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UNITED STATES SURGICAL CORPORATION ANNOUNCES CHANGE IN DISTRIBUTION SYSTEM

 NORWALK, Conn., April 7 /PRNewswire/ -- Leon C. Hirsch, chairman of United States Surgical Corporation (NYSE: USS), in response to growing investor speculation announced today that, "The company will release its earnings on April 15 at 4:15 p.m., and expects to report record sales and strong earnings."
 Mr. Hirsch added that, "For approximately one year, the company has been experimenting with a Just-In-Time (JIT) distributor program. As a result of the positive reaction of its test hospitals, the company accelerated significantly its JIT program during the later part of the first quarter. Many hospitals have reported that JIT can answer their need to reduce inventory levels and the costs connected with handling large inventories. JIT benefits USSC because the distributor handles hospital inventory, providing more time for our technical sales force to support our customers with training programs and other teaching efforts. The new JIT distributor relationship also eliminates the distributors' incentive to push competing brands. Although the short term sales and profit impact of this program will be negative, we believe long term JIT servicing will put us in a more competitive position in dealing with our customers."
 When a hospital becomes part of the USSC JIT program, they identify the distributor they want to service them. The hospital then either sells its USSC inventory to this distributor or uses it up before ordering. USSC ships initial inventory to the distributor; when the hospital approaches minimal inventory, the distributor begins making deliveries on a daily basis. Thereafter, the distributor reorders product from USSC on a monthly basis to replace the product actually used by the hospital during the preceding month.
 Mr. Hirsch added, "The large number of JIT accounts added during the first quarter will result in significantly reduced sales for the second and third quarters of this year as hospitals use up their inventories. The company expects second quarter sales to be flat or slightly down from the prior year's comparable quarter, followed by an improving trend in the third quarter and a strong fourth quarter.
 Despite the expected reduction in revenues short term, the company will continue its aggressive surgical training programs and will expand further its R&D expenditures to ensure future growth. These continuing expenses will result in sharply down second quarter earnings. The company expects sequential earnings improvement in the third quarter and strong improvement in the fourth quarter. EPS for the full year are expected to be down from the prior year's because the major negative aspects of this program should be absorbed in 1993, but 1993 results should be solidly profitable."
 -0- 4/7/93
 /CONTACT: Marianne Scipione, vice president, corporate communications of United States Surgical Corporation, 203-845-1404/
 (USS)


CO: United States Surgical Corporation ST: Connecticut IN: HEA SU:

LD-OS -- NY063 -- 3920 04/07/93 16:42 EDT
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Publication:PR Newswire
Date:Apr 7, 1993
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