EX-99.1 2 c53473_ex99-1.htm ex99-1.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

EX-99.1

NEWS RELEASE
FOR IMMEDIATE RELEASE

 

VITAL SIGNS, INC. ANNOUNCES A 12% INCREASE IN SALES AND A
16% INCREASE IN EARNINGS FOR ITS FISCAL SECOND QUARTER

TOTOWA, N.J., May 8, 2008 -- VITAL SIGNS, INC. (NASDAQ: VITL) today announced sales and earnings for its fiscal second quarter ended March 31, 2008.

Net revenues for the second quarter of fiscal 2008 increased by 11.9% to $58,934,000 compared with $52,649,000 in the comparable period last year.

Net income increased by 15.9% to $9,970,000 for the second quarter of fiscal 2008 compared with $8,601,000 for the second quarter of fiscal 2007. Earnings per diluted share increased by 15.4% to $0.75 for the second quarter of fiscal 2008 compared with $0.65 for the prior-year quarter.

The Company continues to be a strong cash generator. Cash provided from operating activities for the six months ended March 31, 2008 was $20.1 million. On May 6, 2008, Vital Signs’ Board of Directors increased the quarterly dividend to $0.11 per share. The dividend is payable on May 28, 2008 to shareholders of record on May 21, 2008.

Following are the net revenues by business segment for the second quarter of fiscal 2008 compared with the second quarter of fiscal 2007.

                                           ($ Thousands) 
NET REVENUES BY BUSINESS SEGMENT
 
 
FOR THE THREE MONTHS ENDED MARCH 31,
 
 
 
2008   
2007    % CHANGE  
Anesthesia 
$
19,816   
$
18,871    5.0 % 
Respiratory/critical care 
12,304   
11,950    3.0  
Sleep/ventilation 
16,634   
12,154    36.9  
Interventional cardiology/radiology 
7,229   
6,951    4.0  
Pharmaceutical technology 
2,951   
2,723    8.4  
Net Revenues 
$
58,934   
$
52,649    11.9 % 

Anesthesia net revenues increased by 5.0% due primarily to growth in sales of Limb-OTM, the Company’s patented anesthesia circuit, and growth in sales of Infusable®, the Company’s patented pressure infusor system. Sleep/ventilation net revenues increased by 36.9% due to sales growth in the iSleep 20iTM intelligent CPAP and the VivoTM 40 bi-level ventilator as well as from two acquisitions at Sleep Services of America in the second half of the prior year.

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Breas, the Company’s Swedish-based manufacturer of sleep and ventilation products, entered into an agreement with Hamilton Medical, Inc. to distribute the Vivo product line in the U.S. hospital market. Hamilton Medical, Inc. is the U.S. subsidiary of Hamilton Medical AG, a leader in medical ventilation. The agreement is expected to provide approximately $800,000 in Breas product sales in the U.S. during the balance of fiscal 2008.

The table below shows gross profit margins for each of the Company’s segments. Total gross profit margin increased to 53.9% in the second quarter of fiscal 2008 from 52.0% in the same quarter in the prior year.

 
GROSS PROFIT MARGIN BY
 
 
BUSINESS SEGMENT
 
 
FOR THE THREE MONTHS
 
 
ENDED MARCH 31,
 
         
  2008   2007  
Anesthesia  56.1 %  52.2 % 
Respiratory/critical care  56.9   53.8  
Sleep/ventilation  51.7   52.9  
Interventional cardiology/radiology  55.7   55.9  
Pharmaceutical technologies  34.3   27.8  
Total gross profit margin  53.9 %  52.0 % 

Net revenues for the first six months of fiscal 2008 increased by 12.0% to $112,373,000 compared with $100,366,000 in the comparable period last year.

For the six month period ended March 31, 2008, net income increased by 13.0% to $17,969,000 compared with $15,896,000 for the first half of fiscal 2007. Diluted earnings per share increased by 12.5% to $1.35 for the six month period ended March 31, 2008 compared with $1.20 for the six month period ended March 31, 2007.

Following are the net revenues by business segment for the six months ended March 31, 2008 and 2007.

                                       ($ Thousands) 
 
NET REVENUES BY BUSINESS SEGMENT
 
 
 
FOR THE SIX MONTHS ENDED MARCH 31,
 
 
 
 
 2008   
 
 2007  % CHANGE  
Anesthesia 
$
39,259   
$
36,577  7.3 % 
Respiratory/critical care 
23,205   
23,252  (0.2 ) 
Sleep/ventilation 
31,356   
22,425  39.8  
Interventional cardiology/radiology 
12,836   
12,839  0.0  
Pharmaceutical technologies 
 
 5,717   
 
 5,273  8.4  
Net Revenues 
$
112,373   
$
100,366  12.0 % 

 

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Terry Wall, CEO of Vital Signs, commented, “Breas continued to demonstrate exceptional growth in Europe with our iSleep and Vivo product lines. In addition to the strong growth in Europe, we have reached agreement with Hamilton Medical to sell and service our Vivo 30 and 40 bi-level ventilation line in the U.S. The weak U.S. dollar has made it unattractive to import Breas’ Swedish-manufactured CPAP product line; therefore, we are exploring having our CPAP product line manufactured in China.”

Mr. Wall added, “Our three new anesthesia products are progressing as planned, and we should begin seeing their impact in the third and fourth quarters of this year. enFlow® is enjoying a particularly strong start as sales are already at an annual run rate exceeding $1 million. The second quarter performance also reflects the continued success of our cost savings initiatives, as gross margins improved by 190 basis points primarily due to lower materials costs for face masks and non-latex breathing bags. We are confident that we can continue to improve profitability. ”

Based on the improved gross profit margins, the Company’s fully diluted earnings per share guidance for fiscal 2008 has increased to between $2.82 and $2.87 per share.

 

 

All non-historical statements in this press release, including Vital Signs’ guidance with respect to sales by Breas and earnings per share as well as statements regarding the manufacture of the Company’s CPAP products, sales of new anesthesia products, gross profit, and operating margins 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, 2007.

Vital Signs, Inc. and its subsidiaries design, manufacture, and market primarily single-patient-use medical products for the anesthesia and respiratory/critical care markets and has achieved 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 2007, Forbes Magazine named Vital Signs, Inc. as one of the “200 Best Small Companies in America” based on financial criteria.

FOR FURTHER INFORMATION, CONTACT:        Terry D. Wall, CEO   
        or Mark D. Mishler, CFO   
            (973) 790-1330   
        http://www.vital-signs.com   

 

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     VITAL SIGNS, INC.
FINANCIAL HIGHLIGHTS
STATEMENT OF INCOME

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

 
THREE MONTHS ENDED
   
SIX MONTHS ENDED
  
 
MARCH 31,
    
MARCH 31,
  
 
 
2008
 
 
2007
   
 
2008
   
 
2007
 
Gross revenues 
$
77,947
 
$
71,559    
$
149,628    
$
136,983  
       Rebates 
(18,603
) 
 
(17,673 )   
(36,582 )   
(34,260 ) 
       Other deductions 
 
(410
) 
 
 
(1,237
) 
 
 
(673
) 
 
 
(2,357
) 
 
Net revenues 
58,934
 
52,649    
112,373    
100,366  
Cost of goods sold and services 
 
 
     
     
   
     provided 
 
 27,176
 
  
 
 25,295    
 
 53,212    
 
48,805
 
Gross Profit 
31,758
 
27,354    
59,161    
51,561  
                               
Expenses: 
 
 
     
     
   
       Selling, general and administrative 
15,916
 
13,664    
30,578    
26,501  
       Research and development 
2,495
 
1,754    
4,896    
3,598  
       Restructuring charge 
—
 
—    
—    
—  
       Interest and other (income)/expense, net 
 
(1,910
) 
   
(1,414
) 
 
 
(3,828
) 
 
 
(2,713
) 
Income from continuing operations 
 
 
     
     
   
       Before income taxes and minority interest 
15,257
 
13,350    
27,515    
24,175  
Provision for income taxes 
 
 5,162
 
  
 
 4,475    
 
 9,255    
 
 7,765  
Income from continuing operations before 
 
 
     
     
   
       minority interest 
10,095
 
8,875    
18,260    
16,410  
Minority interest 
 
 209
 
  
 
 254    
 
 403    
 
 496  
Income from continuing operations 
9,886
 
8,621    
17,857    
15,914  
(Loss) Income from discontinued operations, 
 
 
     
     
   
       net 
 
 84
 
  
 
 (20 )   
 
 112    
 
 (18 ) 
Net income 
$
9,970
 
  
$
8,601    
$
17,969    
$
15,896  
                               
Earnings (loss) per common share: 
 
 
     
     
   
Basic: 
 
 
     
     
   
     Income per share from continuing 
 
 
     
     
   
       operations 
$
0.74
 
$
0.65    
$
1.34    
$
1.20  
     Discontinued operations 
 
0.01
 
  
 
—
 
 
 
0.01
 
 
 
—
 
     Net earnings 
$
0.75
 
  
$
0.65    
$
1.35    
$
1.20  
Diluted: 
 
 
     
     
   
     Income per share from continuing 
 
 
     
     
   
       operations 
$
0.74
 
$
0.65    
$
1.34    
$
1.20  
     Discontinued operations 
 
0.01
 
 
 
—
 
 
 
0.01
 
 
 
—
 
     Net earnings 
$
0.75
 
 
$
0.65
 
 
$
1.35
 
 
$
1.20
 
Basic weighted average number of shares 
13,292
 
13,220    
13,293    
13,219  
Diluted weighted average number of shares 
13,313
 
13,255    
13,320    
13,271  

 

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     VITAL SIGNS, INC.
FINANCIAL HIGHLIGHTS

BALANCE SHEET SUMMARY

(In thousands of dollars) 
March 31, 
September 
 
 
 
2008 
 
30, 2007 
 
 
Unaudited 
 
Audited   
       Cash and cash equivalents 
$
113,258   
$
48,920   
       Short-term investments 
3,725   
86,671   
       Accounts receivable 
38,953   
36,915   
       inventory 
22,596   
19,778   
       Other current assets 
 
 10,608   
 
 8,982   
       Current assets 
$
189,140   
$
201,266   
 
       Long-term investments 
29,885   
-   
       Other non-current assets 
 
 130,937   
 
 129,670   
       Total assets 
$
349,962   
$
330,944   
 
 
       Current liabilities 
$
18,345   
$
17,826   
       Non-current liabilities 
 
 2,368   
 
 -   
       Total Liabilities 
$
20,713   
$
18,312   
 
       Non-controlling share in subsidiary 
7,111   
6,051   
       Shareholders equity 
 
 322,138   
 
 306,581   
       Total liabilities and shareholders equity 
$
349,962 
 
$
330,944 
 

 

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