ALARIS Medical Systems Announced Increased Quarterly Revenues, Adjusted EBITDA; New COO, CFO to Focus on Enhancing Growth Strategy.SAN DIEGO--(BUSINESS WIRE)--April 29, 1999--
Key Factors:
-- North American and International Businesses Report Sales Growth
-- Instromedix Sales and Costs Contribute to Results
-- Growing Demand for Clinician and Patient Safety Becoming More
Important to Results
ALARIS 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 ) Thursday reported increased revenues, higher gross margins and higher 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 for the quarter ended March 31, future growth. "To more quickly capture this broad opportunity, I have asked our new chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , David L. Schlotterbeck, and new chief financial officer, William C. Bopp BOPP Oncology A chemotherapy regimen: BCNU, Oncovin, procarbazine, prednisone. See Chemotherapy Clinical research Boronated porphyrin An investigational photosensitizing drug; clinical trials will assess BOPP's safety for treating malignant brain tumors. , to join me in refocusing Noun 1. refocusing - focusing again focalisation, focalization, focusing - the act of bringing into focus our growth strategy toannual sales, and we want to be sure we convert this leadership into well-recognized shareholder value," he said. Results For the quarter ended March 31, 1999, the company reported a 7 percent growth in revenues to $93,436,000 compared with $86,971,000 in the same periomedix, sales increased approximately 3 percent. North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. sales increased 2 percent during the quarter as compared with the same quarter last year. This growth was ministration sets. Gross Profit duct costs resulting from 1998 cost reduction efforts. Additionally, gross margin increased to 51.2 percent for the quarter, as compared with 48.4 percent for the same quarter last year, due to the mix of higher margin disposable adof relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. and integration costs. Total relocation and integration expenses are estimated to be approximately $5,000,000 for 1999. Included in the first quarter 1999 operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. is an increase in research and development costs of $1,707,000 or 39 percent due to the inclusion of Instromedix and increased spending on products nearing commercial introduction. Interest Expense Total interest expense increased $2,497,000 due primarily to the company's placement of its 11-1/8 Percent Senior Discount Notes in July 1998 related to the acquisition of Instromedix. This was partially offset by a decrease in interest expense on other 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. due to a decrease in the amount outstanding. The 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 11-1/8 Percent Senior Discount Notes is added to the outstanding principal until August 2003. Accretion of $3,171,000 during the quarter increased the amount outstanding under these notes to $118,264,000 at March 31, 1999. Financial Position ALARIS Medical reported long-term debt (including current portion) of $543,504,000 at March 31, 1999, compared with $546,290,000 at Dec. 31, 1998. 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. increased during the quarter as short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying decreased $15,745,000. This resulted in a total cash balance of $39,512,000 at March 31, 1999, as compared with $29,500,000 at Dec. 31, 1998. Growing the Company "In recent months, as promised, management actively examined a wide range of possible scenarios for maximizing shareholder value. That activity is now behind us. It is very clear that growing our business is the most reliable and powerful way to increase shareholder value. Our job is to grow the company," 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. "To help us pursue that strategy, we have attracted two highly regarded senior executives as chief operating officer and chief financial officer," he added. New COO (Cell Of Origin) See mobile positioning. and CFO See Chief Financial Officer. Schlotterbeck joined ALARIS Medical in mid-April as president and COO. Since 1991, Schlotterbeck has held positions as president and COO of Pacific Scientific, an international manufacturer of motion control, process measurement and safety products; president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Vitalcom Inc., a medical network manufacturer; and executive vice president and COO for Nellcor Inc., a medical device manufacturer recently acquired by Mallinckrodt Inc. During Schlotterbeck's tenure, Nellcor was recognized by Forbes as one of the best-managed U.S. companies under $350 million. Bopp joined the company in March as vice president and CFO. Since 1980 Bopp has held positions of increasing responsibility with C.R. Bard bard, in Wales, term originally used to refer to the order of minstrel-poets who composed and recited the poems that celebrated the feats of Celtic chieftains and warriors. Inc., a $1.2 billion developer, manufacturer and marketer of health-care products. In addition to his most recent position of executive vice president and CFO, from 1995 until this year, he also served as a member of the board of directors of Bard. Investing for the Future Mercer said: "The most important gains in the quarter appear on the expense side of the income statement as they reflect our much more intensive research and development activities and the costs associated with assimilating as·sim·i·late v. as·sim·i·lat·ed, as·sim·i·lat·ing, as·sim·i·lates v.tr. 1. Physiology a. To consume and incorporate (nutrients) into the body after digestion. b. Instromedix into our product mix and technology base. "Within the next 12 months, as a result of these and other investments, we will be launching products that will bring in a new century of acute care and that we believe will further advance ALARIS Medical as a global provider of progressively more integrated care systems around the patient." Mercer also pointed to the continued ramp-up in sales and marketing expenses relative to much slower increases in general and administrative expenses as another sign of ALARIS Medical's investment in growth. Safety Trend In today's increasingly complex health-care environment, ALARIS Medical continues to focus on safety as a key source of differentiation. The company's goal is to reduce medication errors medication error Malpractice An error in the type of medication administered or dosage. See Adverse effect, Error. , increase caregiver care·giv·er n. 1. An individual, such as a physician, nurse, or social worker, who assists in the identification, prevention, or treatment of an illness or disability. 2. safety and decrease 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. site complications. Spending and innovation on improving health-care safety has been focused recently on the safety of the caregiver in addition to the patient. For example, the overall market for needle-free systems grew to more than $300 million in 1998, reflecting the increasing demand for needle-free solutions that protect the caregiver. The company expects its needle-free disposable products Disposable products are items that are not intended by the manufacturer to be reused more than once or a few times as compared to more permanent serviceable and reusable items. Some products that have disposable versions are:
New Product Pipeline -0-
North America Sales
-- In mid-March, the company introduced the Signature Edition(R)
GOLD platform, a new large volume single- and dual-channel
infusion system intended for broad clinical applications. Among
the pump's unique clinical and safety features are advanced
infusion management (AIM), a comprehensive intravenous infusion
monitoring and management system, and precision flow, designed to
provide consistent flow continuity and resolution over time.
-- Going forward, ALARIS Medical expects new concepts such as
connectivity, modularity, telemedicine and medication management
to become a reality. The company is working toward the initial
beta launch in the second half of this year of its integrated
next-generation patient-care system.
Instromedix Division
-- In late February, the Instromedix Division launched the King of
Hearts Express(R) II device, a new multi-lead cardiac event
recorder that provides increased memory for automatic, as well as
patient-activated, electrocardiogram event recording. The
recording is subsequently transmitted over a standard telephone
line for analysis and interpretation. "The Instromedix product
lines complement the company's existing product base and bring
strong brands, advanced communications technology and access to
the rapidly growing alternate site segment of the market to the
company," Mercer noted.
International Sales
-- First sales of ADVANTIS(TM) to hospitals in emerging markets --
Primary market segments to be targeted include international
emerging markets, international general-care hospital markets,
and global home-care markets. The company completed CE marking of
the ADVANTIS DL infusion system in late March, which enables the
system to be launched in Western European markets. This
introduction follows the November 1998 launch of the ADVANTIS DL
infusion system into Asia, Latin America, Eastern/Central Europe
and the Middle East. The ADVANTIS DL instrument is not being
offered for sale in the United States at this time.
-- ReadyMED(R) CE mark -- Designed for the alternate site, ideally
home-care setting, the ReadyMED Elastomeric Ambulatory pump is a
single-use, fixed-rate, positive-pressure system for the delivery
of antibiotics and antivirals. The product complements the full
range of home-care products now available in Europe.
-- Strong performance of TIVA anesthesia syringe pump -- In Europe,
the company is working with pharmaceutical firms to provide an
increased level of patient safety in the application of
particular anesthetic drugs by using the company's Target
Controlled Infusion (TCI) and Total Intravenous Anesthesia (TIVA)
syringe pumps.
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 infusion therapy systems and Instromedix(R) cardiac event cardiac event Coronary event Cardiology Any severe or acute cardiovascular condition including acute MI, unstable angina, or cardiac mortality recorders and pacemaker pacemaker Source of rhythmic electrical impulses that trigger heart contractions. In the heart's electrical system, impulses generated at a natural pacemaker are conducted to the atria and ventricles. follow-up 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. The company'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 also operates manufacturing facilities in Creedmoor, N.C.; Hillsboro, Ore.; Basingstoke, Hampshire, United Kingdom; and Tijuana, Mexico. Additional information on ALARIS Medical can be found at www.alarismed.com. 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. This news release contains forward-looking statements that are 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, 1998. -0-
ALARIS MEDICAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollar and share amounts in thousands, except per share data)
ASSETS
March 31, Dec. 31,
1999 1998
(Unaudited)
Current assets:
Cash $ 39,512 $ 29,500
Receivables, net 86,550 102,295
Inventories 81,500 79,485
Prepaid expenses
and other current assets 26,230 25,246
Total current assets 233,792 236,526
Net investment in sales-type
leases, less current portion 16,758 19,111
Property, plant and
equipment, net 65,947 61,990
Other non-current assets 21,840 22,388
Intangible assets, net 306,775 311,018
$645,112 $651,033
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of
long-term debt $ 12,979 $ 15,423
Accounts payable 19,116 22,103
Accrued expenses and
other current liabilities 58,109 52,340
Total current liabilities 90,204 89,866
Long-term debt 530,525 530,867
Other non-current liabilities 17,626 21,931
Total non-current liabilities 548,151 552,798
Contingent liabilities
and commitments
Stockholders' equity:
Common stock, authorized 75,000
shares at $.01 par value; issued
and outstanding -- 59,233 shares
and 59,221 shares at March 31,
1999, and Dec. 31, 1998,
respectively 592 592
Capital in excess of par value 148,793 148,762
Accumulated deficit (136,494) (135,769)
Treasury stock (2,027) (2,027)
Accumulated other
comprehensive loss (4,107) (3,189)
Total stockholders' equity 6,757 8,369
$ 645,112 $ 651,033
ALARIS MEDICAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND OTHER DATA
(Unaudited)
(Dollar and share amounts in thousands, except per share data)
Three Months Ended March 31,
1999 1998
Sales $ 93,436 $ 86,971
Cost of sales 45,634 44,854
Gross profit 47,802 42,117
Selling and marketing expenses 19,917 17,129
General and administrative expenses 11,235 9,902
Research and development expenses 6,047 4,340
Integration and other non-recurring
charges 2,099 --
Total operating expenses 39,298 31,371
Lease interest income 1,061 1,162
Income from operations 9,565 11,908
Other income (expenses):
Interest income 322 62
Interest expense (13,653) (11,156)
Other, net (459) (357)
Total other expense (13,790) (11,451)
(Loss) income before income taxes (4,225) 457
(Benefit from) provision for income
taxes (3,500) 250
Net (loss) income $ (725) $ 207
Net income (loss) per common
share assuming no dilution $ (.01) $ --
Net income (loss) per common
share assuming dilution $ (.01) $ --
Weighted average common shares
outstanding assuming no dilution 58,777 58,658
Weighted average common shares
outstanding assuming dilution 58,777 60,196
Income from operations 9,565 11,908
Depreciation and amortization 9,194 8,284
Integration and other non-recurring
charges 2,099 --
Adjusted EBITDA $ 20,858 $ 20,192
Adjusted EBITDA represents income from operations before non-recurring non-cash purchase accounting charges, 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. , 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 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. 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 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 similarly titled measures of other companies. |
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