MONTVALE, N.J., Nov. 6, 2008 (GLOBE NEWSWIRE) -- Datascope Corp. (Nasdaq:DSCP) today reported that sales in the first quarter of fiscal 2009 increased 17% to $56.2 million, compared to $48.0 million in the first quarter last year. Favorable foreign currency translation contributed $1.1 million to revenues.
GAAP net earnings from continuing operations* in the first quarter of fiscal 2009 were $4.0 million, or $0.25 per diluted share, after deducting after-tax special charges of $1.0 million, or $0.06 per diluted share, for expenses related to the pending acquisition by Getinge AB of Datascope Corp. The first quarter of fiscal 2009 continued to be burdened by the fees associated with the transitional manufacturing of Cardiac Assist balloon pumps at Datascope's former Patient Monitoring ("PM") facility of about $342 thousand per month. The fee started at the time of the sale of the PM business and will continue through January 2009. GAAP net earnings from continuing operations in the first quarter last year were $11.9 million, or $0.76 per diluted share, after including an after-tax special gain of $7.8 million or $0.50 per diluted share.
Non-GAAP net earnings from continuing operations in the first quarter of fiscal 2009 increased 23% to $5.0 million, or $0.31 per diluted share from $4.1 million, or $0.26 per diluted share last year. Higher non-GAAP earnings from continuing operations in the first quarter reflect strong sales growth in both Cardiac Assist and Vascular Products and higher interest income.
The effective tax rate on non-GAAP earnings from continuing operations in the first quarter of fiscal 2009 was 38.6% compared to 35.0% in the first quarter last year. The tax rate in the first quarter this year does not reflect the benefit of the R&D tax credit for fiscal 2009 or the favorable impact of the retroactive provisions of the Emergency Economic Stabilization Act of 2008 ("EESA"), which reinstated the R&D tax credit to January 1, 2008, because the new law was passed after the end of the first quarter of fiscal 2009.
Commenting on the Company's first quarter results, Dr. Antonino Laudani, Datascope's COO, stated, "The positive results of the first quarter continue to reflect our undivided focus on our cardiovascular business, and 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 continued to grow and our vascular graft line performed very well as we continue to gain market share and expand our presence in developing markets."
The Company projects sales growth of 3% in the second quarter of fiscal 2009. The moderate projected rate of growth reflects the unfavorable effect of the strengthening U.S. dollar and comparison to last year's second quarter, which included initial inventory sales to Datascope's new distributor in Japan. Excluding foreign currency translation, the projected sales increase would be 6%.
The Company projects GAAP second quarter fiscal 2009 diluted earnings per share from continuing operations of $0.40 - $0.42 per share. Projected operating results in the second quarter include a tax rate of 33.8%, which reflects the benefit of the R&D tax credit for fiscal 2009 and the favorable impact of the retroactive provisions of the EESA to January 1, 2008.
In October 2008, we relocated the manufacture of balloon pumps from the former PM facility to our own 90,000 square foot facility in Mahwah, N. J.
First Quarter Sales Discussion
Cardiac Assist Products: First quarter sales increased 14% to a record $45.3 million, primarily reflecting continued strong growth in international markets. Worldwide balloon pump sales increased 22% and intra-aortic balloons (IAB's) increased 9%, driven by the continued worldwide market acceptance of the CS300(tm) balloon pump and the Sensation 7 Fr. catheter. Worldwide sales of the Safeguard manual assist device increased 20%. Favorable foreign currency translation contributed $0.6 million to Cardiac Assist sales in the first quarter.
Vascular Products: First quarter sales rose 29% to $10.4 million, as sales of vascular grafts and peripheral vascular stent products grew 34% and 16%, respectively. Increased vascular graft sales reflect higher sales in international markets and increased sales to our exclusive U.S. distributor. Favorable foreign currency translation increased sales by $0.5 million in the first quarter.
Gain on sale of Discontinued Interventional Products Business
On August 6, 2008, the Company completed the sale 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). In the first quarter of fiscal 2009, we recognized a gain on sale of the IP business of $0.6 million, net of tax. This transaction completed Datascope's previously announced plan to exit the vascular closure market and phase out its Interventional Products business.
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.globenewswire.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. 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.
Datascope Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)
Sept. 30, June 30,
2008 2008
---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 190,296 $ 22,106
Short-term investments 52,977 228,106
Accounts receivable less allowance for
doubtful accounts of $3,011 and $2,777 49,220 65,178
Inventories 34,565 31,030
Prepaid expenses and other current assets 15,503 16,425
Current deferred taxes 2,302 2,476
Current assets of discontinued operations -- 5,773
---------- ----------
Total current assets 344,863 371,094
Property, plant and equipment, net of
accumulated depreciation of $73,178
and $73,563 49,253 49,710
Long-term investments 23,032 22,846
Intangible assets, net 15,199 15,873
Goodwill 4,360 4,575
Other assets 44,194 43,974
Noncurrent assets of discontinued operations -- 15,666
---------- ----------
$ 480,901 $ 523,738
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 15,566 $ 16,951
Dividends payable 1,590 --
Accrued expenses 13,098 13,833
Accrued compensation 10,497 14,377
Deferred revenue 2,498 2,728
Income taxes payable 10,137 43,504
Current liabilities of
discontinued operations -- 500
---------- ----------
Total current liabilities 53,386 91,893
Other liabilities 29,631 25,836
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, 19,471 and 19,401 shares 195 194
Additional paid-in capital 129,843 126,805
Treasury stock at cost, 3,570
and 3,567 shares (109,017) (108,897)
Retained earnings 375,018 377,194
Accumulated other comprehensive income:
Cumulative translation adjustments 1,828 10,043
Benefit plan adjustments (77) (55)
Unrealized gain on
available-for-sale securities 94 266
---------- ----------
Total stockholders' equity 397,884 405,550
---------- ----------
$ 480,901 $ 523,738
========== ==========
Datascope Corp. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 30,
----------------------
2008 2007
---------- ----------
Net earnings from continuing
operations as reported $ 4,039 $ 11,869
Non-GAAP adjustments, net of tax:
Special charges 964 --
Gain on sale of investment -- (7,791)
---------- ----------
Net earnings from continuing operations
as adjusted (non-GAAP) $ 5,003 $ 4,078
========== ==========
Earnings per share from continuing
operations, diluted, as reported $ 0.25 $ 0.76
Non-GAAP adjustments, net of tax:
Special charges 0.06 --
Gain on sale of investment -- (0.50)
---------- ----------
Earnings per share from continuing operations,
diluted, as adjusted (non-GAAP) $ 0.31 $ 0.26
========== ==========
Shares used in per share calculation 16,066 15,483
========== ==========
Datascope Corp. and Subsidiaries
Condensed Consolidated Statements of Earnings (GAAP)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
September 30,
----------------------
2008 2007
---------- ----------
Net sales $ 56,207 $ 48,015
Cost of sales 19,802 16,717
---------- ----------
Gross profit 36,405 31,298
Operating expenses:
Research and development expenses 5,041 4,964
Selling, general and administrative expenses 24,608 20,480
Special charges 1,533 --
---------- ----------
31,182 25,444
---------- ----------
Operating earnings 5,223 5,854
Other (income) expense:
Interest, net (1,605) (558)
Gain on sale of investment -- (13,173)
Other, net 249 138
---------- ----------
(1,356) (13,593)
---------- ----------
Earnings from continuing operations
before income taxes 6,579 19,447
Income taxes 2,540 7,578
---------- ----------
Net earnings from continuing operations 4,039 11,869
Net loss from discontinued operations (1,660) (77)
Net gain on sale of discontinued operations 550 --
---------- ----------
Net earnings $ 2,929 $ 11,792
========== ==========
Net earnings (loss) per share, basic:
Continuing operations $ 0.26 $ 0.77
Discontinued operations (0.10) --
Net gain on sale of discontinued operations 0.03 --
---------- ----------
Net earnings $ 0.19 $ 0.77
========== ==========
Weighted average number of common
shares outstanding, basic 15,793 15,347
========== ==========
Net earnings (loss) per share, diluted:
Continuing operations $ 0.25 $ 0.76
Discontinued operations (0.10) --
Net gain on sale of discontinued operations 0.03 --
---------- ----------
Net earnings $ 0.18 $ 0.76
========== ==========
Weighted average number of common
shares outstanding, diluted 16,066 15,483
========== ==========
* 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.