BIO LOGIC SYSTEMS CORP - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x	Quarterly Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the Quarterly period ended November 30, 2003

¨	Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File No. 0-12240

BIO-LOGIC SYSTEMS CORP.

(Exact Name of Registrant as Specified in its Charter)

Delaware		36-3025678
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

One Bio-logic Plaza, Mundelein, Illinois		60060
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code (847-949-5200)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report): not applicable

Indicate by check x 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 x whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at January 6, 2004
Common Stock $.01 par value		4,135,622

TABLE OF CONTENTS

			Page
Part I.	Financial Information

	Item 1.	Financial Statements

		Condensed Consolidated Balance Sheets at November 30, 2003 (Unaudited) and February 28, 2003	3

		Condensed Consolidated Statements of Operations and Retained Earnings for the three months and nine months ended November 30, 2003 and 2002 (Unaudited)	4

		Condensed Consolidated Statements of Cash Flows for the nine months ended November 30, 2003 and 2002 (Unaudited)	5

		Notes to Unaudited Condensed Consolidated Financial Statements (Unaudited)	6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13

	Item 4.	Controls and Procedures	14

Part II.	Other Information

	Item 6.	Exhibits and Reports on Form 8-K	14

Signatures			15

Part 1. Financial Information

Item 1. Financial Statements

Bio-logic Systems Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

(In Thousands, Except Share Amounts)

	November 30, 2003			February 28, 2003
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	12,218		$	10,678
Accounts receivable, less allowance for doubtful accounts of $375 at November 30, 2003 and $500 at February 28, 2003		5,141			5,569
Inventories		2,467			3,061
Prepaid expenses		254			354
Deferred income taxes		1,366			1,366

Total current assets		21,446			21,028

PROPERTY, PLANT AND EQUIPMENT - Net		2,039			2,075

OTHER ASSETS		1,705			2,087

TOTAL ASSETS	$	25,190		$	25,190

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable	$	730		$	1,896
Accrued salaries and payroll taxes		831			1,072
Accrued other liabilities		1,527			1,201
Accrued income taxes		396			781
Deferred revenue		1,469			1,274

Total current liabilities		4,953			6,224

DEFERRED INCOME TAXES		680			680

Total liabilities		5,633			6,904

COMMITMENTS		—			—

STOCKHOLDERS’ EQUITY:
Common stock, $.01 par value; authorized, 10,000,000 shares;		42			42
4,204,847 issued and 4,129,847 outstanding at November 30, 2003
4,198,606 issued and 4,123,606 outstanding at February 28, 2003
Additional paid-in capital		5,064			5,049
Retained earnings		14,818			13,562
Treasury stock, at cost: 75,000 shares at November 30 and February 28, 2003		(367	)		(367	)

Total stockholders’ equity		19,557			18,286

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	25,190		$	25,190

The accompanying notes are an integral part of these statements.

Bio-logic Systems Corp. and Subsidiaries

Condensed Consolidated Statements of Operations and Retained Earnings

(Unaudited)

(In Thousands, Except Share Amounts and Per Share Data)

	Three Months Ended November 30,					Nine Months Ended November 30,
	2003		2002			2003		2002
NET SALES	$	6,962	$	7,559		$	20,208	$	21,965
COST OF SALES		2,168		2,549			6,205		7,126

Gross Profit		4,794		5,010			14,003		14,839

OPERATING EXPENSES:
Selling, general & administrative		2,918		3,070			8,867		9,644
Research & development		1,262		1,038			3,685		3,494

Total operating expenses		4,180		4,108			12,552		13,138

OPERATING INCOME		614		902			1,451		1,701

OTHER INCOME (EXPENSE):
Interest income		38		41			77		103
Interest expense		—		(4	)		—		(4	)
Miscellaneous		—		(4	)		2		(4	)

Total other income		38		32			79		95

INCOME BEFORE INCOME TAXES		652		934			1,530		1,796

PROVISION FOR INCOME TAXES		70		354			274		693

NET INCOME	$	582	$	580		$	1,256	$	1,103

RETAINED EARNINGS, BEGINNING OF PERIOD		14,236		12,635			13,562		12,112

RETAINED EARNINGS, END OF PERIOD	$	14,818	$	13,215		$	14,818	$	13,215

EARNINGS PER SHARE:
Basic	$	0.14	$	0.14		$	0.30	$	0.26

Diluted	$	0.13	$	0.14		$	0.28	$	0.26

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		4,204,347		4,198,583			4,201,534		4,196,049

Diluted		4,473,315		4,263,301			4,418,709		4,302,346

The accompanying notes are an integral part of these statements.

Bio-logic Systems Corp. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In Thousands)

	Nine Months Ended November 30,
	2003			2002
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income	$	1,256		$	1,103

Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization		584			459
Decreases in assets:
Accounts receivable		428			1,630
Inventories		594			822
Prepaid expenses		100			197
Increases (decreases) in liabilities:
Accounts payable		(1,165	)		(1,028	)
Accrued liabilities and deferred revenue		280			954
Accrued income taxes		(385	)		(38	)

Net cash flows provided by operating activities

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