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DAMON ANNOUNCES SECOND QUARTER OPERATING RESULTS AND MICHIGAN LABORATORY ACQUISITION

 DAMON ANNOUNCES SECOND QUARTER OPERATING RESULTS
 AND MICHIGAN LABORATORY ACQUISITION
 NEEDHAM HEIGHTS, Mass., Aug. 4 /PRNewswire/ -- Damon Corporation (NYSE: DCL) announced today net income per common share of 41 cents for its second quarter ended June 30 1992, as compared to a net loss of (20 cents) per common share in the 1991 second quarter.
 Sales for the second quarter rose 16.4 percent to $76,322,000 as compared to $65,549,000 for the 1991 second quarter. Operating cash flow, or earnings before depreciation, amortization, interest, other income, net and taxes, and after minority interests (EBDIT) increased 17.2 percent to $13,715,000 from $11,707,000 in the comparable 1991 quarter. Net results for the 1992 second quarter included $756,000 of other income, net, which principally related to a one-time payment received by Damon in connection with owned rental property, compared with $2,078,000, which principally related to a pension curtailment gain in the 1991 period.
 For the six-month period ended June 30, 1992, sales rose 17.7 percent to $150,628,000 from the comparable 1991 period. EBDIT increased 19.2 percent to $25,816,000. Net income applicable to common stockholders was $11,156,000 or 71 cents per common share compared to a net loss applicable to common stockholders of ($4,234,000) or (85 cents) per common share for the same period last year.
 Second quarter 1992 operating results reflect the benefit of lower interest expense resulting from the utilization of approximately $19.4 million of net proceeds from the April 6, 1992 equity offering. These net proceeds further reduced outstanding indebtedness under Damon's Revolving Credit facility, subject to reborrowing for general corporate purposes, including acquisitions.
 Damon also announced today that is has acquired all of the stock of United Health Resources, Inc. which operates under the name of Preferred Laboratory and is headquartered in Auburn Hills, Mich. Preferred services the state of Michigan and Northern Ohio with its principal business derived from the greater Detroit metropolitan market and had sales exceeding $18 million for the 12-month period ending June 30, 1992. Preferred was acquired with approximately $9.4 million of cash, $5.4 million of notes and the assumption of certain other liabilities aggregating approximately $6.5 million payable over several years. Importantly, the acquisition is not expected to dilute EPS.
 Damon also announced that its Michigan hospital joint venture agreement will not be renewed when it expires pursuant to its terms in February, 1993. Upon dissolution of the partnership which may occur earlier than the expiration date, Damon will consolidate its commercial business, formerly operated through the joint venture, with preferred to from a large wholly owned regional laboratory.
 Robert L. Rosen, chairman of the board and chief executive officer, stated, "Damon continues to realize improvement in sales, EBDIT and EPS. Sales increases continue to be mostly internally generated from unit volume increases."
 Rosen continued, "Preferred's addition will significantly increase our presence in the Michigan commercial laboratory testing marketplace. Preferred is extremely well run and is compatible with Damon's commitment to the highest quality testing and client service. Damon continues to actively pursue acquisitions of clinical laboratories of varying sizes."
 Regarding developments in some of Damon's other joint ventures, Rosen noted, "In June of this year we renewed our joint venture agreement with our Atlanta partner for a five-year period. This renewal solidifies the prospects for the continued success of our Atlanta laboratory. As previously discussed, the company's hospital joint venture arrangement in San Francisco expires pursuant to it terms in October 1992 and will not be renewed. Damon has entered into a lease for a new laboratory in Northern California that will service the commercial business Damon is retaining from the joint venture, and serve as a large new wholly owned regional laboratory."
 Rosen noted, "The lost hospital in-patient business resulting from the expiration of the joint venture agreements in Detroit and San Francisco is expected to be offset by the acquisition of Preferred and the new wholly owned laboratory Damon is establishing in Northern California. This shift from hospital in-patient business to commercial business is also expected to enhance Damon's operating margin."
 After the dissolution of the San Francisco and Detroit partnerships, Damon will operate nine wholly owned regional laboratories and three regional laboratories under partnership arrangements.
 Damon Corporation, one of the nation's leading clinical laboratory testing companies, provides a full range of high quality, technologically advanced testing services tot the medical community, corporations, federal and state governmental agencies and municipalities nationwide and is a leader in substance abuse testing, preventive health screening and AIDS testing.
 DAMON CORPORATION
 Consolidated Statements of Operations
 (Unaudited, in thousands, except per share amounts)
 Periods ended Three months Six months
 June 30 1992 1991 1992 1991
 Sales $76,322 $65,549 $150,628 $128,015
 Gross profit 29,758 25,940 59,459 50,231
 SG&A expenses 14,937 13,760 31,237 27,653
 Amortization of goodwill 1,379 1,333 2,725 2,689
 Provision for doubtful
 accounts 2,051 1,402 3,870 2,875
 Interest expense, net 2,384 7,353 5,333 14,742
 Other income, net (756) (2,078) (756) (2,078)
 Income before provision for
 taxes and minority
 interests 9,763 4,170 17,050 4,350
 Provision for income taxes 2,140 1,525 3,507 1,591
 Net income before minority
 interests 7,623 2,645 13,543 2,759
 Minority interests 1,044 846 2,387 1,395
 Net income 6,579 1,799 11,156 1,364
 Preferred dividends
 and accretion -- 2,821 -- 5,598
 Net income (loss) applicable
 to common stockholders 6,579 (1,022) 11,156 (4,234)
 Net income (loss) per
 common share $0.41 ($0.20) $0.71 ($0.85)
 Weighted average common
 shares outstanding 16,105 5,000 15,614 5,000
 Other Data:
 Income before provision
 for taxes and minority
 interests 9,763 4,170 17,050 4,350
 Deprec. & amortization 3,368 3,108 6,578 6,047
 Interest expense, net 2,384 7,353 5,333 14,742
 Other income, net (756) (2,078) (756) (2,078)
 Minority interests (1,044) (846) (2,387) (1,395)
 EBDIT $13,715 $11,707 $25,818 $21,666
 -0- 8/4/92
 /CONTACT: David C. Asheim, vice president-investor relations of Damon, 617-449-0800
 (DCL) CO: Damon Corporation ST: Massachusetts, Michigan IN: HEA SU: ERN TNM


SM-TS -- NY019 -- 6582 08/04/92 10:49 EDT
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Date:Aug 4, 1992
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