Printer Friendly

Arrow International, Inc. Shareholders Meeting January 20, 1999.

READING, Pa., Jan. 20 /PRNewswire/ -- Marlin Miller, Jr. opened the 1999 Annual Meeting of Shareholders of Arrow International, Inc. (Nasdaq: ARRO) by announcing that the Company's Board of Directors, meeting earlier in the day, had put in place a management transition plan that the Board has been working on over the past year. Miller then introduced the Company's new management structure and executive officer positions, effective today:
 Marlin Miller, Jr. Chairman of the Board and Chief Executive Officer
 Raymond Neag Vice Chairman of the Board
 Philip B. Fleck President and Chief Operating Officer
 Paul L. Frankhouser Executive Vice President
 Frederick J. Hirt Vice President-Finance, Chief Financial Officer
 and Treasurer
 Scott W. Hurley Controller

Also introduced were two newly elected operating officers: James M. Elmer, Vice President Manufacturing, and Carl N. Botterbusch, Vice President, Research and Engineering.

During the course of the meeting, Miller reviewed for shareholders the Company's progress over the past year and the Company's strategy and plans for continued growth. He emphasized the Company's continuing commitment to global expansion of its business and to the development and marketing of technologically advanced products. The global market opportunity and the projected fiscal year 1999 sales were outlined for the Company's major product offerings.

Philip Fleck, President and Chief Operating Officer, provided a review of important new product initiatives and products in an advanced state of development. He emphasized the significance of these products to the Company's long-term growth as it seeks to enter new and growing markets. He outlined the promising outlook for the Company's implantable drug infusion pumps, percutaneous thrombectomy devices (PTD), and new product offerings in intra-aortic balloon pumping. Based on research acquired in the recently completed C.R. Bard transaction, Arrow expects to offer the first 7 French (smaller diameter) intra-aortic balloon catheter.

Fleck concluded his comments with an update on the Company's progress toward the first human implant of its fully implantable Left Ventricular Assist Device (LVAD). He stated that, based on the LVAD's current stage of development, the Company expects this important milestone to be achieved in fiscal year 1999. A significant number of LVAD production units have now been tested successfully in animals and in the laboratory.

Commenting on the recent weakness in the price of Arrow's common stock, Miller attributed this weakness to a slowdown in the Company's sales growth, the relatively wide gap at this point in time in the valuation of earnings between smaller and larger companies, and a recently published article in The New England Journal of Medicine comparing Arrow's pioneering ARROWg+ard(R) antimicrobial catheter treatment with a competitor's antibiotic catheter treatment.

In discussing the Company's sales growth, Miller stated that although fiscal year 1998 sales and net income, before a special charge, grew 6.1% and 10.3%, respectively, this sales growth rate was below the Company's current target range of 10-15%. He stated that, in fiscal year 1998, the strong U.S. dollar, worldwide health care cost containment, and products in early stages of introduction curtailed the Company's growth rate. For fiscal year 1999, the Company is currently anticipating sales of $292 million, representing growth of 11.9% over fiscal year 1998.

Earnings per share for fiscal year 1999 are currently projected at $1.95 -- $2.00. At the midpoint of this range, earnings per share would increase 12.9 % over FY 1998 and, as of the market close on Friday, January 15, 1999, would be valued at a price to earnings ratio of 12.7. When compared to a price to earnings ratio of 32.6 for the Standard & Poor's (S&P) 500 Index and to other large medical device companies with price to earnings ratios of 20-50, it is apparent that investors are currently assigning much higher valuations to larger companies. Earnings growth for the S&P 500 Index is projected at 3.5% for calendar year 1999.

In discussing The New England Journal of Medicine article, Miller pointed out the key differences in the Arrow and Cook Incorporated (Cook) catheters and how a new product offering by Arrow, currently in clinical trials and anticipated to receive marketing clearance by the FDA within six months, is expected to provide improved infection protection in the 10-30 day time period of catheter use. The catheter manufactured by Cook is impregnated with two antibiotics (Rifampin and Minocycline) on both the interior and exterior of the catheter. Arrow's currently available ARROWg+ardO product is impregnated with two antimicrobial agents (chlorhexidine and silver sulfadyazine) on only the exterior catheter body. The Company's new catheter, in clinical trials, is impregnated with an antimicrobial solution that is three times stronger than the current ARROWg+ard(R) product covering all of its internal surfaces, including the extension lines and hubs of the catheter.

The New England Journal of Medicine article comparing the Arrow and Cook products reported that catheters in service for 10 days or less exhibited essentially the same protection against blood stream infection. When catheters remained in service for 11-30 additional days, the Cook catheter exhibited better protection. Various studies have shown that the average use of central venous catheters is approximately 7 days and that approximately 90% are in use for 10 days or less. It is Arrow's belief that catheters used for more than 10 days (with many infusion lines connected and disconnected) have a significant chance of being contaminated through the catheter hub and interior surface of the catheter. The ARROWg+ard(R) II product (in clinical trial) is designed to address this potential risk for contamination.

Although the current Cook catheter is reported to have reduced blood stream infection rates for catheters that are used for more than 10 days, Arrow believes it has the significant disadvantage of using antibiotics to achieve this result. Most hospitals today are very reluctant to use antibiotics in a preventative mode due to the alarming recent increase in bacterial resistance. Given this hospital concern, Arrow's very broad product line and the expected availability in the near term of the ARROWg+ard(R) II product, the Company does not presently believe that the Cook product will have a material adverse impact on its business.

Arrow International, Inc. develops, manufactures and markets a broad range of clinically advanced, disposable catheters and related products for critical and cardiac care. The Company's products are used primarily by anesthesiologists, critical care specialists, surgeons, emergency and trauma physicians, cardiologists, interventional radiologists, electrophysiologists, pain management specialists and other health care providers.

The Company's common stock trades on The Nasdaq Stock Market under the symbol ARRO.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This news release provides historical information and includes forward-looking statements (including projections). Although the Company believes that the expectations in such forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to have been correct. The forward-looking statements are based upon a number of assumptions and estimates, while presented with numerical specificity and considered reasonable by the Company, are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies which are beyond the control of the Company, and upon assumptions with respect to future business decisions which are subject to change. Accordingly, the forward-looking statements are only an estimate, and actual results will vary from the forward-looking statements, and these variations may be material. Consequently, the inclusion of the forward- looking statements should not be regarded as a representation by the Company of results that actually will be achieved. Forward-looking statements are necessarily speculative in nature, and it is usually the case that one or more of the assumptions in the forward-looking statements do not materialize. Investors are cautioned not to place undue reliance on the forward-looking statements. In connection with the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company wishes to caution the reader that the factors below and those in Exhibit 99.1 to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1998 and in its other filings with the Securities and Exchange Commission could cause the Company's results to differ materially from those stated in the forward- looking statements. These factors include: (i) regulation of the Company's products by the Food and Drug Administration and, in some jurisdictions, by state, local and foreign governmental authorities; (ii) the highly competitive market for medical devices; (iii) pressures to reduce the cost or usage of medical products and services imposed by the health care industry; (iv) dependence on patents and proprietary rights; (v) risks associated with international operations; (vi) potential product liability; (vii) risks associated with derivative financial instruments; and (viii) dependence on key management; and (ix) risk associated with the Year 2000 problem.
COPYRIGHT 1999 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Geographic Code:1USA
Date:Jan 20, 1999
Previous Article:Ameritrade Reports Stronger Than Expected Earnings.
Next Article:SBS Technologies, Inc. Announces Results for Fiscal 1999 2nd Quarter Ended December 31, 1998.

Terms of use | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters