UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
Commission File No. 000-22166
AETRIUM INCORPORATED
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1439182
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2350 HELEN STREET, NO. ST. PAUL, MINNESOTA 55109
(Address of principal executive offices) (Zip Code)
(651) 704-1800
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has 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 (2) has been subject to such filing requirements for the past
90 days.
YES X NO
--------- --------
Number of shares of Common Stock, $.001 par value, 9,568,308
outstanding as of November 6, 1998 ---------
<PAGE>
AETRIUM INCORPORATED
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements as Restated:
Consolidated Balance Sheets as of September 30, 1998 (unaudited)
and December 31, 1997 3-4
Consolidated Statements of Operations (unaudited) for the three
months and nine months ended September 30, 1998 5
and 1997
Consolidated Statements of Cash Flows (unaudited) for the nine
months ended September 30, 1998 and 1997 6
Notes to unaudited consolidated financial statements 7-9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations as Restated 10-13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. 14
Item 2. Changes in Securities and Use of Proceeds. 14
Item 3. Defaults Upon Senior Securities. 14
Item 4. Submission of Matters to a Vote of Security Holders. 14
Item 5. Other Information. 14
Item 6. Exhibits and Reports on Form 8-K. 14
SIGNATURES 15
</TABLE>
2
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AS RESTATED
AETRIUM INCORPORATED
CONSOLIDATED BALANCE SHEETS AS RESTATED
ASSETS
September 30, December 31,
1998 1997
--------------------------------
(Unaudited) (Audited)
(in thousands, except share data)
Current Assets:
Cash and cash equivalents $ 18,416 $ 27,584
Accounts receivable, net 11,835 12,709
Inventories 14,557 16,785
Deferred taxes 2,417 784
Other current assets 1,523 615
--------------------------------
Total current assets 48,748 58,477
--------------------------------
Property and equipment:
Furniture and fixtures 1,939 1,351
Equipment 5,941 5,282
--------------------------------
7,880 6,633
Less accumulated depreciation and
amortization (3,904) (2,990)
--------------------------------
Property and equipment, net 3,976 3,643
--------------------------------
Noncurrent deferred taxes 6,539 4,951
Intangible and other assets, net 17,926 3,823
--------------------------------
Total assets $ 77,189 $ 70,894
================================
See accompanying notes to the consolidated financial statements.
3
<PAGE>
AETRIUM INCORPORATED
CONSOLIDATED BALANCE SHEETS AS RESTATED
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
-----------------------------
(Unaudited) (Audited)
(in thousands, except share data)
<S> <C> <C>
Current liabilities:
Trade accounts payable $ 1,876 $ 2,611
Accrued compensation and commissions 2,088 2,250
Other accrued expenses 3,750 2,807
Income taxes payable 28 734
-----------------------------
Total current liabilities 7,742 8,402
-----------------------------
Shareholders' equity:
Common stock, $.001 par value; 30,000,000
shares authorized; 9,568,308 and 8,786,740
shares issued and outstanding, respectively 10 9
Additional paid-in capital 61,119 46,562
Retained earnings 8,318 15,921
-----------------------------
Total shareholders' equity 69,447 62,492
-----------------------------
Total liabilities and shareholders' equity $ 77,189 $ 70,894
=============================
</TABLE>
See accompanying notes to the consolidated financial statements.
4
<PAGE>
AETRIUM INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and Restated)
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 30,
-------------------------------- -------------------------------
1998 1997 1998 1997
-----------------------------------------------------------------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales $ 12,009 $ 18,683 $ 48,598 $ 45,540
Cost of goods sold 7,044 8,825 29,394 21,938
-----------------------------------------------------------------
Gross profit 4,965 9,858 19,204 23,602
-----------------------------------------------------------------
Operating expenses:
Selling, general, and administrative 5,123 3,848 14,944 9,938
Research and development 3,214 2,969 9,691 7,421
Non-recurring charges 0 0 6,527 7,191
-----------------------------------------------------------------
Total operating expenses 8,337 6,817 31,162 24,550
-----------------------------------------------------------------
Income (loss) from operations (3,372) 3,041 (11,958) (948)
Other income, net 206 238 725 853
-----------------------------------------------------------------
Income (loss) before income taxes (3,166) 3,279 (11,233) (95)
Provision for income taxes 950 (935) 3,630 109
-----------------------------------------------------------------
Net income (loss) $ (2,216) $ 2,344 $ (7,603) $ 14
=================================================================
Net income (loss) per common share:
Basic $ (.23) $ .27 $ (.81) $ .00
Diluted $ (.23) $ .26 $ (.81) $ .00
Weighted average common shares outstanding:
Basic 9,640 8,743 9,382 8,629
Diluted 9,640 9,064 9,382 8,894
</TABLE>
See accompanying notes to the consolidated financial statements.
5
<PAGE>
AETRIUM INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and Restated)
<TABLE>
<CAPTION>
Nine months ended September 30,
--------------------------------
1998 1997
--------------------------------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (7,603) $ 14
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 2,195 809
Acquisition-related charges 3,900 7,191
Writedown of intangibles 2,080 0
Deferred taxes (3,221) (2,265)
Changes in assets and liabilities, net of
effects of acquired businesses:
Accounts receivable, net 3,111 (3,914)
Inventories 4,160 (3,730)
Other current assets (908) 210
Trade accounts payable (1,391) 1,759
Accrued compensation and commissions (115) 516
Other accrued expenses 294 125
Income taxes payable (551) 1,768
--------------------------------
Net cash provided by operating activities 1,951 2,483
--------------------------------
Cash flows from investing activities:
Purchases of businesses and technology, net of cash acquired (8,835) (4,997)
Sale of short term investments 0 1,000
Purchase of property and equipment (1,274) (575)
--------------------------------
Net cash used in investing activities (10,109) (4,572)
--------------------------------
Cash flows from financing activities:
Net proceeds from issuances of common stock 73 763
Repurchase of common stock (1,083) (874)
Principal payments on debt 0 (1,293)
--------------------------------
Net cash used in financing activities (1,010) (1,404)
--------------------------------
Net decrease in cash and cash equivalents (9,168) (3,493)
Cash and cash equivalents at beginning of period 27,584 34,756
--------------------------------
Cash and cash equivalents at end of period $ 18,416 $ 31,263
================================
</TABLE>
See accompanying notes to the consolidated financial statements.
6
<PAGE>
AETRIUM INCORPORATED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND RESTATEMENT
In the opinion of management, the accompanying unaudited restated
consolidated financial statements include all adjustments necessary to
present fairly the financial position, results of operations, and changes
in cash flows for the interim periods presented.
Certain footnote information has been condensed or omitted from these
financial statements. Therefore, these financial statements should be read
in conjunction with the consolidated financial statements and accompanying
footnotes included in Form 10-K for the year ended December 31, 1997.
On April 1, 1998, the company acquired substantially all of the assets and
assumed certain liabilities of the Equipment Division ("Equipment
Division") of WEB Technology, Inc. (see Note 4). The acquisition was
recorded using the purchase method and, as required, the purchase price was
allocated to the assets acquired and liabilities assumed. In connection
therewith, the company hired an independent third party appraisal firm to
value the intangible assets acquired, including in-process research and
development ("IPR&D"). The estimated fair values of the intangible assets
were determined using appraisal and valuation methods commonly used and
considered appropriate at the time. Recently the Securities and Exchange
Commission ("SEC") has published its views regarding methods used to value
intangible assets, including specific guidelines it feels should be used in
determining the value of IPR&D.
Recently, the company re-engaged the appraisal firm to review the valuation
of the WEB intangible assets in light of the new SEC guidance. The
revaluation of the WEB intangible assets resulted in a reduction of the
value of IPR&D and a corresponding net increase in capitalized goodwill and
other intangibles such as developed technology, core technology, customer
lists, and assembled workforce.
The impact of the revaluation on the company's financial statements was to
reduce the amount of IPR&D expense (included in "Non-recurring Charges") in
the second quarter of 1998 and to increase "Selling, General, and
Administrative" expenses in the second and third quarters of 1998 for the
additional amortization expense related to the capitalized intangible
assets as follows (thousands, except per share amounts):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Statement of Operations Three months ended Sept. 30, 1998 Nine months ended Sept. 30, 1998
- ------------------------------------------------------------------------------------------------------
As reported Restated As reported Restated
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Selling, general &
administrative expenses $ 4,905 $ 5,123 $ 14,490 $ 14,944
- ------------------------------------------------------------------------------------------------------
Non-recurring charges 0 0 14,656 6,527
- ------------------------------------------------------------------------------------------------------
Total operating expenses 8,119 8,337 38,837 31,162
- ------------------------------------------------------------------------------------------------------
Loss from operations (3,154) (3,372) (19,633) (11,958)
- ------------------------------------------------------------------------------------------------------
Loss before income taxes (2,948) (3,166) (18,908) (11,233)
- ------------------------------------------------------------------------------------------------------
Income tax benefit 884 950 6,075 3,630
- ------------------------------------------------------------------------------------------------------
Net Loss (2,064) (2,216) (12,833) (7,603)
- ------------------------------------------------------------------------------------------------------
Net loss per diluted share $ (.21) $ (.23) $ (1.37) $ (.81)
- ------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
1. BASIS OF PRESENTATION AND RESTATEMENT (CONTINUED)
- --------------------------------------------------------------
Balance Sheet at
Sept. 30, 1998 As reported Restated
- --------------------------------------------------------------
Intangible and other
assets, net $ 10,251 $ 17,926
- --------------------------------------------------------------
Deferred taxes 11,401 8,956
- --------------------------------------------------------------
Total assets 71,959 77,189
- --------------------------------------------------------------
Retained earnings 3,088 8,318
- --------------------------------------------------------------
Shareholders' equity 64,217 69,447
- --------------------------------------------------------------
Total liabilities and
Shareholders' equity $ 71,959 $ 77,189
- --------------------------------------------------------------
2. INVENTORIES
Inventories consist of the following:
September 30, December 31,
1998 1997
------- -------
(in thousands)
Purchased parts and completed subassemblies $ 7,405 $ 9,307
Work in process 4,906 5,488
Finished goods, including demonstration equipment 2,246 1,990
------- -------
Total $14,557 $16,785
======= =======
3. NET INCOME (LOSS) PER COMMON SHARE
Basic net income per share is computed by dividing net income by the
weighted-average number of common shares outstanding during the period.
Diluted net income per share is computed by dividing net income by the
weighted-average number of common shares and common stock equivalent shares
outstanding during the period. Common stock equivalents include stock
options using the treasury stock method. For the interim periods in which
the company reported net losses, common stock equivalents have been
excluded from the computations because they are antidilutive.
4. ACQUISITIONS
On April 1, 1998, the company acquired substantially all of the assets and
assumed certain liabilities of the Equipment Division ("Equipment
Division") of WEB Technology, Inc., a privately-held company that consisted
of several business units in addition to the Equipment Division. The
Equipment Division specializes in the design, development, manufacturing
and marketing of a variety of electromechanical equipment used by the
semiconductor industry to handle and test integrated circuits. The purchase
price totaled $23,567,500 consisting of $7,835,000 in cash, 900,000 shares
of Aetrium common stock valued at $15,412,500 and $320,000 of
acquisition-related costs. The acquisition was accounted for as a purchase.
The company's consolidated financial statements include the results of the
Equipment Division's operations since April 1, 1998.
8
<PAGE>
4. ACQUISITIONS (CONTINUED)
On April 1, 1997, the company acquired substantially all of the assets and
assumed certain liabilities of Forward Systems Automation, Inc. ("FSA"), a
privately held manufacturer of equipment for the semiconductor and
electronic component industries. The purchase price totaled $9,132,869
consisting of $4,000,000 of cash, 186,000 shares of Aetrium common stock
valued at $2,499,840, $250,000 of acquisition-related costs and $2,383,029
of assumed liabilities. The acquisition was accounted for as a purchase.
The company's consolidated financial statements include the results of
FSA's operations since April 1, 1997.
For each acquisition, a portion of the purchase price, as determined by
third party appraisal, was allocated to intangible assets, including
in-process research and development that had not reached technological
feasibility and did not have alternative future uses. As required by
generally accepted accounting principles, the values of the in-process
research and development ($3,900,000 for the Equipment Division and
$7,190,809 for FSA) were charged to operations in the second quarter of
1998 and 1997, respectively. These amounts are included in the caption
"Non-recurring charges" in the accompanying Statements of Operations.
The following table presents the consolidated results of operations of the
company on an unaudited pro forma basis as if the acquisitions of the
Equipment Division and FSA had taken place at the beginning of each period
(in thousands, except per share data):
<TABLE>
<CAPTION>
Nine months ended
-----------------
Unaudited pro forma Sept. 30, 1998 Sept. 30, 1997
- ------------------- -------------- --------------
<S> <C> <C>
Net sales $51,592 $51,068
Net income (loss) (5,035) 4,045
Net income (loss) per diluted share $ (.52) $ .41
- ----------------------------------------------------------------------------------------
Reported net income (loss) per diluted share before
acquisition-related charges $ (.56) $ .57
- ----------------------------------------------------------------------------------------
</TABLE>
The acquisition-related charges of $3,900,000 in 1998 and $7,190,809 in
1997 are not reflected in the pro forma results above. The unaudited pro
forma results of operations are for comparative purposes only and do not
necessarily reflect the results that would have occurred had the
acquisitions occurred at the beginning of the periods presented or the
results which may occur in the future.
5. COMMON STOCK
During the third quarter ended September 30, 1998, the company repurchased
135,000 shares of its common stock for approximately $869,000 in cash.
These purchases were made pursuant to rights of first refusal agreements
entered into with certain shareholders of WEB Technology Inc., in
connection with the April 1, 1998 acquisition of the Equipment Division of
WEB Technology, Inc.
9
<PAGE>
AETRIUM INCORPORATED
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NET SALES. Net sales for the first nine months ended September 30,
1998, were $48.6 million, an increase of 7 percent from the same
period of 1997. The 1998 results include the net sales of the
product lines acquired in the acquisitions of FSA (in April 1997),
the Advantek Handler Division (in October 1997), and the equipment
business of WEB Technology (in April 1998). Net sales were $12.0
million for the quarter ended September 30, 1998, compared with
$18.7 million for the comparable 1997 quarter, a decrease of 36
percent. The increase for the nine month period is primarily
attributable to the inclusion of the net sales of the acquired
product lines. The decline in the third quarter ended September 30,
1998, compared with the comparable quarter of 1997, primarily
reflects the impact on net sales of a severe semiconductor industry
recession. The decline in net sales also reflects the termination of
a contract for the company's integrated circuit automation modules
by a large OEM customer that discontinued that segment of its
business.
GROSS PROFIT. Gross profit was 39.5 percent of net sales for the
nine months ended September 30, 1998, including an inventory charge
of $3.7 million related to the suspension of marketing efforts on
certain older, less profitable products that was recorded in the
second quarter ended June 30, 1998. Excluding the one-time charge,
gross profit was 47.1 percent of net sales, compared with 51.8
percent for the same period of 1997. Gross profit was 41.3 percent
of net sales for the quarter ended September 30, 1998, compared to
52.8 percent for the quarter ended September 30, 1997. The decrease
in the gross margin, excluding the one-time costs, is primarily
attributable to the inclusion of net sales of the product line
acquired from Advantek and to underabsorbed manufacturing overhead
due to lower net sales than in the same period of 1997.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative expenses for the nine months ended September 30, 1998
were $14.9 million compared with $9.9 million for the comparable
period in 1997, a 50 percent increase. Selling, general and
administrative expenses for the quarter ended September 30, 1998
were $5.1 million, compared with $3.8 million in the comparable
period of 1997, and $5.5 million for the quarter ended June 30,
1998. The increase in selling, general, and administrative expenses
for the nine month period in 1998 is attributable to higher
commissions expense on increased net sales, higher amortization
expense related to acquired intangibles, and the inclusion of
expenses to support recently acquired businesses. The decline in the
third quarter ended September 30, 1998 from the second quarter ended
June 30, 1998, reflects expense reduction actions taken in the
second quarter, including a reduction in work force.
RESEARCH AND DEVELOPMENT. Research and development expenses were
$9.7 million for the nine months ended September 30, 1998 compared
with $7.4 million for the comparable period in 1997, a 31 percent
increase. Research and development expenses were $3.2 million for
the quarter ended September 30, 1998, compared with $3.0 million in
the comparable period of 1997, and $3.5 million for the quarter
ended June 30, 1998. The increase over the nine month period in 1998
is attributable to the expenses for continued development of the
product lines acquired in 1997 and 1998. The decline in the third
quarter ended September 30, 1998 from the second quarter ended June
30,
10
<PAGE>
1998, reflects expense reduction actions taken in the second
quarter, including a reduction in work force.
NON-RECURRING CHARGES. The company incurred non-recurring charges of
$6.5 million in the quarter ended June 30, 1998. Of this amount,
$3.9 million was in connection with the acquisition of the equipment
business of WEB Technology, for that portion of the purchase price
allocated to research and development projects that were in process
at the time of acquisition but had not yet reached technological
feasibility. The balance of the non-recurring charges during the
quarter were for severance costs resulting from a reduction in work
force and the write-off of certain capitalized technology. In
connection with the FSA acquisition, $7.2 million related to
in-process research and development was charged against income in
the second quarter ended June 30, 1997, as the underlying research
and development projects had not yet reached technological
feasibility. See Note 4 to the unaudited consolidated financial
statements.
OTHER INCOME, NET. Other income, net, which consists primarily of
interest income from the investment of excess funds, amounted to
$725,000 for the nine months ended September 30, 1998, which was a
decline from $853,000 for the same period in 1997. Other income,
net, amounted to $206,000 for the quarter ended September 30, 1998,
compared to $238,000 for the same period of 1997.The decline in 1998
reflects primarily the decrease in invested funds due to the cash
outlay of $7.8 million for the acquisition of the equipment business
of WEB Technology in April 1998 and $4.2 million for the acquisition
of the Advantek Handler Division in October 1997.
INCOME TAX EXPENSE (BENEFIT). Income tax expense (benefit) was
provided for at an average effective rate of approximately 29% for
the ninth months ended September 30, 1998, excluding the impact of
non-recurring acquisition-related charges, compared with
approximately 30% for the first nine months of 1997. The company's
effective tax rate compares favorably with the Federal and state
statutory rates primarily due to benefits associated with the
company's Foreign Sales Corporation and research tax credits as well
as the implementation of various tax planning strategies, including
the investment of excess funds in tax exempt instruments.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The company has a $5.0 million line of credit agreement with Harris
Trust and Savings Bank in Chicago, Illinois. Borrowings under this
agreement are secured by receivables, inventories and general
intangibles. Borrowing is limited to a percentage of eligible
receivables and inventories. There were no line of credit advances
outstanding as of September 30, 1998 or December 31, 1997.
The company had cash and cash equivalents of approximately $18.4
million at September 30, 1998. During the third quarter ended
September 30, 1998, the company repurchased 135,000 shares of its
common stock for approximately $869,000 in cash. These purchases
were made pursuant to rights of first refusal agreements entered
into with certain shareholders of WEB Technology Inc., in connection
with the April 1, 1998 acquisition of the equipment business of WEB
Technology, Inc.
The company believes its remaining cash balances of $18.4 million,
funds generated from operations, and borrowings available under its
credit facility will be sufficient to meet capital expenditure and
working capital needs for at least 24 months. The company may
acquire other companies, product lines or technologies that are
complementary to the company's business, and the company's working
capital needs may change as a result of such acquisitions.
11
<PAGE>
BUSINESS RISKS AND UNCERTAINTIES
A number of risks and uncertainties exist which could impact the
company's future operating results. These uncertainties include, but
are not limited to, general economic conditions, competition,
changes in rates of capital spending by semiconductor manufacturers,
the company's success in developing new products and technologies,
market acceptance of new products, risks and unanticipated costs
associated with integrating acquired businesses, and other factors,
including those set forth in the company's SEC filings, including
its current report on Form 10-K for the year ended December 31,
1997.
YEAR 2000 ISSUES
Many existing computer programs use only two digits to identify a
year in the date field, with the result that data referring to the
year 2000 and subsequent years may be misinterpreted by these
programs. If present in the computer applications of the company or
third parties (such as customers, financial institutions, and
suppliers) and not corrected, this problem may cause computer
applications to fail or to create erroneous results and could cause
a disruption in operations and have an adverse effect on the
company's business and results of operations.
The company has adopted a formal plan to evaluate its readiness for
the Year 2000 and address any deficiencies. The plan encompasses 1)
information technology (IT) systems 2) non-IT systems 3) company
products and 4) systems of third parties, including distributors and
key suppliers.
INFORMATION TECHNOLOGY: The company's principal computer systems
that it uses for financial accounting, manufacturing, inventory
control, purchasing, sales administration, engineering, and other
business functions have been determined to be substantially Year
2000 compliant. The company intends to monitor such principal
computer systems throughout the balance of 1998 and 1999 for any
Year 2000 issues.
NON-IT SYSTEMS: By the end of the second quarter of 1999, the
company expects to have completed an evaluation of telephone
systems, manufacturing equipment, facility heating and cooling
systems, and other non-IT systems for Year 2000 readiness, and
will promptly take remedial action as necessary.
COMPANY PRODUCTS: The company has completed a series of tests,
utilizing industry standards, of the electronics systems of its
products, including those product lines no longer being
manufactured but remaining in use at customer sites, and has
determined that the products should continue to operate according
to specification after December 31, 1999.
KEY VENDORS AND SUPPLIERS: The company has initiated a survey of
its key vendors and suppliers to assess their plans for bringing
any non-compliant systems into Year 2000 compliance. Such study is
expected to be completed by the end of the first quarter of 1999.
Substantially all of the effort to evaluate the company's Year 2000
readiness has been made using internal personnel, and therefore
incremental expenses have been less than $50,000. The company
believes it has achieved substantial compliance on Year 2000 issues
on its principal computer systems in the course of normally planned
computer hardware and software upgrades, and thus has not incurred
any additional significant expense to date specifically to address
Year 2000 issues. The company has not incurred
12
<PAGE>
any material expenses in connection with its evaluation of non-IT
systems, and does not expect material expenses in the future,
although the evaluation of non-IT systems is not yet complete. The
company has not incurred any material expenses to date in connection
with the evaluation of its products and the status of its vendors
and suppliers with respect to Year 2000 issues, and does not
anticipate material expenses in the future, although the evaluation
of key vendors' and suppliers' Year 2000 readiness is not yet
complete.
Efforts on the company's Year 2000 readiness plan, as well as its
consideration of contingency plans, are ongoing and will continue to
evolve as new information becomes available. At this stage of the
process, the Company believes that it is difficult to identify the
cause of the most reasonably likely worst case Year 2000 scenario.
The Company has not yet adopted any formal contingency plans, and
will determine the need for such plans as part of its ongoing
assessment of vendors and suppliers, products, and internal business
systems. Due to the complexity and pervasiveness of the Year 2000
issue, and in particular the uncertainty regarding the Year 2000
compliance programs of third parties, no assurances can be given
that there will not be material adverse effects on the company's
business or its results from operations.
13
<PAGE>
AETRIUM INCORPORATED
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None which the company believes will have a material adverse
impact on its financial condition or results of operations.
Item 2. Changes in Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submissions of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
Exhibit
Number Description Method of Filing
------- ----------- ----------------
<S> <C> <C>
3.1 The Company's Restated Incorporated by reference to Exhibit 3.1 to
Articles of Incorporation, the Company's Registration Statement on Form
as amended. SB-2 filed on June 23, 1993 (File No.
33-64962C).
3.2 Articles of Amendment to the Incorporated by reference to Exhibit 3.2 to
Company's Articles of the Company's Quarterly Report on Form 10-Q
Incorporation, dated August filed on November 16, 1998 (File No.
20, 1998. 000-22166).
27 Financial Data Schedule. Filed herewith electronically.
</TABLE>
(b) Reports on Form 8-K
None.
14
<PAGE>
AETRIUM INCORPORATED
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.
AETRIUM INCORPORATED
(Registrant)
Date: March 24, 1999 By: /s/ Joseph C. Levesque
---------------------------------------
Joseph C. Levesque
Chairman of the Board, President, and
Chief Executive Officer
Date: March 24, 1999 By: /s/ Darnell L. Boehm
---------------------------------------
Darnell L. Boehm
Chief Financial Officer, Secretary, and
Director
15
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 18,416
<SECURITIES> 0
<RECEIVABLES> 11,835
<ALLOWANCES> 0
<INVENTORY> 14,557
<CURRENT-ASSETS> 48,748
<PP&E> 7,880
<DEPRECIATION> 3,904
<TOTAL-ASSETS> 77,189
<CURRENT-LIABILITIES> 7,742
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> 69,437
<TOTAL-LIABILITY-AND-EQUITY> 77,189
<SALES> 48,598
<TOTAL-REVENUES> 48,598
<CGS> 29,394
<TOTAL-COSTS> 29,394
<OTHER-EXPENSES> 16,218
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (11,233)
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</TABLE>
