-----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, VMDgxYkKKojujJ41/bp6I0JZfWzQvaMNxRSpkTAveRWOOoZqO4duWAqMCZHu3T3E yD3gAq7RdjEEjuziOClaMg== 0000883322-99-000010.txt : 19990517 0000883322-99-000010.hdr.sgml : 19990517 ACCESSION NUMBER: 0000883322-99-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROTOCOL SYSTEMS INC/NEW CENTRAL INDEX KEY: 0000883322 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 930913130 STATE OF INCORPORATION: OR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-19943 FILM NUMBER: 99622414 BUSINESS ADDRESS: STREET 1: 8500 S W CREEKSIDE PLACE CITY: BEAVERTON STATE: OR ZIP: 97008 BUSINESS PHONE: 6126862500 MAIL ADDRESS: STREET 1: 8500 SW CREEKSIDE PLACE CITY: BEAVERTON STATE: OR ZIP: 97008 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter ended March 31, 1999 Commission File Number 0-19943 PROTOCOL SYSTEMS, INC. - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Oregon 93-0913130 - ------------------------------------------------------------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8500 SW Creekside Place, Beaverton, OR 97008 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (503) 526-8500 - ------------------------------------------------------------------------------ (Registrant's telephone number, including area code) 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. [X] Yes [ ] No Number of shares of common stock outstanding as of May 7, 1999: 8,323,638 shares, $.01 par value per share ------------------------------------------ 2 PROTOCOL SYSTEMS, INC. Index to Form 10-Q PART I FINANCIAL INFORMATION Page No. - ----------------------------- -------- Item 1. Financial Statements Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 1999 and 1998 3 Condensed Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998 4 Consolidated Statements of Cash Flows for the three months ended March 31, 1999 and 1998 5 Notes to Condensed Consolidated Financial Statements 6-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-12 Item 3. Quantitative and Qualitative Disclosures about Market Risk 12-13 PART II OTHER INFORMATION - -------------------------- Item 2. Changes in Securities 14 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 15 - ---------- PAGE<3> ITEM 1. FINANCIAL STATEMENTS PROTOCOL SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands except per share amounts) (unaudited) Three months ended March 31, 1999 1998 ------ ------ Sales $14,299 $14,920 Cost of sales 7,344 8,007 ------- ------- Gross profit 6,955 6,913 Operating expenses: Research and development expenses 1,505 1,859 Selling, general and administrative expenses 4,745 5,015 ------- ------- Total operating expenses 6,250 6,874 ------- ------- Income from operations 705 39 Other income 262 280 ------- ------- Income before income taxes 967 319 Provision for income taxes 242 89 ------- ------- Net income $ 725 $ 230 ======= ======= Comprehensive income $ 499 $ 237 ======= ======= Basic earnings per share $ 0.09 $ 0.03 ======= ======= Diluted earnings per share $ 0.09 $ 0.03 ======= ======= Weighted average number of shares used in the computation of: Basic earnings per share 8,241 8,794 Diluted earnings per share 8,385 9,134 See accompanying notes to condensed consolidated financial statements
PAGE<4> PROTOCOL SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) March 31, December 31, 1999 1998 ------ ------ ASSETS Current assets: Cash and cash equivalents $12,848 $ 8,023 Short-term investments 1,000 6,680 Accounts receivable - net 13,398 17,971 Inventories - net 11,596 12,218 Prepaid expenses and other current assets 1,790 2,469 ------- ------- Total current assets 40,632 47,361 Long-term investments 9,675 4,045 Property and equipment - net 3,874 4,041 Other assets 617 404 ------- ------- $54,798 $55,851 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,543 $ 2,584 Accrued liabilities 3,558 5,481 ------- ------- Total current liabilities 6,101 8,065 Deferred taxes 3 40 Commitments and contingencies Shareholders' equity: Common stock, $.01 par value. Authorized 30,000 shares; issued and outstanding 8,274 at 1999 and 8,207 at 1998 83 82 Additional paid-in capital 28,505 28,105 Unearned compensation -- (48) Accumulated other comprehensive income (loss) (21) 205 Retained earnings 20,127 19,402 ------- ------- Total shareholders' equity 48,694 47,746 ------- ------- $54,798 $55,851 ======= ======= See accompanying notes to condensed consolidated financial statements
5 PROTOCOL SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Three months ended March 31, 1999 1998 ------ ------ Cash flows from operating activities: Net income $ 725 $ 230 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 560 535 Amortization of bond premium 31 53 Provision for deferred taxes 144 91 Other non-cash items 71 - Increase (decrease) in cash resulting from changes in: Accounts receivable 4,501 1,621 Inventories 563 1,404 Prepaid expenses and other assets 130 (51) Accounts payable and accrued liabilities (1,304) (670) ------- ------- Net cash provided by operating activities 5,421 3,213 Cash flows from investing activities: Purchase of investments (10,030) (3,886) Proceeds from maturity of investments 9,980 1,978 Acquisition of property and equipment (357) (629) Expenditures for other assets (250) (443) ------- ------- Net cash used in investing activities (657) (2,980) Cash flows from financing activities: Proceeds from exercise of stock options and stock purchase plan 506 743 Repurchase of common stock (128) (4,293) ------- ------- Net cash provided by (used in) financing activities 378 (3,550) ------- ------- Effect of exchange rates on cash and cash equivalents (317) (5) ------- ------- Net increase (decrease) in cash and cash equivalents 4,825 (3,322) Cash and cash equivalents at beginning of period 8,023 12,257 ------- ------- Cash and cash equivalents at end of period $12,848 $ 8,935 ======= ======= Supplemental disclosure of cash flow information: Cash paid for income taxes $ - $ 545 See accompanying notes to condensed consolidated financial statements
6 PROTOCOL SYSTEMS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS BASIS OF PRESENTATION The accompanying condensed consolidated financial statements have been prepared by the Company without audit and in conformity with generally accepted accounting principles for interim financial information. Accordingly, certain financial information and footnotes have been omitted or condensed. In the opinion of management, the condensed consolidated financial statements include all necessary adjustments (which are of a normal and recurring nature) for the fair presentation of the results of the interim periods presented. These financial statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 1998. The results of operations for the interim period shown in this report are not necessarily indicative of results for any future interim period or the entire fiscal year. INVENTORIES Inventories are valued at the lower of cost or market with cost determined on the first-in, first-out basis (FIFO). The components of inventories, net of reserve, are as follows: March 31, December 31, (in thousands) 1999 1998 - ------------------------------------------------------------------------- Raw materials $ 4,901 $ 4,939 Work in process 2,493 2,838 Finished goods 2,060 2,207 Demonstration instruments 2,142 2,234 ------- ------ Total inventories $11,596 $12,218 ======= ====== PROPERTY AND EQUIPMENT Property and equipment is stated at cost and includes the following: March 31, December 31, (in thousands) 1999 1998 - ------------------------------------------------------------------------- Equipment $12,675 $12,111 Furniture and fixtures 1,913 1,910 Leasehold improvements 456 551 ------ ------ 15,044 14,572 Less accumulated depreciation and amortization 11,170 10,531 ------ ------ Property and equipment - net $ 3,874 $ 4,041 ====== ====== 7 ACCRUED LIABILITIES The components of accrued liabilities are as follows: March 31, December 31, (in thousands) 1999 1998 - ------------------------------------------------------------------------- Accrued salaries, wages and related liabilities $2,322 $2,588 Accrual for special charges 187 1,642 Reserve for warranties 853 915 Deferred revenue and customer deposits 85 98 Other liabilities 111 238 ------ ------ $3,558 $5,481 ====== ====== On December 31, 1998, the Company incurred special charges of $3,188,000 as it discontinued the development of its defibrillator project and restructured its worldwide operations, which included the closure of its subsidiary offices and direct sales organizations in France and Germany and the elimination of 14 positions at the Company's headquarters in Beaverton, Oregon as well as the resignation of the founder and Chief Technical Officer. Cash payments during the first quarter of 1999 related to these special charges totaled $1,326,000 and consisted primarily of employee severance benefits and lease termination costs. During the third quarter of 1998, the Company incurred special charges of $2,246,000 to relocate its wholly-owned subsidiary, Pryon Corporation, from Menomonee Falls, Wisconsin to the Company's Beaverton, Oregon facility in order to improve operating efficiencies. The relocation resulted in a reduction of 56 employees from manufacturing, engineering, sales and administrative functions. Cash payments during the first quarter of 1999 related to these special charges totaled $129,000 and consisted of lease termination and other costs. As of March 31, 1999, special charges relating primarily to lease and other contract terminations of $187,000 were not disbursed. The Company anticipates that these remaining balances will be expended by the end of 1999. INCOME TAXES The provision for income taxes has been recorded based on the current estimate of the Company's annual effective tax rate. This rate differs from the Federal statutory rate primarily because of the provision for state income taxes, utilization of the Company's federal net operating loss carryovers, the benefit of the Company's research and experimentation tax credits, the benefit of the Company's foreign sales corporation and tax-exempt interest income earned on investments. 8 BASIC AND DILUTED EARNINGS PER SHARE In accordance with the requirements of Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share" both basic earnings per share and diluted earnings per share are presented. Basic earnings per share is computed using the weighted average number of common shares outstanding and diluted earnings per share is computed using the weighted average number of common shares outstanding and dilutive potential common shares assumed to be outstanding during the period using the treasury stock method. Dilutive potential common shares consist of options to purchase common stock. COMPREHENSIVE INCOME The following is a reconciliation of net income to comprehensive income: Three months ended March 31, (in thousands) 1999 1998 - ----------------------------------------------------------------------- Net income $ 725 $ 230 Other comprehensive income, net of tax Foreign currency translation adjustments (158) 10 Unrealized holding loss arising during the period (68) (3) ------- ------- Other comprehensive income (loss) (226) 7 ------- ------- Comprehensive income $ 499 $ 237 ======= ======= CONTINGENCIES In 1990, the Company entered into a development and supply agreement with Gensia, Inc. to develop and supply a closed-loop drug delivery and monitoring device ("GenESA device"). This agreement was amended in December 1997. Gensia began shipments of the GenESA device to Europe in 1995 and received FDA clearance to market the product in the United States in the third quarter of 1997. In April 1998, the Company was informed that Gensia planned no additional purchases of the GenESA device under the supply agreement with the Company which provided for the purchase of devices through the year 2002. In July 1998, the Company commenced litigation against Gensia Sicor, Inc. and Gensia Automedics alleging that they have breached the supply agreement and is seeking damages of approximately $10 million. SEGMENT INFORMATION In accordance with SFAS 131 "Disclosures about Segments of an Enterprise and Related Information" the Company functions as a single operating segment: the design, manufacture, sale and servicing of medical instruments and systems. Sales are made primarily to hospitals and other health-care related customers. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Sales. Sales for the first quarter of 1999 decreased 4.2% to $14.3 million from $14.9 million for the first quarter of 1998. Domestic sales, excluding military revenues and Original Equipment Manufacturer ("OEM") sales of Pryon OEM products and GenESA devices, increased slightly to $7.8 million (54.2% of total sales) in the first quarter of 1999 from $7.7 million (51.7% of total sales) in the first quarter of 1998. U.S. military revenues increased 104.1% to $693,000 (4.8% of total sales) in the first quarter of 1999 from $339,000 (2.3% of total sales) in the first quarter of 1998. The Company attributes the increase in its military revenues in the first quarter of 1999 to the unpredictable size and timing of military patient monitoring equipment procurements. International sales, excluding international OEM sales of Pryon OEM products and GenESA devices, decreased 13.8% to $4.1 million (28.5% of total sales) in the first quarter of 1999 from $4.7 million (31.7% of total sales) in the first quarter of 1998. This decrease in international sales was principally due to the continued strength of the U.S. dollar against foreign currencies and soft international markets, particularly in Europe and Asia, and the reorganization of the Company's direct sales organization in Europe. OEM sales of Pryon OEM products and GenESA devices decreased 17.0% to $1.8 million (12.4% of total sales) in the first quarter of 1999 from $2.1 million (14.3% of total sales) in the first quarter of 1998 primarily due to a $496,000 decrease in sales of GenESA devices to Gensia Automedics, Inc. In April 1998, the Company was informed that Gensia planned no additional purchases of the GenESA device under a supply agreement with the Company which provided for the purchase of devices through the year 2002. In July 1998, the Company commenced litigation against Gensia Sicor, Inc. and Gensia Automedics alleging that they have breached the supply agreement and seeking damages of approximately $10 million. This decrease was partially offset by an increase in sales of Pryon OEM products. Gross profit. As a percentage of sales, gross profit increased to 48.6% in the first quarter of 1999 from 46.3% in the first quarter of 1998. The increase in gross profit was due primarily to lower manufacturing overhead caused by a higher production volume in the first quarter of 1999. Production volume was low during the first quarter of 1998 as finished good inventory levels were high at the end of 1997. Research and development. Research and development expenses decreased 19.1% to $1.5 million in the first quarter of 1999 from $1.9 million in the first quarter of 1998. This decrease was primarily the result of the relocation of the Pryon operations from Menomonee Falls, Wisconsin to the Company's Beaverton, Oregon facility in 1998 which resulted in a reduction in the total number of research and development employees. As a percentage of sales, research and development expenses decreased to 10.5% in the first quarter of 1999 from 12.5% in the first quarter of 1998. 10 Selling, general and administrative. Selling, general and administrative expenses decreased 5.4% to $4.7 million in the first quarter of 1999 from $5.0 million in the first quarter of 1998. This decrease resulted primarily from the closure of direct sales organizations in Germany and France initiated in 1998 and the reduction in the number of administrative employees as a result of the relocation of the Pryon operations from Wisconsin to Oregon in 1998. As a percentage of sales, selling, general and administrative expenses decreased to 33.2% in the first quarter of 1999 from 33.6% in the first quarter of 1998. Other income. Other income decreased 6.3% to $262,000 in the first quarter of 1999 from $280,000 in the first quarter of 1998 primarily due to a reduction in the cash and investments balance as the Company utilized $9.1 million of its available cash to repurchase common stock in 1998 and the first quarter of 1999. Provision for income taxes. The provision for income taxes increased to $242,000 in the first quarter of 1999 from $89,000 in the first quarter of 1998 representing effective tax rates of 25.0% and 28.0%, respectively. The effective tax rate, which reflects the estimate of the Company's annual effective tax rate, was lower in the first quarter of 1999 than in the first quarter of 1998 primarily due to the expected utilization of the Company's net operating loss carryover in 1999. Net income. Net income in the first quarter of 1999 was $725,000 or $0.09 per diluted share compared to net income of $230,000 or $0.03 per diluted share in the first quarter of 1998. The increase in net income is primarily due to reduced operating expenses as a result of the relocation of the Pryon manufacturing facility and the world-wide restructuring in 1998. LIQUIDITY AND CAPITAL RESOURCES The Company maintained its strong financial position as of March 31, 1999 with working capital balances of $34.5 million and a current ratio of 6.7:1 as compared to working capital of $39.3 million and a current ratio of 5.9:1 at December 31, 1998. Cash flow from operating activities for the first three months of 1999 was $5.4 million as compared to $3.2 million for the first three months of 1998. The increase in cash flow from operations was primarily due to an increase in collections of accounts receivable. In January 1998 the Company's Board of Directors adopted a resolution authorizing the repurchase of up to 1,000,000 outstanding shares of the Company's common stock. During the first quarter of 1999, the Company repurchased 18,000 shares of its common stock, for a total of 974,000 shares repurchased under the stock repurchase plan. Management believes that current cash and investment balances and future cash flows from operations will be sufficient to meet the Company's liquidity and capital needs for the foreseeable future. 11 YEAR 2000 ISSUES The Company has substantially completed its assessment of its computer software programs and operating systems used in its internal operations, including applications used in its financial, manufacturing equipment, and engineering design tools to determine its readiness for the Year 2000. The inability of computer software programs and operating systems to accurately recognize, interpret and process date codes designating the Year 2000 and beyond could result in a system failure or miscalculations which could have a material impact on the Company's ability to conduct its business. Costs incurred by the Company to date in its assessment of internal systems were not material. The Company has completed its assessment of Year 2000 compliance of each of its product lines. All configurations of instruments (instruments include Propaq and Propaq Encore monitors and all options) and their component parts have been tested and are Year 2000 compliant. Acuity software versions 3.15.05 and all Networked Acuity software versions have been tested and are Year 2000 compliant. Acuity software versions prior to 3.15.05 have a minor connectivity issue related to the Year 2000 between the Acuity central station and the monitors that can be fixed through an upgrade to the Acuity central station provided by the Company. The operation of the Acuity central station and the Propaq monitors in the Year 2000 and beyond should not be adversely affected by this connectivity issue. The Company has also contacted most critical suppliers of products and services to determine that the suppliers' operations and the products and services they provide are Year 2000 compliant. The Company has received responses from approximately 70% of the suppliers contacted, all of which have indicated that their products and operations either are, or expect to be, Year 2000 compliant. The Company will continue to follow up with suppliers who have not yet responded to determine if there are any critical suppliers who may not be Year 2000 compliant. Based on its assessments to date, the Company believes it will not experience any material disruption as a result of Year 2000 issues in its computer software programs and other systems used in its operations. However, there can be no assurances that unanticipated Year 2000 issues will not have a material adverse effect on the Company's business, financial condition or results of operations. Furthermore, there can be no assurance that Year 2000 issues of certain critical third party suppliers, including those supplying electricity, water or telephone service will not experience difficulties resulting in the disruption of service or delivery of supplies to the Company, which could adversely affect the Company's business, financial condition or results of operations. The Company will develop contingency plans for dealing with the most reasonably likely worst case scenario that would occur in the event that the Company and critical third parties fail to complete efforts to achieve Year 2000 compliance on a timely basis by the end of the third quarter of 1999. 12 FORWARD-LOOKING STATEMENTS This Quarterly Report contains statements, including the anticipated effects of the Year 2000 issue, that are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business, management's beliefs and assumptions made by management. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to factors that could cause unforeseen increases or decreases in the expenses expected to be incurred in connection with the operations of the Pryon subsidiary in Oregon, the closure of direct sales organizations in France and Germany, the timely introduction of new products, the Company's ability to identify and remediate Year 2000 issues or the reliability of third party assessments and certifications relating to Year 2000 issues. In addition, such statements could be affected by other factors discussed in this Quarterly Report and from time to time in the Company's other Securities and Exchange Commission filings and reports and by general industry and market conditions and growth rates, and general domestic and international economic conditions. The Company's quarterly operating results have fluctuated in the past and may continue to fluctuate in the future depending on factors such as increased competition, timing of new product announcements, pricing changes by the Company or its competitors, length of sales cycles, market acceptance or delays in the introduction of new products or enhanced versions of existing products, timing of significant orders, regulatory approval requirements, product mix and economic factors and conditions generally and in the market for the Company's products specifically. In particular, the Company's quarterly operating results have fluctuated as a result of the unpredictable size and timing of military patient monitoring equipment procurements, and seasonal or other changes in customer buying patterns. A substantial portion of the Company's revenue in each quarter results from orders booked in that quarter. Accordingly, revenue from quarter to quarter is difficult to forecast. The Company's expense levels are based, in part, on its expectations as to future revenue. If revenue levels are below expectations, operating results are likely to be adversely affected. In particular, net income may be disproportionately affected by a reduction in revenue because only a small portion of expenses vary with revenue. Results of operations in any period should not be considered indicative of the result to be expected for any future period, and fluctuations in operating results may also result in fluctuations in the price of the Company's common stock. No assurance can be given that the Company will be able to grow in future periods or that its operations will remain profitable. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to the impact of foreign currency fluctuations due to a small portion of its international sales. The Company minimizes its risk to foreign currency fluctuations as international sales through independent distributors are made in U.S. dollars which has helped reduce any foreign currency risk. 13 As of March 31, 1999, the Company had an investment portfolio of fixed income securities, including those classified as cash equivalents, short-term investments and long-term investments of $18.3 million. These securities are subject to interest rate fluctuations. An increase in interest rates could adversely affect the market value of the Company's fixed income securities. The Company does not use derivative financial instruments in its investment portfolio to manage interest rate risk. The Company does, however, limit its exposure to interest rate and credit risk by establishing and strictly monitoring clear policies and guidelines for its investment portfolio. The weighted average maturity of the investment portfolio may not exceed 360 days and no single investment may have a maturity date of greater than two years. The guidelines also establish credit quality standards and limit the exposure to one issue, issuer, or type of instrument. Due to these factors the exposure to market and credit risk is not expected to be material. 14 PART II. OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES During the quarter ended March 31, 1999, the Company sold securities without registration under the Securities Act of 1933, as amended (the "Securities Act") upon the exercise of certain stock options granted under the Company's stock option plans. An aggregate of 28,412 shares of Common Stock were issued at an exercise prices ranging from $1.62 to $6.00. These transactions were effected in reliance upon the exemption from registration under the Securities Act provided by Rule 701 promulgated by the Securities and Exchange Commission pursuant to authority granted under Section 3 (b) of the Securities Act. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to a vote of security holders during the quarter ended March 31, 1999. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits: 27.1 Financial Data Schedule (b) No reports were filed on Form 8-K during the quarter for which this report is filed. 15 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. PROTOCOL SYSTEMS, INC. (Registrant) Date: May 14, 1999 By /s/ David F. Bolender --------------------- David F. Bolender Chief Executive Officer, President and Chairman of the Board of Directors By /s/ Craig M. Swanson --------------------- Craig M. Swanson Vice-President and Chief Financial Officer EX-27.1 2
5 This schedule contains summary financial information extracted from Protocol Systems, Inc. Condensed Consolidated Balance Sheet as of March 31, 1999 and Condensed Consolidated Statement of Operations and Comprehensive Income for the three months ended March 31, 1999 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 12,848 10,675 13,398 335 11,596 40,632 15,044 11,170 54,798 6,101 0 0 0 83 48,611 54,798 14,299 14,299 7,344 7,344 5,988 0 0 967 242 725 0 0 0 725 0.09 0.09 Net of allowance The amount of loss provision is not significant and has been included in other expenses.
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