ZEVEX Reports Third Quarter Revenues Up 148%, EPS of $0.10; Enteral Products Market Penetration Accelerates.SALT LAKE CITY--(BW HealthWire)--Nov. 3, 1999-- ZEVEX International, Inc. (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 NM: ZVXI) today reported financial results for the three and nine months ended September 30, 1999. Revenues for the 1999 third quarter were up 148% to $5.7 million, compared with $2.3 million in the prior-year third quarter. Revenue growth was due primarily to significant sales growth in the Company's enteral nutrition Enteral nutrition Nourishment given through a tube or stoma directly into the small intestine, thus bypassing the upper digestive tract. Mentioned in: Electrolyte Supplements, Enterostomy, Necrotizing Enterocolitis delivery products, as well as to the contributions of JTech Medical Industries and Aborn Electronics, both of which were acquired during January 1999. 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. of $627,076 compares with an 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. of $745,867 in the same period last year, when a combination of increased engineering costs and the postponement of several manufacturing orders negatively impacted results. Gross margins improved to 44% from 13% a year ago. Net income for the quarter was $331,741, or $0.10 per diluted share, compared with a net loss of $419,844, or a loss of $0.13 per basic share, during the third quarter of 1998. Sales of the Company's proprietary products during the 1999 third quarter were $2.9 million, or 51% of total revenues, representing a nearly three-fold increase over the $1.0 million in proprietary product sales during the third quarter of 1998. The Company's proprietary products consist of enteral enteral /en·ter·al/ (en´ter'l) enteric. en·ter·al adj. 1. Within or by way of the intestine, as distinguished from parenteral. 2. Enteric. feeding pumps and disposable sets for delivering nutrition directly to the intestines, and musculoskeletal musculoskeletal /mus·cu·lo·skel·e·tal/ (-skel´e-t'l) pertaining to or comprising the skeleton and muscles. mus·cu·lo·skel·e·tal adj. Relating to or involving the muscles and the skeleton. measurement products for the physical therapy market. For the nine months ended September 30, 1999, enteral nutrition delivery products sales growth and acquisitions contributed to a 108% increases in revenues to $15.8 million, compared with $7.6 million in the prior-year nine-month period. Net income was $925,504, or $0.27 per diluted share, compared with net income of $42,445, or $0.01 per diluted share, during the first nine months of 1998. "Third quarter and year-to-date financial performance demonstrates the success of our acquisition strategy and our emphasis on accelerating proprietary product revenue growth. By increasing contributions from proprietary products, we gain greater control over our operations and improve overall profitability," commented Dean G. Constantine, chief executive officer. "Our Aborn Electronics and JTech Medical Industries subsidiaries have consistently contributed to revenue and earnings growth since their acquisitions earlier this year. This quarter, revenues from JTech and our proprietary enteral product line generated more than 50% of our revenues, exceeding sales from our contract manufacturing business for the first time in the Company's history." David J David J. Haskins (b. April 24, 1957, in Northampton, England) is a British alternative rock musician. He was the bassist for the seminal gothic rock band Bauhaus. Life and work . McNally, executive vice president, commented, "All of our major business units are growing and profitable. Enteral nutrition delivery products are the fastest-growing component of our business, with sales more than doubling year-over-year. The ramp in enteral product revenues is led by the accelerating market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" of the EnteraLite(TM) Ambulatory Enteral Feeding Pump, which was featured at a recent conference of pediatric pediatric /pe·di·at·ric/ (pe?de-at´rik) pertaining to the health of children. pe·di·at·ric adj. Of or relating to pediatrics. gastroenterologists. During the first half of 2000, we plan to file for the CE mark for this product line, receipt of which would grant clearance to market in the countries comprising the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community ." Mr. McNally continued, "During the quarter, JTech Medical Industries, our wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , introduced a Y2K-compliant software upgrade for use with Dynatronics Corporation's Dynatron See tetrode. 2000. We anticipate increasing demand for this upgrade during the fourth quarter. On the 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 front, we plan to begin production of an external bedside defibrillator defibrillator, device that delivers an electrical shock to the heart in order to stop certain forms of rapid heart rhythm disturbances (arrhythmias). The shock changes a fibrillation to an organized rhythm or changes a very rapid and ineffective cardiac rhythm to a for Cardiac Science during the fourth quarter of this year. Simultaneously, we are ramping up production of the positioning device for KeraVision Intacs(TM), a treatment for myopia myopia: see nearsightedness. approved by the Food and Drug Administration earlier this year." ZEVEX has scheduled an investor conference call regarding this announcement to be held today at 12:00 p.m. Eastern Time. To participate in the call, a few minutes prior to the start time please dial (212) 346-6462. Those unable to participate are invited to listen to a recording of the call and Q&A from 2:00 p.m. Eastern Time November 3, 1999 through 5:00 p.m. Eastern Time November 5, 1999, by dialing (800) 633-8284, access code 13321768. ZEVEX International designs, manufactures and markets medical devices for enteral nutrition delivery, musculoskeletal evaluation and functional testing (testing) functional testing - (Or "black-box testing", "closed-box testing") The application of test data derived from the specified functional requirements without regard to the final program structure. through its wholly owned subsidiaries. ZEVEX also designs and manufactures advanced medical devices including surgical systems, device components and sensors for medical technology companies. For more information, please visit the Company's Web sites at www.zevex.com and www.jtechmed.com. This news release contains forward-looking statements that involve risks and uncertainties regarding ZEVEX International's operations and future results. Please see the Company's filings with the Securities and Exchange Commission including, without limitation, 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. and Form 10-Qs, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. -0-
ZEVEX INTERNATIONAL, INC.
SELECTED INCOME STATEMENT DATA
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
------------------------------------------------
Total revenues 5,688,131 2,346,143 15,830,988 7,633,207
Cost of sales 3,167,330 2,038,200 8,545,867 4,898,227
Total
operating
expenses 1,893,725 1,053,810 5,681,997 3,085,495
Operating income
(loss) 627,076 (745,867) 1,603,124 (350,515)
Net income (loss) 331,741 (419,844) 925,504 42,445
Basic net income
(loss) per share 0.10 (0.13) 0.27 0.01
Diluted net income
(loss) per share 0.10 (0.12) 0.27 0.01
ZEVEX INTERNATIONAL, INC.
SELECTED BALANCE SHEET DATA
September 30, 1999 December 31, 1998
(unaudited) (audited)
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Cash and cash equivalents $ 3,186,778 $ 7,960,511
Marketable securities 979,467 1,598,032
Total assets 29,574,991 33,760,979
Total current liabilities 3,417,820 7,395,946
Total long-term debt 6,045,000 6,150,000
Total stockholders' equity 19,986,773 20,114,535
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