UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
ý QUARTERLY REPORT PURSUANT TO
SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended September 30, 2002
or
o TRANSITION REPORT PURSUANT TO
SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 000-30406
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HealthTronics Surgical Services, Inc. |
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(Exact name of registrant as specified in its charter) |
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Georgia |
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58-2210668 |
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(State or other
jurisdiction of |
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(I.R.S. Employer |
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1841
West Oak Parkway, Suite A |
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30062 |
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(Address of principal
executive |
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(Zip Code) |
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(770) 419-0691 |
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(Registrant’s telephone number, including area code) |
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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 ý No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock.
11,194,904 Shares of No Par Value Common Stock as of October 31, 2002
HEALTHTRONICS SURGICAL SERVICES, INC.
INDEX TO FORM 10-Q
2
Part 1. Financial Information
Item 1. Financial Statements
HealthTronics Surgical Services, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
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September
30, |
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December
31, |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
10,258,522 |
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$ |
9,905,210 |
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Trade accounts receivable, less allowance for doubtful accounts of $901,881and $1,455,158 at September 30, 2002 and December 31, 2001, respectively |
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13,169,682 |
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16,414,397 |
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Other receivables |
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729,115 |
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3,203,349 |
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Inventory |
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5,756,319 |
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4,720,013 |
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Prepaid expenses and other current assets |
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1,119,083 |
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618,523 |
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Total current assets |
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31,032,721 |
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34,861,492 |
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Property and equipment, at cost: |
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Land |
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349,300 |
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349,300 |
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Building and leasehold improvements |
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885,438 |
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752,763 |
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Medical devices placed in service |
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20,820,517 |
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22,741,182 |
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Office equipment, furniture and fixtures |
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1,323,865 |
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1,485,390 |
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Vehicles and accessories |
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2,681,302 |
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3,575,055 |
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26,060,422 |
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28,903,690 |
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Less accumulated depreciation |
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(7,742,035 |
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(8,084,541 |
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Net property and equipment |
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18,318,387 |
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20,819,149 |
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Partnership investments |
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4,223,312 |
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520,981 |
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Goodwill (net of accumulated amortization of $860,156 at December 31, 2001) |
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41,517,947 |
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43,041,811 |
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Patent license (net of accumulated amortization of $72,483 and $64,986 at September 30, 2002 and December 31, 2001, respectively) |
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27,517 |
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35,014 |
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Other assets |
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3,742,872 |
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2,290,344 |
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Total assets |
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$ |
98,862,756 |
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$ |
101,568,791 |
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Liabilities and shareholders’ equity |
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Current liabilities: |
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Trade accounts payable |
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$ |
4,170,168 |
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$ |
3,297,398 |
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Customer deposits |
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231,405 |
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121,600 |
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Income taxes payable |
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4,084,623 |
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526,342 |
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Other accrued expenses |
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4,208,573 |
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3,799,110 |
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Deferred profit on service contracts and sales of partnership interests |
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610,112 |
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1,065,127 |
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Short-term borrowings |
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9,500,000 |
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11,400,000 |
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Current portion of capital lease obligations |
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531,060 |
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481,269 |
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Current portion of long-term debt |
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6,276,180 |
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4,883,801 |
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Total current liabilities |
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29,612,121 |
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25,574,647 |
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Deferred profit on medical device sales to related parties subject to debt guarantees |
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247,738 |
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411,267 |
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Capital lease obligations, less current portion |
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1,722,010 |
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1,104,853 |
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Long-term debt, less current portion |
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21,790,376 |
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35,452,966 |
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Minority interest |
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13,442,559 |
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14,770,327 |
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Other liabilities |
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2,303,314 |
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2,379,030 |
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Total liabilities |
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69,118,118 |
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79,693,090 |
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Shareholders’ equity: |
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Common stock – no par value, voting: |
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Authorized – 30,000,000 shares at September 30, 2002 and December 31, 2001; Issued – 11,247,904 and 11,103,737 shares at September 30, 2002 and December 31, 2001, respectively; Outstanding – 11,194,904 and 11,050,737 at September 30, 2002 and December 31, 2001, respectively |
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15,578,851 |
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14,303,581 |
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Accumulated other comprehensive expense |
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(331,531 |
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— |
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Retained earnings |
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14,497,318 |
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7,572,120 |
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Total shareholders’ equity |
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29,744,638 |
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21,875,701 |
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Total liabilities and shareholders’ equity |
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$ |
98,862,756 |
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$ |
101,568,791 |
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See accompanying notes.
3
HealthTronics Surgical Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
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Three
months ended |
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Nine
months ended |
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2002 |
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2001 |
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2002 |
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2001 |
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Net revenue |
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$ |
23,071,164 |
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$ |
10,290,933 |
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$ |
66,897,839 |
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$ |
29,505,660 |
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Cost of devices, service parts and consumables |
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5,739,114 |
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1,949,809 |
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12,755,996 |
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6,064,013 |
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Salaries, general and administrative expenses |
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9,633,191 |
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4,399,924 |
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