CLARENCE, N.Y., July 31, 2002 (PRIMEZONE) -- Wilson Greatbatch Technologies, Inc. ("WGT" or "the Company") (NYSE:GB), a leading developer and manufacturer of power sources and components used in pacemakers and other implantable medical devices and specialty batteries for non-medical applications, today reported record revenues and net income for the second quarter of 2002.
2nd Quarter Revenues and Net Income
Total revenues were a record $38.3 million, an increase of 16% over the same quarter of last year. The total revenue growth over the same quarter of last year comprised an increase of 22% for the medical technology product lines and a decrease of 5% for commercial power sources. Net income was a record $3.6 million, or $0.17 per diluted share, an increase of 35% over the same quarter of last year. Effective January 1, 2002, as required under new accounting rules, the Company stopped amortizing goodwill and certain other intangible assets, which decreased amortization expense by $1.0 million and accounted for a $0.03 increase in earnings per diluted share for the quarter.
Revenue Summary
The following table summarizes the Company's revenues by product line for the 2nd Quarters of 2002 and 2001 (in thousands):
2002 2001
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2nd Qtr 2nd Qtr
------- -------
Product Lines
-------------
Medical Technology:
Medical Batteries:
Pacemakers $ 5,185 $ 6,673
ICDs 7,188 5,214
Other 675 192
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Total Medical Batteries 13,048 12,079
Capacitors 5,550 4,348
Components 13,040 9,505
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Total Medical Technology 31,638 25,932
Commercial Power Sources 6,690 7,055
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Total Revenues $38,328 $32,987
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Commenting on the reported revenues, Edward F. Voboril, the Company's Chairman, President and Chief Executive Officer said, "Overall, we are pleased with our second quarter revenues, which were a record and substantially in line with our internal expectations. As I stated during April, we expected the first half of 2002 to be challenging due to softness in certain markets. However, we experienced continued strong growth in our Implantable Cardioverter Defibrillator (ICD) batteries and components product lines. Sales of ICD batteries grew during the quarter by 38% compared to last year. The Cardiac Rhythm Management (CRM) market demand for high-energy devices remains very robust. Furthermore, medical component sales increased by 37% over the prior year second quarter, driven largely by the June 2001 acquisition of Greatbatch-Sierra."
Profit & Loss Summary
The following table summarizes selected profit & loss (P&L) statement amounts for the 2nd Quarters in 2002 and 2001 (in thousands):
2002 2001
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2nd Qtr 2nd Qtr
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Selected P&L Amounts
--------------------
Gross Profit $15,599 $14,609
Gross Margin 41% 44%
SG&A Expenses $ 5,354 $ 4,534
SG&A Expenses as % of Revenues 14% 14%
RD&E Expenses $ 3,390 $ 3,371
RD&E Expenses as % of Revenues 9% 10%
"Our gross margin declined during the 2nd quarter by three percentage points from the same quarter of last year. The decline resulted primarily from production issues at our Greatbatch-Sierra business, which manufactures filtered feedthroughs. We have invested heavily in management time addressing these issues, and we believe that most of these matters have been resolved and that future margins for filtered feedthroughs will increase to their target levels, which are similar to those that we generate in other product lines," Voboril continued.
"While our gross margin declined, we paid close attention to our operating costs and expenses. We held our selling, general and administrative (SG&A) expenses to 14% of total revenue flat with the same quarter of last year. Our research, development and engineering (RD&E) expenses were 9% of total revenue, a decline of one percentage point over the same quarter of last year. As a result, our net income reached a record $3.6 million for the quarter," Voboril added.
Outlook for Remainder of 2002
"Our outlook for the remainder of the year is positive. We have strong momentum with respect to order flow heading into the third quarter. We also recently completed the acquisition of Globe Tool and Manufacturing, and its revenues will be consolidated with the Company's revenues subsequent to its July 9, 2002 acquisition date. We currently anticipate total revenues for 2002 to be in the range of $160 to $165 million and diluted earnings per share will be in the range of $0.75 to $0.80," Voboril concluded.
About Wilson Greatbatch Technologies
Wilson Greatbatch Technologies, Inc. (NYSE:GB) is a leading developer and manufacturer of power sources, wet tantalum capacitors, cases and precision engineered components and subassemblies used in implantable medical devices and other demanding applications. The Company has operations in New York, Maryland, Massachusetts, Nevada and Minnesota. Additional information about the Company is available at www.greatbatch.com.
Conference Call
Mr. Voboril and Lawrence P. Reinhold, the Company's Executive Vice President and Chief Financial Officer, will discuss second quarter 2002 financial results in a conference call scheduled for today, Wednesday July 31, at 4:30 p.m. EDT. Investors will have the opportunity to listen to the conference call on the Internet at www.vcall.com/Eventpage.asp?ID=81945. To listen to the conference call via the Internet, please go to the website at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available two hours after the call and will remain available on the Internet until the next conference call.
Forward-Looking Statements
Some of the statements in this press release and other written and oral statements made from time to time by the company and its representatives are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, and involve a number of risks and uncertainties. These statements can be identified by terminology such as "may", "will", "should", "could", "expects", "intends", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are based on the company's current expectations. The company's actual results could differ materially from those stated or implied in such forward-looking statements. Risks and uncertainties that could cause actual results to differ materially from those stated or implied by such forward-looking statements include, among others, the following matters affecting the Company: dependence upon a limited number of customers; product obsolescence; inability to market current or future products; pricing pressure from customers; reliance on third party suppliers for raw materials; products and subcomponents; fluctuating operating results; inability to maintain high quality standards for our products; challenges to our intellectual property rights; product liability claims; inability to successfully consummate and integrate acquisitions; unsuccessful expansion into new markets; competition; inability to obtain licenses to key technology; regulatory changes or consolidation in the healthcare industry; and other risks and uncertainties described in the company's Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission. The company assumes no obligation to update forward-looking information in this press release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.
Wilson Greatbatch Technologies, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands except per share amounts)
Three Months Ended Six Months Ended
------------------- -------------------
June 28, June 29, June 28, June 29,
2002 2001 2002 2001
------- ------- ------- -------
Revenues $38,328 $32,987 $74,631 $62,558
Cost of goods sold 22,729 18,378 43,080 33,938
------- ------- ------- -------
Gross profit 15,599 14,609 31,551 28,620
Gross margin 41% 44% 42% 46%
Selling, general
and administrative
expenses 5,354 4,534 11,010 8,314
Research, development
and engineering costs,
net 3,390 3,371 7,044 6,559
Intangible amortization 886 1,711 1,772 3,350
------- ------- ------- -------
Operating income 5,969 4,993 11,725 10,397
Interest expense 713 742 1,604 1,470
Interest income (135) (14) (280) (30)
Other expense, net 38 26 65 85
------- ------- ------- -------
Income before income
taxes and extraordinary
loss 5,353 4,239 10,336 8,872
Provision for income
taxes 1,767 1,590 3,411 3,304
------- ------- ------- -------
Income before
extraordinary loss 3,586 2,649 6,925 5,568
Extraordinary loss on
retirement of debt,
net of tax 0 0 0 (2,994)
------- ------- ------- -------
Net income $ 3,586 $ 2,649 $ 6,925 $ 2,574
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Basic earnings (loss)
per share:
Income before
extraordinary loss $ 0.17 $ 0.14 $ 0.33 $ 0.30
Extraordinary loss
on retirement of debt 0.00 0.00 0.00 (0.16)
------- ------- ------- -------
Net income $ 0.17 $ 0.14 $ 0.33 $ 0.14
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Diluted earnings (loss)
per share:
Income before
extraordinary loss $ 0.17 $ 0.14 $ 0.33 $ 0.29
Extraordinary loss
on retirement of debt 0.00 0.00 0.00 (0.16)
------- ------- ------- -------
Net income $ 0.17 $ 0.14 $ 0.33 $ 0.13
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Weighted average shares
outstanding
Basic 20,928 18,713 20,900 18,713
Diluted 21,255 19,102 21,261 19,081
Wilson Greatbatch Technologies, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
June 28, December 28,
2002 2001
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ASSETS
Current assets:
Cash and cash equivalents $ 40,302 $ 43,272
Accounts receivable, net 18,834 17,373
Inventories 30,789 29,026
Prepaid expenses and other current assets 1,168 2,316
Deferred income taxes 2,888 2,888
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Total current assets 93,981 94,875
Property, plant and equipment, net 48,266 44,149
Intangible assets, net 135,003 137,135
Deferred income taxes 5,417 5,417
Other assets 3,030 1,944
-------- --------
Total assets $285,697 $283,520
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,211 $ 6,553
Accrued expenses and other
current liabilities 11,652 13,721
Current maturities of long-term
obligations 13,500 13,005
-------- --------
Total current liabilities 28,363 33,279
Long-term obligations 57,897 61,397
-------- --------
Total liabilities 86,260 94,676
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Stockholders' equity:
Common stock 21 21
Capital in excess of par value 203,214 200,880
Accumulated deficit (2,010) (8,935)
Treasury stock, at cost (1,788) (3,122)
-------- --------
Total stockholders' equity 199,437 188,844
-------- --------
Total liabilities and stockholders' equity $285,697 $283,520
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