<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): July 30, 1997
NEUROMEDICAL SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-26984 13-3526980
(State or other (Commission File No.) (I.R.S. Employer
jurisdiction Identification No.)
of incorporation)
Two Executive Boulevard, Suite 306 10901-4164
Suffern, New York (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (914) 368-3600
<PAGE>
ITEM 5.
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NEUROMEDICAL SYSTEMS, INC.
1997 SECOND QUARTER AND SIX MONTHS FINANCIAL RESULTS
Neuromedical Systems, Inc. today announced second quarter and six
month financial results for the period ended June 30, 1997. The Company also
announced that it received approval from the United States Food and Drug
Administration (FDA) of a Pre-Market Approval (PMA) Supplement covering the use
of its second generation PAPNET(R) Review Station, Review II. In addition, the
Company announced that it was establishing a Pathology Advisory Board consisting
of leading pathologists to advise the Company on medical communications, product
development and clinical trials, and that it had formed a dedicated Laboratory
Support Group to better serve its laboratory customers.
Revenues for the second quarter were $2,230,000, an increase of 119%
from $1,017,000 reported in the second quarter of 1996. During the second
quarter of 1997, 62% of the Company's revenue was derived from the United
States, with the balance coming from Western Europe, Australia and the greater
China market (including Hong Kong, the Peoples Republic of China and Taiwan).
Net loss for the quarter was $8,769,000, or $.28 per share, compared to a net
loss of $7,378,000, or $.25 per share, for the second quarter of 1996.
Revenues for the six months period ended June 30, 1997 were
$3,881,000, an increase of 133% from $1,668,000 reported for the first six
months of 1996. The net loss for the six months of 1997 was $18,494,000, or $.60
per share, compared to a net loss of $14,225,000, or $.49 per share, for the
same period of 1996.
During the second quarter, the Company received approval by the Food
and Drug Administration (FDA) for a PMA Supplement covering the use of a new MS
Windows(R)-based Review Station for use with the PAPNET Testing System. Review
II uses CD/ROM technology for faster retrieval of PAPNET images and has an on-
board database for tracking PAPNET reviewed cases. Review II also has an
interface with a motorized stage, allowing the cytotechnologist to cut down the
amount of time it now takes to locate the suspicious cells detected by the
PAPNET Testing System on the Pap smear slide. The new Review Station, being a
Windows-based system, offers connection to existing laboratory systems. Review
II is available for immediate delivery to customers.
The Company also announced that it is establishing an advisory board
of leading pathologists to advise the Company on medical communications, product
development and clinical trials. The role of the Pathology Advisory Board will
be to focus on building advocacy within the professional communities and to
advise the Company on product development and clinical trials.
In addition, NSI has formed a Laboratory Support Group to focus and
improve customer support and service. The Laboratory Support Group includes
cytotechnologists to work with the laboratory professionals directly performing
the PAPNET test, and engineers to help laboratories integrate PAPNET testing
into their routine flow of work.
-2-
<PAGE>
The Company also announced that it intends to seek approval of the
PAPNET Testing System as an integrated primary screening device in the United
States. In certain overseas markets, the PAPNET Testing System has already been
used effectively on a commercial basis as an integrated primary screener, and
several peer-reviewed scientific articles have supported use of the PAPNET
system in that mode.
During the second quarter, NSI received smears directly from 138
laboratories in the United States. This represents an increase of 10 direct
laboratory customers over the first quarter of 1997. (In addition, there are
approximately 120 laboratories that can refer smears for PAPNET testing if
requested by their customers.) NSI also continued to expand its international
laboratory customer base. During the quarter, the Company received smears for
PAPNET(R) testing from 48 laboratories in Europe and 11 laboratories in
Australia. In Asia, the Company continued to expand its business in Hong Kong
and mainland China through the acquisition in June 1997 of New System
International, Ltd. During the quarter, the Company received slide processing
revenue from 47 laboratories and hospitals in Hong Kong, Taiwan and mainland
China.
Safe Harbor Statement
---------------------
Except for the historical information contained herein, the matters
discussed in this press release may include forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934 which reflect
the Company's current views with respect to further events and financial
performance. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or those anticipated. For information regarding these risks
and uncertainties, see the Cautionary Statements set forth in the Company's
Securities and Exchange Commission fillings, including its Annual Report on Form
10-K for the year ended 1996 and Exhibit 99.1 attached thereto. The words
"believe", "expect", "anticipate", and similar expressions identify forward-
looking statements, which speak only as of their dates. The Company undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
###
-3-
<PAGE>
NEUROMEDICAL SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
-------------- ------------------
1997 1996
-------------- ------------------
(unaudited)
ASSETS
Cash and marketable
securities $ 62,132,000 $ 83,391,000
Other current assets 3,386,000 3,185,000
Property, plant and
equipment, net 16,792,000 16,388,000
Other assets 2,319,000 1,240,000
------------ ------------
Total Assets $ 84,629,000 $104,204,000
============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities $ 9,886,000 $ 9,510,000
Other liabilities 9,612,000 11,166,000
Stockholders' equity 65,131,000 83,528,000
------------ ------------
Total Liabilities and
Stockholders' Equity $ 84,629,000 $104,204,000
============ ============
NEUROMEDICAL SYSTEMS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------------- ----------------------------------
1997 1996 1997 1996
-------------- ------------------ -------------- ------------------
<S> <C> <C> <C> <C>
REVENUES $ 2,230,000 $ 1,017,000 $ 3,881,000 $ 1,668,000
------------ ------------ ------------ ------------
COSTS AND EXPENSES
Cost of sales 2,659,000 1,933,000 5,252,000 3,624,000
Marketing 4,833,000 3,856,000 10,311,000 7,373,000
Research and development 2,041,000 1,529,000 3,989,000 3,079,000
General and administrative 2,058,000 1,815,000 3,998,000 3,556,000
------------ ------------ ------------ ------------
Total Costs and Expenses 11,591,000 9,133,000 23,550,000 17,632,000
------------ ------------ ------------ ------------
Other income (expense),
net 592,000 738,000 1,175,000 1,739,000
------------ ------------ ------------ ------------
NET LOSS $ (8,769,000) $ (7,378,000) $(18,494,000) $(14,225,000)
============ ============ ============ ============
NET LOSS PER SHARE $ (0.28) $ (0.25) $ (0.60) $ (0.49)
============ ============ ============ ============
WEIGHTED AVERAGE
SHARES OUTSTANDING 30,916,000 29,089,000 30,871,000 28,949,000
============ ============ ============ ============
</TABLE>
<PAGE>
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 hereunto duly authorized in Suffern, New York on this 30th` day of
July, 1997.
NEUROMEDICAL SYSTEMS, INC.
By: /s/ David Duncan, Jr.
---------------------
David Duncan, Jr.
Vice President, Finance and
Administration and
Chief Financial Officer
-5-
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<PAGE>
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<PERIOD-END> JUN-30-1997
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