Cholestech Previews First Quarter Fiscal 1999 Results.HAYWARD, Calif.--(BUSINESS WIRE)--June 25, 1998--Cholestech Corp. (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 that the delay of certain key distribution relationships, as well as slower than expected distributor sales in 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. , will result in a revenue shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. from expectations in the current fiscal quarter ending June 26, 1998. The company anticipates that current quarter revenues will be between $4.9 million and $5.0 million, with revenue growth of 15 percent to 25 percent over the previous year, and down sequentially from the previous quarter ended March 26, 1998. Revenues in the quarters ended June 27, 1997, and March 26, 1998, were $4.2 million and $6.4 million respectively. "This quarter we have experienced a slow down in the growth rate of our U.S. business," said Warren E. Pinckert II, 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 Cholestech. "Broadening the company's distribution into the U.S. Pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. market is taking longer to consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. than the company had expected coming into the quarter. Additionally, we are experiencing slower than expected sell-through from several of our U.S. distributors. We remain confident in the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. health of our business but anticipate that the delay in these strategic relationships will create a timing issue for revenue in the current quarter." The company also anticipates that net income and earnings for the quarter will be affected by reduced revenue expectations. Before one-time, non-recurring charges, earnings are expected to be between $0.02 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. ) to $0.04 per share (diluted) across the anticipated range of revenue. Earnings per share in the quarters ending June 27, 1997, and March 26, 1998, were $0.01 per share (diluted) and $0.07 per share (diluted), respectively. "Due to the anticipated revenue shortfall, the company believes that the prudent course of action is to cancel the proposed stock offering announced April 29, 1998," said Andrea J. Tiller, Chief Financial Officer. "The financial impact to Cholestech of the cancelled public offering is a one-time, non-recurring charge of approximately $500,000, or $(0.04) per share (diluted), which will be recorded in the quarter ending June 26, 1998." First quarter, fiscal 1999 earnings, previously scheduled to be released Thursday, July 2, 1998 will be rescheduled. Statements regarding business partnerships and relationships, distribution, distributor relationships, and future revenues and profitability are forward looking statements, the accuracy of which is necessarily subject to risks and uncertainties. Actual results may be affected by factors set forth in the company's Securities and Exchange Commission filings including the company's 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 March 26, 1998. These factors include, but are not limited to: the risk that Customers in the company's target markets may not continue or increase their acceptance of the Cholestech L.D.X(R) System; the risk of fluctuations in the company's quarterly revenues and results of operations due to the timing and level of development, sales and marketing expenditures, the timing of significant orders, the mix of products sold by the company and general economic conditions; the risk that the company may not successfully develop, obtain regulatory approval for and market new tests; the risk that the company may not be able to maintain acceptable manufacturing yields for or expand manufacturing capabilities to accommodate new and existing products; the risk that the company may not be able to maintain its existing distribution relationships or expand upon them in a timely manner or at all; the risk that third party reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. may not be available in the future for the use of the company's products; the risk that changes in government regulation may prevent or increase the cost of use of the company's products or make it easier for the company's competitors to penetrate the company's target markets; and, the risk that the company's competitors may more effectively market their products or develop products that are superior to the company's products. Note to Editors: Cholestech L.D.X is a registered trademark of Cholestech Corp.
CONTACT: Cholestech Corp., Hayward
Andrea J. Tiller, 510/732-7200
atiller@cholestech.com
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