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 ST. PAUL, Minn., April 19 /PRNewswire/ -- Empi, Incorporated (NASDAQ-NMS: EMPI), a medical device manufacturer, today announced sales and earnings for the three months ended March 31, 1994.
 First-quarter sales of $14.4 million were 4 percent lower than 1993 first-quarter sales of $15 million. Net income for the quarter totaled $1.3 million, or $.15 per share, down from $1.9 million, or $.23 per share, in the year earlier period. All per share numbers have been adjusted to reflect the company's 2-for-1 stock split, which was effective June 11, 1993.
 Empi had previously announced that its first-quarter sales and earnings would be below the estimates of securities analysts who follow the company.
 Donald D. Maurer, Empi president and chief executive officer, said: "We are disappointed with our first-quarter financial results, which are in line with the announcement we made in late March. We experienced a general softening of sales across most product lines in both our retail and dealer business during the 1994 first quarter.
 "We believe that much of the reduced demand can be attributed to uncertainties surrounding health care reform, as health care providers continue to focus on cost control. January and February revenues were particularly soft, coinciding with adverse weather conditions in several of our geographic markets. March revenues rebounded somewhat, but not enough to offset the earlier weakness."
 Maurer added: "The greater impact of this soft quarter on earnings resulted from expenses associated with the addition of key personnel and increased spending to support Empi's future growth plans. Expenses are higher than in 1993, particularly in sales and marketing and research and development."
 Maurer noted that sales of Empi's new surface electromyography (sEMG) biofeedback products, acquired during 1993 from Physical Health Devices, Inc., have not grown as quickly as Empi originally expected. "However, during the first quarter we completed some product modifications that we believe will benefit future biofeedback product sales," Maurer said.
 Empi made significant progress during the first quarter to implement its new strategy for the incontinence market. The company has hired and trained 10 specialty sales representatives who are providing more focused selling time to the incontinence market. The company also moved ahead with plans to open an Empi-operated incontinence center in Minneapolis during the second quarter. The center initially will be staffed by a recently hired nurse practitioner who will help patients access a wide range of behavioral treatments for the cure and control of urinary incontinence.
 Maurer said: "While our first-quarter performance did not meet our standards, we recognize that Empi is in a transition period as we apply our long-term diversification vision and financial strength to successfully develop and market new products. We believe in the potential of our new rehabilitation and incontinence products, yet it is difficult to project their revenue contributions on a quarter-to-quarter basis. We anticipate improved financial results in the remainder of 1994; the extent of the improvement will depend upon the successful execution of our diversification strategy, as well as planned growth in our core business."
 Empi develops, manufactures and distributes non-invasive biomedical devices and accessories for electro-therapeutic applications in physical medicine, orthopedic, rehabilitation, urogynecology and neurology. The company's shares are traded on the NASDAQ national market system under the symbol EMPI.
 (in thousands, except per share amounts)
 Three Months Ended
 March 31,
 1994 1993 % Change
 Net Sales $14,367 $14,971 -4
 Cost of Sales and Expenses 12,228 11,686 +5
 Income Before Income Taxes 2,139 3,285 -35
 Income Taxes 856 1,341 --
 Net Income 1,283 $ 1,944 -34
 Net Income Per Common Share $ .15 $ .23 -35
 Weighted Average Shares
 Outstanding 8,662 8,492
 -0- 4/19/94
 /CONTACT: Diane Rose or Marian Briggs, of Padilla Speer Beardsley, 612-871-8877, for Empi; or Timothy Briggs, 612-639-2330; or Barb Howe, 612-639-2429; both of Empi/

CO: Empi, Inc. ST: Minnesota IN: MTC SU: ERN

DB-CP -- MN014 -- 8146 04/19/94 12:10 EDT
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Publication:PR Newswire
Date:Apr 19, 1994

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