ALARIS Medical Systems Reports Third Quarter Results; Sales Grow 15%; Income from Operations Increases 36%; Earnings Per Share of $.15 Exceed Expectations.Business Editors SAN DIEGO--(BUSINESS WIRE)--Oct. 28, 2003 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 Systems, Inc. (NYSE NYSE See: New York Stock Exchange :AMI) today reported that sales for the quarter ended September September: see month. 30, 2003 increased 15% to $130.5 million, compared with $113.1 million for the same period in 2002. Sales growth for the quarter was 11% in constant currency and was consistent with the Company's previous guidance. Income from operations increased 36% to $24.4 million, compared with $17.9 million for the third quarter of 2002. The Company reported net income of $10.9 million, or $.15 per share, compared with net income of $1.9 million, or $.03 per share, for the third quarter of 2002. Earnings per share exceeded the Company's previous guidance for the quarter of $.10 to $.12 per share. The Company's second quarter recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. resulted in $67.7 million of charges ($41.4 million net of tax) in the first half of the year. As a result, the Company reported a net loss of $22.4 million, or $.35 per share, for the first nine months of 2003. Excluding the recapitalization expenses, earnings per share would have been $.28 for the first nine months of 2003, compared with $.06 per share for the first nine months of 2002. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, had the recapitalization occurred on January January: see month. 1, 2003, and excluding the recapitalization expenses, net income for the nine months ended September 30, 2003 would have been $28.9 million and net income per common share, on a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, would have been $.39. (See "Supplemental Schedule Reconciling GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Data to Pro Forma Non-GAAP Data" at the end of this release for the reconciliation of net income and net income per common share to this pro forma data, which are non-GAAP financial measures, as well as a discussion of the reasons that management believes the presentation of such information is useful for investors.) David L. Schlotterbeck, president and chief executive officer, said, "As demonstrated in our strong third quarter results, we believe we continue to distance the Company from its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. . This provides us tremendous confidence and momentum as we enter the next phase of our strategy. Additionally, our strong cash flow performance allowed us to make $30 million in early debt payments during the third quarter and another $10 million in October October: see month. ." Schlotterbeck continued, "The positive impact of our recent recapitalization is clearly seen in our third quarter results. Interest expense as a percent of sales had dropped from 13% a year ago to 5% currently. Our plans are to continue to reduce our debt while growing the Company to further improve this ratio." Third Quarter 2003 Results Sales. For the three months ended September 30, 2003, sales were $130.5 million, an increase of $17.4 million, or 15%, over the same period in the prior year. If currency exchange rates for the third quarter of 2003 had prevailed during the third quarter of 2002, sales would have been $117.3 million for the third quarter of 2002. Thus, excluding the effects of currency changes, the increase in sales for the third quarter of 2003 was $13.2 million, or 11%, over the third quarter of 2002. Higher volumes of both 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. instruments and 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 were the primary factors leading to the increase in 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 of $12.3 million, or 16%, over the prior year. The increase in infusion instruments was primarily due to sales of the Medley med·ley n. pl. med·leys 1. An often jumbled assortment; a mixture: "That night he dreamed he was traveling in a foreign country, only it seemed to be a medley of all the countries he'd ever been to and (TM) Medication medication /med·i·ca·tion/ (med?i-ka´shun) 1. medicine (1). 2. impregnation with a medicine. 3. administration of a medicine or other remedy. Safety System and our proprietary Guardrails(R) Safety Software. We believe the increase in sales of dedicated disposables was due to an increase in our installed base of infusion devices infusion device Therapeutics A device used to administer therapeutics–eg, analgesics, antimicrobials, blood products, chemotherapy, nutrients. See Elastomeric infusion device, Electronic syringe infusion device, Mechanical infusion pump, Minibag. . The growth in other disposables and service was due to an increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.6 million in sales of SmartSite(R) Needle-Free Systems along with an increase in professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. over the third quarter of 2002. The increase in sales of drug infusion products in North America was partially offset by lower volumes of patient monitoring instruments and associated disposables compared with the prior year. International sales for the third quarter of 2003 increased $5.1 million, or 15%, compared with the same period in the prior year. Excluding the effects of currency changes, International sales for the third quarter of 2003 increased 3% over the third quarter of 2002, in line with Company expectations. This increase was due to higher volumes of, and revenues from, dedicated disposable administration sets, SmartSite(R) Needle-Free Systems and service. Gross Profit. Gross profit increased $12.9 million, or 22%, for the quarter ended September 30, 2003, compared with the same quarter in the prior year. The gross margin percentage increased to 54.0% for the third quarter of 2003, from 50.9% for the third quarter of 2002. Excluding the effects of currency changes, gross profit for the third quarter of 2003 would have increased $10.3 million from the third quarter of 2002 and the gross margin percentage for the third quarter of 2002 would have been 51.3%. In both Business Units, the improved margin percentage was due to increased volume of products manufactured and sold, an increased percentage of revenues from sales of software products that carry a higher margin than equipment and disposables, lower warranty An assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. Warranties are used in a variety of commercial situations. In many instances a business may voluntarily make a warranty. costs, and generally lower product costs resulting from improved manufacturing efficiencies. Selling and Marketing Expenses. Selling and marketing expenses increased $2.8 million, or 12%, for the quarter ended September 30, 2003, compared with the same period in 2002, primarily due to increased selling costs associated with higher sales volume in the third quarter of 2003 compared with the third quarter of 2002 and to higher sales and marketing costs related to increased personnel, consulting and related activities supporting the continued deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of our medication safety strategy. As a percentage of sales, selling and marketing expenses decreased to 19.4% for the third quarter of 2003 from 19.9% for the third quarter of 2002. Excluding the effects of currency changes, the increase in selling and marketing expenses for the third quarter of 2003 would have been $2.0 million, or 8%, compared with the third quarter of 2002. General and Administrative Expenses. General and administrative expenses increased $1.8 million, or 18%, for the quarter ended September 30, 2003, compared with the same period in the prior year. As a percentage of sales, general and administrative expenses increased to 9.1% for the third quarter of 2003, from 8.9% for the third quarter of 2002. Increases in administrative expenses were largely due to higher depreciation, legal and other professional services, and bonus expense over the same period in the prior year. Excluding the effects of currency changes, the increase in general and administrative expenses for the third quarter of 2003 would have been $1.5 million, or 15%, compared with the third quarter of 2002. Research and Development Expenses. Research and development expenses increased approximately $1.6 million, or 19%, for the quarter ended September 30, 2003, compared with the same period in the prior year. The increase was due to spending associated with new product development primarily related to our medication safety strategy, including increased spending on new products for the international market. This higher spending was primarily in the form of increased salaries and benefits and outside consulting. Research and development expenses increased to 7.4% of sales for the third quarter of 2003, compared with 7.1% of sales for the third quarter of 2002. Interest Income from Sales-Type Capital Leases. Interest income from sales-type capital leases decreased $.3 million, or 28%, for the quarter ended September 30, 2003, compared with the same quarter in 2002, due to a decrease in the contract portfolio as more customers have utilized third-party financing. Interest Expense. Interest expense decreased $8.0 million, or 55%, for the quarter ended September 30, 2003, compared with the same period in the prior year. Included in interest expense in the third quarter of 2003 is $.7 million of debt-issue cost write-offs related to $30 million in prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. made under the Credit Facility. The decrease in interest expense resulted from the reduction in the principal amount of outstanding debt and lower interest rates on debt under the Credit Facility and the Notes compared with the interest rates on the debt which was refinanced in the second quarter recapitalization. Financial Position At September 30, 2003, ALARIS Medical Systems 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. of $389.4 million (including current portion.) This represents a $138.1 million reduction in total debt since December December: see month. 31, 2002. On July July: see month. 10, 2003, in connection with the exercise by the common stock underwriters of their over-allotment option, the Company made a $10 million prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. of principal under the term loan portion of the Credit Facility. Utilizing cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , ALARIS Medical Systems made two additional prepayments of $10 million each during the third quarter of 2003, as well as the first scheduled principal payment on September 30, 2003 of $0.6 million. Subsequently, in October 2003, the Company made an additional principal prepayment of $10 million, bringing total principal payments on the new term debt to $40.6 million to date. Cash provided by operations was $92.0 million for the first nine months of 2003 compared with $33.7 million for the same period in 2002. The Company had a $30 million undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely credit line and $38.5 million in cash on the balance sheet at September 30, 2003, compared with no credit line and $69.7 million in cash 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. 2002, with the decrease primarily the result of using cash on hand to complete the recapitalization and subsequent principal reductions in the new term loan. Recent Key Developments: -- On September 25, 2003, the Company's common stock listing was transferred to the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. (NYSE) from its previous listing on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. (AMEX AMEX See: American Stock Exchange ). The ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors remains "AMI." ALARIS Medical Systems' president and chief executive officer, David L. Schlotterbeck, rang the opening bell on the NYSE in connection with this first day of trading of its common stock on the exchange. -- The Company released the ASENA Asena is the name of a female wolf in Turkic mythology. It is associated with a Göktürk ethnogenic myth "full of shamanic symbolism".[1] The legend runs as follows. (R) CC Syringe syringe /sy·ringe/ (si-rinj´) (sir´inj) an instrument for injecting liquids into or withdrawing them from any vessel or cavity. Pump with its proprietary Guardrails(R) Safety Software for markets outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . ALARIS Medical Systems' International Business Unit will initially be working in close collaboration Working together on a project. See collaborative software. with key institutions in a number of countries, including New Zealand Zealand: see Sjælland, Denmark. and the United Kingdom, to implement the Company's error-prevention software and help improve medication safety. The ASENA(R) Infusion System, consisting of syringe pumps, 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 pumps 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 and the ASENA(R) Docking Station (1) A cradle for a portable device that serves to charge the unit and connect it to other sources or destinations. For example, an iPod docking station charges the iPod and connects it to a computer, speakers or TV set. , has already established a leadership position outside the United States, where syringe pumps are frequently the instruments of choice to deliver critical drugs. The addition of the Guardrails(R) Safety Software will provide additional clinical benefits for ALARIS Medical Systems' large international customer base and will help provide medication safety where the risk of harm to patients is the greatest, at the point of care. -- The Company announced its sponsorship of an industry-wide workgroup Two or more individuals who share files and databases. Local networks (LANs) are designed to provide electronic sharing of data within workgroups. In general, products designed for workgroups support approximately 50 people, whereas departmental devices support several hundred, and to examine the potential for harm from 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) medication administration. Composed of prominent physicians, nurses and pharmacists This is a list of notable pharmacists.
well as thought leaders from the American Hospital Association American Hospital Association (AHA), n.pr a nonprofit national organization of individuals, institutions, and organizations engaged in direct patient care. The association works to promote the improvement of health care services. (AHA AHA American Heart Association; American Hospital Association. ), National Patient Safety Foundation (NPSF NPSF National Patient Safety Foundation NPSF Neighborhood Pattern Sensitive Fault NPSF National Pipe Straight Fuel NPSF National PARAM Super Computing Facility NPSF National P.O.L.I.C.E. Suicide Foundation, Inc. ) and the Institute for Healthcare Improvement (IHI IHI Institute for Healthcare Improvement (Boston, MA, USA) IHI Ishikawajima-Harima Heavy Industries (Japan, ship building, aerospace & others) IHI Institute of History IHI I'd Hit It ), the workgroup will participate in a series of meetings to develop strategies to help reduce the risk of patient harm. -- During the third quarter, the Company issued three joint press releases highlighting the recent addition of the Medley(TM) Medication Safety System with its proprietary Guardrails(R) Safety Software to contracts with health care group purchasing organizations. Featured in the releases were Novation The substitution of a new contract for an old one. The new agreement extinguishes the rights and obligations that were in effect under the old agreement. A novation ordinarily arises when a new individual assumes an obligation to pay that was incurred by the original party , the supply company for VHA VHA Veterans Health Administration VHA Variable Housing Allowance VHA Villages Homeowners Association VHA Voluntary Hospitals Association VHA Virtual Home Agent VHA Very High Altitude VHA Vapor Hazard Area VHA Vermont Holstein-Friesian Association , Inc. and the University Healthsystem Consortium (UHC UHC UnitedHealthcare UHC United Health Care UHC University Hospitals of Cleveland UHC United Hitech Corporation UHC Udvar-Hazy Center (National Air and Space Museum) UHC University Health/System Consortium UHC Unburned Hydrocarbons ), Amerinet, Inc. and MedAssets. -- On September 18, 2003, the Company announced a five-year, multisource contract with Premier, Inc, one of the nation's largest healthcare alliances. This new contract extends the Company's existing and long-standing long-stand·ing adj. Of long duration or existence: a long-standing friendship. long-standing Adjective existing for a long time supply relationship with Premier and includes medication safety systems, including the Medley(TM) Medication Safety System with its proprietary Guardrails(R) Safety Software, the newest additions to the Medley(TM) System, the Medley(TM) Syringe Module, the Guardrails(R) Clinical Advisories feature and advanced data reporting capabilities. In addition, the contract includes ALARIS Medical Systems' Signature Edition(R) GOLD Infusion System, as well as associated dedicated and non-dedicated 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:
Outlook For the fourth quarter of 2003, we are forecasting sales growth of 13% to 14% over the $134.4 million (which was 20% over the fourth quarter of 2001) reported for the same quarter last year. In constant currency the sales growth is forecasted at 9% to 10%. Earnings per share for the fourth quarter are forecasted to be approximately $.17 to $.19. We have historically experienced seasonality in our sales, with fourth quarter sales being greater than earlier quarters. This is primarily due to seasonal characteristics of the industry, including hospital capital equipment purchasing patterns. We are forecasting that the fourth quarter of 2003 will continue to experience similar seasonality. For full year 2003, we are forecasting sales growth of approximately 15% to 16% (10% to 11% in constant currency) over 2002. Income from operations is currently forecasted to be 30% to 33% higher than the $71.7 million reported for full year 2002. Due to the large loss from the recapitalization activities during the second quarter, we are currently forecasting a net loss for the year, with a net loss per share of approximately $.13 to $.15. Excluding recapitalization expenses, full year 2003 earnings per share are forecasted to be $.45 to $.47. The earnings per share for the nine months ended September 30, 2003 was a $.35 loss. After excluding the recapitalization expenses, earnings per share would have been $.28 for such period. Adding the fourth quarter 2003 earnings per share guidance contained herein to the $.35 actual loss per share for the nine months ended September 30, 2003 will not equal the full year loss per share guidance. This is a result of a GAAP requirement to exclude common stock equivalents (such as stock options) from the weighted average shares during loss periods but to include such common stock equivalents during income periods. Since we are forecasting a net loss for full year 2003, common stock equivalents have not been included in computing computing - computer the forecasted loss per share. Looking beyond 2003, we continue to target sales growth of 10%-13% per year in constant currency over the next five years. We have not completed our 2004 business plan but we currently anticipate constant currency sales growth of 11%-12% for 2004. Our objective is to grow operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. faster than sales and net income faster than operating income. We plan to continue to reduce our leverage, with a target of about $300 million of debt outstanding at year-end 2005. About ALARIS Medical Systems, Inc. ALARIS Medical Systems, Inc. (NYSE:AMI) develops and markets products for the safe delivery of intravenous (IV) medications. The Company's IV medication and infusion therapy delivery systems, software applications, needle-free disposables and related monitoring equipment are marketed in the United States and internationally. ALARIS Medical Systems' "smart" pumps, with the proprietary Guardrails(R) Safety Software, help to reduce the risks and costs of medication errors medication error Malpractice An error in the type of medication administered or dosage. See Adverse effect, Error. , help to safeguard patients and clinicians and gather and record clinical information for review, analysis and interpretation. The Company provides its products, professional and technical support and training services to over 5,000 hospital and health care systems, as well as alternative care sites, in more than 120 countries through its direct sales force and distributors. Headquartered in San Diego, California “San Diego” redirects here. For other uses, see San Diego (disambiguation). San Diego is a coastal Southern California city located in the southwestern corner of the continental United States. As of 2006, the city has a population of 1,256,951. , ALARIS Medical Systems employs approximately 2,900 people worldwide. Additional information on ALARIS Medical Systems can be found at http://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, without limitation, the effect of legislative and 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. changes affecting the health care industry, the potential of increased levels of competition, technological changes, the dependence of ALARIS Medical Systems upon the success of new products (including its proprietary Guardrails(R) Safety Software and the Medley(TM) Medication Safety System) and ongoing research and development efforts, including obtaining regulatory approvals, 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. the Company'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. , and the significant leverage to which the Company is subject. Such risk factors are detailed in the Securities and Exchange Commission filings of ALARIS Medical Systems, Inc., formerly known as 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, 2002, and other filings. On June June: see month. 30, 2003, the two companies were merged. Subsequent SEC filings are available only for ALARIS Medical Systems, Inc. The Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments.
ALARIS MEDICAL SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(Dollar and share amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Sales $130,454 $113,063 $379,393 $325,983
Cost of sales 60,035 55,519 177,195 162,597
--------- --------- --------- ---------
Gross profit 70,419 57,544 202,198 163,386
--------- --------- --------- ---------
Selling and marketing expenses 25,284 22,512 75,061 65,025
General and administrative
expenses 11,902 10,108 35,229 30,372
Research and development
expenses 9,635 8,064 27,934 21,846
Restructuring and other non-
recurring items - - - (585)
--------- --------- --------- ---------
Total operating expenses 46,821 40,684 138,224 116,658
--------- --------- --------- ---------
Interest income from sales-
type capital leases 780 1,080 2,530 3,391
--------- --------- --------- ---------
Income from operations 24,378 17,940 66,504 50,119
--------- --------- --------- ---------
Other income (expenses):
Interest income 119 144 632 626
Interest expense (6,612) (14,632) (35,271) (43,523)
Recapitalization expenses - - (67,695) -
Other, net (261) (334) (783) (635)
--------- --------- --------- ---------
Total other expense (6,754) (14,822) (103,117) (43,532)
--------- --------- --------- ---------
Income (loss) before income
taxes 17,624 3,118 (36,613) 6,587
Provision for (benefit from)
income taxes 6,695 1,246 (14,213) 2,634
--------- --------- --------- ---------
Net income (loss) $10,929 $1,872 $(22,400) $3,953
========= ========= ========= =========
Net income (loss) per common
share, basic $.15 $.03 $(.35) $.07
========= ========= ========= =========
Net income (loss) per common
share, diluted $.15 $.03 $(.35) $.06
========= ========= ========= =========
Weighted average common shares
outstanding, basic 70,716 59,507 63,684 59,350
========= ========= ========= =========
Weighted average common shares
outstanding, diluted 75,250 62,922 63,684 62,112
========= ========= ========= =========
ALARIS MEDICAL SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
(Dollar and share amounts in thousands, except per share data)
ASSETS
September 30, December 31,
2003 2002
---------------- --------------
(Unaudited)
Current assets:
Cash and cash equivalents $38,517 $69,739
Receivables, net 77,726 90,050
Inventories 58,078 56,924
Deferred tax assets, net, current 37,922 18,063
Prepaid expenses and other current
assets 10,038 8,703
---------------- --------------
Total current assets 222,281 243,479
Net investment in sales-type capital
leases, less current portion 11,051 16,050
Property, plant and equipment, net 62,752 56,448
Other non-current assets 40,692 35,666
Goodwill 143,984 143,984
Intangible assets, net 88,425 90,074
---------------- --------------
$569,185 $585,701
================ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $2,450 $-
Accounts payable 21,570 19,187
Accrued expenses and other current
liabilities 57,980 51,157
---------------- --------------
Total current liabilities 82,000 70,344
---------------- --------------
Long-term debt 386,938 527,468
Other non-current liabilities 27,190 20,038
---------------- --------------
Total non-current liabilities 414,128 547,506
---------------- --------------
Contingent liabilities and commitments
Stockholders' equity:
Non-redeemable preferred stock,
authorized 9,000 shares, issued and
outstanding: none - -
Common stock, authorized 85,000 shares
at $.01 par value; issued 71,449 and
60,045 shares at September 30, 2003
and December 31, 2002, respectively 714 600
Capital in excess of par value 275,857 151,423
Accumulated deficit (199,807) (177,407)
Treasury stock, at cost, 453 shares
issued at September 30, 2003
and December 31, 2002 (2,027) (2,027)
Accumulated other comprehensive loss (1,680) (4,738)
---------------- --------------
Total stockholders' equity 73,057 (32,149)
---------------- --------------
$569,185 $585,701
================ ==============
ALARIS MEDICAL SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
Nine Months Ended
September 30,
---------------------------
2003 2002
------------- -------------
Cash flows from operating activities:
Net (loss) income $(22,400) $3,953
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 19,684 17,409
Stock options granted to non-employees
for service - 100
Net loss on disposal/write-off of
property, plant and equipment and
intangibles 707 442
Debt discount and issue costs
amortization and write-offs 2,539 1,993
Accretion of bond interest 8,921 13,493
Recapitalization expenses 67,695 -
(Increase) decrease in assets:
Receivables, net 13,152 (12,563)
Inventories (976) 2,407
Prepaid expenses and other current
assets (901) 3,467
Deferred tax assets, current (17,042) (7,386)
Net investment in sales-type capital
leases, non-current portion 4,999 6,379
Other non-current assets 552 (871)
Increase (decrease) in liabilities:
Accounts payable 2,850 (1,187)
Accrued expenses and other current
liabilities 5,031 3,712
Other non-current liabilities 7,152 2,383
------------- -------------
Net cash provided by operating activities 91,963 33,731
------------- -------------
Cash flows from investing activities:
Capital expenditures (21,930) (11,699)
Patents, trademarks and other (8,494) (922)
------------- -------------
Net cash used in investing activities (30,424) (12,621)
------------- -------------
Cash flows from financing activities:
Repurchase of debt and related costs (591,839) -
Principal payments on long-term debt (30,613) (15,969)
Proceeds from term loan borrowing 245,000 -
Proceeds from issuance of long-term debt 175,000 -
Proceeds from exercise of stock options 3,776 1,695
Proceeds from sale of common stock 125,000 -
Equity issuance costs (7,459) -
Debt issuance costs (12,230) -
------------- -------------
Net cash used in financing activities (93,365) (14,274)
------------- -------------
Effect of exchange rate changes on cash 604 380
------------- -------------
Net (decrease) increase in cash (31,222) 7,216
Cash and cash equivalents at beginning of
period 69,739 51,200
------------- -------------
Cash and cash equivalents at end of period $38,517 $58,416
============= =============
ALARIS MEDICAL SYSTEMS, INC.
SCHEDULE OF SUPPLEMENTAL FINANCIAL DATA (Unaudited)
(Dollars in millions)
Sales data:
Three Months Ended
September 30,
-------------------------------
2003 2002 incr/
(decr)
-------------------------------
North America
Infusion Instruments $24.5 $18.4 33%
Dedicated Disposables 37.8 34.9 8%
Other Disposables and Service 22.0 18.3 20%
------------ ----------
Subtotal 84.3 71.6 18%
Patient Monitoring 6.1 6.5 (6%)
------------ ----------
North America Total $90.4 $78.1 16%
------------ ----------
International
Infusion Instruments $9.9 $9.9 0%
Dedicated Disposables 22.3 18.5 21%
Other Disposables and Service 6.6 5.3 25%
------------ ----------
Subtotal 38.8 33.7 15%
Patient Monitoring 1.3 1.3 0%
------------ ----------
International Total $40.1 $35.0 15%
------------ ----------
ALARIS Medical Systems Total $130.5 $113.1 15%
============ ==========
Nine Months Ended
September 30,
-------------------------------
2003 2002 incr/
(decr)
-------------------------------
North America
Infusion Instruments $68.4 $49.1 39%
Dedicated Disposables 110.6 103.3 7%
Other Disposables and Service 61.3 53.4 15%
------------ ----------
Subtotal 240.3 205.8 17%
Patient Monitoring 17.9 19.2 (7%)
------------ ----------
North America Total $258.2 $225.0 15%
------------ ----------
International
Infusion Instruments $33.9 $29.8 14%
Dedicated Disposables 64.5 53.0 22%
Other Disposables and Service 19.1 14.1 35%
------------ ----------
Subtotal 117.5 96.9 21%
Patient Monitoring 3.7 4.1 (10%)
------------ ----------
International Total $121.2 $101.0 20%
------------ ----------
ALARIS Medical Systems Total $379.4 $326.0 16%
============ ==========
ALARIS MEDICAL SYSTEMS, INC.
SUPPLEMENTAL SCHEDULE
RECONCILING GAAP DATA TO PRO FORMA NON-GAAP DATA (Unaudited)
(Dollar and share amounts in thousands, except per share data)
The following table sets forth a reconciliation of our reported
net loss and net loss per common share for the nine months ended
September 30, 2003 to our net income and net income per share on a pro
forma basis as if the recapitalization had occurred on January 1,
2003, which pro forma amounts are non-GAAP financial measures. The pro
forma data exclude the effect of the pre-tax charges of $67.7 million
we recorded in the first half of 2003.
The pro forma data assume that the following transactions occurred
on January 1, 2003: (i) the sale of 10 million shares of common stock;
(ii) the sale of $175 million aggregate principal amount of ALARIS
Medical Systems' new 7-1/4% senior subordinated notes due 2011 (the
"Notes"); (iii) borrowings of a $245 million term loan under our new
$275 million credit facility at an annual interest rate of 4.05%; (iv)
the repurchase of all of our outstanding indebtedness pursuant to
tender offers; and (v) other debt repurchases made in the first half
of 2003.
The pro forma data is being presented to give management and
investors an enhanced understanding of the effect of the
recapitalization on our operating results. Management believes that
the significant reduction in future interest expense resulting from
the recapitalization is material to an understanding of our business
and will have a significant impact on cash flow and earnings. We have
excluded the effect of the recapitalization expenses from the pro
forma data because such expenses will not have a continuing impact on
the Company. The pro forma data are not necessarily indicative of the
results of operations that would have been achieved had the
transactions reflected therein been consummated prior to the period
presented.
Nine Months Ended
September 30, 2003
-----------------------------
Net loss, as reported $(22,400)
Adjustments to exclude recapitalization
expenses:
Recapitalization expenses 67,695
Income tax benefit (26,279)
-----------------------------
Net income, excluding recapitalization
expenses 19,016
Pro forma adjustments:
Interest expense 15,958
Other, net (75)
Provision for taxes (6,007)
-----------------------------
Net income, pro forma $28,892
=============================
Net loss per common share, diluted, as
reported $(.35)
=============================
Net income per common share, diluted,
excluding recapitalization expenses $.28
=============================
Net income per common share, diluted,
pro forma $.39
=============================
Weighted average common shares
outstanding, as reported 63,684
Dilutive common stock equivalents 4,349
-----------------------------
Weighted average common shares
outstanding, diluted, assuming net
income for period 68,033
Pro forma adjustment:
Weighted average effect of sale of
common stock 6,490
-----------------------------
Weighted average common shares
outstanding, diluted, pro forma 74,523
=============================
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion