MONTVALE, N.J., Aug. 11, 2008 (PRIME NEWSWIRE) -- Datascope Corp. (Nasdaq:DSCP) today reported sales in the fourth quarter of fiscal 2008 of $63.3 million, 12% higher than the fourth quarter last year. Favorable foreign currency translation increased sales by $1.9 million.
GAAP net earnings from continuing operations* in the fourth quarter of fiscal 2008 were $7.6 million, or $0.48 per diluted share. GAAP net earnings from continuing operations last year were $2.3 million, or $0.15 per diluted share, after deducting after-tax special items of $3.5 million or $0.23 per diluted share.
Non-GAAP net earnings from continuing operations in the fourth quarter increased 30% to $7.6 million, or $0.48 per diluted share from $5.9 million, or $0.38 per diluted share last year. Higher non-GAAP earnings from continuing operations in the fourth quarter reflect strong sales growth in both Cardiac Assist and Vascular Products.
Lawrence Saper, Chairman & CEO, said, "Our growing operating results in the fourth quarter and fiscal year 2008 highlight the strength and consistency of our continuing business. We began reporting operating results of continuing business in the third quarter upon the sale of our patient monitoring business. The results of operations were further improved beginning in the fourth quarter by the shift of our IP business to discontinued operations because of the sale of our vascular closure and collagen manufacturing assets to St. Jude Medical, announced on August 7, 2008. "
Commenting on the Company's fourth quarter results, Dr. Antonino Laudani, Datascope's COO, stated, "We are very pleased but not surprised by the very positive results of the fourth quarter since those are in line with what we have seen in the third quarter and represent the results of several factors: a) undivided focus on our cardiovascular business, and b) the implementation of our plans to support the growth of counterpulsation in the United States and in the rest of the world. Our high-margin counterpulsation balloon product line grew in all major markets including the United States. Our vascular graft line performed very well as we continue to gain market share and expand our presence in developing markets."
For the fiscal year ended June 30, 2008, sales rose 8% to $230.9 million, compared to $213.0 million last year, with increases in all continuing businesses. Favorable foreign exchange translation increased sales by $5.4 million in fiscal 2008.
GAAP net earnings from continuing operations were $33.8 million, or $2.16 per diluted share, compared to $18.7 million, or $1.22 per diluted share last year, including special charges and income in both years.
Non-GAAP net earnings from continuing operations were $26.0 million, or $1.66 per diluted share, versus $23.0 million, or $1.49 per diluted share last year, excluding special charges and income in both years.
The Company anticipates another strong quarter in the first quarter of fiscal 2009, with projected sales growth in excess of 13% above last year's first quarter. For full fiscal 2009, the Company projects sales growth in excess of 8%.
The Company projects GAAP diluted earnings per share from continuing operations in the first quarter of fiscal 2009 to be more than $0.30, and GAAP diluted earnings per share from continuing operations in fiscal 2009 to be more than $1.92. Operating results for the first seven months of fiscal 2009 will reflect the burden of approximately $2.4 million in fees associated with the transition of the manufacturing of the Cardiac Assist balloon pumps back to Datascope. The fee started at the time of the sale of the Patient Monitoring business.
Fourth Quarter Sales Discussion
Cardiac Assist Products: Fourth quarter sales increased 10% to a record $51.2 million, due to strong worldwide IAB growth of 16%, reflecting continued growth in international markets, and 7% growth in the United States. This marks the second straight quarter of strong sales growth in the United States, including growth in all seven direct sales regions. As with the continued growth of IAB sales in the European market, we believe that renewed IAB sales growth in the United States stems from a reorganized and expanded direct sales force that is focused on the clinical benefits of IAB use, and has led to increasing use in cardiac catheterization and open-heart surgical procedures. Sales of the Safeguard device increased 25% over the fourth quarter last year, and Safeguard has also increased our presence in the cardiac catheterization lab and given our sales representatives additional opportunities to promote the use of IABs. Sales of balloon pumps were flat compared to a record fourth quarter in the year-ago period which benefited from the introduction of the CS300(tm) pump. Favorable foreign currency translation contributed $1.1 million to Cardiac Assist sales in the fourth quarter. Sales in Japan were also strong. The combination of Datascope K.K., our new subsidiary in Japan and our new distributor, USCI Holdings Ltd., has increased our market presence and will give us faster access to the Japanese market. Datascope Japan K.K. is responsible for import, product service, sales support and product surveillance of the IABP business. USCI Holdings Ltd., the Company's new exclusive distributor, is responsible for sales distribution throughout Japan. Vascular Products: Fourth quarter sales rose 23% to a record $11.6 million, due to an increase of 45% in peripheral vascular stent products, which now represent 16% of total vascular sales and an 18% increase in vascular graft sales primarily reflecting higher sales in international markets and increased market share. Favorable foreign currency translation increased sales by $0.8 million in the fourth quarter.
Acquisition of Peripheral Vascular Stent Business of the Sorin Group
On June 11, 2008, the Company announced that it exercised its option to acquire the Peripheral Vascular Stent business of the Sorin Group of Milan. The acquisition follows Datascope's successful experience as exclusive distributor of the Sorin peripheral stent product line in Europe, in which sales have grown rapidly since the product launch in January 2007. In the fourth quarter of fiscal 2008, sales grew 45% above last year to an annualized level of $7.6 million. With the acquisition, Datascope now gains the opportunity to market the product line throughout the world. Datascope estimates the worldwide market at $800 million annually, of which $200 million is in Europe, $500 million in the United States and $40 million in Japan.
Discontinued Operations; Sale of the PM Business
Effective May 1, 2008, the Company sold its PM business to Mindray Medical International Limited. Datascope received approximately $209 million in cash at the closing and retained approximately $30 million of receivables generated by the PM business. The after tax gain recognized on the sale of the PM business was approximately $77 million and is reflected in net gain on sale of discontinued operations in the Condensed Consolidated Statements of Earnings.
Discontinued Operations; Interventional Products
As announced on August 7, 2008, the Company completed the sale of assets of its vascular closure business, including all assets related to its VasoSeal(r), On-Site(tm), and X-Site(r) devices and its collagen operation, to St. Jude Medical, Inc. (NYSE:STJ). Datascope received $21.0 million in cash at closing, and will receive an additional $3.0 million upon the expiration of an 18 month indemnification period. This transaction completes Datascope's previously announced plan to exit the vascular closure market and phase out its Interventional Products business. In February 2007, Datascope sold its ProGuide chronic dialysis catheter product line to Merit Medical Systems, Inc., for $3.0 million plus a royalty on future ProGuide sales. The operating results of the IP business are included in net earnings from discontinued operations in the Condensed Consolidated Statements of Earnings.
Conference Call
Datascope will hold a conference call and webcast to discuss its fourth quarter and full fiscal 2008 financial results on August 12, 2008, at 12:00 noon (ET). To access the conference call, please dial (888) 631-5927. You may also access the webcast of the conference call on the Company's website, www.datascope.com.
Non-GAAP Measures
Datascope prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP. In an effort to provide investors with additional information regarding the Company's results and to provide a meaningful period-over-period comparison of the Company's financial performance, the Company uses non-GAAP financial measures as defined by the Securities and Exchange Commission. The differences between U.S. GAAP and non-GAAP financial measures are reconciled below. In presenting comparable results, the Company discloses non-GAAP financial measures when it believes such measures will be useful to investors, analysts and other interested parties in evaluating the Company's underlying business performance on a comparable basis with past and future reported earnings per share. Management uses the non-GAAP financial measures to evaluate the Company's financial performance against internal budgets and targets. Importantly, the Company believes non-GAAP financial measures should be considered in addition to, and not in lieu of, U.S. GAAP financial measures. These non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. The Company's non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.
About Datascope Corp.
Datascope Corp. is the global leader of intra-aortic balloon counterpulsation and a diversified cardiovascular device company that develops, manufactures and markets proprietary products for clinical health care markets in interventional cardiology, cardiovascular and vascular surgery, and critical care. The Company's products are sold throughout the world through direct sales representatives and independent distributors. Founded in 1964, Datascope is headquartered in Montvale, New Jersey. For news releases, webcasts and other Company information please visit Datascope's website, www.datascope.com.
The Datascope Corp. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3953
Safe Harbor Statement
The statements in this press release that are not strictly historical are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbors provided therein. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Many of these risks cannot be predicted or quantified and are at least partly outside our control, including the risk that, we will not continue to gain market share and expand our presence in developing markets for our vascular graft product line, as well as other risks detailed in documents filed by Datascope with the Securities and Exchange Commission. The forward-looking statements included in this press release are made only as of the date of this report and the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
* Since Datascope sold its Patient Monitoring ("PM") business
effective May 1, 2008, and its Interventional Products ("IP')
business effective August 6, 2008, operating results of the PM and
IP businesses are shown in net earnings from discontinued
operations in the Condensed Consolidated Statements of Earnings.
Datascope's continuing operations are primarily comprised of the
Cardiac Assist and InterVascular businesses.
Datascope Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)
June 30, June 30,
2008 2007
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 22,106 $ 15,780
Short-term investments 228,106 23,681
Accounts receivable less allowance for
doubtful accounts of $2,777 and $2,603 65,178 85,553
Inventories 31,030 59,455
Prepaid income taxes -- 2,293
Prepaid expenses and other current assets 16,559 11,167
Current deferred taxes 3,203 7,238
Current assets of discontinued operations 5,773 --
--------- ---------
Total current assets 371,955 205,167
Property, plant and equipment, net of
accumulated depreciation of $73,563 and
$100,760 49,710 82,812
Long-term investments 22,846 14,346
Intangible assets, net 15,873 26,074
Goodwill 4,575 12,860
Other assets 44,548 34,897
Noncurrent assets of discontinued operations 15,666 --
--------- ---------
$ 525,173 $ 376,156
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 16,951 $ 18,386
Dividends payable -- 1,532
Accrued expenses 13,488 16,129
Accrued compensation 14,377 17,422
Deferred revenue 2,728 4,380
Income taxes payable 45,360 --
Current liabilities of discontinued
operations 500 --
--------- ---------
Total current liabilities 93,404 57,849
Other liabilities 26,026 25,220
Other liabilities of discontinued operations 459 --
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $1.00 per share:
Authorized 5,000 shares; Issued, none -- --
Common stock, par value $0.01 per share:
Authorized, 45,000 shares;
Issued, 19,401 and 18,867 shares 194 189
Additional paid-in capital 126,876 109,384
Treasury stock at cost, 3,567 and 3,521
shares (108,897) (107,037)
Retained earnings 376,857 294,765
Accumulated other comprehensive income
(loss):
Cumulative translation adjustments 10,043 1,899
Benefit plan adjustments (55) (5,827)
Unrealized gain (loss) on available-for-sale
securities 266 (286)
--------- ---------
Total stockholders' equity 405,284 293,087
--------- ---------
$ 525,173 $ 376,156
========= =========
Datascope Corp. and Subsidiaries
Condensed Consolidated Statements of Earnings (GAAP)
(In thousands, except per share amounts)
(Unaudited)
Year Ended Three Months Ended
June 30, June 30,
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
Net sales $ 230,915 $ 212,991 $ 63,335 $ 56,590
Cost of sales 80,013 74,148 22,004 19,454
--------- --------- --------- ---------
Gross profit 150,902 138,843 41,331 37,136
Operating expenses:
Research and development
expenses 21,079 19,901 4,888 4,873
Selling, general and
administrative expenses 92,617 87,424 23,727 23,640
Special items -- 8,737 -- 5,349
--------- --------- --------- ---------
113,696 116,062 28,615 33,862
--------- --------- --------- ---------
Operating earnings 37,206 22,781 12,716 3,274
Other (income) expense:
Interest, net (2,614) (2,443) (1,016) (560)
Dividend income -- (196) -- --
Gain on sale of
investment (13,173) (1,273) -- --
Other, net 1,727 737 1,524 265
--------- --------- --------- ---------
(14,060) (3,175) 508 (295)
--------- --------- --------- ---------
Earnings from continuing
operations before income
taxes 51,266 25,956 12,208 3,569
Income taxes 17,488 7,244 4,628 1,262
--------- --------- --------- ---------
Net earnings from
continuing operations 33,778 18,712 7,580 2,307
Net loss from
discontinued operations (4,207) (1,247) (5,979) (571)
Net gain on sale of
discontinued operations 76,998 -- 76,998 --
--------- --------- --------- ---------
Net earnings $ 106,569 $ 17,465 $ 78,599 $ 1,736
========= ========= ========= =========
Net earnings (loss) per
share, basic:
Continuing operations $ 2.19 $ 1.23 $ 0.48 $ 0.15
Discontinued operations (0.27) (0.08) (0.38) (0.04)
Gain on sale of
discontinued operations 4.98 -- 4.92 --
--------- --------- --------- ---------
Net earnings $ 6.90 $ 1.15 $ 5.02 $ 0.11
========= ========= ========= =========
Weighted average number
of common shares
outstanding, basic 15,441 15,244 15,656 15,307
========= ========= ========= =========
Net earnings (loss) per
share, diluted:
Continuing operations $ 2.16 $ 1.22 $ 0.48 $ 0.15
Discontinued operations (0.27) (0.08) (0.38) (0.04)
Gain on sale of
discontinued operations 4.93 -- 4.85 --
--------- --------- --------- ---------
Net earnings $ 6.82 $ 1.14 $ 4.95 $ 0.11
========= ========= ========= =========
Weighted average number
of common shares
outstanding, diluted 15,617 15,387 15,885 15,484
========= ========= ========= =========
Datascope Corp. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)
Year Ended Three Months Ended
June 30, June 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------
Net earnings from
continuing operations
as reported $ 33,778 $ 18,712 $ 7,580 $ 2,307
Non-GAAP adjustments, net
of tax:
Special items -- 5,705 -- 3,546
Gain on sale of
investment (7,791) (1,273) -- --
Special dividend income -- (170) -- --
-------- -------- -------- --------
Net earnings from
continuing operations as
adjusted (non-GAAP) $ 25,987 $ 22,974 $ 7,580 $ 5,853
======== ======== ======== ========
Earnings per share from
continuing operations,
diluted, as reported $ 2.16 $ 1.22 $ 0.48 $ 0.15
Non-GAAP adjustments, net
of tax:
Special charges -- 0.36 -- 0.23
Gain on sale of
investment (0.50) (0.08) -- --
Special dividend income -- (0.01) -- --
-------- -------- -------- --------
Earnings per share from
continuing operations,
diluted, as adjusted
(non-GAAP) $ 1.66 $ 1.49 $ 0.48 $ 0.38
======== ======== ======== ========
Shares used in per share
calculation 15,617 15,387 15,885 15,484
======== ======== ======== ========