Back to GetFilings.com



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
__________

Form 10-Q

[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934
 
           For the quarterly period ended December 31, 2003

OR

[    ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

          For the transition period from ____________ to ____________

Commission file number 1-31943

CRITICARE SYSTEMS, INC. 
(Exact name of registrant as specified in its charter)
 
                                           Delaware               39-1501563
                                (State or other jurisdiction                         (IRS Employer Identification No.)
                  of incorporation or organization)

20925 Crossroads Circle, Suite 100, Waukesha, Wisconsin     53186
(Address of principal executive offices)                            (Zip Code)

Registrant's telephone number including area code (262) 798-8282

                                                        N/A                                                            
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  [    ]
 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes [    ]   No  [ X ]
 
Number of shares outstanding of each class of the registrant's classes of common stock as of December 31, 2003: Class A Common Stock 11,277,541 shares.



     

CRITICARE SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND JUNE 30, 2003

(UNAUDITED)

 
ASSETS
December 31,
 2003
June 30,
2003
 
 
 
 
 
CURRENT ASSETS:
 
 
    
 
  
Cash and cash equivalents
$
3,847,088
 
$
3,716,446
 
Accounts receivable, less allowance for doubtful accounts
 
 
    
 
  
of $350,000 and $300,000, respectively
 
7,561,723
   
5,627,198
 
Other receivables
 
421,556
   
553,147
 
Inventories
 
5,951,460
   
6,347,208
 
Prepaid expenses
 
252,065
   
340,934
 
 
 
 
Total current assets
 
18,033,892
   
16,584,933
 
 
  
 
    
 
  
Property, plant and equipment – net
 
2,079,728
   
2,093,408
 
 
  
 
    
 
  
License rights and patents – net
 
80,485
   
83,986
 
 
 
 
 
  
 
    
 
  
TOTAL ASSETS
$
20,194,105
 
$
18,762,327
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
    
 
  
 
  
 
    
 
  
CURRENT LIABILITIES:
 
 
    
 
  
Accounts payable
$
3,094,461
 
$
2,272,953
 
Accrued liabilities:
 
 
    
 
  
Compensation and commissions
 
929,942
   
850,034
 
Product warranties
 
420,321
   
312,000
 
Other
 
305,492
   
254,470
 
 
 
 
Total current liabilities
 
4,750,216
   
3,689,457
 
 
  
 
    
 
  
OTHER LONG-TERM OBLIGATIONS
 
31,953
   
38,662
 
 
  
 
    
 
  
TOTAL LIABILITIES
 
4,782,169
   
3,728,119
 
 
  
 
    
 
  
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, 11,404,874
 
 
    
 
  
shares issued, and 11,277,541 and 11,073,832 outstanding, respectively
 
456,195
   
448,161
 
Additional paid-in capital
 
23,703,918
   
23,360,244
 
Common stock held in treasury (127,333 and 130,192 shares, respectively)
 
(414,292
)
 
(419,618
)
Subscriptions receivable
 
(225,000
)
 
(225,000
)
Retained earnings (accumulated deficit)
 
(8,105,403
)
 
(8,126,097
)
Cumulative translation adjustment
 
(3,482
)
 
(3,482
)
 
 
 
Total stockholders' equity
 
15,411,936
   
15,034,208
 
 
 
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
20,194,105
 
$
18,762,327
 
 
 
 

See notes to consolidated financial statements.


  2  

CRITICARE SYSTEMS, INC.
CONSOLIDATED INCOME STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 2003 AND 2002
(UNAUDITED)

 
           2003
2002
 
 
NET SALES
$
15,352,694
 
$
15,353,953
 
 
  
 
    
 
  
COST OF GOODS SOLD
 
9,093,679
   
9,018,466
 
 
 
 
GROSS PROFIT
 
6,259,015
   
6,335,487
 
 
  
 
    
 
  
OPERATING EXPENSES:
 
 
    
 
  
Sales and marketing
 
3,372,216
   
3,341,298
 
Research, development and engineering
 
1,224,313
   
1,385,655
 
Administrative
 
1,725,051
   
2,088,761
 
 
 
 
Total
 
6,321,580
   
6,815,714
 
 
  
 
    
 
  
LOSS FROM OPERATIONS
 
(62,565
)
  
(480,227
)
 
  
 
    
 
  
OTHER INCOME (EXPENSE):
 
 
    
 
  
Interest expense
 
—
   
(91,533
)
Interest income
 
20,749
   
28,528
 
Other
 
62,510
   
431,752
 
 
 
 
Total
 
83,259
   
368,747
 
 
  
 
    
 
  
INCOME (LOSS) BEFORE INCOME TAXES
 
20,694
   
(111,480
)
 
  
 
    
 
  
INCOME TAX PROVISION
 
—
   
—
 
 
 
 
NET INCOME (LOSS)
$
20,694
 
$
(111,480
)
 
 
 
NET INCOME (LOSS) PER COMMON SHARE:
 
 
    
 
  
Basic
$
0.00
 
$
(0.01
)
Diluted
$
0.00
 
$
(0.01
)
 
  
 
    
 
  
WEIGHTED AVERAGE NUMBER OF COMMON
 
 
    
 
  
SHARES OUTSTANDING:
 
 
    
 
  
Basic
 
11,098,339
   
11,071,264
 
Diluted
 
11,432,539
   
11,071,264
 

See notes to consolidated financial statements.


  3  

CRITICARE SYSTEMS, INC.
CONSOLIDATED INCOME STATEMENTS
THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002
(UNAUDITED)

 
           2003
2002
 
 
 
NET SALES
$
8,980,277
 
$
9,049,606
 
 
  
 
    
 
  
COST OF GOODS SOLD
 
5,295,668
   
5,111,466
 
 
 
 
GROSS PROFIT
 
3,684,609
   
3,938,140
 
 
  
 
    
 
  
OPERATING EXPENSES:
 
 
    
 
  
Sales and marketing
 
1,864,770
   
2,014,338
 
Research, development and engineering
 
623,721
   
756,715
 
Administrative
 
823,793
   
1,131,531
 
 
 
 
Total
 
3,312,284
   
3,902,584
 
 
  
 
    
 
  
INCOME FROM OPERATIONS
 
372,325
   
35,556
 
 
  
 
    
 
  
OTHER INCOME (EXPENSE):
 
 
    
 
  
Interest expense
 
—
   
—
 
Interest income
 
11,009
   
12,662
 
Other
 
29,090
   
131,953
 
 
 
 
Total
 
40,099
   
144,615
 
 
  
 
    
 
  
INCOME BEFORE INCOME TAXES
 
412,424
   
180,171
 
 
  
 
    
 
  
INCOME TAX PROVISION
 
—
   
—
 
 
 
 
NET INCOME
$
412,424
 
$
180,171
 
 
 
 
NET INCOME PER COMMON SHARE:
 
 
    
 
  
Basic
$
0.04
 
$
0.02
 
Diluted
$
0.04
 
$
0.02
 
 
  
 
    
 
  
WEIGHTED AVERAGE NUMBER OF COMMON
 
 
    
 
  
SHARES OUTSTANDING:
 
 
    
 
  
Basic
 
11,121,941
   
11,069,846
 
Diluted
 
11,475,656
   
11,382,915
 

See notes to consolidated financial statements.


  4  

CRITICARE SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 2003 AND 2002

(UNAUDITED)

 
2003
2002
 
OPERATING ACTIVITIES:
 
 
    
 
  
Net income (loss)
$
20,694
 
$
(111,480
)
Adjustments to reconcile net income (loss) to net cash
 
 
    
 
  
  provided by operating activities:
 
 
    
 
  
Depreciation
 
282,897
   
453,725
 
Amortization
 
3,501
   
3,500
 
Provision for doubtful accounts
 
52,442
   
—
 
Provision for obsolete inventory
 
353,103
   
(177,813
)
Gain on sale of Immtech stock
 
—
   
(255,843
)
Gain on sale of building
 
—
   
(41,208
)
Changes in assets and liabilities:
 
 
    
 
  
Accounts receivable
 
(1,986,967
)
 
(875,230
)
Other receivables
 
131,591
   
97,786
 
Inventories
 
17,700
   
(145,120
)
Prepaid expenses
 
88,869
   
122,080
 
Accounts payable
 
821,508
   
1,275,323
 
Accrued liabilities
 
232,542
   
146,219
 
 
 
 
Net cash provided by operating activities
 
17,880
   
491,939
 
 
  
 
    
 
  
INVESTING ACTIVITIES:
 
 
    
 
  
Purchases of property, plant and equipment, net
 
(244,272
)
 
(557,597
)
Proceeds from sale of Immtech stock
 
—
   
255,843
 
Proceeds from sale of building
 
—
   
3,795,164
 
 
 
 
Net cash (used in) provided by investing activities
 
(244,272
)
 
3,493,410
 
 
  
 
    
 
  
FINANCING ACTIVITIES:
 
 
    
 
  
Retirement of long-term debt
 
—
   
(3,197,125
)
Repurchase of Company common stock
 
—
   
(121,359
)
Proceeds from issuance of common stock
 
357,034
   
13,364
 
 
 
 
Net cash provided by (used in) financing activities
 
357,034
   
(3,305,120
)