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 March 31, 2001 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from to
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Commission file number: 0-18793
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VITAL SIGNS, INC.
(Exact name of registrant as specified in its charter)
New Jersey 11-2279807
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 Campus Road
Totowa, New Jersey 07512
(Address of principal executive office, including zip code)
973-790-1330
(Registrant's telephone number, including area code)
--------------------------------------------------------------------------------
(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.
At May 7, 2001, there were 12,913,685 shares of Common Stock, no par
value, outstanding.
VITAL SIGNS, INC.
INDEX
PAGE NUMBER
PART I.
Financial information 1
Item 1. Financial Statements:
Independent Accountant's Report 2
Consolidated Balance Sheets as of March 31, 2001
(Unaudited) and September 30, 2000 3
Consolidated Statements of Income for the Six Months
ended March 31, 2001 and 2000 (Unaudited) 4
Consolidated Statements of Income for the Three
Months ended March 31, 2001 and 2000 (Unaudited) 5
Consolidated Statements of Cash Flows for the Six
Months Ended March 31, 2001 and 2000 (Unaudited) 6
Notes to Consolidated Financial Statements
(Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 11
Item 3. Quantitative and Qualitative Disclosure About
Market Risks 12
PART II.
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
PART I.
Financial Information
Item 1.
Financial Statements
Certain information and footnote disclosures required under generally
accepted accounting principles have been condensed or omitted from the following
consolidated financial statements pursuant to the rules and regulations of the
Securities and Exchange Commission. Vital Signs, Inc. (the "registrant" or the
"Company" or "Vital Signs") believes that the disclosures are adequate to assure
that the information presented is not misleading in any material respect. It is
suggested that the following consolidated financial statements be read in
conjunction with the year-end consolidated financial statements and notes
thereto included in the registrant's Annual Report on Form 10-K for the year
ended September 30, 2000.
The results of operations for the interim periods presented herein are
not necessarily indicative of the results to be expected for the entire fiscal
year.
1
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors
Vital Signs, Inc.
We have reviewed the accompanying consolidated balance sheet of Vital Signs,
Inc. as of March 31, 2001, and the related consolidated statements of income,
and cash flows for each of the three-month and six month periods ended March 31,
2001 and 2000. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an actual audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
GOLDSTEIN GOLUB KESSLER LLP
New York, New York
April 30, 2001
2
VITAL SIGNS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
March 31, September 30,
2001 2000
---------- ------------
(In thousands)
ASSETS
(Unaudited)
---------
Current Assets:
Cash and cash equivalents $ 24,778 $ 7,606
Accounts receivable, less allowance for doubtful accounts of $656
and $571 respectively 28,948 26,377
Inventory 27,228 23,964
Prepaid expenses and other current assets 6,100 6,361
--------- ---------
Total Current Assets 87,054 64,308
Property, plant and equipment - net 51,163 53,016
Marketable securities 567 551
Goodwill and other intangible assets 47,458 47,253
Deferred income taxes 2,235 2,235
Other assets 3,940 5,468
--------- ---------
Total Assets $ 192,417 $ 172,831
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 6,151 $ 4,772
Current portion of long-term debt 398 535
Accrued expenses 4,307 4,858
Notes payable - bank 6,603 8,756
Other current liabilities 5,472 6,103
--------- ---------
Total Current Liabilities 22,931 25,024
Long term debt 2,375 2,711
Other liabilities 245 245
--------- ---------
Total Liabilities 25,551 27,980
Commitments and contingencies
Minority interest in subsidiary 4,269 4,171
Stockholder's Equity
Common stock - no par value; authorized 40,000,000 shares,
issued and outstanding 12,900,347 and 12,307,831 shares,
respectively 26,115 15,132
Accumulated other comprehensive loss (1,606) (1,540)
Retained earnings 138,088 127,088
--------- ---------
Stockholders' equity 162,597 140,680
--------- ---------
Total Liabilities and Stockholders' Equity $ 192,417 $ 172,831
========= =========
(See Notes to Consolidated Financial Statements)
3
VITAL SIGNS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Six Months Ended
March 31,
--------------------------
2001 2000
---- ----
(In Thousands Except Per Share Amounts)
Net sales $ 81,472 $ 72,594
Cost of goods sold 39,522 34,666
-------- --------
Gross Profit 41,950 37,928
Operating expenses:
Selling, general and administrative 20,669 19,169
Research and development 3,830 3,863
Interest (income) (489) (226)
Interest expense 405 244
Other expense (income) (315) 516
Goodwill amortization 657 485
-------- --------
24,757 24,051
-------- --------
Income before provision for income taxes and
minority interest in income of consolidated
subsidiary 17,193 13,877
Provision for income taxes 5,171 4,055
-------- --------
Income before minority interest in income of
consolidated subsidiary 12,022 9,822
Minority interest in income of consolidated
subsidiary 31 360
-------- --------
Net income $ 11,991 $ 9,462
======== ========
Earnings per Common Share:
Basic net income per share $ .97 $ .77
======== ========
Diluted net income per share $ .94 $ .76
======== ========
Basic weighted average number of shares 12,396 12,222
======== ========
Diluted weighted average number of shares 12,701 12,400
======== ========
Dividends paid per share $ .08 $ .08
======== ========
(see Notes to Consolidated Financial Statements)
4
VITAL SIGNS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended
March 31,
--------------------------
2001 2000
---- ----
(In Thousands Except Per Share Amounts)
Net sales $ 40,874 $ 35,481
Cost of goods sold 19,855 17,096
-------- --------
Gross Profit 21,019 18,385
Operating expenses:
Selling, general and administrative 10,484 9,485
Research and development 2,056 2,235
Interest (income) (385) (143)
Interest expense 171 121
Other expense (income) (488) 84
Goodwill amortization 298 242
-------- --------
12,136 12,024
-------- --------
Income before provision for income taxes and minority interest
in income of consolidated subsidiary 8,883 6,361
Provision for income taxes 2,661 1,721
-------- --------
Income before minority interest in income of consolidated
subsidiary 6,222 4,640
Minority interest in income of consolidated subsidiary 134 153
-------- --------
Net income $ 6,088 $ 4,487
======== ========
Earnings per Common Share:
Basic net income per share $ .49 $ .37
======== ========
Diluted net income per share $ .48 $ .36
======== ========
Basic weighted average number of shares 12,549 12,263
======== ========
Diluted weighted average number of shares 12,752 12,436
======== ========
Dividends paid per share $ .04 $ .04
======== ========
(see Notes to Consolidated Financial Statements)
5
VITAL SIGNS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended
March 31,
2001 2000
------------------------
Cash Flows from Operating Activities:
Net income $ 11,991 $ 9,462
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation and amortization 2,685 2,026
Decrease (increase) in net income tax asset -- (515)
Foreign currency unrealized gain (500) --
Amortization of goodwill 657 485
Minority interest in income of consolidated subsidiary 31 360
Changes in operating assets and liabilities:
Increase in accounts receivable (2,366) (1,484)
Decrease (increase) in inventory (3,097) 82
Decrease (increase) in prepaid expenses and other current assets 261 (614)
Decrease in other liabilities (131) (268)
Decrease (increase) in other assets 594 (441)
(Increase) decrease in accounts payable and accrued expenses 635 (1,223)
-------- --------
Net cash provided by operating activities 10,760 7,870
-------- --------
Cash Flows from Investing Activities:
Proceeds from sales of available-for-sale securities -- 13
Acquisition of property, plant and equipment (832) (5,180)
-------- --------
Net cash used in investing activities (832) (5,167)
-------- --------
Cash Flows from Financing Activities:
Purchase of treasury stock (59) (1,171)
Issuance of treasury stock 87 591
Dividends paid (991) (982)
Proceeds from exercise of stock options and warrants 10,955 895
Proceeds from short term notes payable -- 1,358
Principal payments of long-term debt and notes payable (2,748) (5,169)
-------- --------
Net cash provided by (used in) financing activities 7,244 (4,478)
-------- --------
Net increase (decrease) in cash and cash equivalents 17,172 (1,775)
Cash and cash equivalents at beginning of period 7,606 6,655
-------- --------
Cash and cash equivalents at end of period $ 24,778 $ 4,880
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the six months for:
Interest $ 529 $ 224
Income taxes 4,395 4,696
(See Notes to Consolidated Financial Statements)
6
VITAL SIGNS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The consolidated balance sheet as of March 31, 2001, the consolidated
statements of income for the three and six months ended March 31, 2001 and
2000 and the consolidated statement of cash flows for the six months ended
March 31, 2001 and 2000 have been prepared by Vital Signs, Inc. (the
"Company" or "VSI") and are unaudited. In the opinion of management, all
adjustments (consisting solely of normal recurring adjustments) necessary
to present fairly the financial position at March 31, 2001 and the results
of operations and cash flows for the three and six months ended March 31,
2001 and 2000 have been made.
2. See the Company's Annual Report on Form 10-K for the year ended September
30, 2000 (the "Form 10-K") for additional disclosures relating to the
Company's consolidated financial statements.
3. The Company adopted Statement of Financial Accounting Standards No. 131
"Disclosures about Segments of an Enterprise and Related Information" at
September 30, 1999. The Company designs, manufactures and distributes
single-use medical products. The Company's segment of information does not
meet the criteria for separate disclosure.
4. At March 31, 2001, the Company's inventory was comprised of raw materials,
$17,093,000, and finished goods, $10,135,000.
5. In the third quarter of Fiscal 2000, the Company converted its preferred
stock holdings in privately held National Sleep Technologies, Inc. ("NST")
into common stock. Upon such conversion the Company acquired an 84%
ownership in NST. The total value of the Company's investment in NST as of
September 30, 2000 was $10,439,000. The assets acquired amounted to
approximately $4 million and liabilities assumed approximately $6 million.
This acquisition has been accounted for as a purchase resulting in an
excess of purchase price over the fair value of net assets acquired of
approximately $12.8 million. The Company has reflected the operations of
NST as a consolidated subsidiary as of June 1, 2000. The net sales and net
income for the six months ended March 31, 2001 were $6,273,000 and
$85,000, respectively.
6. For Details of Legal Proceedings, see Part II, Item 1, "Legal
Proceedings".
7. Subsequent to the March 31, 2001 reporting period, the Company purchased
41% of Breas Medical AB bringing the Company's ownership percentage to
94%. The Company paid approximately $3.7 million upon signing a definitive
agreement with the balance payable based on a multiple of Breas' sales and
earnings for the twelve months ending March 31, 2002. The ultimate
purchase price for the additional 41% ownership interest will be no less
than $10.9 million or more than $35 million.
7
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Forward Looking Statements
This Quarterly Report on Form 10-Q contains, and from time to time the
Company expects to make, certain forward-looking statements regarding its
business, financial condition and results of operations. In connection with the
"safe harbor" provisions of the Private Securities Litigation Reform Act of 1995
(the "Reform Act"), the Company intends to caution investors that there are
important factors that could cause the Company's actual results to differ
materially from those projected in its forward-looking statements, whether
written or oral, made herein or that may be made from time to time by or on
behalf of the Company. Investors are cautioned that such forward-looking
statements are only predictions and that actual events or results could differ
materially from such statements. The Company undertakes no obligation to
publicly release the results of any revisions to its forward-looking statements
to reflect subsequent events or circumstances or to reflect the occurrence of
unanticipated events.
The Company wishes to ensure that any forward-looking statements are
accompanied by meaningful cautionary statements in order to comply with the
terms of the safe harbor provided by the Reform Act. Accordingly, the Company
has set forth a list of important factors that could cause the Company's actual
results to differ materially from those expressed in forward-looking statements
or predictions made herein and from time to time by the Company. Specifically,
the Company's business, financial condition, liquidity and results of operations
could be materially different from such forward-looking statements and
predictions as a result of (i) cost containment pressures on hospitals and
competitive factors that could affect the Company's primary markets, including
the results of competitive bidding procedures implemented by group purchasing
organizations and/or the success of the Company's sales force, (ii) slow downs
in the healthcare industry or interruptions or delays in manufacturing and/or
sources of supply, (iii) the Company's ability to develop or acquire new and
improved products and to control costs, (iv) market acceptance of the Company's
new products, (v) technological change in medical technology, (vi) the scope,
timing and effectiveness of changes to manufacturing, marketing and sales
programs and strategies, (vii) intellectual property rights and market
acceptance of competitors' existing or new products, (viii) adverse
determinations arising in the context of regulatory matters or legal proceedings
(see Part II, Item 1 of this Quarterly Report on Form 10-Q), (ix) healthcare
industry consolidation resulting in customer demands for price concessions, (x)
the reduction of medical procedures in a cost conscious environment, (xi)
efficacy or safety concerns with respect to marketed products, whether
scientifically justified or not, that may lead to product recalls, withdrawals
or declining sales, and (xii) healthcare reform and legislative and regulatory
changes impacting the healthcare market both domestically and internationally.
8
Results of Operations
The following table sets forth, for the periods indicated, the
percentage increase of certain items included in the Company's
consolidated statement of income.
INCREASE/(DECREASE) FROM PRIOR PERIOD
--------------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, 2001 MARCH 31, 2001
COMPARED WITH COMPARED WITH
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, 2000 MARCH 31, 2000
--------------------------------------
Net Sales 15.2% 12.2%
Cost of goods sold 16.1 14.0%
Gross profit 14.3% 10.6%
Selling, general and administrative
expense 10.5% 7.8%
Research and development expenses (8.0%) (.9%)
Income before provision for income taxes and
minority interest in income of consolidated subsidiary 39.6% 23.9%
Provision for income taxes 54.6% 27.5%
Net income 35.7% 26.7%
9
COMPARISON: QUARTER ENDED MARCH 31, 2001
AND QUARTER ENDED MARCH 31, 2000
Net sales for the quarter ended March 31, 2001 increased by 15.2%
compared with the same period last year. The increase was due to unit increases
(offset in part by slight selling price declines) and in part, to the
acquisition of National Sleep Technologies, Inc. ("NST") which was acquired
effective June 1, 2000 (see Note 5). The Company's interest in NST is reflected
in the results of operations for the three months ended Mach 31, 2001. The
operations of NST are not reflected in the results for the three months ended
March 31, 2000. Prices on existing products declined on average approximately
.7% in the three months ended March 31, 2001 when compared to the same period in
2000.
Sales of anesthesia products, representing 38.0% of net sales,
decreased by approximately 1.2% from the quarter ended March 31, 2001 due
largely to international orders that were received in March, 2001 but delayed by
the customer until April, 2001. Sales of respiratory/critical care products,
representing 43.8% of net sales, increased by approximately 12.1% reflecting
strong demand in the critical care sector. Sales of sleep services and products,
representing 18.2% of net sales, increased by $3.6 million due largely to the
acquisition of NST, effective June 1, 2000. Sleep treatment products grew by 33%
in local currency and by 21% when converted to U.S. dollars.
While net sales increased in dollars by 15.2%, gross profit dollars
increased by 14.3%. The Company's gross profit percentage for the quarter ended
Mach 31, 2001 was 51.4% compared to 51.8% in the same time period of the last
fiscal year. The decrease in gross profit percentage is primarily due to
disappointing results in the Company's blow-fill-seal contract packaging
division, offset in part by the results of the Company's cost improvement
program.
Selling, general and administrative expenses (S, G & A) increased by
$999,000 primarily due to the acquisition of National Sleep Technologies, Inc.,
in June, 2000 offset by cost reductions in the anesthesia/respiratory business
units. NST incurred $1,266,000 of S, G & A expenses in the current quarter.
Research and development expenses ("R&D") decreased by $179,000
primarily due to reduced expenditures in the Company's Breas Medical AB
division.
Other expense, which includes interest income, realized capital gains
and losses, legal and currency gains and losses, decreased by $572,000 from the
quarter ended March 31, 2000 to the quarter ended March 31, 2001 primarily due
to the benefit of foreign currency translation gains on certain liabilities
payable in other than U.S. dollars.
The Company's effective tax rates were 30.0% and 27.1% for the quarters
ended March 31, 2001 and 2000, respectively. The Company's tax rate in the
current period is lower than statutory rates primarily due to benefits realized
from its international operations. The increase in the effective tax rate is
related to the increase in taxable income.
10
COMPARISON: SIX MONTHS ENDED MARCH 31, 2001
AND SIX MONTHS ENDED MARCH 31, 2000
Net sales for the six months ended March 31, 2001 increased by 12.2%
compared with the same period last year. The increase was due to unit increases
(offset in part by slight selling price declines) and in part, to the
acquisition of National Sleep Technologies, Inc. ("NST") which was acquired
effective June 1, 2000 (see Note 5). The Company's interest in NST is reflected
in the results of operations for the six months ended March 31, 2001. The
operations of NST are not reflected in the results for the six months ended
March 31, 2000. Prices on existing products declined on average approximately
.3% in the six months ended March 31, 2001 when compared to the same period in
2000.
Sales of anesthesia products, representing 39.8% of net sales,
decreased by approximately .3% from the six months ended March 31, 2000
primarily due to selling price declines and delays in international shipments.
Sales of respiratory/critical care products, representing 42.0% of net sales,
increased by approximately 6.3%. Sales of sleep services and products,
representing 18.2% of net sales, increased by $6.9 million due largely to the
acquisition of NST, effective June 1, 2000.
While net sales increased in dollars by 12.2%, gross profit dollars
increased by 10.6%. The Company's gross profit percentage for the six months
ended March 31, 2001 was 51.5% compared to 52.2% in the same time period of the
last fiscal year. The decrease in gross profit percentage is primarily due to
the disappointing results in the Company's blow-fill-seal contract packaging
division, offset in part by the results of the Company's cost improvement
program.
Selling, general and administrative expenses (S, G & A) increased by
$1,500,000 primarily due to the acquisition of National Sleep Technologies,
Inc., in June, 2000 offset by cost reductions in the anesthesia/respiratory
business units. NST incurred $2,257,000 of S, G & A expenses in the current six
months.
Research and development expenses ("R&D") decreased by $33,000
primarily due to decreased activity at the Company's Breas Medical AB
subsidiary.
Other expense, which includes interest income, realized capital gains
and losses, legal and currency gains and losses, decreased by $831,000 from the
six months ended March 31, 2000 to the six months ended March 31, 2001 primarily
due to the sale of an investment and currency transaction gains on certain
liabilities payable in other than U.S. dollars.
The Company's effective tax rates were 30.1% and 29.2% for the quarters
ended March 31, 2001 and 2000, respectively. The Company's tax rate in the
current period is lower than statutory rates primarily due to benefits realized
from its international operations. The increase in effective tax rate is related
to the increase in taxable income.
11
Liquidity and Capital Resources
The Company continues to rely upon cash flow from its operations.
During the six months ended March 31, 2001, cash and cash equivalents increased
by $17,172,000 of which approximately $11 million represents proceeds from the
exercise of stock options. During the period, the Company paid dividends of
approximately $991,000, spent $832,000 on capital expenditures and reduced long
term debt and notes payable by $2.7 million. The combined total of cash and cash
equivalents and long-term marketable securities was approximately $25.3 million
at March 31, 2001 as compared to $8.2 million at September 30, 2000.
At March 31, 2001, the Company had approximately $24.8 million in cash
and cash equivalents. On that date, the Company's working capital was $64.1
million and the current ratio was 3.8 to 1, as compared to $39.3 million and 2.6
to 1 at September 30, 2000.
The Company's current policy is to retain working capital and earnings
for use in its business, subject to the payment of certain cash dividends and
treasury stock repurchases. Such funds may be used for product development,
product acquisitions and business acquisitions, among other things. The Company
regularly evaluates and negotiates with domestic and foreign medical device
companies regarding potential business or product line acquisitions or licensing
arrangements by the Company. In May, 2001 $3.7 million was used as an initial
payment to acquire an additional 41% of Breas Medical. An additional payment
will be made in April, 2002 for a minimum of $7.1 million and maximum of $31.2
million.
The Company has a $25 million line of credit with Chase Manhattan Bank
("Chase"). Chase has also expressed its intention to provide additional funds
for the Company's future acquisitions, provided that each such acquisition meets
certain criteria. The terms for any borrowing would be negotiated at the date of
origination. There were no amounts outstanding at March 31, 2001.
Management believes that the funds generated from operations, along
with the Company's current working capital position and bank credit, will be
sufficient to satisfy the Company's capital requirements for the foreseeable
future. This statement constitutes a forward-looking statement under the Reform
Act. The Company's liquidity could be adversely impacted and its need for
capital could materially change if costs are higher than anticipated, the
Company were to undertake acquisitions demanding significant capital, operating
results were to differ significantly from recent experience or adverse events
were to affect the Company's operations.
Item 3.
Quantitative and Qualitative Disclosure About Market Risk
Not Applicable
12
PART II.
OTHER INFORMATION
Item 1.
Legal Proceedings:
(a) Reference is made to Item 3 of the Company's Annual Report on Form 10-K
for the year ended September 30, 2000.
(b) In September 1996, a patent infringement action was filed in Japan against
an OEM medical device distributor in connection with the sale in Japan of
Marquest Medical Products, Inc.'s ABG syringe product line. In July 1999
the Court indicated at a hearing that, based on one exhibit submitted by
the plaintiff, the Marquest ABG syringe products appear to infringe the
plaintiff's patent, and requested that the plaintiff submit an updated
proof of damages. In July 1999, plaintiff filed an updated proof of
damages of approximately $6.5 million, plus interest and costs. On June
23, 2000 the Court entered a judgment against the Company's distributor
for Yen 336,872,689 ($2,887,645) plus five percent annual interest. The
distributor (which has patent indemnification protection from Marquest)
has appealed the judgment to the Tokyo Supreme Court. The matter is in the
appelate process. The Company continues to believe that Marquest ABG
syringe products do not infringe the plaintiff's patent and will continue
to vigorously defend the action.
(c) On December 6, 1999 a complaint was filed against the Company on behalf of
the former shareholders of Vital Pharma, Inc. alleging breach of contract
for failure to pay earnout payments allegedly due under the stock purchase
agreement for the sale of VPI in December, 1995. The Company answered the
complaint, filed counter-claims and moved to transfer the case to
arbitration. In August, 2000 the court ordered plaintiff to submit such
claims to binding arbitration and stayed all other proceedings pending the
outcome of the arbitration. An arbitrator has been selected and the
parties are in the discovery stages of the arbitration.
The Company is also involved in other legal proceedings arising in the
ordinary course of business.
The Company cannot predict the outcome of its legal proceedings with
certainty. However, based upon its review of pending legal proceedings,
the Company does not believe the ultimate disposition of its pending legal
proceedings will be material to its financial condition. Predictions
regarding the impact of pending legal proceedings constitute
forward-looking statements under the Reform Act. The actual results and
impact of such proceedings could differ materially from the impact
anticipated, primarily as a result of uncertainties involved in the proof
of facts in legal proceedings.
13
Item 6.
Exhibits and Reports on Form 8-K
a) Reports on Form 8-K filed during the quarter ended March 31, 2001:
None.
14
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.
VITAL SIGNS, INC.
By: /s/ Anthony J. Dimun
------------------------------
Anthony J. Dimun
Executive Vice President of
Finance and Chief Financial Officer
Date: May 15, 2001
15