EX-99.1 2 c49798_ex99-1.htm c49798_ex99-1.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 99.1

NEWS RELEASE
FOR IMMEDIATE RELEASE

VITAL SIGNS, INC. ANNOUNCES A 12.5% INCREASE IN
THIRD QUARTER EARNINGS FROM CONTINUING OPERATIONS,
EXTENDS FACE MASK AGREEMENT.

           TOTOWA, N.J., August 8, 2007 -- VITAL SIGNS, INC. (NASDAQ: VITL) today announced sales and earnings for the third quarter ended June 30, 2007.

          Income from continuing operations increased 12.5% to $8,733,000, for the third quarter of fiscal 2007 compared to $7,764,000 for the third quarter of fiscal 2006. Earnings from continuing operations per diluted share increased 12% to $.66 per share for the third quarter of fiscal 2007 compared to $.59 per share for the third quarter of fiscal 2006.

          Net revenues for the third quarter of fiscal 2007 increased 6.6% to $51,735,000 compared to $48,544,000 in the comparable period last year.

          Following are the net revenues by business segment for the third quarter of fiscal 2007 compared to the third quarter of fiscal 2006 (in thousands of dollars):

   
NET REVENUES BY BUSINESS SEGMENT
    FOR THE THREE MONTHS ENDED
   
JUNE 30,
    2007   2006   PERCENT
   
 
CHANGE
Anesthesia   $ 19,876   $ 18,379   8.2 %
Respiratory/Critical Care     11,550     11,438   1.0 %
Sleep     13,352     11,973   11.5 %
Interventional cardiology/radiology  
 
6,957
 
 
6,754
 
3.0
%
Net Revenues   $ 51,735
 
$ 48,544
 
6.6 %

          For the nine month period ended June 30, 2007 income from continuing operations increased 16.9% to $25,014,000 as compared to $21,390,000 for the comparable fiscal 2006 period. Diluted earnings per share from continuing operations increased 13.9% to $1.88 for the nine month period ended June 30, 2007 compared to $1.65 for the nine month period ended June 30, 2006.

          Net revenues for the first nine months of fiscal 2007 increased 6.3% to $147,790,000 as compared to $138,980,000 in the comparable period last year.



          Following are the net revenues by business segment for the nine months ended June 30, 2007 and 2006 (in thousands of dollars):

   
NET REVENUES BY BUSINESS SEGMENT
   
FOR THE NINE MONTHS ENDED JUNE 30,
                PERCENT
   
2007
 
2006
 
CHANGE
Anesthesia   $ 56,453   $ 53,957   4.6 %
Respiratory/Critical Care     34,831     32,943   5.7 %
Sleep     36,710     33,780   8.7 %
Interventional cardiology/radiology  
 
19,796
 
 
18,300
 
8.2
%
Net Revenues   $ 147,790
 
$ 138,980
 
6.3 %

          Terry Wall, President and CEO of Vital Signs commented “We introduced two new Anesthesia products in July: Pi’s Pillow™ and InfusaScan™. Pi’s Pillow™ is a head positioning device invented by a physician to help position the patient’s trachea for ease of intubation and increase patient comfort. InfusaScan™ is a new version of our market leading pressure infusor with a clear window that allows for bar code scanning as well as improved visibility of fluid levels.

          We have reduced our guidance to $2.55 -2.58 per share. This revision is primarily the result of slower adoption of our strategy of providing CPAP units to the patients diagnosed with obstructive sleep apnea through our sleep centers. We remain confident that we will be able to increase our distribution of CPAP devices to our patients over the next four quarters, targeting 50% market penetration.”

          On August 3, 2007, Vital Signs extended its exclusive supply agreement with Respironics for six months and purchased related mask manufacturing equipment for $1.5 million. Mr. Wall commented, “This agreement gives us additional supply chain protection as we transition the production of anesthesia face masks, avoids litigation regarding ownership of the tooling and clarifies a non-compete to protect our mask business. Previously discussed cost savings will now be realized in the third quarter of fiscal 2008.”

          On August 2, 2007 the Board approved a quarterly dividend to $0.10 per share payable on August 31, 2007 to shareholders of record on August 17, 2007.

          All non-historical statements in this press release, including Vital Signs’ guidance with respect to fully diluted earnings per share from continuing operations for fiscal 2007, 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, 2006.



          Vital Signs, Inc. and its subsidiaries design, manufacture and market primarily single-use medical products for the anesthesia, respiratory/critical care, achieving 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 2006, Forbes Magazine named Vital Signs, Inc. as one of the “200 Best Small Companies in America” based on financial criteria.

VITL-G      
 
FOR FURTHER INFORMATION, CONTACT:   Terry D. Wall, President
    or William Craig, CFO
    (973) 790-1330  
    http://www.vital-signs.com  



VITAL SIGNS, INC.
FINANCIAL HIGHLIGHTS
STATEMENT OF INCOME

(In Thousands, Except Per Share Amounts)
(Unaudited)

THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
2007 2006 2007 2006
Gross revenues   $ 70,373     $ 66,259     $ 203,046     $ 189,757  
       Rebates     (18,071 )     (16,629 )     (52,332 )     (47,466 )
       Other deductions  
 
(567
)  
 
(1,086
)  
 
(2,924
)  
 
(3,311
)
 
Net revenues     51,735       48,544       147,790       138,980  
Cost of goods sold and services provided     23,581       22,890       68,498       66,046  
Gross Profit     28,154       25,654       79,292       72,934  
 
Expenses:                                
       Selling, general and administrative     13,638       12,301       38,265       36,384  
       Research and development     2,042       1,897       5,614       5,294  
       Restructuring charge                        
       Interest and other (income)/expense, net  
 
(1,074
)  
 
(753
)  
 
(2,853
)  
 
(1,994
)
Income from continuing operations                                
       Before income taxes and minority interest     13,548       12,209       38,266       33,250  
Provision for income taxes     4,538       4,153       12,479       11,196  
Income from continuing operations before                                
       minority interest     9,010       8,056       25,787       22,054  
Minority interest     277       292       773       664  
Income from continuing operations     8,733       7,764       25,014       21,390  
(Loss) Income from discontinued operations, net  
 
( 108
)  
 
180
      (494 )     682  
Net income   $ 8,625     $ 7,944     $ 24,520     $ 22,072  
 
Earnings (loss) per common share:                                
Basic:                                
     Income per share from continuing operations   $ 0.66     $ 0.59     $ 1.89     $ 1.66  
     Discontinued operations  
 
( 0.01
)  
 
0.01
   
 
( 0.04
)  
 
0.05
 
     Net earnings  
$
0.65
   
$
0.60
   
$
1.85
   
$
1.71
 
Diluted:                                
     Income per share from continuing operations   $ 0.66     $ 0.59     $ 1.88     $ 1.65  
     Discontinued operations  
 
( 0.01
)  
 
0.01
   
 
( 0.04
)  
 
0.05
 
     Net earnings  
$
0.65
   
$
0.60
   
$
1.84
   
$
1.70
 
Basic weighted average number of shares     13,233       13,159       13,223       12,881  
Diluted weighted average number of shares     13,274       13,208       13,272       12,962  



VITAL SIGNS, INC.
FINANCIAL HIGHLIGHTS

BALANCE SHEET HIGHLIGHTS:

(In Thousands)
(Unaudited)
June 30,
2007
 
2006
Cash and cash equivalents   $ 53,237   $ 29,409
Short Term Investments     82,395     88,687
Accounts Receivable     37,729     29,934
Inventory     20,525     18,933
Current Assets     216,538     191,630
Total Assets  
$
335,014
 
$
297,473
 
Current Liabilities   $ 17,723   $ 14,665
Total Liabilities     17,723     14,665
Shareholders equity  
$
311,382
 
$
278,369