<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 1995
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: 0-17919
SURGICAL LASER TECHNOLOGIES, INC.
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 31-1093148
-------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Cresson Boulevard, P.O. Box 880
Oaks, PA 19456
-------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(610) 650-0700
-------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
-------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days
Yes X No
--- ---
On August 7, 1995, the registrant had outstanding 9,850,667 shares of
Common Stock, $.01 par value.
Page 1 of 16 Pages
Index is on Page 2
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION:
ITEM 1. Financial Statements:
a. Condensed Consolidated Balance Sheets,
July 2, 1995 (unaudited) and January 1, 1995 3
b. Condensed Consolidated Statements of Operations
(unaudited) for the quarters ended
July 2, 1995 and July 3, 1994 4
c. Condensed Consolidated Statements of Operations
(unaudited) for the six months ended
July 2, 1995 and July 3, 1994 5
d. Condensed Consolidated Statements of Cash Flows
(unaudited) for the six months ended
July 2, 1995 and July 3, 1994 6
e. Notes to Condensed Consolidated Financial
Statements (unaudited) 7-9
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
PART II. OTHER INFORMATION:
ITEM 1. Legal Proceedings 11-12
ITEM 4. Submission of Matters to a Vote of Security Holders 12-13
ITEM 5. Other Information
ITEM 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
EXHIBITS:
EXHIBIT 11 - Computation of Earnings Per Share 15
EXHIBIT 27 - Financial Data Schedule 16
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
<TABLE>
<CAPTION>
Jul. 2, Jan. 1,
1995 1995
------- -------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $2,016 $4,143
(including restricted amounts of $100)
Accounts receivable, net of allowance for doubtful
accounts of $118 and $110 3,652 4,468
Inventories 5,390 4,725
Other 430 257
------- -------
Total current assets 11,488 13,593
Property and equipment, net 8,564 8,869
Patents and licensed technology, net 3,335 3,627
Other assets 516 365
------- -------
Total Assets $23,903 $26,454
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $428 $314
Accounts payable 1,296 1,298
Accrued liabilities 2,866 2,590
------- -------
Total current liabilities 4,590 4,202
------- -------
Long-term debt 6,524 6,567
Stockholders' equity:
Common stock, $.01 par value, 30,000 shares authorized,
9,851 shares and 9,840 shares issued and outstanding 99 98
Additional paid-in capital 32,574 32,526
Accumulated deficit (19,884) (16,939)
------- -------
Total stockholders' equity 12,789 15,685
------- -------
Total Liabilities and Stockholders' Equity $23,903 $26,454
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
- 3 -
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the Quarter Ended:
----------------------
Jul. 2, Jul. 3,
1995 1994
------- -------
<S> <C> <C>
Net sales $3,806 $5,304
Cost of sales 1,642 1,916
------- -------
Gross profit 2,164 3,388
------- -------
Operating expenses:
Selling, general and administrative 2,671 2,667
Product development 668 460
Non-recurring charges(credits) 390 (892)
------- -------
3,729 2,235
------- -------
Operating income (loss) (1,565) 1,153
Interest expense 151 213
Interest income (33) (27)
Equity in (earnings) loss of joint venture 1 (3)
------- -------
Income (loss) before income taxes (1,684) 970
Provision for income taxes - 20
------- -------
Net income (loss) ($1,684) $950
======= =======
Net income (loss) per share ($0.17) $0.10
======= =======
Shares used in calculating net income (loss) per share 9,850 9,260
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
- 4 -
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the Six Months Ended:
------------------------
Jul. 2, Jul. 3,
1995 1994
------- -------
<S> <C> <C>
Net sales $7,973 $9,969
Cost of sales 3,306 3,748
------- -------
Gross profit 4,667 6,221
------- -------
Operating expenses:
Selling, general and administrative 5,636 5,156
Product development 1,351 922
Non-recurring charges(credits) 390 (892)
------- -------
7,377 5,186
------- -------
Operating income (loss) (2,710) 1,035
Interest expense 312 379
Interest income (71) (45)
Equity in (earnings) loss of joint venture (6) (14)
------- -------
Income (loss) before income taxes (2,945) 715
Provision for income taxes 0 20
------- -------
Net income (loss) ($2,945) $695
======= =======
Net income (loss) per share ($0.30) $0.08
======= =======
Shares used in calculating net income (loss) per share 9,848 9,190
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
- 5 -
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
For the Six Months Ended:
------------------------
Jul. 2, Jul. 3,
1995 1994
------- -------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income (loss) ($2,945) $695
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Equity in (income) of joint venture (6) (14)
Depreciation and amortization 921 996
Imputed interest (10) 16
Non-recurring charges (credits) 390 (838)
Decrease (increase) in assets:
Accounts receivable 816 (192)
Inventories (609) (136)
Other current assets (173) (159)
Other assets 1 82
Increase (decrease) in liabilities:
Accounts payable 341 (31)
Accrued liabilities (107) (309)
------- -------
Net cash provided by (used in) operating activities (1,381) 110
------- -------
Cash Flows From Investing Activities:
Additions to property and equipment (255) (337)
Investment in Joint Venture (150) -
Patent costs (119) (184)
------- -------
Net cash used in investing activities (524) (521)
------- -------
Cash Flows From Financing Activities:
Proceeds from exercised stock options and warrants - 1
Payments on long-term debt (222) (318)
------- -------
Net cash used in financing activities (222) (317)
Net decrease in cash and cash equivalents (2,127) (728)
Cash and Cash Equivalents, Beginning of Period 4,143 2,866
------- -------
Cash and Cash Equivalents, End of Period $2,016 $2,138
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
- 6 -
<PAGE>
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Summary Financial Information and Results of Operations:
In the opinion of Surgical Laser Technologies, Inc. and Subsidiaries (the
"Company"), the accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles and with the regulations of the Securities and Exchange Commission
and contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the financial position as of July 2, 1995, the
results of operations for the quarters and six months ended July 2, 1995 and
July 3, 1994 and cash flows for the six months ended July 2, 1995 and July 3,
1994.
Interim Financial Information:
While the Company believes that the disclosures presented are adequate to
prevent misleading information, it is suggested that the unaudited condensed
consolidated financial statements be read in conjunction with the audited
consolidated financial statements and notes included in the Company's Form 10-K
report for the fiscal year ended January 1, 1995, as filed with the Securities
and Exchange Commission. Interim results for the six months ended July 2, 1995
are not necessarily indicative of the results to be expected for the full year.
2. Supplemental Cash Flow Information:
There were no income taxes paid for the six months ended July 2, 1995 or July 3,
1994. Interest paid for the six months ended July 2, 1995 and July 3, 1994 was
$312,000 and $339,000, respectively.
The following noncash investing and financing activities took place:
During the first half of 1995, the Company issued additional notes of $342,000
in conjunction with the financing of certain patent litigation. The notes bear
interest at annual interest rates ranging from 9.5% to 10%, are payable in
monthly installments and are scheduled to be completely repaid between December
1996 and April 1997. For the six months ended July 2, 1995 and July 3, 1994,
$49,000 and $177,000, respectively, of the 8% convertible subordinated notes
were converted at the request of the noteholders into common stock at a
conversion price of $4.50 per share. For the six months ended July 3, 1994, the
Company issued additional common stock of $114,000 in the form of restricted
stock awards, for bonuses previously accrued.
7
<PAGE>
3. Net Income (Loss) Per Share:
For the quarter and six months ended July 2, 1995, net loss per share has been
computed using the weighted average number of shares outstanding during each
period. Common share equivalents have not been considered as they are
anti-dilutive.
Net income per share for the quarter and six months ended July 3, 1994 has been
computed using the weighted average number of common shares and common share
equivalents outstanding during each period using the treasury stock method.
4. Bank Borrowings:
The Company has a $2.75 million line of credit agreement with a bank. The line
of credit provides for a $750,000 sub-line for letters of credit. Under its
sub-line, the Company issued a letter of credit in the amount of $629,000 in
favor of the Montgomery County Industrial Development Corporation (MCIDC) under
the terms of the Mortgage and Security Agreement. There were no other borrowings
under the line at July 2, 1995. Borrowings on the line are secured by the
Company's accounts receivable and inventories and bear interest at the bank's
prime rate plus 1/2%. The line expires on June 30, 1996.
The Company's line of credit agreement prohibits the declaration or payment of
any dividends or distributions on any of its capital stock at any time there are
outstanding obligations to the bank without the prior written consent of the
bank. In addition, the agreement requires the Company to maintain a leverage
covenant, as defined.
5. Income Taxes:
No income tax provision was made for the quarter or six months ended July 2,
1995 due to the losses incurred. Income taxes of $20,000 were provided for the
six months ended July 3, 1994; they consisted primarily of federal alternative
minimum tax and were significantly less than the statutory rate due to the
utilization of net operating loss carryforwards.
6. Segment and Geographic Data:
The Company is engaged in one business segment: the design, development,
manufacture and marketing of laser products for medical applications. The
Company's customers are primarily hospitals and medical centers. Foreign sales,
excluding sales to C.R. Bard, represented 21% of net sales in the first six
months of 1995 as compared to 18% in the same period in 1994. Sales to the
Company's joint venture (see note 7) were 11% of net sales in the first half of
1995. Sales to one customer (C.R. Bard) in the first half of 1994 represented 9%
of net sales.
7. Investment in MEDIQ PRN/SLT:
The Company is a 50% owner of MEDIQ PRN/SLT, a joint venture formed in the
8
<PAGE>
third quarter of 1993 to provide rentals of lasers and related equipment to
hospitals and other health care providers. The investment in MEDIQ PRN/SLT is
accounted for using the equity method and is included in other assets. Sales to
MEDIQ PRN/SLT are recorded at an arms-length price. Under the equity method, 50%
of the gross profit from the sales to the joint venture is deferred and
amortized to income as the related asset is used by the joint venture. The
Company's sales to the joint venture were $901,000 and $354,000 for the six
months ended July 2, 1995 and July 3, 1994, respectively. Accounts receivable
from sales to MEDIQ PRN/SLT at July 2, 1995 are $875,000.
8. Non-recurring charges(credits):
In the second quarter of 1995, the Company recorded a charge of $390,000 for
severance and other expenses accrued in connection with a workforce reduction.
In the second quarter of 1994, the Company recorded a benefit of $838,000 which
is the net effect of the settlement of a lawsuit with Advanced Laser Systems
Technology, Inc. and its principals ("ALST") partially offset by a separate
legal settlement with a former distributor. The net benefit is reflected in the
statement of operations as a non-recurring credit to operating expenses of
$892,000 and interest expense of $54,000.
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Net sales for the quarter ended July 2, 1995 of $3,806,000 decreased $1,498,000,
or 28%, from the same period in 1994, while net sales for the six months ended
July 2, 1995 of $7,973,000 decreased $1,996,000, or 20%, from the first six
months of 1994. Included in the first six months of 1994 net sales were $916,000
of sales to C.R. Bard for which there were no corresponding sales in 1995.
In the second quarter of 1995, net sales of delivery systems, excluding sales to
C.R. Bard, were flat relative to the second quarter of 1994. In the first six
months of 1995, net sales of delivery systems, excluding sales to C.R. Bard,
increased 3% over the comparable period in 1994.
Net sales of Contact Laser(TM) Systems declined 65% and 54% in the second
quarter of 1995 and the first six months of 1995 from the comparable periods in
1994. Affecting the sales of Contact Laser Systems in 1995 are: (1) market
confusion regarding the use of the new electrosurgical roller ball products
versus lasers to perform TURP urologic procedures; and (2) the continued
restriction and postponement of medical device capital purchases by hospitals
within the U.S. hospital market.
In response to lower net sales levels, the Company has taken action, at the end
of the second quarter, to bring its expenditures and employment levels in line
with current sales levels. The actions taken are expected to reduce cash
expenditure levels by approximately $3.1 million on an annualized basis.
9
<PAGE>
The actions included a reduction in force which affected 41 employees, or 27%
of the workforce.
Due to the lower level of sales, gross profits for the quarter ended July 2,
1995 of $2,164,000 decreased $1,224,000, or 36%, from the second quarter of
1994, while gross profits for the first six months of 1995 of $4,667,000
decreased $1,554,000, or 25%, from the first six months of 1994. As a percentage
of net sales, gross profit decreased to 57% in the second quarter from 64% in
the second quarter of 1994, and to 59% in the first six months of 1995 from 62%
in the first six months of 1994. The decrease in gross profit as a percentage of
sales was due primarily to the lower volume of sales.
Operating expenses in the second quarter of 1995 of $3,729,000 included a
non-recurring charge of $390,000 for severance and related costs associated with
the workforce reduction enacted at the end of the quarter. Operating expenses in
the second quarter of 1994 of $2,235,000 included a non-recurring credit of
$892,000 which resulted from the settlement of litigation with Advanced Laser
Systems Technology, Inc. and its principals (ALST) offset, in part, by a charge
and interest expense related to the settlement of litigation with a former
distributor. Excluding these non-recurring items, operating expenses increased
$212,000, or 7%, over the second quarter of 1994.
For the first six months of 1995, operating expenses, excluding the same
non-recurring charges and credits, increased $909,000, or 15%, over the first
six months of 1994.
Product development expenses of $668,000 in the second quarter of 1995 and
$1,351,000 in the first six months of 1995 increased 45% and 47%, respectively,
over the comparable periods in 1994. The increases are due mainly to the
one-year renewal, in the third quarter of 1994, of a consulting agreement with
the principals of ALST, which expired at the end of the second quarter of 1995.
Additionally, the Company incurred comparably higher project-related expenses in
both periods, including higher personnel-related charges.
Selling, general and administrative expenses were flat in the second quarter of
1995 compared to the same quarter of 1994. For the first six months of 1995,
selling, general and administrative expenses increased $480,000, or 9%, over the
first six months of 1994. A charge of $200,000 recorded in the first quarter of
1995 and incurred for a proposed business combination transaction accounts for
42% of this increase. The remainder was due to higher legal fees incurred in
relation to non-patent related litigation and to higher marketing expenses
mainly due to international expansion.
Liquidity and Capital Resources
The Company had cash and cash equivalents of $2,016,000 at July 2, 1995 of which
$100,000 was restricted. In addition, the Company currently has a $2.75 million
line of credit facility with its bank. The facility includes a sub-line for
letters of credit of $750,000. Other than for the letter of credit issued in the
amount of $629,000, there were no other borrowings outstanding under the line of
credit. Borrowings under the line are secured by the Company's accounts
receivable and inventories. The credit facility expires on June 30, 1996.
10
<PAGE>
Net cash used in operating activities was $1,381,000 for the first six months of
1995 compared to cash provided by operating activities of $110,000 for the first
six months of 1994. The decrease in cash provided by operating activities is the
result of the increase in the net loss incurred and the higher investment in
inventories, partially offset by an increase in accounts payable and accrued
expenses.
Net cash used in investing activities was $524,000 and $521,000 in the first six
months of 1995 and 1994, respectively.
Net cash used in financing activities was $222,000 and $317,000 in the first six
months of 1995 and 1994, respectively. The reduction was due primarily to lower
principal payments on the Company's outstanding debt.
Management anticipates capital expenditures of approximately $300,000 in 1995,
of which $255,000 was spent in the first six months. The capital expenditures
are mainly for manufacturing and research and development needs and for sales
demonstration lasers. The Company is not contractually committed to spend the
balance of its estimated capital expenditures. Investment in patents (primarily
litigation costs) is anticipated to be approximately $400,000 in 1995, of which
$119,000 was incurred in the first six months. Management believes that its
current cash position, cash provided by operations as affected by the reduction
in force and associated expense reductions, and other financing alternatives
will be sufficient for these expenditures.
In addition to the actions taken at the end of the second quarter of 1995 to
reduce cash expenditure levels, the Company is negotiating with certain outside
legal counsel terms relating to a significant portion of legal costs that have
been and will be incurred relating to several outstanding lawsuits. The terms
will defer payment of those costs through notes payable, which will be payable
out of, and secured by, any damage awards from the Laser Industries litigation
and/or the litigation with C.R. Bard.
Management believes that inflation has not had a material effect on operations.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
For information regarding certain pending lawsuits, reference is made to the
Company's Form 10-K, Item 3, for the fiscal year ended January 1, 1995, and to
the Company's Form 10-Q, Item 1, for the quarter ended April 2, 1995, as filed
with the Securities and Exchange Commission, which are incorporated herein by
reference. With respect to the action for patent infringement brought by the
Company against Sharplan Lasers, Inc. and Laser Industries Ltd. (collectively,
"Sharplan") in the United States District Court for the Eastern District of
Pennsylvania (the "Eastern District"), the Company will be submitting its
11
<PAGE>
expert reports on damages on or about September 1, 1995. Trial is targeted for
January 1996.
On July 3, 1995, Sharplan brought suit against the Company in the Eastern
District. Sharplan has alleged that the Company fraudulently withheld
information responsive to a request made by Sharplan for document production in
the discovery phase for the liability trial for patent infringement held in
March 1993. Sharplan has alleged that it has only recently uncovered the
information, which it believes was material to the validity of the Company's
Contact Laser patents. Sharplan has asked the court to set aside the liability
judgment resulting from the March 1993 trial and to declare the Company's
Contact Laser patents invalid and unenforceable, or in the alternative, to grant
Sharplan a new liability trial.
The Company denies Sharplan's allegations, noting that the Company provided all
information that was responsive to the request at issue. The Company has also
stated that the information allegedly withheld is not material, in any case, to
the legal issue now being raised. The Company will resist the suit vigorously.
With regard to the action in the Eastern District against Heraeus LaserSonics,
Inc. ("Heraeus") for breach of its Supply Agreement with the Company and other
claims, the court has, with the consent of the parties, dismissed this
litigation without prejudice, and the Company and Heraeus continue in good faith
to negotiate the terms of a resolution of their dispute.
Discovery is proceeding with regard to the action for patent infringement filed
against the Company by Trimedyne in the United States District Court for the
Central District of California. In response to a motion brought by the Company,
the court has bifurcated the liability portion of the case from the damages
portion.
ITEM 4. Submission of Matters to a Vote of Security Holders
a. The Company's 1995 Annual Meeting of Stockholders was held on May
25, 1995.
b. Not applicable
c. At the May 25, 1995 Annual Meeting of Stockholders, the following
two proposals were voted upon and the corresponding votes cast
were:
i) Election of Directors:
12
<PAGE>
<TABLE>
<CAPTION>
Number of Votes
-------------------------------------------------------
Withhold Broker
Nominee For Authority Non Votes
------- --- --------- ---------
<S> <C> <C> <C>
James R. Appleby, Jr. 8,118,809 177,420 1,552,938
Sheldon M. Bonovitz 8,118,809 177,420 1,552,938
Richard J. DePiano 8,118,909 177,320 1,552,938
Jay L. Federman 8,118,559 177,670 1,552,938
Terry A. Fuller 8,118,759 177,470 1,552,938
John L. Long, Jr. 8,118,659 177,570 1,552,938
Vincenzo Morelli 8,118,959 177,270 1,552,938
</TABLE>
On the basis of the above vote, James R. Appleby, Jr., Sheldon M.
Bonovitz, Richard J. DePiano, Jay L. Federman, Terry A. Fuller,
John L. Long, Jr. and Vincenzo Morelli were elected as directors
of the Company.
As noted in a mailing to stockholders dated May 19, 1995, John L.
Long, Jr. gave notification of his intent to resign from the
Board of Directors, if elected. Mr. Long's resignation became
effective June 1, 1995. His seat on the Board has not been
replaced.
ii) Ratification of the appointment of Arthur Andersen LLP as
independent accountants of the Company for the fiscal year ending
December 31, 1995; 8,183,996 votes were cast in favor of such
resolution, 76,382 votes were cast against such resolution and
35,851 votes abstained from voting on such resolution. On the
basis of the above vote, the appointment of Arthur Andersen LLP
was ratified.
d. Not applicable
ITEM 5. OTHER INFORMATION
On July 25, 1995, Richard J. DePiano was elected Chairman of the
Board of Directors of the Company replacing Sheldon M. Bonovitz,
who resigned from the Chair, but continues as a director and
member of the Executive and Compensation Committees of the Board.
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits: Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Disclosure
b. Reports on 8-K: none
13
<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.
SURGICAL LASER TECHNOLOGIES, INC.
Date: August 15, 1995 By /s/ Michael R. Stewart
-------------------------
Michael R. Stewart
Vice President, Controller and
Chief Financial Officer
Signing on behalf of the
registrant and as principal
financial officer
14
<PAGE>
EXHIBIT 11
SURGICAL LASER TECHNOLOGIES, INC.
AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE (UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
For the Quarter Ended: For the Six Months Ended:
---------------------- -------------------------
Jul. 2, Jul. 3, Jul. 2, Jul. 3,
1995 1994 1995 1994
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Primary Earnings (Loss) Per
Common Share:
Net income (loss) ($1,684) $950 ($2,945) $695
-------- -------- ------- -------
Weighted average number of shares
of Common Stock outstanding during
the period 9,850 9,110 9,848 9,089
Additional shares assuming excercise
of stock options and warrants
utilizing the treasury stock method - 150 - 101
-------- -------- ------- -------
Weighted average Common Stock and Common
Stock equivalents outstanding 9,850 9,260 9,848 9,190
-------- -------- ------- -------
Primary earnings (loss) per share ($0.17) $0.10 ($0.30) $0.08
======== ======== ======= =======
Fully Diluted Earnings (Loss) Per
Common Share:
Net income (loss) ($1,684) $987 ($2,944) $770
-------- -------- ------- -------
Weighted average number of shares
of Common Stock outstanding during
the period 9,850 9,110 9,848 9,089
Additional shares assuming excercise
of stock options and warrants
utilizing the treasury stock method - 150 - 101
Additional shares assuming conversion
of convertible subordinated notes - 441 - 441
-------- -------- ------- -------
Weighted average Common Stock and Common
Stock equivalents outstanding 9,850 9,701 9,848 9,631
-------- -------- ------- -------
Fully diluted earnings (loss) per share ($0.17) $0.10 ($0.30) $0.08
======== ======== ======= =======
</TABLE>
-15-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
SURGICAL LASER TECHNOLOGIES, INC. AND SUBSIDIARIES
FINANCIAL DATA SCHEDULE (UNAUDITED)
(In thousands, except per share data)
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUL-02-1995
<CASH> 2,016
<SECURITIES> 0
<RECEIVABLES> 3,770
<ALLOWANCES> (118)
<INVENTORY> 5,390
<CURRENT-ASSETS> 11,488
<PP&E> 14,464
<DEPRECIATION> (5,900)
<TOTAL-ASSETS> 23,903
<CURRENT-LIABILITIES> 4,590
<BONDS> 0
<COMMON> 99
0
0
<OTHER-SE> 12,960
<TOTAL-LIABILITY-AND-EQUITY> 23,903
<SALES> 7,973
<TOTAL-REVENUES> 7,973
<CGS> 3,306
<TOTAL-COSTS> 0
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