SOURCE: Datascope Corp.

October 31, 2005 18:05 ET

Datascope Reports Higher First Quarter 2006 Results

MONTVALE, NJ -- (MARKET WIRE) -- October 31, 2005 -- Datascope Corp. (NASDAQ: DSCP) reported a strong first quarter in which net earnings rose 28% to $6.1 million, or 40 cents per diluted share, compared to $4.7 million or 31 cents per diluted share in last year's first quarter. The increase in net earnings includes a special gain of $0.8 million, or 5 cents per share, from the sale of an unused facility in the Netherlands. Consolidated sales for the quarter rose 10% to $88.3 million from $80.3 million last year. Foreign exchange translation had no significant impact on the sales increase.

Sales of patient monitoring products rose 17%, or $5.5 million, to $37.6 million, due primarily to higher shipments and installations of Panorama™ Monitoring systems that the company introduced last year. Sales of Panorama systems included approximately $2.0 million that were planned to ship in last year's fourth quarter.

In October 2005, the Patient Monitoring division introduced the Anestar Plus™ anesthesia delivery system at the American Society of Anesthesiologists annual meeting in Atlanta. The Anestar Plus is our next generation anesthesia delivery system that replaces the Anestar and includes additional features, such as a pressure support ventilation mode providing assistance to patients with breathing difficulties, as well as many interface enhancements. The Anestar Plus competes in an estimated $400 million worldwide market.

Sales of cardiac assist products increased 13% to $36.6 million due to continued strong worldwide demand for the company's CS100® automatic balloon pump and continued higher sales of intra-aortic balloons in international markets. Sales of the new Linear™ 7.5 Fr. intra-aortic balloon, introduced in January 2005, continued to increase. The Linear 7.5 Fr. has the smallest diameter of any IAB catheter and also features a new balloon membrane that is the most abrasion resistant of any IAB.

Sales of interventional products were $6.3 million compared to $7.8 million last year as sales of vascular closure devices continued to decline. Sales of new interventional products rose 68% year-over-year, to account for 28% of total interventional product sales, up from 13% last year. This gain partially offset the lower sales of vascular closure devices, which fell 35% to $4.3 million.

As reported previously, the company expects new products to reverse the sales decline of its vascular closure business. The first of these new products, X-Site®, is aimed at an estimated $100 million suture-based segment of the vascular closure market. X-Site was launched at the Transcatheter Cardiovascular Therapeutics (TCT) conference and exhibition in Washington, D.C. that was held during the week of October 16, 2005. Selling of X-Site has begun with a limited market launch in the U.S. to be followed by a European market launch in December. During the limited launch period, the Interventional Products division will be training new accounts and ramping up X-Site manufacturing capacity.

InterVascular sales were $7.4 million, 3% below last year, reflecting lower prices on annual tenders in Europe. Sales to InterVascular's exclusive U.S. distributor, W. L. Gore & Associates, Inc. (Gore), including stocking orders, equaled U.S. sales last year. In its first full quarter of distributor sales, Gore's sales to the market approximated InterVascular's sales to the market at the time of the distribution change. While sales to Gore reflect a distributor discount, overall, InterVascular has benefited by eliminating the costs associated with direct selling.

The company's financial position remained strong as of September 30, 2005. During the quarter total cash and short- and long-term marketable securities increased $2.6 million to $63.0 million and the short-term debt of $4.0 million was retired. Capital expenditures for the first quarter of fiscal 2006 amounted to $1.4 million compared to $1.7 million last year.

On May 16, 2001, Datascope announced that its Board of Directors authorized $40 million to buy shares of its common stock from time to time, subject to market conditions and other relevant factors affecting the company. To date the company has repurchased approximately 915 thousand shares at a cost of $35.3 million. The remaining balance under the existing share repurchase program is $4.7 million.

Datascope's news releases and other company information, including specifics about its November 1, 2005 conference call and webcast (at 12:00 noon, EST, call in number: (800) 819-9193), can be found on the company's website, www.datascope.com.

Datascope Corp. is a diversified medical device company that manufactures (itself or through agreements with unaffiliated companies) and markets proprietary products for clinical health care markets in interventional cardiology and radiology, cardiovascular and vascular surgery, anesthesiology, emergency medicine and critical care.

This press release contains forward-looking statements that 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 the introduction of X-Site and other new interventional products will not reverse the sales trend of the Interventional Products division, and that market conditions may change, particularly as the result of competitive activity in the markets served by the company. Additional risks are the company's dependence on certain unaffiliated suppliers (including single source manufacturers) for patient monitoring, cardiac assist and interventional products, continued demand for the company's products, rapid and significant changes that generally characterize the medical device industry and the ability to continue to respond to such changes, the uncertain timing of regulatory approvals, as well as other risks detailed in documents filed by Datascope with the Securities and Exchange Commission.


                   Datascope Corp. and Subsidiaries
          Condensed Consolidated Statements of Earnings
            (In thousands, except per share amounts)

                                            Three Months Ended
                                               September 30,
                                           2005           2004
                                       ----------     ----------

Net Sales                              $   88,300     $   80,300
                                       ----------     ----------
Costs and Expenses:
    Cost of sales                          37,427         31,952
    Research and development
     expenses                               8,765          8,636
    Selling, general and
     administrative expenses               34,485         33,425
    Special gain                             (810)            --
                                       ----------     ----------
                                           79,867         74,013
                                       ----------     ----------

Operating Earnings                          8,433          6,287
Other (Income) Expense:
    Interest income, net                     (487)          (525)
    Other, net                                669            (28)
                                       ----------     ----------
                                              182           (553)
                                       ----------     ----------
Earnings Before Income Taxes                8,251          6,840
Income Tax Expense                          2,195          2,120
                                       ----------     ----------
Net Earnings                           $    6,056     $    4,720
                                       ==========     ==========

Earnings Per Share, Basic              $     0.41     $     0.32
                                       ==========     ==========

Weighted average common
 shares outstanding, Basic                 14,798         14,792
                                       ==========     ==========

Earnings Per Share, Diluted            $     0.40     $     0.31
                                       ==========     ==========

Weighted average common
 shares outstanding, Diluted               15,080         15,213
                                       ==========     ==========




                   Datascope Corp. and Subsidiaries
                Condensed Consolidated Balance Sheets
               (In thousands, except per share amounts)

                                           Sept 30,       June 30,
                                            2005           2005
                                         ----------     ----------
Assets
Current Assets:
     Cash and cash equivalents           $   15,692    $   12,188
     Short-term investments                  29,697        30,384
     Accounts receivable less allowance
      for doubtful accounts of
      $2,319 and $2,279                      70,810        74,145
     Inventories, net                        56,669        54,626
     Prepaid income taxes                        --           645
     Prepaid expenses and other current
      assets                                 10,410        11,157
     Current deferred taxes                   5,357         5,294
                                         ----------    ----------
         Total Current Assets               188,635       188,439

Property, Plant and Equipment, net of
 accumulated  depreciation of $84,886
 and $82,427                                 86,659        87,648
Long-term Investments                        22,583        22,813
Intangible Assets                            20,731        20,908
Goodwill                                      4,065         4,065
Other Assets                                 33,106        33,209
                                         ----------    ----------
                                         $  355,779    $  357,082
                                         ==========    ==========

Liabilities and Stockholders' Equity
Current Liabilities:
    Accounts payable                     $   18,285    $   18,850
    Accrued expenses                         15,024        17,319
    Accrued compensation                     12,605        15,335
    Short-term debt                              --         4,000
    Deferred revenue                          3,479         3,975
    Income taxes payable                      3,674            --
                                         ----------    ----------
         Total Current Liabilities           53,067        59,479

Other Liabilities                            32,042        31,738
Commitments and Contingencies
Stockholders' Equity:
    Preferred stock, par value $1.00 per
     share: Authorized 5,000 shares;
     Issued, none                                --            --
    Common stock, par value $.01 per share:
     Authorized, 45,000 shares;
     Issued, 18,264 and 18,256 shares           183           183
    Additional paid-in capital               89,036        88,773
    Treasury stock at cost, 3,465 and
     3,460 shares                          (105,319)     (105,175)
    Retained earnings                       297,542       292,524
    Accumulated other comprehensive loss:
       Cumulative translation adjustments    (3,047)       (2,713)
       Minimum pension liability
        adjustments                          (7,503)       (7,503)
       Unrealized loss on available-for-sale
        securities                             (222)         (224)
                                         ----------    ----------
         Total Stockholders' Equity         270,670       265,865
                                         ----------    ----------
                                         $  355,779    $  357,082
                                         ==========    ==========

Contact Information

  • For Information Contact:
    Murray Pitkowsky
    Senior VP and CFO
    Datascope Corp.
    14 Philips Parkway
    Montvale, NJ 07645
    (201) 307-5504
    www.datascope.com