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QUEST MEDICAL INC. SECOND QUARTER NET EARNINGS ARE $.12 PER SHARE VS. $.09 PER SHARE

 DALLAS, July 30 /PRNewswire/ -- Quest Medical Inc. (NASDAQ: QMED), a manufacturer of proprietary disposable products for the health care industry, announced today that net earnings for the second quarter ended June 30, 1993, were $635,000, or $.12 per share, including a pre-tax gain of approximately $524,000 from a litigation settlement, on revenue of $3,447,000. This compares to net earnings of $471,000, or $.09 per share, on revenue of $3,451,000 for last year's second quarter.
 President Thomas C. Thompson noted that second quarter sales and gross profit were unchanged from the prior year due to continuing sluggish demand for medical devices by the company's hospital customers. He said that a scheduled increase in R&D expense to support development of Quest's proprietary myocardial protection system to protect the heart during open heart surgery, as well as higher marketing expenses associated with the company's expanded product line, led to a decline in operating earnings for the period.
 "Development of the myocardial protection system is proceeding as planned, and we expect to have prototypes available late this year," Thompson said.
 On May 13, 1993, Quest entered into a settlement agreement relating to its litigation against Kirschner Medical Corp. and certain related parties. Quest received approximately $400,000 in cash after expenses and 100,000 warrants to purchase Kirschner Medical common stock for three years at an exercise price of $6.00 per share.
 For the six months ended June 30, 1993, net earnings were $856,000, or $.16 per share, compared to $881,000, or $.16 per share, for the first half of 1992. Revenue was $6,749,000 vs. $6,743,000 for the prior year.
 Quest Medical Inc. develops, manufactures, and markets proprietary disposable products used in cardiovascular surgery, oncology, anesthesiology, and obstetrics.
 QUEST MEDICAL INC.
 Consolidated Statement of Earnings
 (Unaudited)
 Three Months Ended
 June 30,
 1993 1992
 Net revenue $3,447,000 $3,451,000
 Cost of revenue 1,733,000 1,725,000
 Gross profit 1,714,000 1,726,000
 Operating expenses:
 General and administrative 601,000 583,000
 Marketing 507,000 422,000
 Research & development 376,000 291,000
 Total 1,484,000 1,296,000
 Earnings
 from operations 230,000 430,000
 Other income (expense):
 Gain on sale of
 marketable securities 57,000 26,000
 Litigation settlement 524,000 --
 Interest expense (20,000) (30,000)
 Interest and other income 93,000 110,000
 Earnings from
 continuing operations
 before income taxes 884,000 536,000
 Income taxes 249,000 65,000
 Net earnings $635,000 $471,000
 Earnings per common &
 common equivalent share:
 Primary $.12 $.09
 Fully diluted $.12 $.09
 Weighted average number of
 common & common equivalent
 shares outstanding:
 Primary 5,431,847 5,486,773
 Fully Diluted 5,510,589 5,486,773
 QUEST MEDICAL INC.
 Consolidated Statement of Earnings
 (Unaudited)
 Six Months Ended
 June 30,
 1993 1992
 Net revenue $6,749,000 $6,743,000
 Cost of revenue 3,466,000 3,361,000
 Gross profit 3,283,000 3,382,000
 Operating expenses:
 General and administrative 1,221,000 1,194,000
 Marketing 969,000 785,000
 Research & development 698,000 567,000
 Total 2,888,000 2,546,000
 Earnings
 from operations 395,000 836,000
 Other income (expense):
 Gain on sale of
 marketable securities 108,000 19,000
 Litigation settlement 524,000 ---
 Interest expense (41,000) (63,000)
 Interest and other income 206,000 232,000
 Earnings from
 continuing operations
 before income taxes 1,192,000 1,024,000
 Income taxes 336,000 143,000
 Net earnings $856,000 $881,000
 Earnings per common &
 common equivalent share:
 Primary $.16 $.16
 Fully diluted $.16 $.16
 Weighted average number of
 common & common equivalent
 shares outstanding:
 Primary 5,452,812 5,463,318
 Fully diluted 5,492,183 5,463,318
 -0- 7/30/93
 /CONTACT: F. Robert Merrill III, VP-Finance of Quest Medical, 214-387-2740/
 (QMED)


CO: Quest Medical Inc. ST: Texas IN: MTC SU: ERN

EH-JB -- LA015 -- 7827 07/30/93 14:33 EDT
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Publication:PR Newswire
Date:Jul 30, 1993
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