FITCHBURG, MA--(Marketwire - November 14, 2008) - Arrhythmia Research Technology, Inc. (the
"Company") (
AMEX:
HRT) (NYSE Alternext US: HRT) and its wholly owned
subsidiary Micron Products, Inc. ("Micron") reported total revenue of
$5,838,000 and net income of $68,000 for the quarter ended
September 30, 2008 compared to total revenue of $4,458,000 and net income
of $421,000 for the same quarter of 2007. Basic net income per share for
the three months ended September 30, 2008 decreased to $0.03 per share from
$0.16 per share for the same period in 2007.
Total revenue increased by 31% while net income decreased by 84% and
earnings per share decreased by 81% in the quarter ending
September 30, 2008 as compared to the same period in 2007.
For the nine months ended September 30, 2008, total revenue of $17,724,000
and net income of $352,000 was achieved as compared to total revenue of
$14,867,000 and net income of $1,101,000 for the same period in 2007.
Basic net income per share for the nine months ended September 30, 2008 was
$0.13 as compared to $0.41 for the same period in 2007. As previously
reported, the decrease in net income for the nine month period includes
nonrecurring charges of $302,000 or $0.07 per share, net of taxes, related
to acquisition and research and development activities.
Total revenue increased by 19% while net income and earnings per share
decreased by 68% in the nine months ending September 30, 2008 as compared
to the same period in 2007.
James E. Rouse, the Company's President and CEO, commented, "Although total
revenue in the period increased over the same period in 2007, our earnings
were disappointing as we continue to experience extreme margin pressure as
well as increasing costs. The decrease in net income during the quarter
was the result of several factors. We experienced lower than expected
margins in our sensor products as a result of continued price erosion due
to a competitive marketplace as well as volatility in commodity prices
which resulted in higher material costs that we were unable to completely
offset with price increases to customers. The MIT division incurred higher
labor costs to meet customer delivery schedules in addition to capital
equipment investments associated with early stage products. Revenues from
these early stage products are not expected to offset operating costs
positively until 2009. The custom molding and moldmaking divisions
experienced sales decreases as a direct result of the slowing U.S. economy
which can be expected to continue to impact these divisions in the near
term. In addition, a low margin product line introduced by the MIT
division in 2008 has been detrimental to margins than originally projected
due to significantly higher internal costs caused by quality and delivery
problems from a subcontractor. The Company has incurred expenses in 2008,
not present in previous years that have had a severe effect on operating
income in the first nine months. These additional expenses include, but
are not limited to, $110,000 in energy costs, $200,000 in depreciation of
capital equipment and technology upgrades, non-recurring write-downs of
$302,000 related to acquisition and research and development activities,
and approximately $100,000 in costs associated with the preparation for
compliance with Section 404 of Sarbanes Oxley in the form of consulting
fees and additional administrative personnel.
"Our task going forward is to continue efforts to increase sales revenue in
higher margin products while reducing costs and improving efficiencies. At
the same time, all current products, services and programs, including those
in development, are being evaluated for contribution and value to our
overall business strategy and results. Products, services and programs
that are underperforming from an overall contribution standpoint and not
expected to improve will be phased out or discontinued so that the
Company's resources can be put to use in developing those of more strategic
value. We remain cautiously optimistic that our efforts to maximize higher
margin products, services and programs and our investments in capital
equipment, sales and marketing, engineering and information technology
resources for our more diverse offerings will produce improved results and
position our company to capitalize on future growth opportunities."
The Company, through its wholly owned subsidiary Micron Products, Inc.,
manufactures silver plated and non-silver plated conductive resin sensors
and distributes metal snaps used in the manufacture of disposable ECG, EEG,
EMS and TENS electrodes. Micron's NEM division manufactures custom
injection molded products for medical, electronic, industrial and consumer
applications. Micron's MIT division provides end-to-end product life cycle
management through a comprehensive portfolio of value-added services such
as design, engineering, prototyping, manufacturing, machining, assembly and
packaging. Micron's Leominster Tool division provides high end mold design,
manufacturing and precision machining for various industries. The Company's
products also include proprietary signal-averaging electrocardiography
(SAECG) software used in the detection of potentially lethal heart
arrhythmias.
For more information please check our websites:
http://www.arthrt.com
http://www.micronproducts.com
http://www.leominstertool.com
http://www.newenglandmolders.com
http://www.micronintegrated.com
Forward-looking statements made herein are based on current expectations of
the Company that involve a number of risks and uncertainties and should not
be considered as guarantees of future performance. The factors that could
cause actual results to differ materially include: interruptions or
cancellation of existing contracts, impact of competitive products and
pricing, product demand and market acceptance, risks, the presence of
competitors with greater financial resources than the Company, product
development and commercialization risks, changing economic conditions in
developing countries, and an inability to arrange additional debt or equity
financing. More information about factors that potentially could affect
the Company's financial results is included in the Company's filings with
the Securities and Exchange Commission, including its Annual Report on Form
10-K for the year ended December 31, 2007.
Contact Information: Contact:
David A. Garrison
(978) 345-5000
Website: http://www.arthrt.com