Cholestech 2nd Quarter Revenues Increase by 34%; Results In-line With September Guidance.Health/Medical Writers HAYWARD, Calif.--(BW HealthWire)--Oct. 25, 2000 Cholestech Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CTEC CTEC Course and Teacher Evaluation Council (Northwestern University, Office of the Register) CTEC Certified Technical Education Center CTEC Certified Technical Education Center (Microsoft) ) today announced net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $8.5 million for the second quarter of fiscal 2001 ended September 29, an increase of 34% over net sales of $6.3 million reported in the same quarter of last year. Net income after tax totaled $29,000 -- or breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations -- as the Company continued to invest in its new WellCheck(TM) and WellCheck.com business units. This compares with net income of $730,000, or $0.06 per share (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. ), in the second quarter last year. Results for the quarter are consistent with company expectations announced on September 20, 2000. At the time, the company said it expected its second quarter results to reflect a 30 to 35 percent increase in consolidated revenues, as well as higher costs due to the start-up Start-up The earliest stage of a new business venture. of its WellCheck Personal Health Management Centers demonstration program and the amortization of website development costs for its WellCheck.com business. Previously announced amortization of website development costs of $270,000 was included in WellCheck.com's 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. and is expected to continue on a per quarter basis over the next three years. For the six months ended September 29, 2000, net sales increased 44% to $17.4 million from $12.1 million in the same period last year. As a result of the company's investment in new businesses, net income decreased 23% to $1.0 million, or $0.08 per share (diluted), from $1.3 million, or $0.11 (diluted), a year ago. "Our core business continues to fund our start-up investments toward our goal of being the leading worldwide provider of tools and information to the healthcare professional and the consumer for the assessment of risk and the monitoring of therapy for chronic diseases", said Warren E. Pinckert II, president and chief executive officer of Cholestech. "Our WellCheck Personal Health Management demonstration program in the Dallas Texas area has tested over 5,500 people in the first five weeks of the program. 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. the National Cholesterol Education Program The National Cholesterol Education Program is a program managed by the National Heart, Lung and Blood Institute, a division of the National Institutes of Health. Its goal is to reduce increased cardiovascular disease rates due to hypercholesterolemia (elevated cholesterol guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. , 16 percent of the tested Dallas population had a total cholesterol level greater than 240, and more than two risk factors, which puts them at high risk for coronary heart disease coronary heart disease: see coronary artery disease. coronary heart disease or ischemic heart disease Progressive reduction of blood supply to the heart muscle due to narrowing or blocking of a coronary artery (see atherosclerosis). . 30 percent of the tested population was found to be in the borderline borderline /bor·der·line/ (-lin) of a phenomenon, straddling the dividing line between two categories. borderline risk category with their total cholesterol measurement between 200 and 239. These people have received a coronary heart disease risk assessment that can be the start for seeking medical intervention A procedure used in a lawsuit by which the court allows a third person who was not originally a party to the suit to become a party, by joining with either the plaintiff or the defendant. and making positive changes to their lifestyle. We are very pleased with the program results so far." About Diagnostic Products Sales in Cholestech's core Diagnostic Products' business grew 21 percent over the second quarter of the prior year - driven in large part by 46 percent growth in the Physician Office Laboratory market. Sales of Cholestech L-D-X(R) Systems increased 34 percent for the quarter ended September 29, and are up 64 percent year to date over the first half of fiscal 2000. Sales were dampened somewhat by the strong dollar versus the Euro, which slowed sales in the company's European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. markets. International sales increased 13 percent over the prior year quarter. Gross margins remained relatively flat with the prior year, with significant improvements in operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. control. Operating expense of $3.2 million represented 41 percent of sales, compared with operating expense of 47 percent in the second quarter of last year. The Diagnostic Products' business contributed $1.4 million in operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. during the quarter, up 142 percent from the same quarter last year. Looking forward, the company continues to expect its core Diagnostics business to generate a sustainable growth rate Sustainable growth rate Maximum rate of growth a firm can sustain without increasing financial leverage. of 20 to 30 percent on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis. About WellCheck & WellCheck.com "The goal of WellCheck and WellCheck.com is to empower empower verb To encourage or provide a person with the means or information to become involved in solving his/her own problems people with tools and information to easily assess, manage, and improve their health - particularly in the areas of coronary heart disease. WellCheck is growing into the first nationwide cholesterol testing Cholesterol Test Definition The cholesterol test is a quantitative analysis of the cholesterol levels in a sample of the patient's blood. Total serum cholesterol (TC) is the measurement routinely taken. service and WellCheck.com, our online personal health management site, enables consumers to monitor their health and provides information on to how better manage their cholesterol," Pinckert said. WellCheck generated revenues of $820,000 during the second quarter, with an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $235,000 before goodwill. Expenses during the quarter increased as the Company launched the WellCheck Personal Health Management Centers demonstration program in the Dallas area. Ongoing expenses related to the July launch of the company's WellCheck.com personal health management site remained relatively stable, with the addition of website amortization costs for the first time during the quarter. Three months post-launch, WellCheck.com remains in the early start-up phase and, as previously announced, is not expected to deliver material revenues in fiscal 2001. "As we have stated previously, Cholestech's earnings will be affected by the timing of further investments in our WellCheck testing services and WellCheck.com personal health management web site. Investors should remember that our goal is to drive higher volume through our core business by providing easier access to testing and personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. cholesterol management through the Internet," Pinckert said. Investor Conference Call The Company will conduct a conference call on fiscal second quarter results beginning at 7 a.m. (PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT ) today. The call will be available to all investors and media via the company's website www.cholestech.com or by dialing (800) 633-8414 and entering reservation number 16573706. A replay of the call will be aired from approximately 9 a.m. today until 9 a.m. on October 28 at the company's website or by dialing (800) 633-8284 and entering reservation number 16573706 and following operator instructions. About Cholestech Cholestech is committed to helping people lead longer, healthier, and more active lives. Working together, the Cholestech business units of Diagnostic Products, WellCheck(TM), and WellCheck.com can provide simple, accessible, and reliable personal health information to health care practitioners and consumers in over 35 countries around the world. By offering efficient and economic diagnostic screening for cholesterol, blood sugar, and liver function, Cholestech hopes to help more people understand whether or not they face potentially serious health risks. Therapeutic monitoring options using the Cholestech L-D-X(R) System can help patients monitor their progress as they work with their health care provider to reduce their risk of cardiovascular cardiovascular /car·dio·vas·cu·lar/ (-vas´ku-ler) pertaining to the heart and blood vessels. car·di·o·vas·cu·lar adj. Abbr. and other diseases. 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. Statement of Cholestech Corporation under 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: This 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 Private Securities Litigations Reform Act of 1995, including statements regarding: amortized website development costs expected to continue on a per quarter basis; WellCheck becoming the first nationwide, consumer-focused cholesterol testing service; WellCheck and WellCheck.com's positively impacting demand for the Cholestech L-D-X(R) System; and the core diagnostics business sustaining a 23% growth rate. Actual results may differ materially from those in the forward-looking statements due to risks and uncertainties, including: those inherent in acquisitions of technologies and businesses; integration issues; unanticipated expenditures; changing relationships with customers, suppliers, and strategic partners; potential contractual, intellectual property, or employment issues; delays; the loss of a significant customer; the availability and pricing of competing products and services and the resulting effects on sales and pricing of our products and services; and other factors. Cholestech L-D-X(R), WellCheck(TM), and WellCheck.com are registered trademarks of Cholestech Corporation. All other trademarks mentioned in this document are the property of their respective owners. For more information about Cholestech and its products visit us on the web at www.cholestech.com Note to Editors: (1) Financial Schedules attached (2) Cholestech executives available for interviews on either financial results or business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . Contacting Joe Graceffo, Kalt Rosen & Co., 415/397-2686 or Graceffo@KRC-PR.com
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts, unaudited)
Thirteen weeks ended Twenty-six weeks ended
9/29/00 9/24/99 9/29/00 9/24/99
-------- -------- -------- --------
Net revenues:
Domestic $ 7,402 $ 5,371 $ 14,887 $ 10,432
International 1,086 957 2,489 1,671
-------- -------- -------- --------
8,488 6,328 17,376 12,103
-------- -------- -------- --------
Cost of goods sold 3,221 2,593 6,638 5,193
-------- -------- -------- --------
Gross profit 5,267 3,735 10,738 6,910
-------- -------- -------- --------
Sales & marketing 2,761 1,666 5,011 3,204
Research & development 544 679 1,440 1,273
Website operation &
content 730 0 730 0
General & administrative 1,185 645 2,558 1,238
Other 158 173 308 219
-------- -------- -------- --------
Total operating expenses 5,378 3,163 10,047 5,934
-------- -------- -------- --------
Operating income (loss) (111) 572 691 976
Net interest and other
income (expense) 139 185 327 333
Provision (benefit) for
income taxes (1) 27 40 43
-------- -------- -------- --------
Net income $ 29 $ 730 $ 978 $ 1,266
======== ======== ======== ========
Net income per share:
Basic $ 0.00 $ 0.06 $ 0.08 $ 0.11
Diluted $ 0.00 $ 0.06 $ 0.08 $ 0.11
Shares used to compute
net income per share:
Basic 12,031 11,628 12,004 11,573
Diluted 12,524 11,969 12,494 11,899
SEGMENT RESULTS OF OPERATIONS
Thirteen weeks ended 9/30/00
Diagnostic
Products WellCheck WellCheck.com Cholestech
---------- --------- ------------- ----------
Net revenues $ 7,667 $ 821 $ -- $ 8,488
Cost of goods sold 3,112 109 -- 3,221
------- ------- ------- -------
Gross profit 4,555 712 -- 5,267
------- ------- ------- -------
Sales & marketing 1,990 718 53 2,761
Research &
development 544 0 0 544
Website operation
& content 0 0 730 730
General &
administrative 640 229 316 1,185
Other 0 158 0 158
------- ------- ------- -------
Total operating
expenses 3,174 1,105 1,099 5,378
------- ------- ------- -------
Operating income
(loss) $ 1,381 $ (393) $(1,099) $ (111)
======= ======= ======= =======
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion