Surgical Laser Technologies, Inc. Reports Financial Results for Fourth Quarter and Year 1998 and Impending Sale of Former Headquarters Facility.MONTGOMERYVILLE, Pa.--(BUSINESS WIRE)--Feb. 8, 1999--Surgical Laser Technologies, Inc. (NASDAQ/SmallCap:SLTID) today announced its financial results for the fourth quarter and twelve months of 1998 and the impending im·pend intr.v. im·pend·ed, im·pend·ing, im·pends 1. To be about to occur: Her retirement is impending. 2. sale of its former headquarters facility in Oaks, Pa. Sales for the fourth quarter of 1998 were $2,542,000 compared to sales of $2,681,000 in the fourth quarter of 1997. The net loss for the fourth quarter of 1998 was $1,037,000, or $.52 per share compared to a profit in the fourth quarter of 1997 of $51,000, or $.03 per share. The loss in the fourth quarter of 1998 included a non-recurring charge of $485,000, or $.25 per share, to write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. the book value of the Company's former headquarters facility. The charge resulted from the Company's execution of an agreement of sale on the facility with the current lessee One who rents real property or Personal Property from another. A lessee of land is a tenant. Cross-references Landlord and Tenant. lessee n. the person renting property under a written lease from the owner (lessor). , with closing expected in the next three months. The expected sale will have a positive cash impact, after all costs, of approximately $275,000, and upon closing of the sale will eliminate the $4,043,000 remaining in mortgage debt. For the year 1998, sales were $9,393,000 compared to sales in 1997 of $11,665,000. The net loss for the year 1998 was $2,552,000, or $1.29 per share, versus a net loss in 1997 of $381,000, or $.19 per share. The 1998 net loss included the above-mentioned non-recurring charge of $485,000, and the 1997 net loss included a net non-recurring credit of $177,000 which included $1.0 million received in the settlement of a lawsuit lawsuit: see procedure; tort. offset by $.8 million in facility-related charges. Commenting on the results, Keith Stoneback, SLT's President and Chief Executive Officer, stated: "Excluding the non-recurring charge in 1998 and credit in 1997, 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. were reduced by $400,000 in 1998 from 1997, and additional expense reduction measures have been taken that are not as yet reflected in the results. In addition, the fourth quarter 1998 expenses and gross profit include several items that are not reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of our ongoing costs, including a provision to cover the expected completion of our 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. with Trimedyne. We continue to emphasize cash management and are pleased to report a break-even cash quarter in the fourth quarter and a cash position above $6 million at the end of 1998. Continuing, Stoneback added: "We accomplished several objectives in the fourth quarter in the transition of SLT SLT Salut (French) SLT Sri Lanka Telecom SLT Senior Leadership Team SLT Something Like That SLT Selective Laser Trabeculoplasty SLT South Lake Tahoe (California) SLT Single Line Telephone and the implementation of our strategy. We began commercial shipments of two new products expanding our offerings to the Ear, Nose and Throat (ENT ENT ears, nose, and throat (otorhinolaryngology). ENT abbr. ear, nose, and throat ENT ear, nose and throat. ENT Ears, nose & throat; formally, otorhinolaryngology ) market. The HemoSleeve HemoSleeve™ ENT Bipolar electrosurgical sheath used with microdebriders to obtain hemostasis during ENT procedures (tm) bipolar (1) See bipolar transmission. (2) One of two major categories of transistor; the other is "field effect transistor" (FET). Although the first transistors and first silicon chips were bipolar, most chips today are field effect transistors wired as CMOS logic, which coagulation coagulation (kōăg'y  lā`shən), the collecting into a mass of minute particles of a solid dispersed throughout a liquid (a sol), usually followed by the precipitation or product is used in
conjunction with powered micro-debriders and the ClearEss(tm)
suction/irrigation product is used in conjunction with endoscopic en·do·scope n. An instrument for examining visually the interior of a bodily canal or a hollow organ such as the colon, bladder, or stomach. en sinus procedures. We believe there is an opportunity to expand distribution of the HemoSleeve product through a private label/OEM strategy that would complement our direct sales efforts. In addition, we sold several laser systems under our agreement with CorMedica(R) Corporation for their use in the clinical trials for percutaneous percutaneous /per·cu·ta·ne·ous/ (per?ku-ta´ne-us) performed through the skin. per·cu·ta·ne·ous adj. Passed, done, or effected through the unbroken skin. transluminal transluminal /trans·lu·mi·nal/ (trans-loo´mi-n'l) through or across a lumen, particularly of a blood vessel. trans·lu·min·al adj. Passing or occurring across a lumen. endomyocardial revascularization or PTER(tm). During the quarter, we implemented the Fiber Delivery System product changes required by our private label partners Diomed and Olympus, and completed our first shipment to Japan. And lastly, but importantly, we entered into an agreement of sale on SLT's former headquarters facility in Oaks, Pa., which will strengthen our balance sheet through the elimination of over $4.0 million in debt related to the facility." In closing, Stoneback added: "Recognizing the need to increase revenues, our efforts continue to be focused on the acquisition of additional products and/or companies and strategic alliances that will expand our offerings in the ENT and Neurosurgery neurosurgery /neu·ro·sur·gery/ (noor´o-sur?jer-e) surgery of the nervous system. neu·ro·sur·ger·y n. Surgery on any part of the nervous system. areas and effectively managing the Company's balance sheet through the transition and implementation of our strategy." SLT is a company in transition. Currently, SLT is a worldwide leader in the development, manufacture and marketing of lasers and disposable Contact Laser(tm) Delivery Systems that can be used in virtually all general and specialty surgical procedures Surgical procedures have long and possibly daunting names. The meaning of many surgical procedure names can often be understood if the name is broken into parts. For example in splenectomy, "ectomy" is a suffix meaning the removal of a part of the body. "Splene-" means spleen. . SLT markets proprietary Contact Laser Delivery Systems that provide the surgeon with precise and controlled cutting, vaporization vaporization, change of a liquid or solid substance to a gas or vapor. There is fundamentally no difference between the terms gas and vapor, but gas is used commonly to describe a substance that appears in the gaseous state under standard conditions of and coagulation of tissue. SLT's mission is to achieve and maintain worldwide leadership in the development, manufacturing and marketing of value-added devices, supplies and therapies used to treat maladies in the head and neck. While focused on this mission, SLT also seeks to leverage its production resources through private label or similar manufacturing arrangements and to exploit its core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
Additional information on Surgical Laser Technologies, Inc. and its products can be found on the Company's Web site at www.slti.com. NOTE: The 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. contained herein reflect management's current views with respect to future events and financial performance. These forward-looking statements including the ability to increase sales and/or benefit from new product developments and supply agreements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of SLT, including but not limited to those risks and uncertainties set forth under the caption Risk Factors in Item 7 of 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 fiscal year ended December 28, 1997. -0-
SURGICAL LASER TECHNOLOGIES, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER SHARE DATA)
----------------------------------------------------------------------
Consolidated For the For the Twelve
Statement Quarter Ended: Months Ended:
of Operations: 1/3/99 12/28/97 1/3/99 12/28/97
(unaudited) (unaudited)
----------------------------------------------------------------------
Net sales $2,542 $2,681 $9,393 $11,665
Cost of sales 1,373 1,057 4,466 4,772
-------- -------- -------- --------
Gross profit 1,169 1,624 4,927 6,893
-------- -------- -------- --------
Operating expenses:
Selling, general and
administrative 1,511 1,482 5,944 6,613
Product development 233 99 1,179 910
Non-recurring charges
(credits) 485 (1) - 485 (1) (177)(2)
-------- -------- -------- --------
2,229 1,581 7,608 7,346
-------- -------- -------- --------
Operating income (loss) (1,060) 43 (2,681) (453)
Other income 97 98 407 366
Interest expense, net (74) (78) (275) (282)
Income taxes - (12) (3) (12)
-------- --------- -------- --------
Net income (loss) ($1,037) $51 ($2,552) ($381)
======== ========= ======== ========
Shares used in
calculation of basic
and diluted income
(loss) per share 1,978 (3) 1,977 (3) 1,978 (3) 1,977 (3)
Basic and diluted
income (loss) per
share ($0.52)(3) $0.03 (3) ($1.29)(3) ($0.19)(3)
As of:
----------------------------------------------------------------------
Consolidated Balance Sheet Data: 1/3/99 12/28/97
----------------------------------------------------------------------
Cash, cash equivalents and
short-term investments $6,023 $6,549
Accounts receivable, net 1,437 1,925
Inventories 2,540 2,986
Property and equipment, net 5,530 6,867
Total assets 16,648 19,996
Current liabilities 4,089 2,497
Long-term debt 3,965 6,142
Stockholders' equity 8,594 11,357
(1) Includes a write-down of $.3 million to the carrying value
and a $.2 million reserve for settlement costs related to the
impending sale of Company's former headquarters facility.
(2) Includes a non-recurring credit of $1.0 million received in
settlement of a lawsuit offset in part by non-recurring charges of $.8
million for facility-related items.
(3) Restated for the effect of the 1 for 5 Reverse Stock Split
implemented on January 8, 1999.
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