Cholestech Reports Improved Second Quarter Fiscal 2000 Profit.HAYWARD Hayward, city (1990 pop. 111,498), Alameda co., W Calif.; settled 1851, inc. 1876. It is an important commercial and distribution center for farm products. Manufactures include wire, plastics, metal and paper products, textiles, machinery, and motor vehicles. , Calif.--(BW HealthWire)--Oct. 27, 1999-- Cholestech Corporation (Nasdaq: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 growth in the Company's Physician Office Laboratory (POL) market, combined with improved gross margin, helped drive performance in the second quarter of fiscal 2000. Record sales in the POL market, offset by flat growth in the remainder of the Company's markets, contributed to total revenue of $6.3 million for the quarter, up 4 percent from the second quarter of fiscal 1999. Net income after tax, excluding "other" 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. , increased 506 percent to $897,000 in the second quarter of fiscal 2000 from $148,000 in the same period last year. During the quarter, the Company recorded "other" 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. of $173,000, including $121,000 related to the extension by the Company, within the terms of the Company's Employee Stock Option Program, of selected existing employee stock options from a term of 5 years to a term of 7 years. After these "other" charges, the Company recorded 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. ), versus net income of $310,000, or $0.03 per share (diluted), in the same period of the prior fiscal year. "Revenue for the second quarter continued to be driven by increased sales of our single-use cassettes, which increased 27 percent over the same period in the prior year" 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. "Demand in the POL market increased 53 percent year-over-year, and the Company experienced increased cassette A removable magnetic tape storage module that contains supply and takeup reels (hubs) in the same housing. Most audio tapes and videotapes use cassettes as well as backup tape technologies such as DAT, 8mm and Magstar MP (see below). utilization in this market. I'd I'd 1. Contraction of I had. 2. Contraction of I would. I'd I had or I would I'd have ~would like to congratulate our ALT (character) alt - /awlt/ 1. The alt modifier key on many keyboards, including the IBM PC. On some keyboards and operating systems, (but not the IBM PC) the alt key sets bit 7 of the character generated. See bucky bits. 2. Development Team, who have successfully brought this new product to the point where we anticipate commercial shipments into moderately-complex sites by the end of calendar 1999. The Company has maintained stable spending levels, resulting in a marked improvement in 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. -- 11.8 percent for the quarter before other operating expenses, up from a 1.1 percent 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. in the same quarter last year." Gross margin improved from the prior year resulting in gross profit of $3.7 million, or 59 percent of revenue versus 51 percent realized in the second quarter of fiscal 1999. Additional spending improvements reduced operating expenses to 47 percent of revenues excluding the "other" operating expenses noted above, compared to 52 percent of revenues in the same period of the prior year. The Cholestech L.D.X(R) System is currently the only preventive-care testing system waived under CLIA CLIA Clinical Laboratory Improvement Amendments of 1988 Congressional legislation that promulgated quality assurance practices in clinical labs, and required them to measure performance at each step of the testing process from the beginning to the end-point of a '88 that can conduct multiple diagnostic tests from a single drop of blood and provide simultaneous results -- in less than five minutes -- that are as accurate as similar tests performed in clinical and hospital labs. Cholestech's portfolio of CLIA-waived products is designed to offer efficient and economic diagnostic screening and therapeutic monitoring options which will ultimately enable people to lead longer, healthier, and more active lives. Statements regarding the future performance of the company, including statements regarding the anticipated launch date of ALT and the market response to this new product, are forward looking statements, the accuracy of which is necessarily subject to risks and uncertainties. Actual results may be affected by additional 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, 1999, and Form 10-Q Form 10-Q See 10-Q. for the quarter ended June June: see month. 25, 1999. Note to Editors: Cholestech L.D.X is a registered trademark of Cholestech Corporation. -0-
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts, unaudited)
Thirteen weeks ended Twenty-six weeks ended
9/24/99 9/25/98 9/24/99 9/25/98
Net revenues:
Domestic $ 5,371 $ 5,144 $ 10,431 $ 9,315
International 957 963 1,672 1,477
-------- -------- -------- --------
6,328 6,107 12,103 10,792
Cost of goods sold 2,593 2,984 5,193 4,886
Gross profit 3,735 3,123 6,910 5,906
Sales & marketing 1,666 1,818 3,204 3,446
Research & development 679 729 1,273 1,428
General & administrative 645 646 1,239 1,131
Other(1) 173 (175) 269 575
Total operating expenses 3,163 3,018 5,935 6,580
Operating income (loss) 572 105 975 (674)
Net interest and
other income (expense) 185 218 333 412
Provision for income taxes 27 13 43 13
Net income (loss) $ 730 $ 310 $ 1,265 $ (275)
Net income (loss)
per share
Basic $ 0.06 $ 0.03 $ 0.11 ($ 0.02)
Diluted $ 0.06 $ 0.03 $ 0.11 ($ 0.02)
Shares used to compute
net income (loss)
per share
Basic 11,628 11,473 11,573 11,473
Diluted 12,019 11,764 11,899 11,473
Exclusive of "other" charges:
Total operating expenses $ 2,990 $ 3,193 $ 5,666 $ 6,005
Operating income (loss) 745 (70) 1,244 (99)
Net interest
income & expense 185 218 333 412
Provision for income taxes 33 -- 55 13
Net income $ 897 $ 148 $ 1,522 $ 399
Net income per share
Basic $ 0.08 $ 0.01 $ 0.13 $ 0.03
Diluted $ 0.07 $ 0.01 $ 0.13 $ 0.03
Shares used to compute
net income per share
Basic 11,628 11,473 11,573 11,473
Diluted 12,019 11,764 11,899 11,761
(1) Other expenses in the second quarter of fiscal 1999 include a
reduction in the expenses associated with the Company's cancelled
public stock offering.
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