Zevex (NASDAQ:ZVXI)
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ZEVEX International Inc. (Nasdaq: ZVXI) reported record
financial results for the three and nine months ending Sept. 30, 2005.
Net income for the third quarter ending Sept. 30, 2005, was a
record $785,483, or $0.22 per share, compared with a net loss of
$294,721, or ($0.09) per share, for the same period of 2004. For the
nine-month period ending Sept. 30, 2005, net income was a record
$999,104, or $0.28 per share, compared with $106,952, or $0.03 per
share, for the same period of 2004.
Revenue for the third quarter ending Sept. 30, 2005, increased 52
percent to $8.1 million, compared with $5.3 million for the third
quarter of 2004. For the nine-month period ending Sept. 30, 2005,
revenue grew by 18 percent to $20.9 million, compared with $17.8
million for the same period of 2004.
ZEVEX CEO and President David McNally said, "Sales were very
strong in both of our divisions during the third quarter. Our Applied
Technology division produced revenue of $3.4 million, a 44 percent
gain over third quarter 2004 revenue of $2.3 million. Applied
Technology division sales were substantially higher this quarter due
to strong demand from two of our largest customers.
"In addition, our Therapeutics division produced revenue of $4.7
million, a 59 percent gain over third quarter 2004 revenue of $3.0
million. The international revenue from our Therapeutics division
increased more than sixfold over last year's third quarter, primarily
based upon sales to Numico, our exclusive distributor for a
private-label version of our newest, most advanced enteral feeding
pump, the EnteraLite(R) Infinity(R), that provides patients in
hospitals, nursing homes, or at home with the lightest, most accurate,
and longest lasting, battery-operated pump available in Europe. Also,
growth in our domestic ambulatory pump and disposable set sales led to
a 14 percent increase in revenue from our Therapeutics division during
this year's third quarter," concluded McNally. McNally further stated
that the company has added a second production shift in order to
support forecasted demand for the company's products.
Gross profit for the third quarter increased to 38 percent,
compared with 34 percent in the same quarter of 2004, primarily due to
the product mix delivered during the quarter. Operating expenses
continued to decline as a percent of sales to 28 percent for the third
quarter of 2005, compared with 40 percent for the same quarter of
2004. Selling, general and administrative expenses were 24 percent of
sales for the third quarter of 2005, compared with 32 percent for the
same quarter of 2004. Research and development expenses for the third
quarter of 2005 were 4 percent of sales, compared with 8 percent of
sales for the same quarter of 2004. Operating income for the third
quarter of 2005 was 10 percent of sales, compared with a loss for the
same quarter of 2004.
For both the nine-month periods ended Sept. 30, 2005 and 2004,
gross profit was 37 percent. Operating expenses for the first nine
months of 2005 were 32 percent of sales, compared with 36 percent of
sales for the same period of 2004. Selling, general and administrative
expenses were 27 percent of sales for the nine-month period of 2005,
compared with 30 percent for the same period of 2004. R&D expenditures
were 4 percent of sales for the first nine months of 2005, compared
with 6 percent of sales for the same period of 2004. For the
nine-month period ended Sept. 30, 2005, operating income was 5 percent
of sales, compared with 1 percent of sales for the same period of
2004.
McNally added, "We are very encouraged by this quarter's
performance. The reductions in operating expenses expressed as a
percentage of sales for the third quarter and first nine months of
2005 compared to the same periods of 2004 indicate that we have been
able to generate more sales without proportionally increasing overhead
expenses. This operating leverage is a tribute to our management team
and all our employees who are exercising budget control while driving
sales growth."
CONFERENCE CALL
ZEVEX International Inc. invites all those interested to join the
ZEVEX management team for its earnings conference call for the third
quarter ended Sept. 30, 2005. The call will be held Tuesday, Nov. 1,
2005, at 4:30 p.m. EDT (3:30 p.m. Central, 2:30 p.m. Mountain, 1:30
p.m. Pacific). The telephone numbers for the call are as follows:
Domestic: 800-257-6566
International: 303-262-2052
A live webcast and a rebroadcast of the conference call will be
available on the company's Web site at www.zevex.com and
www.streetevents.com. To listen to the live broadcast, please enter
the site 10-15 minutes prior to the call in order to download any
necessary software, and then click on the "Webcast" icon on the ZEVEX
home page to access the call. The webcast will be archived on both
sites. There is no other replay access to the call.
ABOUT ZEVEX
ZEVEX International Inc. (www.zevex.com), founded in 1986, is a
diversified medical device company committed to creating products that
transform life with patented and proprietary medical device
technologies -- from sensors and surgical tools to medical electronic
systems. For more information concerning ZEVEX and its products,
please visit the ZEVEX Web site at the following link: www.zevex.com.
Forward-Looking Statements
Statements made in this press release, including those relating to
forecasted demand, anticipated revenue and profit growth and other
statements regarding future performance, are forward looking and are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements involve risks and
uncertainties that may cause actual results to differ materially from
those set forth in these statements. Among these, the company's
efforts to continue to improve its sales and margins in its core
businesses may not be effective, or such efforts could be more
difficult or expensive than the company currently anticipates.
Further, demand from the company's largest customers could fluctuate,
possibly impacting revenue on a quarterly or annual basis. In addition
to the foregoing, the economic, competitive, governmental,
technological and other factors identified in the company's filings
with the Securities and Exchange Commission, including the Form 10-K
for the year ended Dec. 31, 2004, may cause actual results or events
to differ materially from those described in the forward-looking
statements in this press release.
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ZEVEX INTERNATIONAL INC.
CONSOLIDATED INCOME STATEMENT
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2005 2004 2005 2004
(unaudited)(unaudited)(unaudited) (unaudited)
Revenue:
Product sales $7,985,249 $5,187,253 $20,512,430 $17,180,510
Engineering services 151,974 152,153 406,610 591,597
---------- ---------- ----------- ------------
Total revenue 8,137,223 5,339,406 20,919,040 17,772,107
Cost of sales 5,056,861 3,517,818 13,183,688 11,193,467
---------- ---------- ----------- ------------
Gross profit 3,080,362 1,821,588 7,735,352 6,578,640
Operating expenses:
Selling, general and
administrative 1,945,200 1,707,321 5,746,869 5,408,745
Research and
development 330,242 427,711 895,870 993,354
---------- ---------- ----------- ------------
Total operating expenses 2,275,442 2,135,032 6,642,739 6,402,099
Operating income (loss) 804,920 (313,444) 1,092,613 176,541
Other income (expense):
Interest and other
income 12,337 10,120 28,892 14,976
Interest expense (31,774) (25,254) (119,766) (114,807)
---------- ---------- ----------- ------------
Income (loss) before
income taxes 785,483 (328,578) 1,001,739 76,710
Benefit (provision) for
income taxes -- 33,857 (2,635) 30,242
---------- ---------- ----------- ------------
Net income (loss) $785,483 ($294,721) $999,104 $106,952
========== ========== =========== ============
Basic net income (loss)
per share $0.23 ($0.09) $0.29 $0.03
========== ========== =========== ============
Weighted average shares
outstanding 3,407,290 3,400,964 3,404,549 3,400,964
========== ========== =========== ============
Diluted net income
(loss) per share $0.22 ($0.09) $0.28 $0.03
========== ========== =========== ============
Diluted weighted average
shares outstanding 3,575,475 3,400,964 3,531,890 3,473,602
========== ========== =========== ============
ZEVEX INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEET
Sept. 30, Dec. 31,
2005 2004
ASSETS (unaudited)
Current assets
Cash and cash equivalents $613,362 $212,859
Designated cash for sinking fund payment
on industrial development bond 71,897 96,042
Accounts receivable, net of allowances
for doubtful accounts of $158,000 and
$192,000 5,543,932 3,563,436
Other receivable -- 35,500
Inventories 4,285,552 4,584,755
Marketable securities 28,800 29,250
Prepaid expenses and other current assets 68,763 149,690
----------- -----------
Total current assets 10,612,306 8,671,532
Property and equipment, net 4,605,962 4,345,942
Patents, trademarks and other intangibles,
net 354,122 335,244
Goodwill, net 4,048,264 4,048,264
----------- ------------
Total assets $19,620,654 $17,400,982
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $2,338,158 $1,949,618
Other accrued liabilities 859,078 606,734
Deferred revenue 83,332 --
Bank line of credit 610,536 --
Income taxes payable 2,005 2,005
Current portion of industrial development
bond 100,000 100,000
Current portion of other long-term debt 55,460 53,246
----------- ------------
Total current liabilities 4,048,569 2,711,603
Industrial development bond 1,100,000 1,200,000
Other long-term debt 724,486 766,362
Stockholders' equity
Common stock; $.001 par value, 10,000,000
authorized shares, 3,446,850 issued and
3,407,617 outstanding at Sept. 30, 2005,
and 3,440,197 issued and 3,400,964
outstanding at Dec. 31, 2004 3,447 3,440
Additional paid-in capital 16,316,373 16,290,452
Unrealized gain on marketable securities (18,975) (18,525)
Treasury stock; 39,233 shares (at cost)
at Sept. 30, 2005, and Dec. 31, 2004 (89,422) (89,422)
Accumulated deficit (2,463,824) (3,462,928)
----------- ------------
Total stockholders' equity 13,747,599 12,723,017
----------- ------------
Total liabilities and stockholders' equity $19,620,654 $17,400,982
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