products increased by $806,000 or 19.5% to $4.9
million for the three months ended March 31, 2000, compared to $4.1 million for
the three months ended March 31, 1999. Our AGF related products, which were
launched on a nationwide basis during the second quarter of 1999, accounted for
$1.4 million of the sales of orthobiologic products for the three months ended
March 31, 2000. Sales of synthetic bone products decreased by $172,000 or 4.9%
versus the same quarter of 1999. We believe the decline in Pro Osteon(R) sales
was primarily related to the shift in domestic distribution from direct sales
representatives to independent agents, which we believe are focusing a greater
portion of their efforts on spinal implant product sales.
Total domestic sales of spinal implant products and orthobiologic products
increased 31.7% or $2.2 million to $9.0 million for the three months ended March
31, 2000 compared to $6.8 million for the same period of 1999. International
sales increased $287,000 or 13.4% to $2.4 million for the first quarter of 2000
from $2.1 million for the first quarter of 1999.
For the quarter ended March 31, 2000, the gross margin was 69.0% of sales
compared to 68.7% of sales for the quarter ended March 31, 1999.
10
<PAGE>
Total operating expenses for the quarter ended March 31, 2000 increased by
18.5% or $959,000 to $6.2 million, compared to $5.2 million for the same quarter
of 1999. As a percentage of sales, total operating expenses decreased from
57.8% in the first quarter of 1999 to 53.8% in the first quarter of 2000.
Research and development expenses increased by 30.2% or $275,000 due primarily
to the hiring of personnel and other costs related to spinal implant product
development projects. Selling and marketing expenses increased $576,000 or
17.7% compared to the first quarter of 1999 primarily due to increased
commissions on higher domestic sales. General and administrative expenses
increased by 10.6% or $108,000 due primarily to higher product liability
insurance premiums resulting from increased sales.
Net interest and other income increased $59,000 or 61.5% related
principally to an increase in interest income combined with reduced interest
expense. Interest income for the quarter ended March 31, 2000 increased $40,000
or 41.7% from the same quarter of 1999 due to increased cash and short-term
investment balances combined with higher interest rates. Interest expense
decreased during the quarter ended March 31, 2000 as a result of conversions of
convertible subordinated debentures into common stock.
In the first quarter of 1999, we reduced our valuation allowance against
our deferred tax assets by an amount roughly equal to taxable income, resulting
in no income tax provision for the period. This continued throughout 1999 until
the fourth quarter, at which time the valuation allowance was exhausted.
Accordingly, we expect to record income tax provisions in the year 2000, and in
the first quarter we recorded an income tax provision of $739,000, reflecting an
effective tax rate of approximately 39%.
Liquidity and Capital Resources
In the first quarter of 2000, our operating activities generated $50,000 of
net cash. We invest our excess cash in U.S. Treasury securities and high-grade
marketable securities. At March 31, 2000, cash, cash equivalents and short-term
investments totaled $9.6 million as compared to $9.8 million at December 31,
1999. We also have a $5.0 million revolving line of credit available to us that
had no amount outstanding at March 31, 2000 and which expires in June 2000. We
currently intend to seek an extension of that facility.
We have used and may continue to use our cash, our common stock, or a
combination of both to pay for purchased technologies, product lines, mergers
and acquisitions. We also intend to continue to invest in the development of our
business. We believe we currently possess sufficient resources to meet the cash
requirements of our operations for at least the next year. However, some of the
aforementioned activities may require cash in excess of that which we currently
possess, and we can give no assurance that we will be able to raise the
additional capital on satisfactory terms, if at all.
At March 31, 2000, we had no material commitments for capital expenditures.
________________________
The quarterly results contained herein are unaudited and reflect certain
assumptions of management that may change. Results of the quarter may not be
representative of results for future quarters or indicative of our financial
results for the year. Certain statements in this Quarterly Report on Form 10-Q
are forward-looking and may involve risks and uncertainties, including, but not
limited to: product demand and market acceptance risks; risks related to the
development of future products; risk that we will not receive additional
regulatory approval of products; and the impact of competitive products.
Additional information on factors that could affect our financial results and
growth prospects is disclosed in reports we file from time to time with the
Securities and Exchange Commission, including the "Certain Business
Considerations Section" of our Annual Report on Form 10-K.
11
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits.
Reference is made to the Exhibit Index on Page 14 hereof.
b. Reports on Form 8-K.
No reports on Form 8-K were filed during the fiscal quarter ended
March 31, 2000.
12
<PAGE>
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.
DATE: May 11, 2000 INTERPORE INTERNATIONAL, INC.
(Registrant)
By: /s/ David C. Mercer
----------------------------
David C. Mercer,
Chairman and Chief Executive Officer
By: /s/ Richard L. Harrison
----------------------------
Richard L. Harrison
Sr. Vice President and
Chief Financial Officer
13
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ---------- -----------
3.01 Certificate of Incorporation of Interpore International, Inc. as
amended (1)
3.02 Bylaws of Registrant (1)
3.03 Amendment Number One to Bylaws (16)
4.01 Rights Agreement dated November 19, 1998, between Interpore
International, Inc. and U.S. Stock Transfer Corporation, which
includes the form of Certificate of Determination of the Series A
Junior Participating Preferred Stock of Interpore International,
Inc. as Exhibit A, the form of Right Certificate as Exhibit B and
the Summary of Rights to Purchase Preferred Shares as Exhibit C
(2)
4.02 Registration Rights Agreement dated December 8, 1999 by and
between Interpore International, Inc., John A. Dawdy and Andrew
G. Hood (20)
10.01 Cancellation and Release Agreement dated March 1, 1993 among
Registrant, Interpore Orthopaedics, Inc., Pfizer, Inc. and
Howmedica, Inc. (3)
10.02 Single Tenant Lease dated July 25, 1991 between Registrant and
The Irvine Company as amended by a Third Amendment to Lease dated
December 11, 1996 (4)
10.03 Amended and Restated Loan and Security Agreement dated June 22,
1999 among Registrant, Interpore Orthopaedics, Inc., Cross
Medical Products, Inc., Interpore Cross International Inc., and
Silicon Valley Bank (19)
10.04 Amended and Restated Stock Option Plan dated March 19, 1991 (6),
First Amendment to the Amended and Restated Stock Option Plan,
effective October 15, 1991 (3); Amendment to the Amended and
Restated Stock Option Plan dated September 17, 1994 (7)
10.05 1995 Stock Option Plan (8)
10.06 Stock Option Plan for Non-Employee Directors of Interpore
International (9)
10.07 Danninger Medical Technology, Inc. Amended and Restated 1984 Non-
Statutory Stock Option Plan (10)
10.08 Danninger Medical Technology, Inc. Amended and Restated 1984
Incentive Stock Option Plan (10)
10.09 Cross Medical Products Inc. Amended and Restated 1994 Stock
Option Plan (10)
10.10 Asset Purchase Agreement dated March 12, 1997, among Cross
Medical Products, Inc., Danninger Healthcare, Inc. and OrthoLogic
Corp. (11)
10.11 Indenture concerning 8.5% Convertible Subordinated Debentures
between Cross Medical Products, Inc. and Fifth Third Bank (12)
10.12 Supplemental Indenture between Interpore International, Inc. and
Cross Medical Products, Inc. and Fifth Third Bank (5)
10.13 Form of Indemnification Agreement (13)
10.14 Schedule of Parties to Form of Indemnification Agreement (14)
10.15 Agreement between Dr. Edward Funk and Cross Medical Products,
Inc. dated February 11, 1998 (15)
14
<PAGE>
Exhibit
Number Description
- --------- ------------
10.16 Form of Employment Agreement dated August 17, 1998 between Interpore
International, Inc. and its executive officers (14)
10.17 Schedule of Parties to Form of Employment Agreement dated August 17,
1998 (14)
10.18 1999 Consultants Stock Option Plan (17)
10.19 Amended and Restated Employee Qualified Stock Purchase Plan dated
November 13, 1998 (18)
10.20 Asset Purchase Agreement dated December 8, 1999, by and among
Interpore Orthopaedics, Inc., Quantic Biomedical, Inc., Quantic
Biomedical Partners, John A. Dawdy and Andrew G. Hood (20)
27.01 Financial Data Schedule
___________
(1) Incorporated by reference from our Registration Statement on Form S-4,
Registration No. 333-49487.
(2) Incorporated by reference from our Current Report on Form 8-K dated
December 1, 1998.
(3) Incorporated by reference from our Registration Statement on Form S-1,
Registration No. 33-69872.
(4) Incorporated by reference from our Current Report on Form 8-K dated
February 11, 1998.
(5) Incorporated by reference from our Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1998.
(6) Incorporated by reference from our Registration Statement on Form S-8,
Registration No. 33-77426.
(7) Incorporated by reference from our Registration Statement on Form S-8,
Registration No. 33-86290.
(8) Incorporated by reference from our Proxy Statement for the 1994 Annual
Meeting of Shareholders.
(9) Incorporated by reference from our Proxy Statement for the 1995 Annual
Meeting of Shareholders.
(10) Incorporated by reference from our Registration Statement on Form S-8,
Registration No. 333-53775.
(11) Incorporated by reference from the Cross Medical Products, Inc. Annual
Report on Form 10-K for the year ended December 31, 1996.
(12) Incorporated by reference from the Cross Medical Products, Inc.
Registration Statement on Form S-2, Registration No. 333-02273.
(13) Incorporated by reference from our Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1998.
(14) Incorporated by reference from our Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 1998.
(15) Incorporated by reference from the Cross Medical Products, Inc. Annual
Report on Form 10-K for the year ended December 31, 1997.
(16) Incorporated by reference from our Annual Report on Form 10-K for the
fiscal year ended December 31, 1998.
(17) Incorporated by reference from our Proxy Statement for the 1999 Annual
Meeting of Stockholders.
(18) Incorporated by reference from our Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1999.
(19) Incorporated by reference from our Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1999.
(20) Incorporated by reference from our Annual Report on Form 10-K for the
fiscal year ended December 31, 1999.
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE THREE
MONTH PERIOD 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> $7,598,000
<SECURITIES> 2,000,000
<RECEIVABLES> 10,803,000
<ALLOWANCES> 481,000
<INVENTORY> 12,659,000
<CURRENT-ASSETS> 35,650,000
<PP&E> 4,995,000
<DEPRECIATION> 3,510,000
<TOTAL-ASSETS> 41,916,000
<CURRENT-LIABILITIES> 4,250,000
<BONDS> 0
0
0
<COMMON> 144,000
<OTHER-SE> 34,814,000
<TOTAL-LIABILITY-AND-EQUITY> 41,916,000
<SALES> 11,443,000
<TOTAL-REVENUES> 11,443,000
<CGS> 3,552,000
<TOTAL-COSTS> 3,552,000
<OTHER-EXPENSES> 6,055,000
<LOSS-PROVISION> 30,000
<INTEREST-EXPENSE> (60,000)
<INCOME-PRETAX> 1,896,000
<INCOME-TAX> 739,000
<INCOME-CONTINUING> 1,157,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,157,000
<EPS-BASIC> .08
<EPS-DILUTED> .08
</TABLE>
