MENTOR REPORTS FISCAL YEAR 1992 RESULTS
MENTOR REPORTS FISCAL YEAR 1992 RESULTS SANTA BARBARA, Calif., May 18 /PRNewswire/ -- Mentor Corp.
(NASDAQ: MNTR) today reported sales of $89.4 million for the fiscal year ended March 31, 1992, an increase of 21 percent over sales of $73.8 million for the prior year.
Net income for the year was $4.5 million, or $0.42 per share, compared to $5.9 million, or $0.54 per share for last year, a decrease of 24 percent. For the fourth quarter, sales were $22.0 million, an increase of 12 percent over sales of $19.6 million last year. Net income for the fourth quarter was $0.4 million, or $0.04 per share, compared to $1.2 million, or $0.11 a share last year, a decrease of 66 percent. The company experienced good to excellent sales throughout the year for most of its business segments. As the year progressed, however, earnings were increasingly affected by the high costs of meeting changing Food and Drug Administration regulatory requirements and the effects of the breast implant controversy. The plastic surgery industry was severely impacted by the controversy over silicone-gel breast implants during the past year, particularly by the moratorium on gel implants which the FDA imposed in January. Under these adverse conditions Mentor achieved an increase of 17 percent in sales of plastic surgery products, testimony to the strength and diversity of the company's product lines. The company's international business was also affected by the FDA moratorium on gel implants, which extended to international sales and shipments. Even so, Mentor's international sales increased by 25 percent over the prior year, passing the $20 million mark. Mentor's urology business was the strongest performer for the year, and accounted for almost half of the company's total sales. Urology implant sales increased 30 percent over the prior year, while urological disposables also reached record levels, resulting in an overall sales increase of 29 percent for the urology business segment. Sales of Mentor's ophthalmology product line increased by 12 percent over the prior year, accounting for 21 percent of the company's total sales. The one business segment which fared poorly for the year was the company's Teknar subsidiary, which manufactures ultrasound imaging equipment for urology and ophthalmology. Manufacturing difficulties in the third and fourth quarters created operating losses for the subsidiary which depressed Mentor's earnings for the second half of the year. These difficulties have largely been resolved, and Teknar's performance is expected to be much improved in the year ahead. Mentor said that its general outlook for the year ahead is quite encouraging. The FDA's decisions on the various breast implant issues have resolved much of the uncertainty which had permeated the business over the past year. Mentor said that the FDA advisory panel concluded that while additional long-term studies are needed to establish with certainty that silicone-gel implants are safe, there is no evidence that they are unsafe, and there us no evidence of a casual relationship between gel-filled breast implants and immune- related or other systemic disorders. The panel also concluded that there is a need for gel implants for breast reconstruction, and in the interests of public health recommended that they continue to be available to women needing breast reconstruction for medical reasons. Mentor said that the breast implant controversy and the associated media circus served to generate considerable litigation alleging harm caused by silicone gel. Now that the FDA panel has found no evidence of harm caused by gel, and determined that gel implants are in fact needed in the interests of public health, the company believes that media interest is likely to diminish, reducing future interest in litigation. Since the ultimate costs of litigation cannot be predicted in advance, it is the company's practice to expense litigation costs as they occur and no provision has been made in the financial statements for future costs of breast implant litigation. The FDA has decided to implement the panel's recommendations regarding the future availability of silicon-gel implants. Long-term studies will continue. In the meantime, because of the confirmed public health need, gel implants will be available for all women who need breast reconstruction for medical reasons. Gel implants will not be available for cosmetic breast augmentation, except on a very limited basis under a controlled clinical study. However, saline-filled (salt water) implants are available as a satisfactory alternative. As the developer and leading manufacturer of saline implants, Mentor is prepared to supply the needs of the cosmetic market. Mentor's Becker expandable gel implant provides the surgeon with the most practical means for breast reconstruction. The company is already filling requests for gel implants under the FDA's "urgent need" program and will shortly begin more general shipments when details of the national breast implant registry and other protocols are finalized. The FDA is now permitting overseas sales of gel implants when requested by the appropriate government authority of each country. Mentor has already resumed shipments to England at the request of the British Department of Health and expects to be shipping to other countries very shortly. Because of the public health need for gel-filled breast implants, both in the United States and abroad, there will be a continuing demand for these products, and Mentor will continue to manufacture them. Accordingly, management has determined that no write-down of assets related to breast implant manufacturing is necessary. Since several competitors have exited the plastic surgery business, there are now only two producers of breast implants in the United States. This is both a great opportunity and a great responsibility for Mentor. The company is looking forward to serving the needs of the market while working with the medical profession and the FDA to increase knowledge and advance the technology of breast implants. The company anticipates that its present sales growth trends will continue through the year ahead and looks forward to improved earnings for the first quarter and throughout the year. Mentor Corp. produces medical and surgical devices for the specialties of urology, plastic surgery and ophthalmology. MENTOR CORP. Consolidated Statements of Income (in thousands, except per share data) For the 3 months ended March 31, 1992 1991 Net sales $22,007 $19,630 Cost and Expenses Cost of sales 8,610 7,405 Selling, general and administrative 10,521 8,632 Research and development 1,665 1,432 Total 20,796 17,469 Operating income 1,211 2,161 Interest expense (593) (602) Interest income 5 221 Other (expense) income (69) (86) Income before income taxes 554 1,694 Income taxes 128 481 Net income $426 $1,213 Net income per share $0.04 $0.11 Dividends per share $0.04 $0.04 Average shares outstanding 10,677 10,965 For the year ended March 31, 1992 1991 Net sales $89,422 $73,793 Costs of Expenses Cost of sales 35,607 28,453 Selling, general and administrative 38,632 29,468 Research and development 6,332 4,833 Total 80,571 62,754 Operating income 8,851 11,039 Interest expense (2,276) (2,206) Interest income 430 1,516 Other (expense) income (299) (1,468) Income before income taxes 6,706 8,881 Income taxes 2,196 2,961 Net income $4,510 $5,920 Net income per share $0.42 $0.54 Dividends per share $0.16 $0.16 Average shares outstanding 10,789 10,934 MENTOR CORP. Condensed Consolidated Statements of Financial Position (Unaudited) (In thousands) March 31, March 31, 1992 1991 Assets Current assets: Cash & marketable securities $6,084 $9,718 Accounts receivable 15,985 15,260 Inventory 21,393 16,226 Prepaid and other assets 2,680 1,684 Total current assets 46,142 42,888 Property, plant and equipment, net 17,264 13,873 Other assets 26,162 27,754 Total assets $89,568 $84,515 Liabilities and Shareholders' Equity Current liabilities $18,197 $14,621 Deferred income taxes (756) 0 Convertible subordinated debentures 24,182 25,700 Long-term debt 218 255 Shareholders' equity 47,727 43,939 Total liabilities and shareholders' equity $89,568 $84,515 -0- 5/18/92 /CONTACT: Christopher J. Conway, chairman of Mentor Corp., 805-681-6000/ (MNTR) CO: Mentor Corp. ST: California IN: MTC SU: ERN
AL-CH -- LA026 -- 1399 05/18/92 14:21 EDT
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|Date:||May 18, 1992|
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