-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GScEBKuN0G09RnY9p2on6uV31PLFCj4/waiJjKrKK+VUYGu7u7B8IzKhDVp+UYKi 6VUgsljpUkY1ltFQrKgPkA== 0001005477-01-501897.txt : 20020410 0001005477-01-501897.hdr.sgml : 20020410 ACCESSION NUMBER: 0001005477-01-501897 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: US NEUROSURGICAL INC CENTRAL INDEX KEY: 0001089815 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 521842411 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-26575 FILM NUMBER: 1783112 BUSINESS ADDRESS: STREET 1: 2400 RESEARCH BLVD STREET 2: SUITE 325 CITY: ROCKVILLE STATE: MD ZIP: 20850 BUSINESS PHONE: 3012088998 MAIL ADDRESS: STREET 1: 2400 RESEARCH BLVD STREET 2: SUITE 325 CITY: ROCKVILLE STATE: MD ZIP: 20850 10-Q 1 d01-35091.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended Commission file number September 30, 2001 0-26575 U.S. NEUROSURGICAL, INC. (Exact name of Registrant as specified in its charter) Delaware 52-1842411 (State of other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 2400 Research Blvd, Suite 325, Rockville, Maryland 20850 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (301) 208-8998 Not Applicable (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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at October 25, 2001 ----- ----------------------------- Common Stock, $.01 par value 7,316,685 Shares PART I FINANCIAL INFORMATION U.S. NEUROSURGICAL, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS
ASSETS September 30, December 31, 2001 2000 ---- ---- Current assets: Cash and cash equivalents $ 234,000 $ 286,000 Accounts receivable net of allowance of $150,000 in 2000 552,000 397,000 Income tax receivable 33,000 -- Deferred tax asset 45,000 60,000 Other current assets 27,000 27,000 ----------- ----------- Total current assets 891,000 770,000 ----------- ----------- Gamma Knife (net of accumulated depreciation of $5,065,000 in 2001 and $4,176,000 in 2000) 1,400,000 2,058,000 Leasehold improvements (net of accumulated amortization of $1,093,000 in 2001 and $740,000 in 2000) 1,593,000 1,868,000 Office furniture and computers (net of accumulated depreciation of 67,000 in 2001 and $48,000 in 2000) 40,000 59,000 ----------- ----------- Total property and equipment 3,033,000 3,985,000 ----------- ----------- Cash held in escrow 105,000 101,000 ----------- ----------- TOTAL $ 4,029,000 $ 4,856,000 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 102,000 $ 106,000 Accrued litigation settlement 100,000 150,000 Obligations under capital lease and loans payable- current portion 1,025,000 841,000 Due to stockholder 300,000 300,000 Income tax payable -- 135,000 Other current liabilities -- 25,000 ----------- ----------- Total current liabilities 1,527,000 1,557,000 Accrued litigation settlement 100,000 200,000 Deferred tax liability 250,000 250,000 Obligations under capital lease and loans payable Net of current portion 1,095,000 1,718,000 ----------- ----------- 2,972,000 3,725,000 ----------- ----------- Stockholders' equity: Common stock 73,000 73,000 Additional paid-in capital 2,789,000 2,789,000 Accumulated deficit (1,793,000) (1,728,000) Treasury stock, at cost (12,000) (3,000) ----------- ----------- Total stockholders' equity 1,057,000 1,131,000 ----------- ----------- TOTAL $ 4,029,000 $ 4,856,000 =========== ===========
The accompanying notes to financial statements are an integral part hereof. 2 U.S. NEUROSURGICAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended September 30, ------------- 2001 2000 ---- ---- Revenue: Patient Revenue $ 657,000 $ 653,000 --------- --------- Expenses: Patient Expenses 308,000 304,000 Selling, General and Administrative 294,000 404,000 --------- --------- Total 602,000 708,000 --------- --------- Income (loss) from operations 55,000 (55,000) Interest expense (63,000) (62,000) Interest income 2,000 2,000 --------- --------- Loss from continuing operations before income tax (6,000) (115,000) Income tax benefit -- (40,000) Loss from Continuing operations (6,000) (75,000) Income from Discontinued Operations (less applicable -- 22,000 Income tax of $ 10,000 in 2000) Net Loss $ (6,000) $ (53,000) ========= ========= Earnings per share from continuing operations $ -- $ .01 ========= ========= Earnings per share from discontinued operations -- Earnings per share $ $ .01 ========= ========= The accompanying notes to financial statements are an integral part hereof. 3 U.S. NEUROSURGICAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended September 30, ------------- 2001 2000 ---- ---- Revenue: Patient Revenue $ 1,893,000 $ 1,924,000 ----------- ----------- Expenses: Patient Expenses 979,000 860,000 Selling, General and Administrative 900,000 967,000 ----------- ----------- Total 1,879,000 1,827,000 ----------- ----------- Income from operations 14,000 97,000 Interest expense (216,000) (235,000) Interest income 8,000 10,000 ----------- ----------- Loss from continuing operations before income tax (194,000) (128,000) Income tax benefit (62,000) (44,000) ----------- ----------- Loss from continuing operations (132,000) (84,000) Income from Discontinued Operations (less applicable 67,000 109,000 Income tax of $33,000 in 2001 and $61,000 in 2000) ----------- ----------- Net (Loss) income $ (65,000) $ 25,000 =========== =========== Earnings per share from continuing operations $ (.02) $ (.01) =========== =========== Earnings per share from discontinued operations $ .01 $ .01 =========== =========== Earnings per share $ (.01) $ -- =========== ===========
The accompanying notes to financial statements are an integral part hereof. 4 U.S. NEUROSURGICAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30 --------------- 2001 2000 ---- ---- Cash flows from operating activities: Net (loss) income $ (65,000) $ 25,000 Adjustments to reconcile net income to net cash provided by operating activities: Provision for doubtful accounts -- 150,000 Depreciation and amortization: 952,000 861,000 Changes in operating assets and liabilities: Increase in receivables (155,000) (295,000) Increase in income tax receivable and other assets (33,000) (28,000) Decrease in payables and income tax payable (164,000) (56,000) Deferred tax benefit 15,000 -- ----------- ----------- Net cash provided by operating activities 550,000 657,000 ----------- ----------- Cash flows from investing activities : Increase in cash held in escrow (4,000) (4,000) ----------- ----------- Net cash used in investing activities (4,000) (4,000) ----------- ----------- Cash flows from financing activities: Proceeds from loan 200,000 -- Repayment of accrued litigation (150,000) (100,000) Purchase of treasury stock (9,000) -- Payment of capital lease obligations (639,000) (902,000) ----------- ----------- Net cash used in financing activities (598,000) (1,002,000) ----------- ----------- Net (decrease) in cash and cash equivalents (52,000) (349,000) Cash and cash equivalents - beginning of period 286,000 464,000 ----------- ----------- CASH AND CASH EQUIVALENTS - END OF PERIOD 234,000 $ 115,000 =========== =========== Supplemental disclosures of cash flow information: Cash paid for Interest 216,000 235,000 Income Taxes 135,000 5,000
The accompanying notes to financial statements are an integral part hereof. 5 U.S. NEUROSURGICAL, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note A - Basis of Preparation The accompanying financial statements at September 30, 2001, and for the three and nine months ended September 30, 2001 and 2000, are unaudited. However, in the opinion of management, such statements include all adjustments necessary for a fair statement of the information presented therein. The balance sheet at December 31, 2000 has been derived from the audited financial statements at that date appearing in the Company's Annual Report on Form 10-K. Pursuant to accounting requirements of the Securities and Exchange Commission applicable to quarterly reports on Form 10-Q, the accompanying financial statements and these notes do not include all disclosures required by generally accepted accounting principles for complete financial statements. Accordingly, these statements should be read in conjunction with the Company's most recent annual financial statements. Results of operations for interim periods are not necessarily indicative of those to be achieved for full fiscal years. Note B - Treasury Stock During 2001, the Company purchased as part of its buyback program, 175,000 shares of its own common stock at a cost of $9,000. 6 U.S. NEUROSURGICAL, INC. AND SUBSIDIARY MANAGEMENT DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION The following discussion and analysis provides information, which the Company's management believes is relevant to an assessment and understanding of the Company's results of operations and financial condition. This discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere herein. Third Quarter 2001 Compared to Third Quarter 2000 and Nine Months Ended September 30, 2001 Compared to Nine Months Ended September 30, 2000 Results of Operations Patient revenue increased 1% to $657,000 in the quarter ended September 30, 2001 from $653,000 for the quarter ended September 30, 2000. Patient expenses increased 1% to $308,000 from $304,000 in the same period from a year earlier. Selling, general and administrative expense for the quarter ended September 30 decreased 27% to $294,000 from $404,000 a year ago. The Company established a reserve of approximately $150,000 during 2000 to cover a deduction to its accounts receivable caused by a retroactive reduction in fees paid by NYU. Interest expense increased to $63,000 from $62,000 in the same period a year earlier; due to the financing of new cobalt in the Kansas City location in the 4th quarter of 2000. For the quarter ended September 30, 2001, the net loss from continuing operations was $6,000 as compared to a loss of $75,000 for the same period a year earlier. For the nine months ended September 30, revenue decreased 2% to $1,893,000 from $1,924,000 in the same period a year earlier. Patient expenses increased 14% to $979,000 in 2001 from $860,000 in the same period in 2000. In the third quarter of 2000 the Kansas City location reloaded the cobalt on its machine. The amortization of such cobalt was the cause of the increase. Selling, general and administrative expenses decreased 7% to $900,000 as compared to $967,000 in the same period, a year earlier. Interest expense decreased 8% to $216,000 from $235,000 in the same period a year ago due to paydown of principal on the Gamma Knife capital leases. Loss from continuing operations was $132,000 for the nine months ended September 30, 2001 as compared to a loss of 84,000 for the nine months ended September 30, 2000. The Company received $100,000 in 2001 and $170,000 in 2000 from collection on contracts from discontinued operations. Liquidity and Capital Resources At September 30, 2001 the Company had a working capital deficit of $638,000 as compared to a deficit of $787,000 at December 31, 2000. Cash and cash equivalents at September 30, 2001 were $234,000 as compared with $286,000 at December 31, 2000. The decrease in cash was due to paydown of capital leases as well as a delay in collection of account receivable from NYU. 7 Net cash provided by operating activities was $550,000 for the nine months ended September 30, 2001 as compared with $657,000 for the same period, a year earlier. Depreciation and amortization was $952,000 for the nine month period ended September 30, 2001 and was 861,000 in the 2000 period. There was an increase in accounts receivable of $155,000 in 2001 and $295,000 during the nine months ended September 30, 2000. Payables and income tax payable decreased $164,000 for the nine months ended September 30, 2001 as compared $56,000 for the same period in 2000. Net cash used in financing activities was $598,000 for the nine months ended September 30, 2001 as compared to $1,002,000 for the same period a year ago. The Company paid $639,000 towards its capital lease obligations for the nine months ended September 30, 2001 as compared to $902,000 in the same period in 2000. During 2000 the company completed payment on its RMC Gamma Knife lease. The company financed $900,000 in the fourth quarter of 2000 to pay for the reload of the cobalt in Kansas City. Notes payable decreased by $150,000 in 2001. The company borrowed $200,000 during 2001 to fund its short term operating costs. This is a forty month loan payable at 9.5 percent. Disclosure Regarding Forward Looking Statements Statements contained in this Information Statement that are not historical facts may be deemed to be forward-looking statements. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from that projected or suggested herein due to certain risks and uncertainties including, without limitation, the payment, timing and ultimate collectability of accounts receivable for Gamma Knife procedures from different payor groups such as Medicare and private payors; competition; technological obsolescence; government regulation; and malpractice liability. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested may be identified from time to time in USN's filings with the Securities and Exchange Commission (SEC) and USN's public announcements, copies of which are available from the SEC or from the Company upon request. 8 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. U.S. NEUROSURGICAL, INC. Date November 12, 2001 By /s/ Alan Gold ----------------- ---------------- Alan Gold Director and President Chief Executive Officer Date November 12, 2001 By /s/ Howard Grunfeld ----------------- ---------------------- Howard Grunfeld Chief Financial Officer 9 -----END PRIVACY-ENHANCED MESSAGE-----