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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 2002 Commission File No. 2-82655
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INTERWEST MEDICAL CORPORATION
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(Exact name of registrant as specified in its charter)
Oklahoma 75-1864474
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
Arlington Heights Professional Office Building
3221 Hulen Street, Suite C, Fort Worth, TX 76107-6193
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(Address of principal executive offices, zip code)
Registrant's telephone number, including area code: (817)731-2743
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Not Applicable
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(Former name, former address, and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
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APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
(Not Applicable)
Yes X No
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(APPLICABLE TO CORPORATE ISSUERS)
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report. 15,917,911
shares of Common Stock, $0.001 Par Value.
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2002 2001
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(unaudited)
ASSETS
CURRENT ASSETS
Cash $ 952,687 $ 1,412,024
Accounts receivable - trade 2,577,185 2,359,104
Income taxes receivable 4,641 4,641
Investments - trading 1,738,155 1,477,949
Prepaid expenses and other receivables 146,952 86,637
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Total current assets 5,419,620 5,340,355
PROPERTY AND EQUIPMENT, at cost
Land 294,354 294,354
Buildings and improvements 3,960,924 3,960,924
Equipment and furniture 1,404,243 1,236,298
Oil and gas properties (successful efforts method of accounting) 182,636 170,489
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5,842,157 5,662,065
Less accumulated depreciation 2,387,082 2,272,882
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3,455,075 3,389,183
OTHER ASSETS
Cash escrow accounts 34,290 27,888
Deferred financing costs, net 361,995 361,995
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396,285 389,883
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TOTAL ASSETS $ 9,270,980 $ 9,119,421
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 47,290 $ 47,290
Accounts payable 2,605,031 1,736,400
Accrued expenses 372,297 596,627
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Total current liabilities 3,024,618 2,380,317
LONG-TERM DEBT 4,300,196 4,340,814
STOCKHOLDERS' EQUITY
Common stock, par value $0.001
authorized 50,000,000 shares; issued 22,000,000 shares 22,000 22,000
Additional paid-in capital 5,096,745 5,096,745
Retained earnings (2,121,370) (1,669,916)
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2,997,375 3,448,829
Less
Cost of shares held in the treasury
2002 - 6,082,089 shares; 2001 - 6,075,389 shares 891,209 890,539
Notes receivable - officer 160,000 160,000
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1,946,166 2,398,290
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,270,980 $ 9,119,421
============= =============
See Accompanying Notes to Condensed
Consolidated Financial Statements.
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------- --------------------------------
2002 2001 2002 2001
-------------- -------------- -------------- --------------
Net patient service revenue $ 3,346,771 $ 3,474,853 $ 6,450,194 $ 6,704,682
Other revenue 5,934 24,430 37,391 43,541
-------------- -------------- -------------- --------------
Total revenue 3,352,705 3,499,283 6,487,585 6,748,223
COSTS AND EXPENSES
Professional care of patients 1,972,499 1,906,990 3,800,511 3,722,232
General services 642,234 609,703 1,261,634 1,180,734
Administrative services 550,360 636,872 1,000,923 1,170,445
Other costs 2,529 3,216 16,108 8,800
Depreciation, depletion
and amortization 68,149 64,090 130,609 128,180
-------------- -------------- -------------- --------------
Income from operations 116,934 278,412 277,800 537,832
OTHER INCOME (EXPENSES)
Interest income 7,051 4,929 12,898 12,285
Interest expense (69,216) (86,147) (148,316) (185,502)
Investment income (loss) (592,705) 184,113 (593,836) (335,773)
-------------- -------------- -------------- --------------
Income (loss) before
taxes on income (loss) (537,936) 381,307 (451,454) 28,842
Provision (benefit)
for income taxes -- -- -- --
-------------- -------------- -------------- --------------
NET INCOME (LOSS) $ (537,936) $ 381,307 $ (451,454) $ 28,842
============== ============== ============== ==============
Weighted average number
of shares outstanding 15,917,911 15,930,111 15,920,702 15,930,111
============== ============== ============== ==============
Earnings per common share -
basic and diluted $ (0.03) $ 0.02 $ (0.03) $ 0.00
============== ============== ============== ==============
See Accompanying Notes to Condensed
Consolidated Financial Statements.
INTERWEST MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
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2002 2001
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CASH FLOWS FROM OPERATING ACTIVITIES $ (214,801) $ 25,235
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition of property (210,846) (155,119)
Net changes in escrow accounts (6,402) (6,402)
Proceeds from sale of property and equipment 14,000 --
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Net cash provided by
(used in) investing activities (203,248) (161,521)
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock (670) --
Payments on borrowings (40,618) (21,970)
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Net cash provided by
(used in) financing activities (41,288) (21,970)
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Net increase (decrease) in cash (459,337) (158,256)
CASH, beginning of period 1,412,024 885,513
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CASH, end of period $ 952,687 $ 727,257
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See Accompanying Notes to Condensed
Consolidated Financial Statements.
INTERWEST MEDICAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to
present fairly the Company's financial position as of June 30, 2002, and
its results of operations for the three and six months ended June 30,
2002 and 2001, and cash flows for the six months ended June 30, 2002 and
2001. The results of operations for the period presented are not
necessarily indicative of the results to be expected for a full year.
2. Income per share was computed by dividing the net income by the weighted
average number of shares outstanding.
REVIEW BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Weaver and Tidwell, L.L.P., Independent Certified Public Accountants, have
performed a review of the condensed consolidated balance sheet as of June 30,
2002 and the condensed consolidated statements of operations for the three and
six months ended June 30, 2002 and 2001, and cash flows for the six months ended
June 30, 2002 and 2001, in accordance with established professional standards
and procedures for such a review. All adjustments or additional disclosures
proposed by Weaver and Tidwell, L.L.P. have been reflected in the data
presented.
The report of Weaver and Tidwell, L.L.P. commenting upon their review is
included as Part I - Exhibit I.
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
To the Board of Directors
InterWest Medical Corporation
We have reviewed the condensed consolidated balance sheet of InterWest Medical
Corporation as of June 30, 2002, and the related condensed consolidated
statements of operations for the three and six month periods ended June 30, 2002
and 2001, and cash flows for the six months ended June 30, 2002 and 2001. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists of obtaining an understanding of the system for the
preparation of interim financial information, applying analytical review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated statements referred to above,
for them to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 2001, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the year then ended (not presented herein); and in our report dated
February 18, 2002, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 2001, is fairly stated
in all material respects in relation to the consolidated balance sheet from
which it has been derived.
WEAVER AND TIDWELL, L.L.P.
Fort Worth, Texas
August 7, 2002
PART I - EXHIBIT I
Item 2. Management's Discussion and Analysis of Financial Position and
Results of Operations.
Changes in Balance Sheet Accounts
Current assets were $5,419,620 and total assets were $9,270,980 at June 30, 2002
as compared to current assets $5,340,355 and $9,119,421 total assets at December
31, 2001. Current liabilities were $3,024,618 at June 30, 2002 as compared to
$2,380,317 at December 31, 2001.
Results of Operations
For the Three Months Ended June 30, 2002, operating revenue was $3,552,705;
costs and expenses were $3,235,771, net loss was ($537,936) and interest income
was $7,051, as compared to the Three Months Ended June 30, 2001, operating
revenue of $3,499,283, costs and expenses of $3,220,871, net income of $381,307
and interest income of $4,929.
For the Six Months Ended June 30, 2002, operating revenue was $6,487,585; costs
and expenses were $6,209,785; net loss was ($451,454) and interest income was
$12,898, as compared to the Six Months Ended June 30, 2001, operating revenue of
$6,748,223; costs and expenses of $6,210,391; net income of $28,842 and interest
income of $12,285.
Cash Flows
For the Six Months Ended June 30, 2002, cash flows from operating activities
were ($214,801), cash flows from investing activities were ($203,248), cash
flows from financing activities were ($41,288), net decrease in cash was
($459,337), cash at the beginning of the period was $1,412,024, and cash at the
end of the period was $952,687 as compared to the Six Months Ended June 30,
2001, to cash flows from operating activities of $25,235, cash flows from
investing activities of ($161,521), cash flows from financing activities of
($21,970), net decrease in cash of ($158,256), cash at the beginning of the
period of $885,513, and cash at the end of the period of $727,257.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders.
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) None.
(b) None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its half by the
undersigned thereunto duly authorized.
INTERWEST MEDICAL CORPORATION
By: /s/ ARCH B. GILBERT
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Arch B. Gilbert, President,
Chief Executive Officer,
Chief Financial Officer, and
Chief Accounting Officer
Date: August 12, 2002
CERTIFICATION OF OFFICERS
OF INTERWEST MEDICAL CORPORATION
PURSUANT TO 18 USC SECTION 1350
I hereby certify that the accompanying report on Form 10-Q for the period ended
June 30, 2002, and filed with the Securities and Exchange Commission on the date
hereof pursuant to Section 13(a) of the Securities Exchange Act of 1934 (the
"Report") by InterWest Medical Corporation fully complies with the requirements
of that section.
I further certify that the information contained in the Report fairly presents,
in all material respects, the financial condition and results of operations of
the company.
/s/ ARCH B. GILBERT August 12
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Arch B. Gilbert
President, Chief Executive Officer
and Chief Financial Officer