CRITICARE
SYSTEMS, INC.
|
(Exact
name of registrant as specified in its
charter) |
Delaware |
39-1501563 | |
(State
or other jurisdiction of
incorporation
or organization) |
(IRS
Employer Identification No.) |
20925
Crossroads Circle, Suite 100, Waukesha, Wisconsin |
53186
| |
(Address
of principal executive offices) |
(Zip
Code) |
N/A
|
Former
name, former address and former fiscal year, if changed since last
report. |
ASSETS |
March
31, 2005 |
June
30, 2004 |
|||||
CURRENT
ASSETS: |
|||||||
Cash
and cash equivalents |
$ |
3,731,417 |
$ |
3,738,825 |
|||
Accounts
receivable, less allowance for doubtful accounts |
|||||||
of
$300,000 and $260,000, respectively |
6,345,700
|
6,489,884
|
|||||
Other
receivables |
446,233
|
359,806
|
|||||
Inventories
|
5,478,645
|
6,418,135
|
|||||
Prepaid
expenses |
190,913
|
364,375
|
|||||
Total
current assets |
16,192,908
|
17,371,025
|
|||||
Property,
plant and equipment - net |
1,640,645
|
2,094,330 |
|||||
License
rights and patents - net |
71,733
|
76,985 |
|||||
TOTAL
ASSETS |
$ |
17,905,286 |
$ |
19,542,340 |
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY |
|||||||
CURRENT
LIABILITIES: |
|||||||
Accounts
payable |
$ |
2,844,321 |
$ |
3,237,405 |
|||
Accrued
liabilities: |
|||||||
Compensation
and commissions |
844,926
|
863,113
|
|||||
Product
warranties |
486,000
|
444,000
|
|||||
Liability
under guarantees |
— |
490,000
|
|||||
Out
of court settlement |
— |
200,000
|
|||||
Obligations
under capital lease |
61,442
|
57,712
|
|||||
Other
|
146,731
|
174,395
|
|||||
Total
current liabilities |
4,383,420
|
5,466,625
|
|||||
LONG-TERM
LIABILITIES: |
|||||||
Obligations
under capital lease |
218,211
|
264,770
|
|||||
Other
long-term obligations |
13,171
|
21,646
|
|||||
Total
long-term liabilities |
231,382
|
286,416
|
|||||
TOTAL
LIABILITIES |
4,614,802
|
5,753,041
|
|||||
STOCKHOLDERS'
EQUITY: |
|||||||
Preferred
stock - $.04 par value, 500,000 shares authorized,
no
shares issued or outstanding |
— |
— |
|||||
Common
stock - $.04 par value, 15,000,000 shares authorized, 11,696,649 and
11,574,749 shares
issued,
respectively, and 11,581,766 and 11,450,021 shares outstanding,
respectively |
|||||||
|
467,865 |
462,990 |
|||||
Additional
paid-in capital |
24,237,384 |
23,965,900 |
|||||
Common
stock held in treasury (114,883 and 124,728 shares,
respectively) |
(391,099 |
) |
(409,439 |
) | |||
Retained
earnings (accumulated deficit) |
(11,020,184 |
) |
(10,226,670 |
) | |||
Cumulative
translation adjustment |
(3,482 |
) |
(3,482 |
) | |||
Total
stockholders' equity |
13,290,484 |
13,789,299 |
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
17,905,286 |
$ |
19,542,340 |
2005 |
2004 |
||||||
NET
SALES |
$ |
18,760,733 |
$ |
21,923,864 |
|||
COST
OF GOODS SOLD |
11,357,934 |
12,855,828 |
|||||
GROSS
PROFIT |
7,402,799 |
9,068,036 |
|||||
OPERATING
EXPENSES: |
|||||||
Sales
and marketing |
4,231,575 |
5,316,293 |
|||||
Research,
development and engineering |
1,899,752 |
1,810,732 |
|||||
Administrative |
2,140,193 |
2,484,791 |
|||||
Total |
8,271,520 |
9,611,816 |
|||||
LOSS
FROM OPERATIONS |
(868,721 |
) |
(543,780 |
) | |||
OTHER
INCOME (EXPENSE): |
|||||||
Interest
expense |
(23,091 |
) |
— |
||||
Interest
income |
38,311 |
29,496 |
|||||
Other
income |
59,987 |
122,371 |
|||||
Total |
75,207 |
151,867 |
|||||
LOSS
BEFORE INCOME TAXES |
(793,514 |
) |
(391,913 |
) | |||
INCOME
TAX PROVISION |
— |
— |
|||||
NET
LOSS |
$ |
(793,514 |
) |
$ |
(391,913 |
) | |
NET
LOSS PER COMMON SHARE: |
|||||||
Basic |
$ |
(0.07 |
) |
$ |
(0.04 |
) | |
Diluted |
$ |
(0.07 |
) |
$ |
(0.04 |
) | |
WEIGHTED
AVERAGE NUMBER OF COMMON |
|||||||
SHARES
OUTSTANDING: |
|||||||
Basic |
11,469,066 |
11,173,768 |
|||||
Diluted |
11,469,066 |
11,173,768 |
2005 |
2004 |
||||||
NET
SALES |
$ |
6,054,370 |
$ |
6,571,171 |
|||
COST
OF GOODS SOLD |
3,624,399 |
3,762,149 |
|||||
GROSS
PROFIT |
2,429,971 |
2,809,022 |
|||||
OPERATING
EXPENSES: |
|||||||
Sales
and marketing |
1,358,781 |
1,944,077 |
|||||
Research,
development and engineering |
724,817 |
586,419 |
|||||
Administrative |
649,823 |
759,740 |
|||||
Total |
2,733,421 |
3,290,236 |
|||||
LOSS
FROM OPERATIONS |
(303,450 |
) |
(481,214 |
) | |||
OTHER
INCOME (EXPENSE): |
|||||||
Interest
expense |
(6,064 |
) |
— |
||||
Interest
income |
18,238 |
8,748 |
|||||
Other
income |
46,405 |
59,859 |
|||||
Total |
58,579 |
68,607 |
|||||
LOSS
BEFORE INCOME TAXES |
(244,871 |
) |
(412,607 |
) | |||
INCOME
TAX PROVISION |
— |
— |
|||||
NET
LOSS |
$ |
(244,871 |
) |
$ |
(412,607 |
) | |
NET
LOSS PER COMMON SHARE: |
|||||||
Basic |
$ |
(0.02 |
) |
$ |
(0.04 |
) | |
Diluted |
$ |
(0.02 |
) |
$ |
(0.04 |
) | |
WEIGHTED
AVERAGE NUMBER OF COMMON |
|||||||
SHARES
OUTSTANDING: |
|||||||
Basic |
11,501,085 |
11,326,283 |
|||||
Diluted |
11,501,085 |
11,326,283 |
2005 |
2004 |
||||||
OPERATING
ACTIVITIES: |
|||||||
Net
loss |
$ |
(793,514 |
) |
$ |
(391,913 |
) | |
Adjustments
to reconcile net loss to net cash |
|||||||
used
in operating activities: |
|||||||
Depreciation |
448,691 |
442,910 |
|||||
Amortization |
5,252 |
5,251 |
|||||
Provision
for doubtful accounts |
40,000 |
80,602 |
|||||
Provision
for obsolete inventory |
340,000 |
429,073 |
|||||
Changes
in assets and liabilities: |
|||||||
Accounts
receivable |
104,184 |
(1,295,961 |
) | ||||
Other
receivables |
(86,427 |
) |
57,073 |
||||
Inventories |
683,561 |
(400,094 |
) | ||||
Prepaid
expenses |
173,462 |
28,939 |
|||||
Accounts
payable |
(393,084 |
) |
695,729 |
||||
Accrued
liabilities |
(702,326 |
) |
114,555 |
||||
Net
cash used in operating activities |
(180,201 |
) |
(233,836 |
) | |||
INVESTING
ACTIVITIES: |
|||||||
Purchases
of property, plant and equipment, net |
(79,078 |
) |
(324,360 |
) | |||
Net
cash used in investing activities |
(79,078 |
) |
(324,360 |
) | |||
FINANCING
ACTIVITIES: |
|||||||
Retirement
of obligations under capital lease |
(42,828 |
) |
— |
||||
Proceeds
from issuance of common stock |
294,699 |
827,059 |
|||||
Net
cash provided by financing activities |
251,871 |
827,059 |
|||||
NET
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
(7,408 |
) |
268,863 |
||||
CASH
AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
3,738,825 |
3,716,446 |
|||||
CASH
AND CASH EQUIVALENTS, END OF PERIOD |
$ |
3,731,417 |
$ |
3,985,309 |
|||
SUPPLEMENTAL
CASH FLOW INFORMATION: |
|||||||
Cash
paid for: |
|||||||
Income
taxes paid-net |
$ |
3,444 |
$ |
3,053 |
|||
Interest |
$ |
23,091 |
— |
March
31, 2005 |
June
30, 2004 |
||||||
Component
parts |
$ |
1,992,358 |
$ |
1,988,414 |
|||
Work
in process |
1,159,774 |
781,156 |
|||||
Finished
units |
3,276,513 |
4,258,565 |
|||||
Total
inventories |
6,428,645 |
7,028,135 |
|||||
Less:
reserve for obsolescence |
950,000 |
610,000 |
|||||
Net
inventory |
$ |
5,478,645 |
$ |
6,418,135 |
March
31, 2005 |
June
30, 2004 |
||||||
Machinery
and equipment |
$ |
2,768,721 |
$ |
2,675,093 |
|||
Furniture
and fixtures |
889,108 |
937,906 |
|||||
Leasehold
improvements |
218,423 |
218,423 |
|||||
Production
tooling |
2,064,866 |
2,030,618 |
|||||
Demonstration
and loaner monitors |
808,209 |
945,339 |
|||||
Property,
plant and equipment - cost |
6,749,327 |
6,807,379 |
|||||
Less:
accumulated depreciation |
(5,108,682 |
) |
(4,713,049 |
) | |||
Property,
plant and equipment - net |
$ |
1,640,645 |
$ |
2,094,330 |
Three
Months Ended |
|
Nine
Months Ended |
| ||||||||||
|
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|||||
Net
income (loss) - as reported |
$ |
(244,871 |
) |
$ |
(412,607 |
) |
$ |
(793,514 |
) |
$ |
(391,913 |
) | |
Net
income (loss) - pro forma |
$ |
(356,989 |
) |
$ |
(431,118 |
) |
$ |
(1,129,867 |
) |
$ |
(447,446 |
) | |
Basic
net income (loss) per share - as reported |
$ |
(0.02 |
) |
$ |
(0.04 |
) |
$ |
(0.07 |
) |
$ |
(0.04 |
) | |
Diluted
net income (loss) per share - as reported |
$ |
(0.02 |
) |
$ |
(0.04 |
) |
$ |
(0.07 |
) |
$ |
(0.04 |
) | |
Basic
net income (loss) per share - pro forma |
$ |
(0.03 |
) |
$ |
(0.04 |
) |
$ |
(0.10 |
) |
$ |
(0.04 |
) | |
Diluted
net income (loss) per share - pro forma |
$ |
(0.03 |
) |
$ |
(0.04 |
) |
$ |
(0.10 |
) |
$ |
(0.04 |
) |
3.1 |
Restated
Certificate of Incorporation of the Company (incorporated by reference to
the Registration Statement filed on Form S-1, Registration No.
33-13050). |
3.2 |
By-Laws
of the Company (incorporated by reference to the Registration Statement
filed on Form S-1, Registration No.
33-13050). |
4.1 |
Specimen
Common Stock certificate (incorporated by reference to the Registration
Statement filed on Form S-1, Registration No.
33-13050). |
4.2 |
Rights
Agreement (incorporated by reference to the Company’s Current Report on
Form 8-K filed on April 18, 1997). |
31.1 |
Certification
of Emil H. Soika, President and Chief Executive Officer (Principal
Executive Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. |
31.2 |
Certification
of Joel D. Knudson, Vice President - Finance and Secretary (Principal
Financial Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of
2002. |
32* |
Certification
of Principal Executive Officer and Principal Financial Officer pursuant to
18 U.S.C. Section 1350. |