TOTOWA, N.J., May 8, 2008 (PRIME NEWSWIRE) -- Vital Signs, Inc. (Nasdaq:VITL) today announced sales and earnings for its fiscal second quarter ended March 31, 2008.
Net revenues for the second quarter of fiscal 2008 increased by 11.9% to $58,934,000 compared with $52,649,000 in the comparable period last year.
Net income increased by 15.9% to $9,970,000 for the second quarter of fiscal 2008 compared with $8,601,000 for the second quarter of fiscal 2007. Earnings per diluted share increased by 15.4% to $0.75 for the second quarter of fiscal 2008 compared with $0.65 for the prior-year quarter.
The Company continues to be a strong cash generator. Cash provided from operating activities for the six months ended March 31, 2008 was $20.1 million. On May 6, 2008, Vital Signs' Board of Directors increased the quarterly dividend to $0.11 per share. The dividend is payable on May 28, 2008 to shareholders of record on May 21, 2008.
Following are the net revenues by business segment for the second quarter of fiscal 2008 compared with the second quarter of fiscal 2007.
($ Thousands) NET REVENUES BY BUSINESS SEGMENT
------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31,
------------------------------------
2008 2007 % CHANGE
------------------------------------
Anesthesia $ 19,816 $ 18,871 5.0%
Respiratory/critical care 12,304 11,950 3.0
Sleep/ventilation 16,634 12,154 36.9
Interventional cardiology/
radiology 7,229 6,951 4.0
Pharmaceutical technology 2,951 2,723 8.4
------------------------------------
Net Revenues $ 58,934 $ 52,649 11.9%
====================================
Anesthesia net revenues increased by 5.0% due primarily to growth in sales of Limb-OTM, the Company's patented anesthesia circuit, and growth in sales of Infusable(r), the Company's patented pressure infusor system. Sleep/ventilation net revenues increased by 36.9% due to sales growth in the iSleep 20iTM intelligent CPAP and the Vivo(tm) 40 bi-level ventilator as well as from two acquisitions at Sleep Services of America in the second half of the prior year.
Breas, the Company's Swedish-based manufacturer of sleep and ventilation products, entered into an agreement with Hamilton Medical, Inc. to distribute the Vivo product line in the U.S. hospital market. Hamilton Medical, Inc. is the U.S. subsidiary of Hamilton Medical AG, a leader in medical ventilation. The agreement is expected to provide approximately $800,000 in Breas product sales in the U.S. during the balance of fiscal 2008.
The table below shows gross profit margins for each of the Company's segments. Total gross profit margin increased to 53.9% in the second quarter of fiscal 2008 from 52.0% in the same quarter in the prior year.
GROSS PROFIT MARGIN
BY BUSINESS SEGMENT
-------------------------------
FOR THE THREE MONTHS
ENDED MARCH 31,
-------------------------------
2008 2007
-------------------------------
Anesthesia 56.1 % 52.2 %
Respiratory/critical care 56.9 53.8
Sleep/ventilation 51.7 52.9
Interventional cardiology/
radiology 55.7 55.9
Pharmaceutical technologies 34.3 27.8
-------------------------------
Total gross profit margin 53.9 % 52.0 %
Net revenues for the first six months of fiscal 2008 increased by 12.0% to $112,373,000 compared with $100,366,000 in the comparable period last year.
For the six month period ended March 31, 2008, net income increased by 13.0% to $17,969,000 compared with $15,896,000 for the first half of fiscal 2007. Diluted earnings per share increased by 12.5% to $1.35 for the six month period ended March 31, 2008 compared with $1.20 for the six month period ended March 31, 2007.
Following are the net revenues by business segment for the six months ended March 31, 2008 and 2007.
($ Thousands) NET REVENUES BY BUSINESS SEGMENT
------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31,
------------------------------------
2008 2007 % CHANGE
------------------------------------
Anesthesia $39,259 $36,577 7.3 %
Respiratory/critical care 23,205 23,252 (0.2)
Sleep/ventilation 31,356 22,425 39.8
Interventional cardiology/
radiology 12,836 12,839 0.0
Pharmaceutical technologies 5,717 5,273 8.4
------------------------------------
Net Revenues $112,373 $100,366 12.0 %
====================================
Terry Wall, CEO of Vital Signs, commented, "Breas continued to demonstrate exceptional growth in Europe with our iSleep and Vivo product lines. In addition to the strong growth in Europe, we have reached agreement with Hamilton Medical to sell and service our Vivo 30 and 40 bi-level ventilation line in the U.S. The weak U.S. dollar has made it unattractive to import Breas' Swedish-manufactured CPAP product line; therefore, we are exploring having our CPAP product line manufactured in China."
Mr. Wall added, "Our three new anesthesia products are progressing as planned, and we should begin seeing their impact in the third and fourth quarters of this year. enFlow(r) is enjoying a particularly strong start as sales are already at an annual run rate exceeding $1 million. The second quarter performance also reflects the continued success of our cost savings initiatives, as gross margins improved by 190 basis points primarily due to lower materials costs for face masks and non-latex breathing bags. We are confident that we can continue to improve profitability."
Based on the improved gross profit margins, the Company's fully diluted earnings per share guidance for fiscal 2008 has increased to between $2.82 and $2.87 per share.
All non-historical statements in this press release, including Vital Signs' guidance with respect to sales by Breas and earnings per share as well as statements regarding the manufacture of the Company's CPAP products, sales of new anesthesia products, gross profit, and operating margins constitute Forward Looking Statements under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from such statements as a result of a variety of risks and uncertainties, including unanticipated delays in bringing products to market, regulatory approval of new products, market conditions, and competitive responses as well as other factors referred to by Vital Signs in its Annual Report on Form 10-K for the year ended September 30, 2007.
Vital Signs, Inc. and its subsidiaries design, manufacture, and market primarily single-patient-use medical products for the anesthesia and respiratory/critical care markets and has achieved the number one market share position in the U.S. for five of its major product categories. Vital Signs also provides diagnostic services and therapeutic devices for the treatment of obstructive sleep apnea. Vital Signs is ISO 13485 certified and has CE Mark approval for its products. In 2007, Forbes Magazine named Vital Signs, Inc. as one of the "200 Best Small Companies in America" based on financial criteria.
VITAL SIGNS, INC.
FINANCIAL HIGHLIGHTS
STATEMENT OF INCOME
-------------------
(In Thousands, Except Per Share Amounts)
--------------------------------------
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Gross revenues $ 77,947 $ 71,559 $149,628 $136,983
Rebates (18,603) (17,673) (36,582) (34,260)
Other deductions (410) (1,237) (673) (2,357)
-------- -------- -------- --------
Net revenues 58,934 52,649 112,373 100,366
Cost of goods sold and
services provided 27,176 25,295 53,212 48,805
-------- -------- -------- --------
Gross Profit 31,758 27,354 59,161 51,561
Expenses:
Selling, general and
administrative 15,916 13,664 30,578 26,501
Research and
development 2,495 1,754 4,896 3,598
Restructuring charge -- -- -- --
Interest and other
(income)/expense, net (1,910) (1,414) (3,828) (2,713)
-------- -------- -------- --------
Income from continuing
operations
Before income taxes and
minority interest 15,257 13,350 27,515 24,175
Provision for income
taxes 5,162 4,475 9,255 7,765
-------- -------- -------- --------
Income from continuing
operations before
minority interest 10,095 8,875 18,260 16,410
Minority interest 209 254 403 496
-------- -------- -------- --------
Income from continuing
operations 9,886 8,621 17,857 15,914
(Loss) Income from
discontinued
operations, net 84 (20) 112 (18)
-------- -------- -------- --------
Net income $ 9,970 $ 8,601 $ 17,969 $ 15,896
======== ======== ======== ========
Earnings (loss) per
common share:
Basic:
Income per share from
continuing operations $ 0.74 $ 0.65 $ 1.34 $ 1.20
Discontinued operations 0.01 -- 0.01 --
-------- -------- -------- --------
Net earnings $ 0.75 $ 0.65 $ 1.35 $ 1.20
======== ======== ======== ========
Diluted:
Income per share from
continuing operations $ 0.74 $ 0.65 $ 1.34 $ 1.20
Discontinued operations 0.01 -- 0.01 --
-------- -------- -------- --------
Net earnings $ 0.75 $ 0.65 $ 1.35 $ 1.20
======== ======== ======== ========
Basic weighted average
number of shares 13,292 13,220 13,293 13,219
Diluted weighted average
number of shares 13,313 13,255 13,320 13,271
VITAL SIGNS, INC.
FINANCIAL HIGHLIGHTS
BALANCE SHEET SUMMARY
---------------------
(In thousands of dollars) March 31, September 30,
2008 2007
------------- -------------
Unaudited Audited
Cash and cash equivalents $ 113,258 $ 48,920
Short-term investments 3,725 86,671
Accounts receivable 38,953 36,915
inventory 22,596 19,778
Other current assets 10,608 8,982
------------- -------------
Current assets $ 189,140 $ 201,266
Long-term investments 29,885 --
Other non-current assets 130,937 129,670
------------- -------------
Total assets $ 349,962 $ 330,944
============= =============
Current liabilities $ 18,345 $ 17,826
Non-current liabilities 2,368 --
------------- -------------
Total Liabilities $ 20,713 $ 18,312
Non-controlling share
in subsidiary 7,111 6,051
Shareholders equity 322,138 306,581
------------- -------------
Total liabilities and
shareholders equity $ 349,962 $ 330,944
============= =============