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GRAHAM-FIELD HEALTH PRODUCTS, INC. REPORTS RECORD REVENUES AND RESULTS FOR THE YEAR AND FOURTH QUARTER ENDED DECEMBER 31, 1995

HAUPPAUGE, N.Y., March 8 /PRNewswire/ -- Graham-Field Health Products, Inc. (NYSE: GFI), a manufacturer and supplier of healthcare products, today reported record revenues and results for the year ended December 31, 1995. Revenues for the year were $100,403,000, as compared to $94,501,000 for 1994, a 6% increase. Income before income taxes was $1,298,000, as compared to a loss before income taxes of $3,303,000 for the prior year. Net income was $738,000 or $.06 per share on 13,332,000 weighted average shares outstanding, as compared to a net loss of $2,356,000 or $.18 per share on 12,879,000 weighted average shares outstanding for the prior year.

For the quarter ended December 31, 1995, revenues were $25,890,000, as compared to $23,769,000 for the same period last year, representing a 9% increase in revenues. The income before income taxes was $661,000, as compared to the loss before income taxes of $2,601,000 for the same period last year. Net income for the quarter ended December 31, 1995 was $359,000 or $.03 per share on 14,101,000 weighted average shares as compared to a net loss of $1,871,000 or $.14 per share on 12,929,000 weighted average shares outstanding for the same period in the prior year.

The increase in revenues for the year ended December 31, 1995 is primarily attributable to improved service levels, improvements in the Company's paperless St. Louis distribution facility, the development of new sales and marketing programs, and the expansion of the Company's product lines. During 1995, Graham-Field introduced over 100 new products including the Temco deluxe four-wheel walkabout, the John Bunn Nebulite II medication compressor and the Labtron automatic wrist blood pressure monitor. The increase in revenues includes approximately $200,000 relating to an insurance recovery and favorable settlement of a dispute. The Company's revenues also include approximately $935,000 attributable to a business acquired as of July 1, 1995. The revenue increase was achieved despite the decline in sales to Apria Healthcare Group, Inc. (formerly Abbey Home Healthcare, which merged with Homedco in June 1995) of 21% and 47% for the year and quarter ended December 31, 1995. The Company previously announced that its current supply agreement with Apria expired on December 31, 1995.

Growth in the international market, particularly in Europe, Asia and Latin America significantly outpaced the Company's overall revenue growth for the year despite troubled economic conditions in Mexico. For the year ended December 31, 1995, international revenue grew by approximately 10%, with a decline in sales in Mexico by approximately 45%. With the peso stabilizing, the Company anticipates significant revenue growth in Mexico in 1996.

The increase in net income is due to increased revenues, an increase in the Company's gross profit margin, and the decrease in selling, general and administrative expenses. The Company's gross profit margin increased by approximately 1% for the quarter ended December 31, 1995, but remained relatively unchanged for the year. The decrease in selling, general and administrative expenses was primarily attributable to cost reduction programs, and the continued efficiencies generated by the Company's distribution network and investments in new business systems. For the year and quarter ended December 31, 1995, selling, general, and administrative expenses declined as a percentage of operating revenue to 27% from 33%, excluding non-recurring charges of approximately $1,321,000 in the 1994 period. In addition, interest expense decreased in the fourth quarter due to lower interest rates and reduced borrowing levels.

On March 4, 1996, the Company sold its Gentle Expressions(R) breast pump product line to The Lumiscope Company, Inc. for $1,000,000. Under the terms of the transaction, Lumiscope will purchase certain inventory of the Gentle Expressions breast pump product line over a six-month period, and provide the Company with a one-year royalty based upon Lumiscope's sales to a certain retail discount chain. In addition, the Company entered into a supply agreement with Lumiscope pursuant to which Lumiscope will continue to supply the Company with the Gentle Expressions product line for resale to the export market and certain other accounts. According to Irwin Selinger, Chairman of the Board and Chief Executive Officer, "we have decided to retain our HealthTeam consumer business, and will reevaluate this business and its position within Graham-Field. The sale of the Gentle Expressions breast pump product line will enable Graham-Field to concentrate and focus its strategies and objectives on its traditional lines and core business of the home healthcare and medical/surgical markets."

Irwin Selinger, Chairman of the Board and Chief Executive Officer stated, "1995 was a turn-around year for Graham-Field. We have reduced our operating costs through aggressive cost reduction programs, strengthened our balance sheet, and reduced short-term borrowings. The most significant factor in the growth of net income was our 6% revenue increase. With improved service levels and intensified sales and marketing efforts, I believe that our revenues will continue to grow resulting in higher levels of profitability. We have recently announced the expansion of our Consolidation Advantage Program (CAP) to include the sale of used refurbished equipment and added new programs which will provide an outlet for our customers to dispose of their excess equipment. As reimbursement rates continue to decline, we believe these programs will increase the value of our CHP program."

Graham-Field manufactures, markets and distributes more than 20,000 healthcare products for hospital, physician and home use to approximately 16,000 home healthcare, physician, hospital supply and pharmaceutical distributors, retailers and wholesalers.
 CONSOLIDATED CONDENSED BALANCE SHEETS
 GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES
 December 31
 ASSETS 1995 1994


CURRENT ASSETS:
 Cash and cash equivalents $214,000 $121,000
 Accounts receivable - net 21,936,000 19,173,000
 Inventories 29,819,000 30,410,000
 Other current assets 1,789,000 1,135,000


Recoverable and prepaid
 income taxes 221,000 239,000
 TOTAL CURRENT ASSETS 53,979,000 51,078,000


PROPERTY, PLANT AND EQUIPMENT
 - net 8,120,000 9,245,000


EXCESS OF COST OVER NET
 ASSETS ACQUIRED - net 29,291,000 29,531,000
 INVESTMENT IN LEVERAGED LEASE 487,000 488,000
 OTHER ASSETS 4,910,000 5,659,000
 DEFERRED TAX ASSETS 3,012,000 3,493,000
 TOTAL ASSETS $99,799,000 $99,494,000
 LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES:
 Notes payable to bank $2,100,000 $673,000


Current maturities of

long-term debt and capital
 lease obligations 1,578,000 615,000
 Accounts payable 8,750,000 7,901,000
 Acceptances payable 5,000,000 10,350,000
 Accrued expenses 2,788,000 3,257,000
 TOTAL CURRENT LIABILITIES 20,216,000 22,796,000


LONG-TERM DEBT AND
 CAPITAL LEASE OBLIGATIONS 972,000 1,596,000
 GUARANTEED SENIOR NOTES 19,000,000 20,000,000
 TOTAL LIABILITIES 40,188,000 44,392,000


STOCKHOLDERS' EQUITY:

Preferred Stock
 Common Stock 352,000 323,000
 Additional paid-in capital 66,887,000 63,145,000
 (Deficit) (7,628,000) (8,366,000)
 59,611,000 55,102,000


TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY $99,799,000 $99,494,000
 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 GRAHAM-FIELD HEALTH PRODUCTS, INC. AND SUBSIDIARIES
 Three Months Ended Year Ended
 December 31 December 31
 1995 1994 1995 1994
 REVENUES: $25,890,000 $23,769,000 $100,403,000 $94,501,000


COST AND EXPENSES:

Cost of
 revenues 17,687,000 16,587,000 68,883,000 65,032,000


Selling, general and
 administrative 6,950,000 9,084,000 27,566,000 30,142,000
 Interest expense 592,000 699,000 2,656,000 2,630,000
 25,229,000 26,370,000 99,105,000 97,804,000


INCOME(LOSS) BEFORE

INCOME TAXES
 (BENEFIT) 661,000 (2,601,000) 1,298,000 (3,303,000)


INCOME TAXES
 (BENEFIT) 302,000 (730,000) 560,000 (947,000)
 NET INCOME(LOSS) $359,000 $(1,871,000) $738,000 $(2,356,000)


PER SHARE DATA:

NET INCOME(LOSS)
 PER SHARE $.03 $(.14) $.06 $(.18)


WEIGHTED AVERAGE NUMBER

OF COMMON AND COMMON

EQUIVALENT SHARES
 OUTSTANDING 14,101,000 12,929,000 13,332,000 12,879,000
 -0- 3/8/96


/CONTACT: Gary M. Jacobs, Vice President - Finance, Chief Financial Officer, or Richard S. Kolodny, Vice President, General Counsel, 516- 582-5900 of Graham-Field Health Products, Inc./

(GFI)

CO: Graham-Field Health Products, Inc. ST: New York IN: MTC SU: ERN

SH -- NYF017 -- 1528 03/08/96 10:06 EST
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