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UNITED STATES OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION OMB NUMBER: 3235-0058
Washington, D.C. 20549 Expires: May 31, 1997
Estimated average burden
FORM 12b-25 hours per response....2.50
SEC File Number 1-11150
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CUSIP Number 917272 304
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NOTIFICATION OF LATE FILING
(Check One):
[X] Form 10-K [ ] Form 11-K [ ] Form 20-F [ ] Form 10-Q SB [ ] Form N-SAR
For Period Ended: March 31, 1997
--------------------------------------------------------
[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended:
-----------------------------------------
Read Instruction (on back page) Before Preparing Form. Please Print or Type.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
If the notification relates to a portion of the filing checked above,
identify the Item(s) to which the notification relates:
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PART I -- REGISTRANT INFORMATION
UROHEALTH SYSTEMS, INC.
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Full Name of Registrant
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Former Name if Applicable
5 Civic Plaza, Suite 100
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Address of Principal Executive Office (Street and Number)
Newport Beach, CA 92660
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City, State and Zip Code
PART II--RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following
should be completed. (Check box if appropriate)
[X] (a) The reasons described in reasonable detail in Part
III of this form could not be eliminated without
unreasonable effort or expense;
[X] (b) The subject annual report, semi-annual report,
transition report on Form 10-K, Form 20-F, Form
11-K, Form N-SAR, or portion thereof, will be filed
on or before the fifteenth calendar day following
the prescribed due date; or the subject quarterly
report or transition report on Form 10-Q, or portion
thereof will be filed on or before the fifth
calendar day following the prescribed due date; and
[X] (c) The accountant's statement or other exhibit required
by Rule 12b-25(c) has been attached if applicable.
PART III--NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 11-K, 10-Q, N-SAR
or the transition report portion thereof could not be filed within the
prescribed time period.
The Company has been in discussions with its auditors during the year-end audit
process with respect to issues relating to deferral of revenue recognition on
distributor initial stocking orders and introductory shipments of a new
product. The resolution of these issues has delayed the completion of the
Annual Report on Form 10-K for the year ended March 31, 1997.
(ATTACH EXTRA SHEETS IF NEEDED)
SEC 1344 (11/91)
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PART IV--OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to
this notification
<TABLE>
<S> <C> <C>
Michael L. Hawkins 714 668-5858
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(Name) (Area Code) (Telephone Number)
</TABLE>
(2) Have all other periodic reports required under Section 13 or
15(d) of the Securities Exchange Act of 1934 or Section 30 of
the Investment Company Act of 1940 during the preceding 12
months or for such shorter period that the registrant was
required to file such report(s) been filed? If answer is no,
identify report(s).
[X] Yes [ ] No
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(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last fiscal
year will be reflected by the earnings statements to be
included in the subject report or portion thereof?
[X] Yes [ ] No
If so, attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the
reasons why a reasonable estimate of the results cannot be
made. See Attachment B.
UROHEALTH SYSTEMS, INC.
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(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date June 30, 1997 By Charles A. Laverty
--------------------------- ----------------------------------
Charles A. Laverty,
Chief Executive Officer
INSTRUCTION: The form may be signed by an executive officer of the registrant
or by any other duly authorized representative. The name and title of the
person signing the form shall be typed or printed beneath the signature. If
the statement is signed on behalf of the registrant by an authorized
representative (other than an executive officer), evidence of the
representative's authority to sign on behalf of the registrant shall be filed
with the form.
ATTENTION
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Intentional misstatements or omissions of fact constitute
Federal Criminal Violations (See 18 U.S.C. 1001)
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GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 (17 CFR 240,12b-25) of the General
Rules and Regulations under the Securities Exchange Act of 1934.
2. One signed original and four conformed copies of this form and amendments
thereto must be completed and filed with the Securities and Exchange
Commission, Washington, D.C. 20549, in accordance with Rule 0-3 of the
General Rules and Regulations under the Act. The information contained in
or filed with the form will be made a matter of public record in the
Commission files.
3. A manually signed copy of the form and amendments thereto shall be filed
with each national securities exchange on which any class of securities
of the registrant is registered.
4. Amendments to the notifications must also be filed on form 12b-25 but need
not restate information that has been correctly furnished. The form shall be
clearly identified as an amended notification.
5. Electronic Filers. This form shall not be used by electronic filers unable
to timely file a report solely due to electronic difficulties. Filers unable
to submit a report within the time period prescribed due to difficulties in
electronic filing should comply with either Rule 201 or Rule 202 of
Regulation S-T or apply for an adjustment in filing date pursuant to Rule
13(b) of Regulation S-T.
<PAGE> 3
ATTACHMENT A TO FORM 12b-25
OF
UROHEALTH SYSTEMS, INC.
JUNE 30, 1997
[LETTERHEAD OF ERNST & YOUNG LLP]
June 30, 1997
Mr. Charles A. Laverty
Chief Executive Officer
Urohealth Systems, Inc.
5 Civic Plaza, Suite 100
Newport Beach, CA 92660
Dear Mr. Laverty:
In accordance with the notification to the Securities and Exchange Commission
on Form 12b-25 of Urohealth Systems, Inc.'s inability to timely file its annual
report on Form 10-K for the year ended March 31, 1997, the factors described in
the succeeding paragraph make impractical submission of our report as of a date
which will permit timely filing of your fiscal 1997 annual report to the
Commission.
Our audit has identified issues that require adjustment of the Company's
unaudited consolidated financial statements for the year ended March 31, 1997
and restatement of the unaudited interim consolidated financial statements for
each of the first three quarters of fiscal 1997. Such matters include: deferral
of revenue recognition for introductory shipments of the Company's new EndoView
video endoscopy system made in the first and second quarters of fiscal 1997;
deferral of revenue recognition on initial stocking orders made to distributors
in the third and fourth quarters of fiscal 1997; and reduction of the carrying
value of certain inventories at each quarter-end of fiscal 1997. As a result of
the time required to identify and quantify these as well as other adjustments,
all necessary auditing procedures have not been completed.
You are authorized to attach a copy of this letter as an exhibit to Form 12b-25
to the Securities and Exchange Commission.
Very truly yours,
/s/ Ernst & Young LLP
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ATTACHMENT B TO FORM 12b-25
OF
UROHEALTH SYSTEMS, INC.
JUNE 30, 1997
RESPONSE TO ITEM (3) OF PART IV:
Attached is a press release issued by the Registrant with respect to its
financial results for the year-ended March 31, 1997:
For: UROHEALTH Systems, Inc.
Contact: Charles A. Laverty
Chairman & Chief Executive Officer
UROHEALTH Systems, Inc.
(714) 668-5858
Investor Relations: Betsy Brod/Karen Kruza
Press: Richard Dukas
Morgen-Walke Associates
(212) 850-5600
FOR IMMEDIATE RELEASE
- ---------------------
UROHEALTH SYSTEMS, INC. REPORTS YEAR END RESULTS
NEWPORT BEACH, CA, JULY 1, 1997 - UROHEALTH SYSTEMS, INC. (NASDAQ:
UROH) today announced financial results for the twelve months ended March 31,
1997 and expected revenues for the first quarter of fiscal 1998.
Revenues for the fiscal year increased 60.2% to $90.7 million from
$56.6 million in the prior year. The Company's results reflect several
acquisition, restructuring, financing and inventory charges totaling $73.7
million as compared to similar charges of $13.2 million in the prior year.
Inclusive of these charges, the Company reported a net loss attributable to
common stockholders of $89.2 million, or $4.59 per share, as compared to a net
loss of $30.2 million, or $2.03 per share a year ago.
As previously reported, results for fiscal 1997 were lower than expected
due to a change in the timing of the recognition of revenues associated with
initial stocking orders to distributors for products shipped by the Company's
surgical division and new video endoscopy products shipped during fiscal 1997.
As a result, the Company will defer recognition of revenue aggregating $900,000;
$1.3 million; $2.7 million; and $11.7 million related to net shipments in the
first through fourth quarters of fiscal 1997, respectively. The Company will
recognize revenue for re-stocking distributor orders on an accrual basis going
forward and expects to recognize the $15.2 million for initial stocking orders
in subsequent periods of the current fiscal year. Additionally, UROHEALTH, in
agreement with its auditors, will not recognize $1.4 million in EndoView sales
shipped in 1997, but will recognize these revenues as payment is made by the
hospitals for the product. The first three quarters of fiscal 1997 have been
restated to show the effects of these adjustments.
The Company stated that based on information to date, it currently
expects to report revenues in the range of $24 million to $26 million for the
first quarter ending June 30, 1997. This revenue level is lower than previously
anticipated due to a slower than expected order flow in the surgical division
from recently signed group purchasing organization agreements.
- more-
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Page 2
"While our performance for the year was complicated by one time charges
and revenue timing issues, we remain confident in the long-term prospects for
UROHEALTH. Through seven acquisitions and a number of research and development
projects, some of which will be commercially available later this year, we have
strengthened each of our business platforms," commented Chairman, President
and CEO Charles Laverty.
"The Microsurge transaction was an important strategic fit for the
Company. The extensive line of reposable products for minimally invasive
surgery that we acquired, combined with the existing products in our surgical
division, have allowed us to market to large group purchasing organizations and
to offer customers additional options such as pre-packaged custom and standard
surgical kits.
"In addition to the products acquired from Microsurge, the Company
obtained a product supply agreement with Tenet as part of the transaction. This
contract, combined with the agreements with Voluntary Hospitals of America,
Premier Inc. and our recently announced product arrangement with HealthSouth
Corporation, gives UROHEALTH purchasing agreements with four of the six major
group purchasing organizations.
"Over the past two years, we have created a strong business foundation
for UROHEALTH and today are solidly positioned with both products and
customers, to take advantage of the changing demographics in healthcare that
have driven our business."
UROHEALTH Systems, Inc. is a designer, manufacturer and marketer of
disease specific urological, gynecological and general surgery medical products
for the health care market.
This press release contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. These include
statements regarding the Company's growth and expansion plans and expected
results for the first quarter of fiscal 1998. Such statements are based on
management's current expectations and are subject to a number of uncertainties
and risks that could cause actual results to differ materially from those
described in the forward-looking statements. Factors that may cause such a
difference include, but are not limited to, those described in the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 1996 and in the
Company's S-3 effective November 13, 1996.
(tables to follow)
<PAGE> 6
UROHEALTH SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
12 Months 12 Months
Ended Ended
March 31, March 31,
1997 1996
--------- ---------
<S> <C> <C>
Net sales $ 90,695 $ 56,630
Cost of sales 41,083 19,837
--------- --------
Gross profit 49,612 36,793
Operating expenses:
Research and development 4,997 3,881
Selling, general and administrative 57,691 47,977
Merger and acquisition costs 3,600 5,083
Write-off of purchased research
and development 47,232 --
Restructuring charge 12,000 5,456
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Total operating expenses 125,520 62,397
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Income (loss) from operations (75,908) (25,604)
Other income (expense):
Minority interest consisting of accrued
dividends on preferred stock of subsidiary (25) (70)
Interest income 339 170
Interest expense (8,143) (1,165)
Other -- (110)
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Income (loss) before taxes and
extraordinary item (83,737) (26,779)
Income tax expense (benefit) (227) 748
--------- --------
Income (loss) before extraordinary item (83,510) (27,527)
Extraordinary item 2,973 --
--------- --------
Net income (loss) $ (86,483) $(27,527)
========= ========
Income (loss) per share:
Net income (loss) $ (86,483) $(27,527)
Inducement and dividends and accretion
on redeemable convertible stock 2,694 2,672
--------- --------
Net loss attributable to common stockholders $ (89,177) $(30,199)
========= ========
Net income (loss) per share $ (4.59) $ (2.03)
========= ========
Primary weighted average number of common shares
used to compute income (loss) per share 19,419 14,881
========= ========
</TABLE>
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UROHEALTH SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, dollars in thousands)
<TABLE>
<CAPTION>
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
ASSETS
Current assets $ 49,884 $20,693
Property, plant and equipment, net 26,339 9,084
Other assets 61,409 3,578
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TOTAL ASSETS $137,632 $33,355
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 48,643 $23,034
Long term liabilities 103,500 14,899
Stockholders' equity (14,511) (4,578)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $137,632 $33,355
======== =======
</TABLE>
<PAGE> 8
UROHEALTH SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
3 Months Ended 3 Months Ended 3 Months Ended
June 30, 1996 September 30, 1996 December 31, 1996
----------------- ------------------- ------------------
Original Original Original
Reported Restated Reported Restated Reported Restated
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net sales $16,892 $16,027 $ 21,388 $ 20,064 $29,684 $26,995
Cost of sales 5,257 5,249 7,025 6,958 10,911 10,788
----------------- ------------------- -----------------
Gross profit 11,635 10,778 14,363 13,106 18,773 16,207
Operating expenses:
Research and development 343 343 611 611 1,195 1,195
Selling, general and administrative 9,106 9,106 10,689 10,689 12,742 12,742
Merger and acquisition costs - 0 - 0 - -
Write-off of purchased research and
development - - 25,500 25,500 - -
Restructuring charge - - 4,000 4,000 - -
----------------- ------------------- -----------------
Total operating expenses 9,449 9,449 40,800 40,800 13,937 13,937
----------------- ------------------- -----------------
Income (loss) from operations 2,186 1,329 (26,437) (27,694) 4,836 2,270
Other income (expense):
Minority interest consisting of
accrued dividends on preferred
stock of subsidiary (18) (18) (18) (18) (18) (18)
Interest income 51 51 96 96 93 93
Interest expense (961) (961) (1,724) (1,747) (2,179) (2,226)
Other - - - - - -
----------------- ------------------- -----------------
Net income (loss) before taxes and
extraordinary item 1,258 401 (28,083) (29,363) 2,732 119
Income tax expense (benefit) - - (377) (377) - -
----------------- ------------------- -----------------
Net income (loss) before
extraordinary item 1,258 401 (27,706) (28,986) 2,732 119
Extraordinary item 2,973 2,973 - - - -
----------------- ------------------- -----------------
Net income (loss) $(1,715) $(2,572) $(27,706) $(28,986) $ 2,732 $ 119
================= =================== =================
Income (loss) per share:
Net income (loss) $(1,715) $(2,572) $(27,706) $(28,986) $ 2,732 $ 119
Inducement & dividends and
accretion on redeemable
convertible preferred stock 398 398 - 0 - 0
----------------- ------------------- -----------------
Net loss attributable to
common stockholders $(2,113) $(2,970) $(27,706) $(28,986) $ 2,732 $ 119
================= =================== =================
Net income (loss) per share $ (0.16) $ (0.22) $ (1.80) $ (1.88) $ 0.15 $ 0.01
================= =================== =================
Primary weighted average number of
common shares used to compute
income (loss) per share 13,442 13,442 15,430 15,430 18,782 18,782
================= =================== =================
</TABLE>
<PAGE> 9
UROHEALTH SYSTEMS, INC.
BALANCE SHEETS
(UNAUDITED DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
June 30, 1996 September 30, 1996 December 31, 1996
-------------------- -------------------- -------------------
Original Original Original
Reported Restated Reported Restated Reported Restated
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 3,603 $ 3,603 $ 1,511 $ 1,511 $ 2,272 $ 2,272
Short-term investments - - - - - -
Receivables, net of allowance for
doubtful accounts 11,113 10,248 17,006 15,682 24,958 22,269
Inventories 8,991 8,999 17,134 17,201 21,373 21,496
Prepaids and deposits 2,063 2,063 4,063 4,063 3,307 3,307
Income tax receivable - - 377 377 377 377
Deferred debt issuance costs - - - - - -
-------------------- -------------------- -------------------
Total current assets 25,770 24,913 40,091 38,834 52,287 49,721
Property and equipment, net 11,598 11,598 23,692 23,692 24,785 24,785
Patents and intangibles, net of
accumulated 4,581 4,581 4,490 4,490 6,264 6,264
Deposits and other assets 867 867 1,415 1,415 2,609 2,609
Deferred debt issue costs 4,940 4,940 5,854 5,854 5,727 5,727
Goodwill 7,240 7,240 42,266 42,266 42,081 42,081
-------------------- -------------------- -------------------
$ 54,996 54,139 $117,808 116,551 $133,753 131,187
-------------------- -------------------- -------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses 10,298 10,298 14,052 14,075 12,067 12,114
Compensation and employee benefits 645 645 2,141 2,141 3,026 3,026
Restructuring accrual 2,141 2,141 2,593 2,593 1,810 1,810
Revolving lines of credit - - 15,000 15,000 16,500 16,500
Current portion of notes payable
and capital 872 872 310 310 521 521
-------------------- -------------------- -------------------
Total current liabilities 13,956 13,956 34,096 34,119 33,924 33,971
Long-term liabilities:
Notes payable 65 65 6,023 6,023 6,000 6,000
Bank term loan - - 20,000 20,000 13,500 13,500
Capital leases 181 181 150 150 152 152
Deferred Compensation 28 28 28 28 29 29
Other liabilities 256 256 113 113 98 98
Restructuring, less current portion 797 797 1,853 1,853 1,684 1,684
Minority interest in consolidated
subsidiary 1,090 1,090 1,109 1,109 1,126 1,126
Convertible subordinated debentures 34,300 34,300 50,000 50,000 50,000 50,000
Common stockholders' equity:
Preferred stock, $0.001 par value
Authorized shares - 5,000,000
Issued and outstanding shares - - - - - - -
Common Stock, $0.001 par value
Authorized shares - 50,000,000
Issued and outstanding shares - 14 14 16 16 19 19
Warrants 5,217 5,217 5,217 5,217 5,217 5,217
Additional paid-in capital 65,367 65,367 93,177 93,177 113,204 113,204
Foreign currency adjustment (88) (88) (82) (82) (41) (41)
Deficit (66,187) (67,044) (93,892) (95,172) (91,159) (93,772)
-------------------- -------------------- -------------------
Total common stockholders' equity 4,323 3,466 4,436 3,156 27,240 24,627
-------------------- -------------------- -------------------
$ 54,996 54,139 $117,808 116,551 $133,753 131,187
==================== ==================== ===================
</TABLE>
