I-Flow's Second Quarter Revenue Rises 12% to a Record $9.5 Million; Post-Operative Pain Relief Sales Nearly Doubled, Up 89% Versus Second Quarter 2001.Business Editors & Health/Medical Writers LAKE FOREST, Calif.--(BUSINESS WIRE)--July 26, 2002 I-Flow 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 :IFLO) announced today that revenue for the second quarter ended June 30, 2002, rose 12% to a record $9,505,000 from $8,479,000 in the second quarter of 2001. Net income for the quarter was $106,000, or $0.01 per 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. share, compared to $399,000, or $0.03 per diluted share, for the same period a year ago. Chairman, President and Chief Executive Officer Donald M. Earhart said, "We accomplished a great deal during the second quarter and are pleased with our progress. Our transition from an OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and organization to a direct seller and marketer of the ON-Q(R) Post-Operative Pain Relief System and proprietary Soaker(TM) Catheter catheter /cath·e·ter/ (kath´e-ter) 1. a tubular, flexible surgical instrument that is inserted into a cavity of the body to withdraw or introduce fluid. 2. urethral c. is complete. I-Flow maintained profitability, excluding the effect of the accounting charge, throughout this transition, despite our heavy investment in sales and marketing programs, and we are highly gratified grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. by the 89% increase in post-operative pain relief sales over the prior-year quarter. We can now focus on increasing market share from our existing base, while simultaneously striving to increase the overall market size by demonstrating the clinical and economic advantages of our post-operative pain relief products. As we seek to establish new relationships with hospitals and doctors and strengthen alliances with existing customers, we will continue to invest heavily in the sales and marketing infrastructure necessary to support our strategic plan for growth. We believe the increasing acceptance of the ON-Q technology for post-operative pain relief is setting the stage for I-Flow to achieve these goals. Our primary focus has been to execute an effective sales and marketing campaign to increase awareness, and we're off to a good start. We remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about I-Flow's revenue and earnings growth opportunities in the second half." For the six months ended June 30, 2002, revenues rose by 10% to $18,055,000 from $16,471,000 for last year's first half. Net income before extraordinary items for the six months ended June 30, 2002, was $242,000, or $0.02 per diluted share, versus $715,000, or $0.05 per diluted share, for the same period in 2001. The Company also announced that it will take a non-cash goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $3,474,000 for the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ." The charge will be recorded as a cumulative effect of an accounting change, retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a to January 1, 2002, in accordance with the new rule. SFAS 142 requires an impairment test of the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of goodwill in the year of adoption. I-Flow has completed this impairment test and concluded that consolidated goodwill in the amount of $3,474,000 should be written down in accordance with the provisions of the rule. Including the goodwill impairment charge, the net loss for the six months ended June 30, 2002, was $3,232,000, or $0.21 per share. Another aspect of SFAS 142 is that it eliminates periodic amortization of goodwill. For I-Flow, this change resulted in a reduction in quarterly pre-tax amortization expense of approximately $246,000 in the quarter ended June 30, 2002, as compared to the prior-year quarter, and a reduction of approximately $492,000 in the six months ended June 30, 2002, as compared to the six months ended June 30, 2001. Regional Anesthesia regional anesthesia n. Anesthesia characterized by the loss of sensation in a circumscribed region of the body, produced by the application of a regional anesthetic, usually by injection. Sales for I-Flow's Regional Anesthesia business, which includes the award-winning PainBuster(R), ON-Q(R) and Soaker(TM) Catheter pain management systems as well as products from I-Flow's Spinal Specialties, Inc. subsidiary, increased 60% to $3,163,000 for this year's second quarter versus $1,973,000 for last year's second quarter. Sales of Regional Anesthesia products for the six months ended June 30, 2002, grew 39% to $5,551,000 versus $4,004,000 for the six months ended June 30, 2001. For the three months ended June 30, 2002, sales of the Company's post-operative pain relief products, the ON-Q, Soaker Catheter and PainBuster, increased by 89% over the same period in 2001. "Our team of dedicated sales and marketing professionals is now fully integrated, providing an effective platform to aggressively grow our regional anesthesia business. Working with Ketchum, a premier healthcare marketing communications Marketing communications (or marcom) are messages and related media used to communicate with a market. Those who practice advertising, branding, direct marketing, graphic design, marketing, packaging, promotion, publicity, sponsorship, public relations, sales, sales firm, we are executing a comprehensive public relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most program to increase awareness among consumers and the medical community about the many benefits of this innovative and proprietary technology to control pain. In April 2002, we successfully launched www.AskYourSurgeon.com, an exciting new Web site designed to highlight the ON-Q Post-Operative Pain Relief System and to educate consumers about their post-surgical pain treatment options. We had over 150,000 visits to the site during the second quarter. Then, in May 2002, the results of two important clinical studies were announced -- one showing a 40% reduction in morphine morphine, principal derivative of opium, which is the juice in the unripe seed pods of the opium poppy, Papaver somniferum. It was first isolated from opium in 1803 by the German pharmacist F. W. A. use after surgery in women undergoing cesarian sections, the other showing significantly shorter hospital stays and reduced overall costs in hysterectomy hysterectomy (hĭstərĕk`təmē), surgical removal of the uterus. A hysterectomy may involve removal of the uterus only or additional removal of the cervix (base of the uterus), fallopian tubes (salpingectomy), and ovaries patients," Earhart said. "We also are pleased with the performance of our Spinal Specialties, Inc. subsidiary, whose products include the innovative OsteoJect(TM) Bone Cement Delivery System introduced in April 2002. The OsteoJect represents the kind of innovative technology that we believe will move I-Flow forward as we seek additional applications for our infusion technology in large, high-growth markets," Earhart continued. Oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. Infusion Services Sales for Oncology Infusion Services provided by I-Flow's InfuSystem subsidiary in the second quarter ended June 30, 2002, were $2,602,000 compared to $2,619,000 for last year's second quarter. Sales for the six months ended June 30, 2002, were $5,093,000 versus $5,150,000 for the last year's first half. Contributing to the 1% decrease compared to the prior-year six-month period was an unusually large one-time equipment sale in the prior-year period. Beginning in the quarter ended June 30, 2002, InfuSystem's sales force and medical billing expertise have been utilized on a cooperative basis to further grow the market for I-Flow's ON-Q Post-Operative Pain Relief System using both in-network and out-of-network billing programs targeted specifically at free-standing ambulatory surgery centers ambulatory surgery center A free-standing center that performs various types of surgery and cosmetic surgery cosmetic surgery, plastic surgery for cosmetic purposes, such as the improvement of the appearance of the face by removing wrinkles or reshaping the nose. offices. As these programs become established, we expect InfuSystem to return to double-digit revenue growth. Infusion Therapy Worldwide sales for IV Infusion Therapy, which includes the Company's 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. elastomeric pumps, mechanical 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. and electronic 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 disposables, decreased 4% to $3,740,000 for the quarter ended June 30, 2002, from $3,887,000 in the same period last year. The decrease from the prior-year quarter resulted primarily from the timing of purchases by a specific U.S. distributor. Sales for the six months ended June 30, 2002, increased slightly to $7,411,000 versus $7,317,000 for the same period last year. Balance Sheet At June 30, 2002, I-Flow reported working capital of $15.9 million, 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 $17,000 and shareholder equity of $26.9 million. Cash and cash equivalents totaled $1.9 million, and net book value per common share Book Value Per Common Share A measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. Formula: outstanding was $1.74 after the accounting charge. About I-Flow I-Flow Corporation (www.I-Flowcorp.com) designs, develops and markets technically advanced, low-cost ambulatory Movable; revocable; subject to change; capable of alteration. An ambulatory court was the former name of the Court of King's Bench in England. It would convene wherever the king who presided over it could be found, moving its location as the king moved. infusion systems that are redefining the standard of care by providing life-enhancing, cost-effective solutions for pain relief and infusion therapy. Certain disclosures made by the Company in this release and in other reports and statements released by the Company are and will be forward-looking in nature, such as comments that express the Company's opinions about trends and factors that may impact future operating results. Disclosures that use words such as the Company "believes," "anticipates" or "expects," or use similar expressions, are intended to identify 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. . Such statements are subject to certain risks and uncertainties, which could cause actual results to differ from those expected, and readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to republish re·pub·lish tr.v. re·pub·lished, re·pub·lish·ing, re·pub·lish·es 1. To publish again. 2. Law To revive (a libel or a canceled will). revised forward-looking statements to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures made by the Company in this release that seek to advise interested parties of the risks and other factors that affect the Company's business, as well as in the Company's periodic reports on Forms 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission. The risks affecting the Company's business include reliance on the success of the home healthcare industry, the reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. system currently in place and future changes to that system, competition in the industry, economic conditions in foreign countries, currency exchange rates, technological changes and product availability. Any such forward-looking statements, whether made in this release or elsewhere, should be considered in context with the various disclosures made by the Company about its business.
I-FLOW CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
($ in thousands, except for per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
(Unaudited) (Unaudited)
Net Revenues $ 9,505 $ 8,479 $ 18,055 $ 16,471
Cost of sales 3,792 3,469 7,248 6,815
Gross Profit 5,713 5,010 10,807 9,656
Costs and expenses:
Selling, general
& administrative 4,975 3,746 9,316 7,242
Research & development 565 524 1,091 1,082
Total expenses 5,540 4,270 10,407 8,324
Operating Income 173 740 400 1,332
Interest expense (income), net (4) 30 (5) 77
Income before taxes 177 710 405 1,255
Provision for income taxes 71 311 163 540
Net income before
Extraordinary Items $ 106 $ 399 $ 242 $ 715
Effect of a Change in Accounting
Principle: Goodwill impairment -- -- (3,474) --
Net Income (Loss) $ 106 $ 399 $ (3,232) $ 715
Net income per share, before
effect of a change in
accounting principle:
Basic 0.01 0.03 0.02 0.05
Diluted 0.01 0.03 0.02 0.05
Loss from Goodwill Impairment -- -- (0.23) --
Net income (loss) per share
-- Basic 0.01 0.03 (0.21) 0.05
Net income (loss) per share
-- Diluted 0.01 0.03 (0.21) 0.05
Weighted average shares
-- Basic 15,363 15,249 15,358 15,154
Weighted average shares
-- Diluted 16,033 15,642 16,112 15,584
CONDENSED CONSOLIDATED BALANCE SHEET
($ in thousands)
June 30, Dec. 31,
ASSETS 2002 2001
(unaudited) (audited)
Current Assets $ 21,378 $ 21,674
Property, Plant &
Equipment, Net 5,243 4,805
Other Assets 5,829 9,225
Total $ 32,450 $ 35,704
June 30, Dec. 31,
LIABILITIES & EQUITY 2002 2001
(unaudited) (audited)
Current Liabilities $ 5,543 $ 5,852
Long-term liabilities 17 83
Shareholders' Equity 26,890 29,769
Total $ 32,450 $ 35,704
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion