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SPACELABS MEDICAL INC. REPORTS RECORD 1992 RESULTS; FOURTH-QUARTER NET INCOME UP 31.6 PERCENT

 REDMOND, Wash., Feb. 2 /PRNewswire/ -- SpaceLabs Medical Inc. (NASDAQ: SLMD) announced today financial results for the fourth quarter and year ended Dec. 25, 1992.
 Net income for the quarter was $5.7 million, or 50 cents per share, a 31.6-percent increase. In 1991, the company earned $4.3 million in the same quarter, or 41 cents per share. Revenue for the quarter was $65.3 million, an increase of 11.3 percent, compared to $58.6 million in the fourth quarter of 1991.
 For the full year, the company earned $17.2 million, or $1.57 per share, compared to net income of $15.8 million, or $1.54 per share in 1991. Excluding non-recurring items in both years, net income increased 28.8 percent to $18.6 million, or $1.70 per share, in 1992, versus $14.4 million, or $1.41 per share, in 1991. The non-recurring items were a $1.4-million (13 cents per share) after-tax charge associated with the 1992 second-quarter spin-off of SpaceLabs Medical from Westmark International and a $1.3-million (13 cents per share) after-tax gain from the sale of a building in the second quarter of 1991.
 Revenue for the year increased 12.1 percent from $225.0 million to $252.2 million. This growth was due primarily to worldwide sales increases of the company's Patient Care Management System (PCMS(TM)) critical care patient monitors. Revenue from international sales in 1992 was 20.5 percent of total revenue compared to 18.9 percent in the prior year. This increase was due in part to its success in obtaining regulatory approval for its PCMS product line in additional overseas countries.
 The company attributed its improved results to the increase in revenue discussed above and to an increase in gross margin percentage to 52.4 percent in 1992, compared to 51.6 percent in 1991, and a reduction in selling, general and administrative expenses as a percentage of revenue to 28.0 percent in 1992 from 29.2 percent in 1991. The effective tax rate was 41.9 percent in 1992, compared to 39.0 percent in 1991. The increase was primarily due to non-recurring expenses in connection with the spin-off from Westmark and additional amortization of goodwill in 1992, neither of which are deductible for tax purposes.
 Referencing the company's performance, Chairman and Chief Executive Officer Carl Lombardi said, "We are very pleased with our financial results for the fourth quarter of 1992 and the year in total, especially in light of the current slowdown in hospital capital equipment spending." Going forward, he emphasized that the company's strategy continues to be the investment in new product development and expansion of its marketing efforts. He added that in 1992 the company invested $28.7 million, or 11.4 percent of revenue, in its research and development program, and that over the past five years, its investment in research and development had averaged 11.4 percent of total revenues. "This commitment has allowed us to introduce 36 new products or product enhancements in the past four years."
 With regard to SpaceLabs Medical's expanding international operations, Lombardi also indicated that in the fourth quarter of 1992, the company formed a new subsidiary operation in Austria, raising to eight the number of countries where SpaceLabs Medical has direct operations.
 SpaceLabs Medical, founded in 1958, is a leading manufacturer of clinical information systems and patient monitoring products.
 SPACELABS MEDICAL INC.
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited, in thousands except per-share data)
 Three Months Twelve Months
 Ended Dec. 25, Dec. 27, Dec. 25, Dec. 27,
 1992 1991 1992 1991
 Revenue $65,275 $58,629 $252,229 $225,026
 Cost of sales 30,435 27,758 119,944 108,949
 Gross margin 34,840 30,87608 65,818
 Research and
 development 7,215 6,903 28,708 24,902
 Stock distribution
 expenses -- -- 1,299 --
 Reorganization charges -- -- 181 --
 Other expense (income),
 net 874 144 1,825 (1,185)
 Total 25,318 23,522 102,621 89,535
 Income from
 operations 9,522 7,349 29,664 26,542
 Interest income
 (expense), net 172 (255) (59) (727)
 Income before income
 taxes 9,694 7,094 29,605 25,815
 Provision for income
 taxes 3,983 2,755 12,410 10,056
 Net income $ 5,711 $ 4,339 $ 17,195 $ 15,759
 Per-Share Data
 Net income $ 0.50 $ 0.41 $ 1.57 $ 1.54
 Weighted average
 common shares and
 equivalents
 outstanding 11,365 10,545 10,948 10,220
 SPACELABS MEDICAL INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited, in thousands)
 Dec. 25, Dec. 27,
 1992 1991
 ASSETS
 Current Assets:
 Cash and cash equivalents $ 38,481 $ 991
 Due from Westmark -- 12,882
 Receivables 55,286 46,463
 Inventories 44,451 38,048
 Prepaid expenses 2,454 1,277
 Deferred income taxes 17,292 14,699
 Total 157,964 114,360
 Property, plant and equipment, net 38,095 38,663
 Other assets 12,521 14,550
 Total $208,580 $167,573
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Current Liabilities:
 Bank overdraft -- $ 2,699
 Short-term borrowings 405 1,989
 Current portion of long-term debt 700 700
 Accounts payable and accrued expenses 27,611 25,795
 Deferred revenue 3,342 3,030
 Taxes on income 1,972 2,729
 Total 34,030 36,942
 Long-term debt 12,600 13,300
 Other long-term liabilities 1,024 1,790
 Shareholders' equity $160,926 $115,541
 Total $208,580 $167,573
 Common shares outstanding 11,119 9,924
 NOTE: Patient Care Management System (PCMS) is a trademark of SpaceLabs Medical Inc.
 -0- 2/2/93
 /CONTACT: Alex Lenke of SpaceLabs Medical, 206-867-7345/
 (SLMD)


CO: SpaceLabs Medical Inc. ST: Washington IN: MTC SU: ERN

SW-LM -- SE008 -- 2062 02/02/93 16:31 EST
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