Fresenius Medical Care AG Announces Preliminary Third Quarter 1999 Results From Operations Before Material Charge to Resolve U.S.A. Legal Issues.BAD HOMBURG Bad Hom·burg
A city of west-central Germany at the foot of the Taunus Mountains near Frankfurt. It is a famous spa and resort. Population: 53,200. , Germany--(BW HealthWire)--Nov. 2, 1999--
PRELIMINARY THIRD QUARTER OPERATING RESULTS
-- Net revenues increased to $ 969 million, a 10 % currency-adjusted growth
-- Preliminary results from operations (before charge) rose 13% to $144 million
-- Above-market growth in Dialysis Products continued
-- Company intends to record a material charge relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc US Government investigations
Fresenius Medical Care Fresenius Medical Care is a German company specializing in the production of medical supplies, primarily to facilitate or aid renal dialysis. It is 37%-owned by the health care company Fresenius SE. AG (Frankfurt Stock Exchange Frankfurt Stock Exchange
The largest of Germany's eight securities exchanges, operated by Deutsche Borse AS. :FME FME Formal Methods Europe
FME Faculty of Mechanical Engineering (Brno University of Technology, Czech Republic)
FME Feature Manipulation Engine
FME Facultat de Matemàtiques I Estadística & FME3)(NYSE NYSE
See: New York Stock Exchange :FMS FMS - Flexible Manufacturing System (factory automation). & FMS_p), the world's largest provider of dialysis products and services, today announced preliminary results from operations for the quarter ended September 30, 1999, before an anticipated one time charge for U.S.A. legal issues. Net revenues for the third quarter increased to $969 million from $890 million, an increase of 10% on a currency adjusted basis.
Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented, "Once again, our preliminary operating results before the material charge increased substantially, reflecting solid growth in revenues across our businesses, and we continued progress in improving profitability in key areas with a keen focus on achieving cost savings and other efficiencies. The anticipated third quarter charge will address potential liability arising from the pending 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. Government investigations."
Revenues 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. , which accounted for 73% of total revenue, increased 8% to $708 million with both Dialysis Care and Dialysis Products revenues increasing at 8%. International revenues rose 11% to $261 million compared to the third quarter of last year. On a currency-adjusted basis, International revenues advanced 17% compared to the third quarter of 1998. Within the International segment, growth in Dialysis Care revenues, which increased by over 13% on a currency-adjusted basis, once again reflected the successful expansion of the International Dialysis Care business in key areas. The growth rate of 14% in International Dialysis Products revenues, 19% on a currency-adjusted basis, quite clearly surpassed the average growth rate in the markets.
"The strong revenue growth of the International business is well above the market rate of growth and reflects our ongoing effort to expand our Dialysis Care business, particularly in Europe and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . In Asia-Pacific we can already see the benefit of our product initiatives resulting in substantial increases of Dialysis Product revenues. In North America, we have a solid foundation and both the dialysis care and products grew at or above market," Mr. Lipps concluded.
Preliminary Nine Month Operating Results
At $2.83 billion, net revenues from continuing operations continuing operations
Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the were 10% higher than net revenues of $2.58 billion for the first nine months of 1998.
In the nine month period just ended, North American North American
named after North America.
North American blastomycosis
see North American blastomycosis.
North American cattle tick
see boophilusannulatus. revenues rose 9% to $2.1 billion compared to $1.9 billion the same period last year. North American Dialysis Care revenue increased by 11% to $1.7 billion with an organic revenue growth of 9%. During the period, 40 new clinics were opened and 13 clinics were acquired bringing the total in North America to 833 clinics. North American Dialysis Product revenues, including sales to Company-owned clinics, increased 7% to $522 million compared to the first nine months of 1998.
The continued solid performance in North American products are signs of strong acceptance of innovative technology introduced by the Company in the market place. In particular, its dialyzer dialyzer /di·a·lyz·er/ (di´ah-liz?er) hemodialyzer.
1. A machine equipped with a semipermeable membrane and used for performing dialysis.
2. and dialysis machine products. With respect to Peritoneal Dialysis peritoneal dialysis
The removal of soluble substances and water from the body by transfer across the peritoneum, utilizing a solution which is intermittently introduced into and removed from the peritoneal cavity. , the IQ card, a monitoring program for Peritoneal Dialysis, as well as the initial market feedback from a pilot study on the Premier Plus(TM) double bag showed very positive signs in terms of market opportunities.
International revenues rose to $755 million,13% on a currency-adjusted basis, from $685 million for the nine month period ended September 30, 1998. Growth in International Dialysis Care revenue was especially strong, increasing by 18% adjusted for currency effects. As of September 30, 1999, the Company operated a total of 234 clinics outside of North America. In the first nine months, 18 clinics were added via acquisitions and another 11 new clinics were opened by the Company. Adjusted for currency, International Dialysis Products revenue, increased 12%, including sales to company-owned dialysis clinics, to $599 million compared to $545 million in the first nine months of 1998.
The substantial increase in International Dialysis Products revenues was driven by the continuing growth in the Company's core products - dialysis machines and dialyzers - reflecting our leading product market position in Central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. and driving sales growth throughout Europe, Latin America and Asia-Pacific.
The latest high-end dialyzers introduced in key markets, namely the F10 HPS See Seer*HPS. and HDF (Hierarchical Data Format) A file format for scientific data that is developed and maintained by NCSA. Governments and research organizations around the world use HDF for archiving and distributing collected data.
HDF - Hierarchical Data Format 100S, supported the strong development of dialyzer sales. Our leadership in developing innovative products was further demonstrated in recent studies that again highlighted the clinical benefits of the BTM BTM
See: Book to market. (TM). Fresenius Medical Care's unique blood temperature monitor BTM(TM) which measures blood temperature and supports the clinician in a time- and cost-saving manner to prevent hypotensive hypotensive /hy·po·ten·sive/ (-ten´siv) marked by low blood pressure or serving to reduce blood pressure.
1. Of or characterized by low blood pressure.
2. episodes during dialysis has shown strong market acceptance.
Growth in peritoneal dialysis sales developed satisfactorily. The stay-safe(R) system continues to gain recognition for its unique manner in which handling and safety issues are addressed. Furthermore, in view of the increasing market controversies about inherent risks associated with the use of PVC PVC: see polyvinyl chloride.
in full polyvinyl chloride
Synthetic resin, an organic polymer made by treating vinyl chloride monomers with a peroxide. material for peritoneal dialysis systems the stay-safe(R) system offers an alternative since it is manufactured from Biofine(TM), a completely PVC-free film.
For the first nine months of the current year, Fresenius Medical Care generated $260 million in cash from continuing operations. A total of $190 million was expended net for acquisitions and capital expenditures during the same period.
Third Quarter Charge to resolve U.S.A. legal issues
The Company intends to record a substantial and material charge in the quarter ended September 30, 1999, for the resolution of the United States Government legal investigations of National Medical Care, Inc. (NMC NMC Nursing & Midwifery Council (UK)
NMC NSSDC Master Catalog (NASA)
NMC Northwestern Michigan College (Traverse City, Michigan)
NMC National Meteorological Center ) and its subsidiaries. Due to the still pending negotiations with the United States Government, the extent of the charge is not yet determined. The United States Government legal investigations began in 1995, prior to the acquisition of NMC.
Dr. Ben Lipps said, "We will continue to work diligently with the United States Government to resolve the remaining legal issues. Our goal has been to achieve a resolution that is fair and does not compromise our ability to provide the best available care to our critically ill patients." While there can be no assurance that these matters can be settled without litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.
When a person begins a civil lawsuit, the person enters into a process called litigation. , the issues have been narrowed as a result of recent negotiations.
Fresenius Medical Care AG is the world's largest, integrated provider of products and services for individuals with chronic kidney failure Chronic Kidney Failure Definition
Chronic kidney failure occurs when disease or disorder damages the kidneys so that they are no longer capable of adequately removing fluids and wastes from the body or of maintaining the proper level of certain , a condition that affects some 920,000 individuals worldwide. Through its network of approximately 1,070 dialysis clinics the North America, Europe, Latin America and Asia-Pacific, Fresenius Medical Care provides dialysis treatment to approximately 78,500 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. For more information about Fresenius Medical Care, visit the Company's website at http://www.fmc-ag.com. -0-
Fresenius Medical Care AG Statement of preliminary Results from operations before material charge at current exchange rate (in US-$ thousands) Three Months Three Months Nine Months Nine Months Ended Sept. Ended Sept. Ended Sept. Ended Sept. 30, 1999 30, 1998 30, 1999 30, 1998 Continuing Operations Net revenues Dialysis Care $ 653,876 $ 607,929 $1,920,571 $1,732,276 Dialysis Products 314,824 282,385 911,437 851,626 -------------------------------------------- 968,700 890,314 2,832,008 2,583,902 Cost of revenues 615,564 554,821 1,796,394 1,608,819 -------------------------------------------- Gross profit 353,136 335,493 1,035,614 975,083 Selling, general and administrative 201,140 199,715 596,250 597,467 Research and development 8,022 7,891 25,983 21,081 -------------------------------------------- Preliminary results from operations before material charge to resolve legal issues 143,974 127,887 413,381 356,535 ============================================ Interest expense, net 53,070 58,343 163,254 161,931 Segment and other Information (in US-$ million) Sales North America $ 708 $ 656 $2,077 $1,898 International 261 234 755 685 -------------------------------------------- Total sales $ 969 $ 890 $2,832 $2,584 ============================================ Depreciation / Amortization $ 71 $ 70 $ 209 $ 205 Allowance for doubtful accounts $ 8 $ 20 $ 30 $ 54 Employees (Sept., 30) Full-time equivalents 28,773 26,577 Average weighted number of shares Ordinary shares 70,000,000 Preference shares 9,023,341