UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from to
Commission File Number 0-28566
HENLEY HEALTHCARE, INC.
(Exact name of small business issuer as specified in its
charter)
TEXAS 76-0335587
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
120 Industrial Boulevard, Sugar Land, Texas 77478
(Address of principal executive offices)
281-276-7000
(Issuer's telephone number)
Check whether the issuer (i) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (ii)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
As of November 12, 1997, Henley Healthcare, Inc. had 3,133,556 shares of
common stock outstanding.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE>
INCLUDED IN THIS REPORT ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION
21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ALTHOUGH THE COMPANY
BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE
REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS REFLECTED IN SUCH
FORWARD-LOOKING STATEMENTS WILL PROVE TO HAVE BEEN CORRECT. THE COMPANY'S ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THE FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS INCLUDING THOSE SET FORTH UNDER PART 1
ITEM 2 "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES."
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The information required hereunder is included in this report as set
forth in the "Index to Financial Statements."
INDEX TO FINANCIAL STATEMENTS
PAGE
Consolidated Balance Sheet 3
Consolidated Statements of Operations 4-5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7-9
<PAGE>
HENLEY HEALTHCARE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
September 30,
1997
------------
ASSETS
Current Assets:
Cash and cash equivalents .................................. $ 298,788
Accounts receivable, net of allowance for doubtful
accounts of $201,498 ..................................... 6,359,840
Inventory .................................................. 8,153,995
Prepaid expenses ........................................... 637,057
Other current assets ....................................... 126,923
------------
Total current assets ................................ 15,576,603
Property, plant and equipment, net of
accumulated depreciation of $487,821 ....................... 3,885,688
Goodwill and other intangibles, net of accumulated
amortization of $248,153 ................................... 4,134,945
Other assets ................................................. 216,411
------------
TOTAL ASSETS ........................................ $ 23,813,647
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Line of credit - bank ...................................... $ 6,027,641
Accounts payable ........................................... 2,192,143
Accrued expenses and other current liabilities ............. 994,982
Current maturities of long-term debt ....................... 326,367
------------
Total current liabilities ........................... 9,541,133
Interest payable ............................................. 477,167
Long-term debt, net of current maturities .................... 9,658,182
------------
Total liabilities .................................. 19,676,482
Stockholders' Equity:
Preferred stock - $.10 par value; authorized
2,500,000 shares; none issued and outstanding
Common stock - $.01 par value; authorized
20,000,000 shares; issued 3,372,556
shares at September 30, 1997 ............................ 33,725
Additional paid-in-capital ................................. 12,308,393
Accumulated deficit ........................................ (7,978,774)
------------
4,363,344
Treasury stock, at cost, 279,000 common shares ............. (226,179)
------------
Stockholders' equity ................................. 4,137,165
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .......... $ 23,813,647
============
See notes to consolidated financial statements.
3
<PAGE>
HENLEY HEALTHCARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended September 30, 1997 1996
----------- -----------
Net sales .................................... $ 5,443,304 $ 5,228,426
Cost of sales ................................ 2,616,294 2,341,731
----------- -----------
Gross profit ................................. 2,827,010 2,886,695
Operating expenses ........................... 2,474,087 2,334,088
----------- -----------
Income from operations ....................... 352,923 552,607
Interest expense ............................. (267,292) (234,899)
Other income (expense), net .................. (53,475) (16,624)
----------- -----------
Net income ................................... $ 32,156 $ 301,084
=========== ===========
Net income per common share .................. $ 0.01 $ 0.12
=========== ===========
Weighted average common shares outstanding ... 3,093,556 2,412,827
=========== ===========
See notes to consolidated financial statements.
4
<PAGE>
HENLEY HEALTHCARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine months ended September 30, 1997 1996
------------ -----------
Net sales ..................................... $ 15,854,961 $ 8,093,719
Cost of sales ................................. 7,186,107 3,755,479
------------ -----------
Gross profit .................................. 8,668,854 4,338,240
Operating expenses ............................ 7,484,964 4,413,794
------------ -----------
Income (loss) from operations ................. 1,183,890 (75,554)
Interest expense .............................. (774,304) (559,612)
Other income (expense), net ................... (130,553) (26,615)
------------ -----------
Net income (loss) ............................. $ 279,033 $ (661,781)
============ ===========
Net income (loss) per common share ............ $ 0.09 $ (0.36)
============ ===========
Weighted average common shares outstanding .... 2,955,184 1,823,288
============ ===========
See notes to consolidated financial statements.
5
<PAGE>
HENLEY HEALTHCARE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended September 30, 1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ........................................................................ $ 279,033 $ (661,781)
----------- -----------
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Depreciation and amortization expense ................................................. 435,789 169,675
Amortization of discount on notes payable ............................................. -- 151,667
Interest expense ...................................................................... 225,167 --
Bad debt expense ...................................................................... 1,041,628 916,054
Shares issued for public relations agreement .......................................... -- 8,000
Changes in operating assets and liabilities:
(Increase) in accounts receivable ................................................... (1,580,757) (2,268,589)
(Increase) decrease in inventory .................................................... (433,598) 1,302,013
(Increase) in prepaid expenses and other current assets ............................. (375,740) (180,769)
(Increase) in other assets .......................................................... (157,084) --
Decrease in accounts payable and accrued liabilities ................................ 558,826 411,555
----------- -----------
Total adjustments ............................................................ (285,769) 509,606
----------- -----------
Net cash used in operating activities ........................................ (6,736) (152,175)
----------- -----------
Cash flows from investing activities:
Acquisitions, net of cash acquired of $68,600 and $1,909, respectively ................... (3,689,641) (6,496,613)
Intangible asset expenditures ............................................................ (2,001) --
Capital expenditures ..................................................................... (148,446) (92,725)
----------- -----------
Net cash used in investing activities ......................................... (3,840,088) (6,589,338)
----------- -----------
Cash flows from financing activities:
Net proceeds from line of credit ......................................................... 3,840,570 2,796,493
Net proceeds from issuance of common stock ............................................... -- 1,926,525
Proceeds from long-term debt ............................................................. 1,430,000 2,508,998
Principal payments of long-term debt ..................................................... (1,632,850) (95,446)
----------- -----------
Net cash provided by financing activities ...................................... 3,637,720 7,136,570
----------- -----------
Net increase (decrease) in cash and cash equivalents ....................................... (209,104) 395,057
Cash and cash equivalents at beginning of period ........................................... 507,892 203,364
----------- -----------
Cash and cash equivalents at end of period ................................................. $ 298,788 $ 598,421
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest ................................................................................. $ 719,543 --
----------- -----------
</TABLE>
See notes to consolidated financial statements
6
<PAGE>
HENLEY HEALTHCARE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION:
The accompanying unaudited interim consolidated financial statements of
Henley Healthcare, Inc. and Subsidiaries (collectively, the "Company"),
have been prepared in accordance with generally accepted accounting
principles and the rules of the Securities and Exchange Commission (the
"SEC"), and should be read in conjunction with the audited consolidated
financial statements and notes thereto contained in the Company's latest
Annual Report filed with the SEC on Form 10-KSB/A. In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results
of operations for the interim periods presented have been reflected
herein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full year.
Notes to the consolidated financial statements which would substantially
duplicate the disclosure contained in the audited consolidated financial
statements for the most recent fiscal year, 1996, as reported in the
Form 10-KSB/A, have been omitted.
2. NAME CHANGE:
Effective June 1997 the Company's shareholders approved an amendment to
the Company's Articles of Incorporation that changed the name of the
Company to Henley Healthcare, Inc.
3. NET INCOME (LOSS) PER SHARE:
Net income (loss) per common share is calculated on the basis of the
weighted average number of common shares outstanding during the period.
The dilutive effect of common stock equivalents is not material.
The Company plans to adopt Financial Accounting Standards No. 128,
"Earnings per Share" on December 15, 1997. Management believes this will
not have a material effect on the consolidated financial statements for
the nine months ended September 30, 1997 and 1996.
4. ACQUISITIONS:
In January 1997, the Company entered into an agreement pursuant to which
it acquired all of the issued and outstanding common stock of Texas
T.E.N.S., Inc., a privately-owned Texas corporation, for an estimated
purchase price of approximately $850,000 including related acquisition
costs of approximately $50,000. The purchase price was paid by the
Company's issuance of a subordinated promissory note in the principal
amount of $400,000 (the "Tens Note") with the balance of the purchase
price being paid in cash. The principal balance of the Tens Note was due
and payable monthly beginning on February 1, 1997, and ending on January
1, 1999, in equal installments of principal plus all accrued and unpaid
interest due on the Tens Note on the date of each such payment. Interest
on the Tens Note was calculated at the Prime Rate. On August 29, 1997,
the principal balance on the Tens Note plus all accrued and unpaid
interest due on the Note through that date was paid off.
7
<PAGE>
HENLEY HEALTHCARE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
In January 1997, the Company also purchased substantially all of the
inventory, distribution systems and customers associated with the
Homecare (third-party billing) division of Gatti Medical Supply, Inc., a
privately-owned Pennsylvania corporation, for an estimated purchase
price of approximately $350,000 including related acquisition costs of
approximately $50,000 and up to an additional $300,000 subject to the
achievement of specific terms and conditions. Under the terms of the
purchase agreement, the Company issued to the sellers a total of 51,117
shares of common stock and will issue up to an aggregate 50,117
additional shares of common stock subject to the achievement of specific
terms and conditions in the agreement.
In March 1997, the Company entered into new agreements with CB Svendsen
a/s ("CBS"), the Danish company with whom the Company has worked on the
development and marketing of the Microlight 830(TM) since June 1991.
Pursuant to the new agreements, the Company paid $100,000 to CBS and
obtained unto perpetuity the sole and exclusive world-wide distribution
rights to all low level laser devices manufactured by or for CBS. Also
pursuant to the agreements, the Company obtained unto perpetuity the
exclusive world-wide manufacturing rights to all low level laser devices
manufactured by or for CBS subject to the payment to CBS by June 15,
1998, of $175,000.
On May 2, 1997, the Company entered into an agreement pursuant to which
it acquired all of the issued and outstanding shares of common stock of
Med-Quip, Inc. ("Medquip"), a privately-owned Georgia corporation, for
an estimated purchase price of approximately $1,450,000 including
related acquisition costs of approximately $50,000. The purchase price
was paid by the issuance of an aggregate of 300,000 shares of the
Company's common stock and the payment of approximately $40,000 in cash.
On September 30, 1997, the Company entered into an agreement with Cybex
International, Inc., a New York corporation ("Cybex"), whereby it
purchased certain assets of (and assumed certain liabilities associated
with) the isokinetic rehabilitation product line (the "Product Line") of
Cybex for an estimated purchase price of approximately $3.2 million. The
assets acquired consist of tangible personal property including
machinery, equipment, furniture and fixtures; general intangibles;
contracts; intellectual property; business licenses; inventory; and
prepaid expenses.
The purchase price was paid in cash which the Company obtained pursuant
to an amendment to its Amended and Restated Loan Agreement (the "Amended
Loan Agreement") entered into with Comerica Bank - Texas, a Texas
banking corporation ("Comerica"). The Amended Loan Agreement with
Comerica provides for a revolving loan which permits borrowings up to
$8,000,000 pursuant to a borrowing base calculation derived from the
Company's accounts receivable and inventory. In connection with the
Amended Loan Agreement, the Company paid off its Term Note A with
Comerica in the amount of $893,000 and issued a substitute Term Note A
in the amount of $1,430,000. The revolving loan's maturity date is
February 1, 1999, while the maturity date of the $1,430,000 Term Note A
is September 30, 2002. All of the borrowings from Comerica are secured
by substantially all of the assets of the Company including the assets
acquired from Cybex. The Amended Loan Agreement also contains a number
of affirmative covenants, negative covenants and financial covenants
with which the Company must comply including a minimum tangible net
worth, leverage ratio, working capital ratio, fixed charge ratio and
interest coverage ratio.
8
<PAGE>
HENLEY HEALTHCARE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
In connection with the Amended Loan Agreement with Comerica relating to
the acquisition of the Product Line from Cybex, the Company entered into
an amendment to the Subordination Agreement (the "Subordination
Amendment") by and among Maxxim Medical, Inc. ("Maxxim"), Comerica and
the Company. Pursuant to the Subordination Amendment, the maximum amount
of the Company's debt with Comerica that can be issued senior to
Maxxim's Convertible Subordinated Promissory Note from the Company (the
"Maxxim Note") was increased from $10,000,000 to $12,000,000. In
exchange for Maxxim's execution of the Subordination Amendment, the
Company entered into a note modification agreement with Maxxim in which
the Conversion Price (as defined in the Maxxim Note) was reduced from
$3.00 to $2.00. The modification of the Maxxim Note increases the number
of shares of the Company's common stock, par value $.01 per share
("Common Stock"), beneficially owned by Maxxim from 2,333,333
(approximately 43%) to 3,500,000 (approximately 53%). The Maxxim Note is
convertible into Common Stock at any time at Maxxim's option.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto and other detailed
information contained in the Company's Annual Report for fiscal year 1996 filed
with the SEC on Form 10-KSB/A.
RESULTS OF OPERATIONS
The Company reported consolidated net income of approximately $279,000
for the nine months ended September 30, 1997 compared to a net loss of
approximately $662,000 reported for the same period in 1996. The Company's
profitability has resulted primarily from the operations of the acquired
entities including the achievement of comparatively larger sales. During the
quarter ended March 31, 1996, the Company was still in the development stage and
had limited operating revenues.
Sales revenue was approximately $5,443,000 for the quarter ended
September 30, 1997, representing an increase of approximately $215,000 over the
amount reported for the same period in 1996. For the nine months ended September
30, 1997 sales revenue was approximately $15,855,000, representing an increase
of approximately $7.7 million over the amount reported for the same period in
1996. The increases are attributable primarily to additional sales generated by
the businesses that have been acquired since the end of April 1996. Also
contributing to the increases are the effects of expanded distribution outlets
during this period.
Gross margin as a percentage of sales for the quarter ended September
30, 1997 decreased to approximately 52% from approximately 55% reported for the
same period in 1996, as a result of the one-time sale of a block of higher
margin products during the quarter ended September 30, 1996. For the nine months
ended September 30, 1997 gross margin as a percentage of sales increased to
approximately 55% compared to approximately 54% reported for the same period in
1996. The increase resulted primarily from overall sales of many higher-margin
products during the 1997 period by the recently acquired businesses.
Operating expenses for the quarter ended September 30, 1997 increased
approximately $140,000 over the approximately $2.4 million reported for the same
period in 1996. For the nine months ended September 30, 1997 operating expenses
increased approximately $3.0 million over the approximately $4.4 million
reported for the same period in 1996. The increases in operating expenses are
due to the increased relative costs of operating the newly acquired businesses.
However, as a percent of sales, operating expenses for the three months ended
September 30, 1997 showed no significant change when compared to the same period
in 1996. Operating expenses, as a percent of sales, for the nine months ended
September 30, 1997 decreased to approximately 47% compared to approximately 55%
reported for the same period in 1996. The decreased operating expenses as a
percentage of sales reflect the effects of larger overall sales volume from the
acquired operations.
Interest charges for the quarter and nine months ended September 30,
1997 were approximately $267,000 and $774,000, respectively, compared to
approximately $235,000 and $560,000 reported for the same periods in 1996. The
overall increase in interest expense was primarily due to the interest-bearing
notes issued to finance certain of the Company's acquisitions.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Company had cash and cash equivalents in the
amount of $298,788 compared with cash and cash equivalents of $507,892 at
December 31, 1996. The decrease in cash and cash equivalents resulted primarily
from expenses incurred in pursuing the Company's overall growth strategy.
The Company's current sources of liquidity consist primarily of (i)
funds from operations, (ii) funds held at the end of fiscal year 1996 and (iii)
the amounts, if any, available under the Amended Loan Agreement with Comerica.
The Amended Loan Agreement with Comerica provides for (i) a one-year revolving
loan ("Line of Credit"), which permits borrowings up to $8,000,000 through
January 1999 and (ii) two term loans in the amounts of $1,430,000 ("Term Note
A") and $1,616,000 ("Term Note B"). Term Note A and Term Note B are payable in
monthly installments of $23,833 and $8,978, respectively, plus interest through
September 2002 and May 2011, respectively. The Line of Credit also includes a
$250,000 letter of credit facility. Interest on the Line of Credit and the two
term loans is payable monthly and is calculated at a rate equal to the Prime
Rate plus one-half of one percent per annum. Term Note B is callable by Comerica
beginning on the fifth anniversary of the Amended Loan Agreement. All of the
borrowings from Comerica are secured by substantially all of the assets of the
Company. As of September 30, 1997, the Company had approximately $1,972,000
available for borrowing under the Line of Credit. The total amount available for
borrowing under the Line of Credit is the lesser of (i) $8,000,000 and (ii) a
variable borrowing base calculated based on the amount and type of outstanding
accounts receivable and the value of certain items of inventory. At September
30, 1997, the Company had working capital of approximately $6,035,000 and its
current ratio was 1.6 to 1 as compared to $5,931,000 and 2.3 to 1 at September
30, 1996. This decrease in the current ratio is primarily due to the increase in
the amount of outstanding line of credit, consistent with the Company's growth
strategy. At September 30, 1997, the Company had no material capital expenditure
commitment.
In connection with an agreement entered into in April 1996 with Maxxim,
the Company issued the Maxxim Note in the principal amount of $7 million. The
Maxxim Note is due and payable on March 1, 2003 with interest payable
semi-annually on November 1 and May 1 of each calendar year and calculated at a
rate equal to 2% per annum and increasing annually 2% per annum. The Company may
redeem all or any portion of the outstanding principal amount of the Maxxim Note
at redemption prices ranging from 104% to 110% of the principal amount being
redeemed, depending on when the redemption occurs as set forth in the Maxxim
Note. In addition, the Maxxim Note is subject to mandatory redemption in annual
installments of $1.4 million commencing on March 1, 1999 at premiums starting at
7% and decreasing 1% each year. The Company is also required to redeem 40% of
the Maxxim Note upon the completion of a public offering. The Maxxim Note is
convertible into common stock at an initial conversion price of $2 per share,
provided that upon the occurrence of any default under the Maxxim Note, the
conversion price will be automatically adjusted to an amount equal to the lesser
of the conversion price then in effect or 80% of the average market price for
the Company's common stock for the 30 trading days immediately preceding the
event of default. The conversion price is also subject to adjustment upon the
occurrence of certain events (including certain issuances of common stock for
less than the conversion price) to provide anti-dilution protection.
Management believes that the funds generated from operations, along with
the Company's current working capital position and bank credit, will be
sufficient to satisfy the Company's capital requirements for the existing
operations for the foreseeable future. If the Company's operating cash flows are
inadequate, the Company may require new sources of liquidity to (i) make the
required payments under its promissory notes and other financial commitments
including the Amended Loan Agreement and the Maxxim Note, (ii) pursue additional
acquisitions, (iii) expand the operations of the acquired entities, (iv) fund
future activities that may be required to obtain Food and Drug Administration
("FDA")
11
<PAGE>
marketing clearance for the Microlight 830(TM), (v) make the payments required
to obtain the exclusive manufacturing rights to the Microlight 830(TM) and (vi)
begin full-scale manufacturing of the Microlight 830(TM). The Company believes
that its success in obtaining the necessary financing will depend on, among
other factors, successfully operating the recently acquired businesses and
successfully marketing the Microlight 830(TM) if it is cleared for commercial
distribution by the FDA. Sources of additional financing may include additional
bank debt or the public or private sale of equity or debt securities. There can
be no assurance that the Company will be successful in arranging such financing
on terms commercially acceptable to the Company.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
RECENT SALES OF UNREGISTERED SECURITIES
In connection with the acquisition of Medquip as described in Footnote 4
to the Financial Statements, the Company issued to Medquip's former shareholders
an aggregate of 300,000 shares of the Company's common stock in a private
transaction in which the Company relied on the exemption from registration
available under Section 4(2) of the Securities Act of 1993, as amended, and Rule
506 promulgated thereunder.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
See "Index of Exhibits" below which lists the documents required
to be filed as exhibits by Regulation S-B.
(b) REPORTS ON FORM 8-K
None.
<PAGE>
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE EXCHANGE ACT, THE REGISTRANT
CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED.
HENLEY HEALTHCARE, INC.
(Registrant)
By: /S/ MICHAEL M. BARBOUR
Date: November 13, 1997 Michael M. Barbour
(President and Chief Executive Officer)
By: /S/ DAN D. SUDDUTH
Date: November 13, 1997 Dan D. Sudduth
(Executive Vice President and
Chief Financial Officer)
By: /S/ CHIKE J. OGBOENYIYA
Date: November 13, 1997 Chike J. Ogboenyiya
(Vice President and Chief Accounting Officer)
<PAGE>
HENLEY HEALTHCARE, INC.
EXHIBITS TO FORM 10-QSB
For the quarter ended September 30, 1997
INDEX OF EXHIBITS
Exhibits incorporated by reference to a prior filing are designated by
an asterisk (*); all exhibits not so designated are documents required to be
filed as exhibits to this report.
EXHIBIT
NO. DESCRIPTION
27.1 Financial Data Schedule for the quarter ended September 30, 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM BALANCE SHEET, STATEMENT OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 298,788
<SECURITIES> 0
<RECEIVABLES> 6,359,840
<ALLOWANCES> 0
<INVENTORY> 8,153,995
<CURRENT-ASSETS> 15,576,603
<PP&E> 3,885,688
<DEPRECIATION> 0
<TOTAL-ASSETS> 23,813,647
<CURRENT-LIABILITIES> 9,541,133
<BONDS> 0
0
0
<COMMON> 33,725
<OTHER-SE> 4,137,165
<TOTAL-LIABILITY-AND-EQUITY> 23,813,647
<SALES> 15,854,961
<TOTAL-REVENUES> 15,854,961
<CGS> 7,186,107
<TOTAL-COSTS> 7,186,107
<OTHER-EXPENSES> 7,484,964
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (774,304)
<INCOME-PRETAX> 279,033
<INCOME-TAX> 0
<INCOME-CONTINUING> 279,033
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 279,033
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
