ALARIS Medical Reports First Quarter Financial Results.Business Editors & Health/Medical Writers SAN DIEGO--(BW HealthWire)--May 3, 2001 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., (AMEX AMEX See: American Stock Exchange :AMI) today reported sales of $98.9 million for the quarter ended March 31, 2001, an increase of $10.3 million, or 12%, when compared with the same period in 2000. 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 increased $3.2 million to $19.5 million for the first quarter of 2001 versus $16.3 million for the same period in the prior year. The company reported a net loss of $2.5 million or $0.04 per share for the quarter, compared with a net loss of $5.2 million or $0.09 per share a year ago. The sales, Adjusted EBITDA and net loss per share were all in line with the outlook for the quarter indicated in the company's press release of April 17, 2001. David L. Schlotterbeck, president and chief executive officer, said, "We are very pleased with the growth generated from our core products during the quarter and the strong improvement of our international business. Return of top line growth is consistent with our strategy and the steps we have taken to turn around the company. We believe we are tracking to the next steps of our strategy which include new product introductions this year and improved bottom line performance next year." First Quarter Results Sales Sales increased $10.3 million, or 12%, for the quarter ended March 31, 2001, compared with the same quarter last year. As previously disclosed, the company believes that first quarter 2000 sales were adversely impacted by approximately $3 million due to Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 stocking orders of disposable disposable Nursing adjective Referring to that which is discarded or disposed of noun An item used in health care-related Pt contact which is discarded after use–eg masks, gloves, gowns, needles, paper products, syringes, wipes. See Biohazardous waste. administration sets from customers in 1999. As a result, when adjusted for this impact, first quarter sales grew by 8%. However, the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. Y2K impact on 2001 is essentially offset by an unfavorable foreign currency effect of approximately $3 million in the first quarter of 2001 compared with the first quarter of 2000. North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. sales increased $5.5 million, or 9%, compared with the first quarter of 2000 (5% growth when normalized for Y2K sales). The increase in North America sales was primarily due to higher volumes of drug infusion INFUSION, med. jur. A pharmaceutical operation, which consists in pouring a hot or cold fluid upon a substance, whose medical properties it is desired to extract. Infusion is also used for the product of this operation. Although infusion differs from decoction, (q.v. disposable administration sets. International sales increased $4.8 million, or 16%, compared with the first quarter of 2000 (13% growth when normalized for Y2K sales). Drug infusion instrument sales increased $3.9 million due to higher volumes of both syringe syringe /sy·ringe/ (si-rinj´) (sir´inj) an instrument for injecting liquids into or withdrawing them from any vessel or cavity. pumps and large volume pumps, as well as stable selling prices, primarily in the U.K. International disposable administration set revenues increased $1.3 million compared with first quarter 2000. The majority of the company's international sales are denominated in foreign currency. A stronger U.S. dollar in 2001 compared with actual foreign currency exchange rates in effect during 2000, adversely impacted first quarter 2001 sales by $3.0 million, or 10%. Using constant exchange rates, International sales increased 26%. Gross Margin Gross margin increased $5.9 million, or 14%, during the quarter ended March 31, 2001, compared with the same quarter last year. The gross margin percentage increased to 48.4% in the first quarter of 2001, from 47.4% in the first quarter of 2000. Contributing to the margin increase in 2001 was the overall worldwide mix of increased disposables sales, which have higher margins than instruments, and higher international sales that generally carry higher margins than North America sales. Selling and Marketing Expense Selling and marketing expense decreased $0.3 million, or 2%, during the quarter ended March 31, 2001, compared with the same period in 2000, primarily due to lower spending related to worldwide sales meetings sales meeting n → reunión f de ventas . These reductions were partially offset by higher distribution costs distribution costs distribute npl → Vertriebskosten pl and increased selling costs resulting from higher sales volume than in the first quarter of 2000. As a percentage of sales, selling and marketing expenses decreased to 18.9% from 21.4% for the first quarter of 2000. General and Administrative Expense General and administrative expense increased $2.1 million, or 21%, during the quarter ended March 31, 2001, compared with the same period in the prior year. This increase is due to higher costs for employee benefits, consulting and information technology. As a percentage of sales, general and administrative expense increased from 11.1% during the first quarter of 2000 to 12.1% for the first quarter of 2001. Research and Development Expense Research and development expense increased approximately $0.9 million, or 15%, during the quarter ended March 31, 2001, primarily due to increased spending associated with new product development. As a percentage of sales, research and development expense increased to 6.8% for the first quarter of 2001, compared with 6.6% for the first quarter of 2000. Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and Other Non-recurring Charges Restructuring and other non-recurring charges of $5.7 million ($3.4 million net of tax) in the first quarter of 2001 included $2.4 million of accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. legal, advisory and consultant expenses related to obtaining an amendment to the ALARIS Medical Systems bank credit agreement. This amendment was completed in April 2001. The company also recorded $3.3 million in restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. during the first quarter of 2001. This restructuring related to efforts aimed at process improvement and streamlining of operations in the North America business and resulted in the elimination of 70 positions. The restructuring charges are composed of severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and related benefits of $2.8 million and consulting fees of approximately $0.5 million. Adjusted EBITDA for the first quarter of 2001 excludes the $5.7 million of non-recurring charges. Interest Expense Interest expense decreased $0.3 million, or 2%, during the quarter ended March 31, 2001, compared with the same period in the prior year. The decrease in interest is due to lower debt balances in the current year compared with the prior year period. These decreases were partially offset by increased interest accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the on the company's 11-1/8% senior discount notes. Interest Income Interest income increased $0.4 million during the quarter ended March 31, 2001, compared with the same quarter in 2000 as a result of higher cash balances during the current period compared with the prior year period. The increase in cash during the first quarter of 2001 was due, in part, to the sale of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Other Expense Other expense decreased $0.4 million during the quarter ended March 31, 2001, compared with the same quarter in the prior year due to the receipt of $0.5 million of other income in 2001 relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the sale of a tradename. Discontinued Operations During the third quarter of 2000, the company sold its Instromedix(R) division to Card Guard Technologies Inc. ("Card Guard") The agreement with Card Guard provided that the company would assist the buyer in setting up a fully independent headquarters and manufacturing facility. During the first quarter of 2001, the company completed its obligations related to the agreement and recorded a gain of $3.7 million, net of taxes. During the first quarter of 2000, discontinued operations for the Instromedix division were $0.4 million, net of taxes. Earnings Per Share The per share loss of $0.04 for the quarter includes several non-recurring items which effectively offset one another. Included in the loss per share is a $0.06 per share gain related to the remaining gain recognition from the sale of the Instromedix division. Offsetting this is a $0.06 per share loss related to the after tax effects of the restructuring and other non-recurring charges described above. Financial Position ALARIS Medical reported 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. (including current portion) of $522.7 million at March 31, 2001, compared with $523.8 million at Dec. 31, 2000. Cash provided by operations was approximately $24 million for the quarter. The company had $50 million in cash on the balance sheet at March 31, 2001, compared with $30.6 million at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2000, and is in compliance with all of its bank covenants. Recent Key Developments -- The company submitted its required certification of substantial compliance to the FDA on April 30, 2001. Continued efforts are ongoing and are anticipated to further enhance the company's compliance and quality systems. -- User trials of the MEDLEY(TM) Patient Care System continued through the first quarter with strong product performance. In mid-April, several product enhancements were introduced at the trial sites to better position the product line for additional features scheduled for introduction over the next two years. While no meaningful issues have been observed, management has elected to gain additional runtime on the product before beginning shipments. Commercial production started in April and the company expects customer shipments to begin in May. -- The redesigned ASENA(TM) GW device, a compact large volume pump with semi-dedicated disposables, remains on track for International launch in the third quarter of 2001. The company has an order backlog of over 1,000 units for this product. -- The ASENA(TM) CC syringe pump, introduced outside of the U.S. in late January, has enjoyed strong demand as a premium performance product targeting particularly acute patients. -- The A-Line(TM) level of consciousness monitor has been well received in a significant number of evaluations across the U.K. and Europe. However, the sales cycle for the product is longer than expected as institutions have had to rearrange their originally allocated capital budgeted to allow purchase of this previously unavailable technology. A-Line A-line adj. Having a fitted top and a flared bottom: an A-line dress. [From garments being shaped like a capital A. (TM) is a trademark licensed from Danmeter A/S. Outlook Second quarter sales are anticipated to be at or slightly below first quarter levels with a higher mix of North America sales resulting in a slightly lower gross margin percentage. Adjusted EBITDA is anticipated to be in the $16 million to $18 million range. For the full year 2001, the company reiterated previous indications that sales are anticipated to grow about six percent and Adjusted EBITDA is anticipated to be in the $74 million to $77 million range. 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 (R) 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 (R) brand names of 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. infusion therapy systems and patient monitoring products. The company's principal line of business is the design, manufacture and marketing of intravenous infusion therapy products, patient monitoring instruments and related disposables. The company's products are distributed in 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 also operates manufacturing facilities in Creedmoor Creedmoor is the name of a number of places in the United States of America:
Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . 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. as defined in the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Persons reading this release are cautioned that such forward-looking statements involve risks and uncertainties, including restrictions contained in the instruments governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. ALARIS Medical's indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. , the significant leverage to which it is subject, the effect of change in foreign currency exchange rates, the dependence of ALARIS Medical upon the success of new products and ongoing research and development efforts including obtaining regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals, the potential of increased levels of competition and technological changes. 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, 2000. ALARIS Medical assumes no obligation to update any forward-looking statements as a result of new information or future events or developments.
ALARIS MEDICAL INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollar and share amounts in thousands, except per share data)
ASSETS
March 31, Dec. 31,
2001 2000
(Unaudited)
Current assets:
Cash $ 49,992 $ 30,630
Receivables, net 70,519 79,790
Inventories 57,526 62,324
Prepaid expenses and
other current assets 30,975 33,049
Total current assets 209,012 205,793
Net investment in sales-type
leases, less current portion 26,905 25,920
Property, plant and equipment,
net 56,911 59,988
Other non-current assets 27,817 28,481
Intangible assets, net 246,896 249,803
$ 567,541 $ 569,985
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of
long-term debt $ 39,054 $ 19,871
Accounts payable 23,061 22,077
Accrued expenses and other
current liabilities 48,104 46,262
Total current liabilities 110,219 88,210
Long-term debt 483,666 503,974
Other non-current liabilities 15,065 13,535
Total non-current liabilities 498,731 517,509
Contingent liabilities and commitments
Stockholders' equity:
Common stock, authorized 75,000
shares at $.01 par value;
issued and outstanding --
59,296 shares at March 31,
2001 and Dec. 31, 2000 593 593
Capital in excess of par value 148,992 148,992
Accumulated deficit (178,227) (175,753)
Treasury stock (2,027) (2,027)
Accumulated other
comprehensive loss (10,740) (7,539)
Total stockholders' equity (41,409) (35,734)
$ 567,541 $ 569,985
ALARIS MEDICAL INC.
CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS AND OTHER DATA (Unaudited)
(Dollar and share amounts in thousands,
Three Months Ended March 31,
2001 2000
Sales $ 98,889 $ 88,568
Cost of sales 51,059 46,619
Gross profit 47,830 41,949
Selling and marketing
expenses 18,694 18,983
General and administrative
expenses 11,948 9,849
Research and development
expenses 6,731 5,873
Restructuring and other
non-recurring charges 5,743 --
Total operating expenses 43,116 34,705
Lease interest income 1,276 1,130
Income from operations 5,990 8,374
Other income (expenses):
Interest income 635 223
Interest expense (13,997) (14,310)
Other, net (939) (1,331)
Total other expense (14,301) (15,418)
Loss before income taxes (8,311) (7,044)
Benefit from income taxes (2,100) (2,242)
Loss from continuing
operations (6,211) (4,802)
Discontinued operations:
Loss from operations of
discontinued business
(net of tax benefit) -- (394)
Gain on disposal of business
(net of tax expense) 3,737 --
Total income (loss) from
discontinued operations 3,737 (394)
Net loss $ (2,474) $ (5,196)
Net loss per common share
from continuing operations $ (.10) $ (.08)
Discontinued operations $ .06 $ (.01)
Net loss per common share
assuming dilution $ (.04) $ (.09)
Weighted average common shares
outstanding assuming no dilution 58,845 58,845
Weighted average common shares
outstanding assuming dilution 58,845 58,845
Income from operations $ 5,990 $ 8,374
Depreciation and amortization 7,750 7,903
Restructuring and other
non-recurring charges 5,743 --
Adjusted EBITDA $ 19,483 $ 16,277
Adjusted EBITDA represents income from operations before restructuring, integration and other non-recurring charges, non-cash purchase accounting 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 The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , 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. Integration 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 Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. of Adjusted EBITDA may not be comparable to similar titled measures of other companies. |
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