ALARIS Medical Reports Continued Financial Improvement.SAN DIEGO--(BUSINESS WIRE)--July 20, 1998-- Key financial gains include: -- 3% worldwide sales growth -- 6.8% international sales growth as adjusted for foreign currency rate changes -- 7.2% Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become gain ALARIS Alaris is the brand name of the regional rail network run by the Spanish national rail company RENFE that connects the major cities of Madrid and Valencia. Alaris services currently use ETR 490 trainsets. Medical Inc. (Nasdaq:ALRS ALRS Admiralty List of Radio Signals ALRS Alerting Service (aviation) ALRS Apache Leap Research Site ALRS Alternate Launch & Recovery Surface ALRS Automated Logistics Retrieval System ALRS Automatic Line Router Switch ) Monday Monday: see week. reported 3.0% higher sales and 8.5% higher gross profit. The increased revenue and the company's continued success with its cost-reduction programs resulted in a 7.2% increase in Adjusted EBITDA for the quarter ended June June: see month. 30, 1998. These gains were achieved despite an unfavorable foreign currency exchange environment as compared with the same periods in 1997 and do not reflect contributions from two recently announced acquisitions effected during the quarter which are not expected to contribute to financial growth until future periods. Results Sales for the quarter ended June 30, 1998, increased 3.0% to $90,683,000 from $88,072,000 in the second quarter last year. U.S. sales increased 2.8% and international sales increased 3.2%. Adjusting for the impact of changes in foreign currency exchange rates, international sales increased 6.8%. Due to a $5,534,000 (or $.06 per share, net of tax) write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of acquired in-process R&D related to acquisitions completed during the quarter, the company reported a net loss of $1,968,000, or $0.03 per share, vs. a loss of $7,002,000, or $0.12 per share, in the same period of 1997. Adjusted EBITDA increased 7.2% to $22,032,000, or 24.3% of sales, compared with $20,560,000, or 23.3% of sales, a year ago. Sales for the six months ended June 30, 1998, increased 4.5% to $177,654,000 from $170,067,000 for the same period last year. U.S. sales increased 2.6% and international sales increased 7.6%. Adjusting for the impact of changes in foreign currency exchange rates, international sales increased 11.8%. The company reported a net loss of $1,761,000, or $0.03 per share, vs. a loss of $11,317,000, or $0.19 per share, in the first six months of 1997. Adjusted EBITDA increased 11.6% to $42,224,000, or 23.8% of sales, compared with $37,822,000, or 22.2% of sales, a year ago. Leading the Growth ALARIS Medical President and Chief Executive Officer William William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack J. Mercer mer·cer n. Chiefly British A dealer in textiles, especially silks. [Middle English, from Old French mercier, trader, from merz, merchandise, from Latin merx said: "Technology and service leadership continued to be important competitive advantages for our core business helping us produce revenue gains during the quarter. Overall, global demand for our products continues to be strong. We ended the quarter with a back order of about $8 million, up 36%, from $5.9 million at the end of the first quarter." U.S. Contribution For the quarter ended June 30, 1998, U.S. sales were $57,002,000 or approximately 63% of total sales. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Douglas Douglas, city, Isle of Man Douglas, city (1991 pop. 19,950), capital of the Isle of Man, Great Britain. It is a popular resort, connected by rail to Ramsey and Port Erin, on the Irish Sea. Tourism is the chief industry. C. Jeffries, vice president and CFO See Chief Financial Officer. : "A key contributor to this internal growth continues to be the SmartSite System, as customers recognize the clinical and cost advantages of using our needle-free valve. "For the second quarter, 29% of our U.S. drug infusion disposables revenue is from products incorporating the SmartSite technology. We expect SmartSite product sales to continue to increase as a percent of total U.S. disposables sales during the second half." Jeffries also said that the result of contracts established over the past year with hospital group purchasing organizations A group purchasing organization is an entity that leverages the purchasing power of a group of businesses to obtain discounts from vendors based on the collective buying power of the GPO members. Many GPOs are funded by administrative fees that are actually paid by the vendors. was another important aspect of U.S. sales growth. Increased volume of patient- monitoring products also contributed to U.S. sales gains. International Contribution International sales were $33,681,000 or approximately 37% of total revenues. Jeffries said: "International sales growth continued, although a strengthening U.S. dollar reduced international sales growth by several percentage points. Our ability to grow on a U.S. dollar basis in this environment reflects the success of our strategy to develop direct sales forces in key international markets. Most important to current results, however, is the continued demand for our large volume and syringe syringe /sy·ringe/ (si-rinj´) (sir´inj) an instrument for injecting liquids into or withdrawing them from any vessel or cavity. pump infusion systems." Margin Gains Gross profit increased 8.5% to $44,184,000 for the three months ended June 30, 1998, from $40,711,000 for the three months ended June 30, 1997. Jeffries said this profit improvement reflects stable pricing and the continued success of the company's cost-reduction programs, resulting in improved gross margins. Recent Acquisitions Also during the quarter, the company completed two technology acquisitions. Neither of these acquisitions contributed to current results, but are expected to add to revenues in the future. On May 13, 1998, ALARIS Medical signed a definitive agreement with Caesarea Caesarea modern Horbat Qesari Ancient seaport, Palestine. Located on the coast of present-day Israel south of the city of Haifa, it was originally a Phoenician settlement. Medical Electronics Limited to license a pole-mounted volumetric volumetric /vol·u·met·ric/ (vol?u-met´rik) pertaining to or accompanied by measurement in volumes. vol·u·met·ric adj. Of or relating to measurement by volume. infusion pump infusion pump A device designed to deliver drugs and/or 'biologicals', at low doses and at a constant or controllable rate; ↑ rates of delivery in such devices may be associated with local hemolysis, compromising the potential benefits of a calibrated delivery technology which allows the company to build and market intravenous intravenous /in·tra·ve·nous/ (-ve´nus) within a vein or veins.intrave´nously in·tra·ve·nous adj. Abbr. IV Within or administered into a vein. (IV) infusion products which will incorporate this technology. On May 20, 1998, ALARIS Medical acquired the assets of Patient Solutions Inc. (PSI) which included the rights to two ambulatory Movable; revocable; subject to change; capable of alteration. An ambulatory court was the former name of the Court of King's Bench in England. It would convene wherever the king who presided over it could be found, moving its location as the king moved. pumps developed specifically by PSI for the home-care market, as well as a broad range of accessories and IV-disposable products for use in the ambulatory-infusion market. The most recent acquisition was of the privately owned Instromedix Inc., which added a portfolio of products that primarily address cardiac disease diagnosis, vital signs monitoring and management to the company's existing product lines, and focuses on the delivery of patient care in the alternate-site setting. This acquisition closed July July: see month. 17, 1998. Financial Position At June 30, 1998, ALARIS Medical reported total assets of $550,263,000 and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $30,002,000. Improved operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. resulted in a $13.8 million reduction in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. during the first half of 1998. At June 30, 1998, long-term debt (including current portion) was $432,345,000, vs. $446,130,000, at Dec. 31, 1997. ALARIS Medical Inc., through its operating company operating company A business that engages in transactions with outsiders. ALARIS Medical Systems Inc., is known for its IMED IMED International Medical Education Directory and IVAC IVAC Islington Voluntary Action Council (England, UK) IVAC Insert Valid Access Card (satellite TV hacking) IVAC International Video & Audio Convention IVAC Idle Air Control Valve brand names of intravenous infusion therapy systems. The company's principal line of business is the design, manufacture and marketing of intravenous infusion therapy products, patient-monitoring instruments and related disposables. ALARIS Medical's products are distributed to more than 120 countries worldwide. In addition to its San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. world headquarters and manufacturing facility, the company operates manufacturing facilities in Creedmoor Creedmoor is the name of a number of places in the United States of America:
Additional information on ALARIS Medical can be found at www.alarismed.com. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based largely upon the company's expectations for demand and acceptance of new and existing products, technologies and opportunities, regulatory approvals and market and industry segment growth. Actual results could vary materially from these expected results due to a variety of factors, including, without limitation, changes in the market, competition, government regulation and foreign operations. Such risk factors are detailed in the Securities and Exchange Commission filings of ALARIS Medical Inc. including Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Dec. 31, 1997. -0-
ALARIS MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND OTHER DATA
(Unaudited)
(Dollar and share amounts in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Sales $ 90,683 $ 88,072 $ 177,654 $ 170,067
Cost of sales 46,499 47,361 91,353 94,331
Gross margin 44,184 40,711 86,301 75,736
Selling and marketing
expenses 17,101 16,414 34,230 31,909
General and administrative
expenses 9,639 9,681 19,541 18,935
Research and development
expenses 4,660 4,123 9,000 8,191
Purchased in-process
research and development 5,534 -- 5,534 --
Integration and other
non-recurring charges -- 12,247 -- 15,899
Total operating
expenses 36,934 42,465 68,305 74,934
Lease interest income 1,060 1,029 2,222 2,191
(Loss) income from
operations 8,310 (725) 20,218 2,993
Other income (expenses):
Interest income 85 227 147 385
Interest expense (10,639) (11,002) (21,795) (21,695)
Other, net (324) (302) (681) (400)
Total other expense (10,878) (11,077) (22,329) (21,710)
Loss before income taxes (2,568) (11,802) (2,111) (18,717)
Benefit from income taxes (600) (4,800) (350) (7,400)
Net loss $ (1,968) $ (7,002) (1,761) (11,317)
Net loss per common share
assuming no dilution $ (.03) $ (.12) $ (.03) $ (.19)
Net loss per common
share assuming
dilution $ (.03) $ (.12) $ (.03) $ (.19)
Weighted average common
shares outstanding
assuming no dilution 58,680 58,635 58,669 58,788
Weighted average common
shares outstanding
assuming dilution 58,680 58,635 58,669 58,788
Income (loss) from
operations 8,310 (725) 20,218 2,993
Depreciation and
amortization 8,188 9,038 16,472 17,323
Inventory purchase
accounting adjustment -- -- -- 1,607
Purchased in-process
research and development 5,534 -- 5,534 --
Integration and other
non-recurring charges -- 12,247 -- 15,899
Adjusted EBITDA $ 22,032 $ 20,560 $ 42,224 $ 37,822
ALARIS MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollar and share amounts in thousands, except per share data)
ASSETS
June 30, Dec. 31,
1998 1997
(Unaudited)
Current assets:
Cash $ 2,285 $ 6,984
Receivables, net 82,274 83,406
Inventories 65,619 61,666
Prepaid expenses and other current assets 22,352 23,260
Total current assets 172,530 175,316
Net investment in sales-type leases,
less current portion 23,473 30,404
Property, plant and equipment, net 56,693 55,365
Other non-current assets 17,295 16,279
Intangible assets, net 280,272 287,933
$ 550,263 $ 565,297
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 15,068 $ 14,559
Accounts payable 23,669 24,042
Accrued expenses and other current
liabilities 56,213 52,668
Total current liabilities 94,950 91,269
Long-term debt 417,277 431,571
Other non-current liabilities 8,034 10,508
Total non-current liabilities 425,311 442,079
Contingent liabilities and commitments
Stockholders' equity:
Common stock, authorized 75,000 shares
at $.01 par value; issued and
outstanding -- 59,102 shares and
59,160 shares at Dec. 31, 1997 and
June 30, 1998, respectively 591 591
Capital in excess of par value 148,524 148,341
Accumulated deficit (113,092) (111,330)
Treasury stock (2,027) (2,027)
Equity adjustment for foreign currency
translation (3,994) (3,626)
Total stockholders' equity 30,002 31,949
$ 550,263 $ 565,297
Adjusted EBITDA represents income from operations before
non-recurring non-cash purchase accounting charges, restructuring
charges, integration charges, and depreciation and amortization.
Adjusted EBITDA does not represent net income or cash flows from
operations, as these terms are defined under generally accepted
accounting principles, and should not be considered as an alternative
to net income as an indicator of the company's operating performance
or to cash flows as a measure of liquidity. The company has included
information concerning Adjusted EBITDA herein because it understands
that such information is used by certain investors as one measure of
an issuer's historical ability to service debt. Restructuring and
other one-time non-recurring charges are excluded from Adjusted EBITDA
as the company believes that the inclusion of these items would not be
helpful to an investor's understanding of the company's ability to
service debt. The company's computation of Adjusted EBITDA may not be
comparable to similar titled measures of other companies.
CONTACT: ALARIS Medical Inc., San Diego Barbara Burkett, 619/458-7038 or Financial Relations Board, 310/442-0599 Stacy Roughan, general information, Moira Conlon/Lisa Baker, investors Marjorie Ornston, media |
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