<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1998
Commission File Number 0-26670
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NORTH AMERICAN SCIENTIFIC, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 51-0366422
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7435 Greenbush Avenue, North Hollywood, CA 91605
(Address of principal executive offices)
(818) 503-9201
(Registrant's telephone number, including area code)
----------------------
Check whether the issuer (1) 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.
[X] Yes [ ] No
The number of shares of Registrant's Common Stock, $.01 par value,
outstanding as of June 9, 1998 was 6,424,675 shares.
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<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
INDEX
Page
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets as of April 30, 1998 and
October 31, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Income for the three months and
six months ended April 30, 1998 and 1997 . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows for the six months
ended April 30, 1998 and 1997 . . . . . . . . . . . . . . . . . . . . 5
Condensed Notes to Consolidated Financial Statements . . . . . . . . . . 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . 8
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . 11
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS . . . . . . 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . 12
-2-
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
April 30, October 31,
1998 1997
------------ -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 12,776,000 $ 1,596,000
Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . 812,000 430,000
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . 453,000 378,000
Income taxes receivable. . . . . . . . . . . . . . . . . . . . . . - 106,000
Prepaid expenses and other current assets. . . . . . . . . . . . . 185,000 61,000
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . 14,226,000 2,571,000
Note receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 500,000
Equipment and leasehold improvements, net . . . . . . . . . . . . . 1,160,000 346,000
Investment in and advances to Affiliates . . . . . . . . . . . . . . 1,531,000 -
Deposits and other assets . . . . . . . . . . . . . . . . . . . . . 329,000 256,000
------------ -----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,746,000 $ 3,673,000
------------ -----------
------------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . $ 732,000 $ 364,000
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 81,000
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . 106,000 -
------------ -----------
Total current liabilities . . . . . . . . . . . . . . . . . . . 958,000 445,000
------------ -----------
Stockholders' equity
Preferred stock, $.01 par value, 2,000,000 shares authorized;
no shares issued . . . . . . . . . . . . . . . . . . . . . . . . - -
Common stock, $.01 par value, 10,000,000 shares authorized;
6,424,675 and 5,176,052 shares issued and outstanding as of
April 30, 1998 and October 31, 1997, respectively. . . . . . . . 64,000 34,000
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . 16,746,000 3,515,000
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . (22,000) (321,000)
------------ -----------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . 16,788,000 3,228,000
------------ -----------
Total liabilities and stockholders' equity . . . . . . . . . . . $ 17,746,000 $ 3,673,000
------------ -----------
------------ -----------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
--------------------------- ---------------------------
1998 1997 1998 1997
----------- ------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . . . . . . . $ 1,353,000 $ 930,000 $ 2,172,000 $ 1,769,000
Cost of goods sold . . . . . . . . . . . . . . . . . . 587,000 479,000 1,103,000 918,000
----------- ------------ ----------- -----------
Gross profit . . . . . . . . . . . . . . . . . . . 766,000 451,000 1,069,000 851,000
----------- ------------ ----------- -----------
Selling, general and administrative expenses . . . . . 453,000 266,000 811,000 555,000
Research and development . . . . . . . . . . . . . . . 26,000 5,000 67,000 15,000
----------- ------------ ----------- -----------
Income from operations . . . . . . . . . . . . . . . . 287,000 180,000 191,000 281,000
Interest and other income. . . . . . . . . . . . . . . 143,000 8,000 309,000 16,000
----------- ------------ ----------- -----------
Income before provision for income taxes . . . . . . . 430,000 188,000 500,000 297,000
Provision for income taxes . . . . . . . . . . . . . . 151,000 86,000 179,000 118,000
----------- ------------ ----------- -----------
Net income . . . . . . . . . . . . . . . . . . . . . . $ 279,000 $ 102,000 $ 321,000 $ 179,000
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
Earnings per share
Basic. . . . . . . . . . . . . . . . . . . . . . . . $ .04 $ .02 $ .05 $ .04
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
Diluted. . . . . . . . . . . . . . . . . . . . . . . $ .04 $ .02 $ .05 $ .04
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
Weighted average number of common and
common equivalent shares outstanding
Basic. . . . . . . . . . . . . . . . . . . . . . . 6,408,264 4,542,302 6,292,283 4,531,052
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
Diluted . . . . . . . . . . . . . . . . . . . . . . 7,159,203 5,071,952 7,052,716 4,942,622
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-4-
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30,
---------------------------
1998 1997
------------ -----------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 321,000 $ 179,000
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization . . . . . . . . . . . . . . . . 85,000 24,000
Changes in assets and liabilities
Accounts receivable . . . . . . . . . . . . . . . . . . . (382,000) 113,000
Inventories . . . . . . . . . . . . . . . . . . . . . . . (75,000) (131,000)
Income taxes receivable. . . . . . . . . . . . . . . . . . 106,000 -
Prepaid expenses and other assets . . . . . . . . . . . . (266,000) (26,000)
Accounts payable . . . . . . . . . . . . . . . . . . . . . 368,000 55,000
Accrued expenses . . . . . . . . . . . . . . . . . . . . . 39,000 (9,000)
Income taxes payable . . . . . . . . . . . . . . . . . . . 106,000 (155,000)
------------ -----------
Net cash provided by operating activities . . . . . . . 302,000 50,000
------------ -----------
Cash flows from investing activities:
Investment in and advances to affiliates . . . . . . . . . . . . (1,531,000) -
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . (892,000) (87,000)
------------ -----------
Net cash used in investing activities . . . . . . . . . (2,423,000) (87,000)
------------ -----------
Cash flows from financing activities:
Issuance of common shares for cash . . . . . . . . . . . . . . . . 13,301,000 50,000
------------ -----------
Net cash provided by financing activities . . . . . . . 13,301,000 50,000
------------ -----------
Effect of foreign currency translation on cash . . . . . . . . . . . - (6,000)
------------ -----------
Net increase in cash and cash equivalents . . . . . . . . . . . . . 11,180,000 7,000
Cash and cash equivalents at beginning of period . . . . . . . . . . 1,596,000 866,000
------------ -----------
Cash and cash equivalents at end of period . . . . . . . . . . . . . $ 12,776,000 $ 873,000
------------ -----------
------------ -----------
Supplemental disclosure of cash flow information:
Interest paid. . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 6,000
------------ -----------
------------ -----------
Income taxes paid. . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 281,000
------------ -----------
------------ -----------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
-5-
<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial information as of April 30, 1998 and for the three
months and six months then ended is unaudited. In the opinion of the
Company, the unaudited financial information is presented on a basis
consistent with the audited financial statements and contains all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair statement of the results for such interim periods. The results of
operations for interim periods are not necessarily indicative of results of
operations for the full year. The interim financial statements should be
read in conjunction with the audited financial statements and notes thereto
included in the Company's Annual Report on Form 10-KSB for the fiscal year
ended October 31, 1997.
Certain reclassifications of previously reported amounts have been made to
conform to the current period's presentation.
NOTE 2 - STOCK SPLIT
Effective April 20, 1998, the Company effected a 3-for-2 stock split in the form
of a share dividend. The par value of the Company's common stock was unchanged.
All common stock information set forth in the consolidated financial statements
and notes thereto has been restated to reflect the stock split.
NOTE 3 - INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined using
the first-in-first-out method.
NOTE 4 - NET INCOME PER SHARE
The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings per Share", in the first quarter of fiscal 1998. SFAS 128 requires
the Company to present basic and diluted earnings per share on the face of the
statement of operations. Basic earnings per share is computed by dividing the
net income by the weighted average number of shares outstanding for the period.
Diluted earnings per share is computed by dividing the net income by the sum of
the weighted average number of common shares outstanding for the period plus the
assumed exercise of all dilutive securities by applying the treasury stock
method.
NOTE 5 - PRIVATE PLACEMENT
In November 1997, the Company completed a private placement of 800,000 shares of
its common stock to certain institutional investors. The net proceeds to the
Company from the sale were approximately $13.3 million.
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<PAGE>
NOTE 6 - PRACSYS TRANSACTION
In February 1998, the Company entered into agreements with PracSys Corp., a
privately held Massachusetts corporation ("PracSys"), pursuant to which PracSys
(i) will manufacture and sell to the Company two particle accelerators to be
used in the production of certain isotopes related to the Company's
brachytherapy product line and (ii) will operate the machines to produce the
isotopes for an initial two year period. The agreements call for total payments
to PracSys of approximately $2.7 million upon the achievement of certain
milestones. As of April 30, 1998, disbursements to PracSys under these
agreements totaled approximately $1.5 million. In addition, PracSys will receive
a service fee and also will be entitled to a "royalty" on the Company's sales of
products which incorporate isotopes produced using the accelerators.
The Company and PracSys also entered into an Exclusivity and Purchase Agreement
pursuant to which the Company has been granted certain exclusivity rights with
regard to certain PracSys technology. Pursuant to this agreement, the Company
also received 140,150 shares of PracSys common stock, which is equal to
approximately 5% of the total outstanding shares of PracSys on a fully-diluted
basis, and a three year warrant to purchase up to 5% of the number of shares of
PracSys common stock issued in a public offering.
NOTE 7 - RECENT ACCOUNTING PRONOUNCEMENTS
REPORTING COMPREHENSIVE INCOME
In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income
("SFAS 130"). SFAS 130 establishes standards for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. Comprehensive income is defined as the change in equity of
a business enterprise during a period from transactions and other events and
circumstances from non-owner sources. The Company is required to adopt SFAS 130
for its fiscal year beginning November 1, 1998; reclassification of financial
statements for earlier periods provided for comparative purposes is required.
The Company does not expect this pronouncement to materially impact the
presentation of its financial statements.
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION
In June 1997, the FASB issued SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information Reporting ("SFAS 131"). SFAS 131 establishes
standards for disclosure about operating in segments in annual financial
statements and selected information in interim financial reports. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. This statement supersedes SFAS No. 14,
Financial Reporting for Segments of a Business Enterprise. The Company is
required to adopt SFAS 131 for its fiscal year ending October 31, 1999, and
requires that comparative information from earlier years be restated to conform
to the requirements of this standard. The Company does not expect this
pronouncement to materially change the Company's current reporting and
disclosures.
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<PAGE>
NORTH AMERICAN SCIENTIFIC, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements contained herein and the notes thereto.
Certain matters discussed in this quarterly report on Form 10-QSB are forward
looking as that term is defined by: (i) the Private Securities Litigation
Reform Act of 1955 (the "1995 Act") and (ii) releases issued by the SEC.
These statements are being made pursuant to the provisions of the 1995 Act
and with the intention of obtaining the benefits of the "Safe Harbor"
provisions of the 1995 Act. The Company cautions investors that any forward
looking statements made by the Company are not guarantees of future
performance and that actual results may differ materially from those in such
forward looking statements as a result of various factors, including, but not
limited to the risks detailed herein or detailed from time to time in the
Company's filings with the SEC, including those factors identified under
"Business-Risk Factors" in the Company's Annual Report on Form 10-KSB for the
fiscal year ended October 31, 1997.
RESULTS OF OPERATIONS
THREE MONTHS ENDED APRIL 30, 1998 COMPARED TO THREE MONTHS ENDED APRIL 30, 1997
NET SALES. Net sales increased $423,000, or 46%, to $1,353,000 for the three
months ended April 30, 1998 from $930,000 for the three months ended April 30,
1997. The increase in net sales was primarily due to: (i) the inclusion of
revenues from a new product line, brachytherapy sources, which was introduced in
the first quarter of fiscal 1998 which increase was partially offset by (ii) a
slight decline in sales of the reference source product line due to increased
competition.
GROSS PROFIT. Gross profit increased $315,000 or 70% to $766,000 for the three
months ended April 30, 1998 from $451,000 for the three months ended April 30,
1997. Gross profit as a percent of sales increased from 48% to 57% during this
period. The increase in gross profit as a percentage of sales was primarily
attributable to the inclusion of revenues from the brachytherapy product line in
the second quarter of fiscal 1998 which yield greater gross margins than the
Company's reference source product line.
RESEARCH AND DEVELOPMENT. Research and development efforts continued into the
second quarter of 1998 with such expenditures totaling $26,000 during this
period compared to $5,000 in the corresponding 1997 period. The increase was
due primarily to development efforts associated with new product lines. Such
expenditures are expected to increase in future periods.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses increased $187,000, or 70%, to $453,000 for the
three months ended April 30, 1998 from $266,000 for the three months ended April
30, 1997. SG&A expenses increased primarily due to the following: (i) the
Company added staff to focus on reference source business product sales, to
improve gross margins and to develop capabilities for new product lines and (ii)
other general and administrative expenses were increased to support the growth
of the Company.
INCOME FROM OPERATIONS. Income from operations increased $107,000 to $287,000
for the three months ended April 30, 1998, from $179,000 for the three months
ended April 30, 1997. This increase is a result of a combination of the factors
described above.
-8-
<PAGE>
INTEREST INCOME. Interest income increased $135,000 to $143,000 for the three
months ended April 30, 1998 from $8,000 for the three months ended April 30,
1997. This increase resulted from the investment of funds received from the
Company's 1997 private placement.
NET INCOME. Net income increased $177,000 to $279,000 for the three months
ended April 30, 1998 from $102,000 for the three months ended April 30, 1997.
The increase is a result of the factors described above.
SIX MONTHS ENDED APRIL 30, 1998 COMPARED TO SIX MONTHS ENDED APRIL 30, 1997
NET SALES. Net sales increased $403,000, or 23%, to $2,172,000 for the six
months ended April 30, 1998 from $1,769,000 for the six months ended April 30,
1997. The increase in net sales is primarily due to: (i) the introduction of a
new product line, brachytherapy sources, in the first quarter of fiscal 1998
which increase was partially offset by (ii) a slight decline in sales of the
reference source product line due to increased competition.
GROSS PROFIT. Gross profit increased $218,000 or 26% to $1,070,000 for the six
months ended April 30, 1998 from $851,000 for the six months ended April 30,
1997. Gross profit as a percent of sales remained consistent between the
periods.
RESEARCH AND DEVELOPMENT. Research and development efforts continued into the
first half of 1998 and such expenditures totaled $67,000 for the period under
review, compared to $15,000 in the same 1997 period. The increase was due
primarily to development efforts associated with the brachytherapy source line.
Such expenditures are expected to increase in future periods.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A expenses increased $256,000,
or 46%, to $811,000 for the six months ended April 30, 1998 from $555,000 for
the six months ended April 30, 1997. SG&A expenses increased primarily due to
the following: (i) the Company added staff to focus on increasing reference
source business product sales and gross margins, and to develop capabilities for
new product lines (ii) an increase in other general and administrative expenses
to support the growth of the Company and (iii) the inclusion of $85,000 in waste
disposal costs associated with the Company's first waste shipment since it began
operations in 1990.
INCOME FROM OPERATIONS. Income from operations decreased $90,000 to $191,000
for the six months ended April 30, 1998, from $281,000 for the six months ended
April 30, 1997. This decrease is a result of the factors described above.
INTEREST INCOME. Interest income increased $293,000 to $309,000 for the six
months ended April 30, 1998 from $16,000 for the six months ended April 30,
1997. This increase resulted from the investment of funds received from the
Company's 1997 private placement.
NET INCOME. Net income increased $142,000 to $321,000 for the six months ended
April 30, 1998 from $179,000 for the six months ended April 30, 1997. The
increase is a result of the factors described above.
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<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At April 30, 1998, the Company had cash and cash equivalents aggregating
approximately $12.8 million. The increase in the Company's cash position during
the six months ended April 30, 1998, was primarily the result of the private
placement of 800,000 shares of its common stock in November 1997 which resulted
in net proceeds to the Company of approximately $13.3 million. For the six
months ended April 30, 1998, net cash provided by operating activities was
approximately $.3 million. Cash used in investing activities for capital
expenditures and agreements with PracSys totaling approximately $2.4 million
were made during the six months ended April 30, 1998. The capital expenditures
primarily related to projects designed to increase manufacturing capacity for
the new brachytherapy source line.
To date, the Company's short term liquidity needs have generally consisted of
operating capital to finance growth in inventories, trade accounts receivable
and new product development as well as to take advantage of strategic
investments in related businesses. The Company has satisfied these needs
primarily through a combination of private and public equity financings and from
cash generated by operations. The Company has no long-term debt and has not
had, or had the need for, a line of credit or similar arrangement with a bank.
Management anticipates that its existing cash resources will be sufficient to
fund its planned expansion over the next 24 months, although additional funding
may be required to fund the acquisition of complementary businesses,
technologies or products.
YEAR 2000 COMPLIANCE. While Year 2000 considerations are not expected to
materially impact the Company's internal operations, they may have an effect on
some of the Company's customers and suppliers, and thus indirectly affect the
Company. It is not possible to quantify the aggregate costs to the Company with
respect to customers and suppliers with Year 2000 problems, although the Company
does not anticipate it will have a material adverse impact on its business.
-10-
<PAGE>
PART II - OTHER INFORMATION
The Company was not required to report the information pursuant to Items 1
through 6 of Part II of Form 10-QSB except as follows:
ITEM 1 LEGAL PROCEEDINGS
In June 1996, an action was commenced in the United States District Court for
the Eastern District of Virginia entitled BEST INDUSTRIES, INC vs. CIS BIO
INTERNATIONAL, INC. et al., Civil Action 96-737-A. See the Company's
disclosure under Item 3 - Legal Proceedings in its Annual Report on Form 10-KSB
for the fiscal year ended October 31, 1997 and Item 1 - Legal Proceedings in its
Quarterly Report on Form 10-QSB for the first quarter ended January 31, 1998.
Upon remand to the lower court, the court awarded fees and costs to the Company
in the amount of approximately $11,000 in May 1998. Upon payment of such fees
and costs by the plaintiff, the case was dismissed by the lower court without
prejudice. The Company continues to believe the allegations contained in the
original complaint were without merit, and if the case is refiled by the
plaintiff the Company intends to vigorously defend such action.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 3, 1998, the Company held its 1998 Annual Meeting of Stockholders. The
following persons were elected as directors to hold office until the 1999 Annual
Meeting of Stockholders: Irwin J. Gruverman, L. Michael Cutrer, Dr. Allan M.
Green, Larry Berkin and Michael C. Lee. The number of shares cast for, withheld
and abstained with respect to each of the nominees were as follows:
<TABLE>
<CAPTION>
NOMINEE FOR WITHHELD ABSTAINED
<S> <C> <C> <C>
Gruverman 3,682,949 2,500 0
Cutrer 3,682,949 2,500 0
Green 3,682,949 2,500 0
Berkin 3,682,949 2,500 0
Lee 3,682,949 2,500 0
</TABLE>
The stockholders also voted to adopt an amendment to the 1996 Stock Option Plan
of the Company to increase the number of shares issuable thereunder to
1,500,000. A total of 1,849,389 shares were cast for the adoption of the
proposal, 144,200 shares were cast against this proposal, and 33,075 shares
abstained.
The stockholders also voted to approve the ratification of the selection of
Price Waterhouse LLP as independent accountants for the Company for the fiscal
year ending October 31, 1998. A total of 3,683,374 shares were cast for the
adoption of the proposal, 1,800 shares were cast against this proposal, and 275
shares abstained.
1,658,785 broker nonvotes were received in connection with the vote upon the
amendment to the 1996 Stock Option Plan.
-11-
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits - The following Exhibits are filed herewith:
Exhibit 11.1 - Computation of Earnings per Share
Exhibit 27 - Financial Data Schedules
b. Reports on Form 8-K -. The Registrant filed a Current Report on Form 8-K
on February 9, 1998 to make certain disclosures concerning pending
litigation. The Registrant filed a Current Report on Form 8-K on February
19, 1998 to disclose the consummation of agreements with PracSys Corp.
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.
NORTH AMERICAN SCIENTIFIC, INC.
June 12, 1998 By: /s/ L. Michael Cutrer
--------------------------------
Name: L. Michael Cutrer
Title: President and
Chief Executive Officer
June 12, 1998 By: /s/ Alan I. Edrick
--------------------------------
Name: Alan I. Edrick
Title: Chief Financial Officer
-12-
<PAGE>
EXHIBIT 11.1
NORTH AMERICAN SCIENTIFIC, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
-------------------------- --------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
NET INCOME USED TO COMPUTE PER SHARE DATA
Net income . . . . . . . . . . . . . . . . . . . $ 279,000 $ 102,000 $ 321,000 $ 179,000
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Shares
Weighted average number of common
shares outstanding (basic). . . . . . . . . . 6,408,264 4,542,302 6,292,283 4,531,052
Add dilutive effect of
Common stock options . . . . . . . . . . . . 733,913 859,500 747,019 859,500
Warrants. . . . . . . . . . . . . . . . . . . 171,000 225,000 171,000 187,500
Less treasury shares repurchased . . . . . . . . 153,974 554,850 157,586 635,430
Weighted average number of common
shares outstanding (diluted). . . . . . . . . 7,159,203 5,071,952 7,052,716 4,942,622
Earnings per Common Share
Basic . . . . . . . . . . . . . . . . . . . . $ .04 $ .02 $ .05 $ .04
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Diluted . . . . . . . . . . . . . . . . . . . $ .04 $ .02 $ .05 $ .04
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
-13-
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0
0
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<INCOME-TAX> 179
<INCOME-CONTINUING> 321
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<NET-INCOME> 321
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
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<RESTATED>
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS YEAR
<FISCAL-YEAR-END> OCT-31-1997 OCT-31-1997 OCT-31-1997 OCT-31-1997
<PERIOD-START> NOV-01-1996 NOV-01-1996 NOV-01-1996 NOV-01-1996
<PERIOD-END> JAN-31-1997 APR-30-1997 JUL-31-1997 OCT-31-1997
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<PP&E> 469,800 541,500 605,900 635,100
<DEPRECIATION> (250,900) (263,100) (276,000) (289,000)
<TOTAL-ASSETS> 1,917,300 2,113,900 3,221,000 3,673,100
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0 0 0 0
0 0 0 0
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<CGS> 438,500 918,000 1,367,100 1,844,200
<TOTAL-COSTS> 288,800 555,000 851,300 1,094,600
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<LOSS-PROVISION> 0 0 0 0
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<INCOME-PRETAX> 109,700 296,900 374,700 420,800
<INCOME-TAX> 32,300 117,900 154,500 144,600
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<EPS-PRIMARY> .03 .04 .05 .06
<EPS-DILUTED> .02 .04 .04 .05
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