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): MAY 1, 1997
NEUROMEDICAL SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 0-26984 13-3526980
(State or other (Commission File (I.R.S. Employer
jurisdiction No.) Identification No.)
of incorporation
Two Executive Boulevard, Suite 306
Suffern, New York 10901-4164
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 368-3600
ITEM 5.
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NEUROMEDICAL SYSTEMS, INC.
FIRST QUARTER 1997 FINANCIAL RESULTS
On April 30, 1997 Neuromedical Systems, Inc. ("NSI" or the
"Company") announced results for its first quarter ended March
31, 1997.
Revenues for the first quarter were $1,651,000, an increase
of 154% from $651,000 for the first quarter of 1996. Of such
revenues, $1,607,000 represented per slide charges for the
screening of Pap smears, and the balance of such revenues
represented rental payments on PAPNET[REGISTERED TRADEMARK]
Review Stations. The revenue increase over the first quarter of
1996 was due primarily to a significant increase in both unit
volume and unit pricing.
The Company reported a net loss for the first quarter of
$9,725,000, or $.32 per share, compared to a net loss of
$6,847,000 or $.24 per share for the first quarter of 1996. The
increased net loss during the first quarter of 1997, compared to
the first quarter of 1996, was due primarily to an increase in
marketing and sales expenses in the United States and Australia
and to an increase in the cost of sales, primarily associated
with increased royalty expenses and the expansion of slide
processing capacity in the United States in anticipation of
increased future demand for PAPNET[REGISTERED TRADEMARK] testing.
In addition, the Company's research and development and general
and administrative expenses also increased, although at a slower
rate than marketing and cost of sales expenses.
During the first quarter the Company promoted certain of its
sales personnel who were regionally successful in translating
patient demand into slide revenue in an effort to replicate their
success nationwide.
During the first quarter, the Company trained a number of
new laboratories, adding PAPNET[REGISTERED TRADEMARK]
availability to several regions which were previously
underserved. PAPNET[REGISTERED TRADEMARK] testing is now
available by physician request through more than 230 local,
regional, and national laboratories throughout the United States.
In February, the Company announced that Medical Mutual of
Ohio (formally Blue Cross Blue Shield of Northern Ohio), one of
the largest health care insurers in the state of Ohio, will cover
the cost of PAPNET[REGISTERED TRADEMARK] testing for its
enrollees. Medical Mutual of Ohio also recommended to its
clinicians and laboratories that all negative Pap smears covered
by its benefit plans be examined using PAPNET[REGISTERED
TRADEMARK] testing.
The Company added to its management team during the quarter
with the appointment of Dr. Howard M. Solomon, as Vice President
of Medical Operations. Prior to joining NSI, Dr. Solomon was
Vice President of Clinical Affairs of London International U.S.
Holdings, Inc., a medical device manufacturer.
NSI also continued to expand its international laboratory
distribution. During the first quarter of 1997, the Company
received smears for PAPNET[REGISTERED TRADEMARK] testing from 44
laboratories in Europe and South Africa and 11 laboratories in
Australia. In Asia, the Company continued to expand its business
in Hong Kong, Taiwan and mainland China. During the quarter, the
Company received slide processing revenue from 42 laboratories
and hospitals in these countries.
Safe Harbor Statement
---------------------
Except for the historical information contained herein, the
matters discussed in this Form 8-K are forward-looking statements
that involve risks and uncertainties. The forward-looking
statements in this release are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995. Actual results may differ materially due to a variety of
factors, including without limitation, uncertain demand and
acceptance of new and existing products (including the
PAPNET[REGISTERED TRADEMARK] Testing System), the Company's
continuing negative operating cash flow, reliance on a single
product, competition, dependence on key personnel, the impact on
the Company of territorial license agreements, dependence on
patents and proprietary technology, government regulation,
limited marketing and sales history, the impact of third-party
reimbursement decisions, the risk of litigation and other risks
detailed in the Company's Securities and Exchange Commission
filings, including its Annual Report on Form 10-K for the year
ended 1996 and Exhibit 99.1 filed therewith.
<TABLE>
<CAPTION>
NEUROMEDICAL SYSTEMS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 31, DECEMBER 31,
------------- ------------------
1997 1996
------------- ------------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and marketable
securities $ 72,021,000 $ 83,391,000
Other current assets 3,365,000 3,185,000
Property, plant and
equipment, net 17,102,000 16,388,000
Other assets 1,191,000 1,240,000
------------- -------------
Total Assets $ 93,679,000 $ 104,204,000
============= ==============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities $ 10,043,000 $ 9,510,000
Other liabilities 9,725,000 11,166,000
Stockholders' equity 73,911,000 83,528,000
------------- --------------
Total Liabilities and
Stockholders' Equity $ 93,679,000 $ 104,204,000
============= ==============
</TABLE>
<TABLE>
<CAPTION>
NEUROMEDICAL SYSTEMS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
-------------------------------
1997 1996
------------- ---------------
<S> <C> <C>
REVENUES $ 1,651,000 $ 651,000
------------- --------------
COSTS AND EXPENSES
Cost of Sales 2,593,000 1,691,000
Research and development 1,948,000 1,550,000
Marketing 5,478,000 3,517,000
General and administrative 1,940,000 1,741,000
------------- --------------
Total Costs and Expenses 11,959,000 8,499,000
------------- --------------
Other income (expense), net 583,000 1,001,000
------------- --------------
NET LOSS $ (9,725,000) $ (6,847,000)
============= ==============
NET LOSS PER SHARE $ (0.32) $ (0.24)
============= ==============
WEIGHTED AVERAGE
SHARES OUTSTANDING 30,825,000 28,808,000
============= ==============
</TABLE>
The filing of this Form 8-K by the Company is made pursuant to
the Company's contractual obligations under Section 6A of the
Underwriting Agreement (U.S. Version) among the Company and the
underwriters of the Company's initial public offering of common
stock, par value $.0001 per share, dated December 7, 1995,
previously filed with the Commission as an Exhibit to the
Company's Registration Statement on Form S-1, dated as of even
date therewith.
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 1st of May, 1997.
NEUROMEDICAL SYSTEMS, INC.
By: /s/ David Duncan, Jr.
---------------------
David Duncan, Jr.
Vice President, Finance and
Administration and Chief Financial
Officer
EXHIBIT INDEX
Exhibit Number Description of Document
- -------------- -----------------------
1.3 Form of Underwriting Agreement*
23.1 Consent of Ernst & Young LLP,
Independent Auditors**
27.1 Financial Data Schedule***
* Previously filed with the Commission in connection with
the Company's Registration Statement on Form S-1, dated
December 7, 1995, Registration No 33-97722.
** Previously filed with the Commission in connection with
the Company's Registration Statement Post-Effective
Amendment No. 2 to Form S-1 on Form S-3, dated April 21,
1997, Registration No. 33-97722, and incorporated herein by
reference with respect to information included herein from
the audited financial statements of the Company for the year
ended December 31, 1996.
*** Filed herewith.
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