EX-99.1 2 c54508_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
EARNINGS FOR ITS FISCAL THIRD QUARTER

TOTOWA, N.J., August 7, 2008 -- VITAL SIGNS, INC. (NASDAQ: VITL) today announced sales and earnings for its fiscal third quarter ended June 30, 2008.

Net revenues for the third quarter of fiscal 2008 increased by 11.5% to $60,684,000 compared with $54,407,000 in the comparable period last year.

Net income increased by 12.3% to $9,685,000 for the third quarter of fiscal 2008 compared with $8,625,000 for the third quarter of fiscal 2007. Earnings per diluted share increased by 12.3%to $0.73 for the third 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 nine months ended June 30, 2008 was $35.2 million. Vital Signs’ Board of Directors approved a quarterly dividend of $0.11 per share payable on August 28, 2008 to shareholders of record on August 21, 2008.

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

($ Thousands) 
NET REVENUES BY BUSINESS SEGMENT
 
 
 
FOR THE THREE MONTHS ENDED JUNE 30,
 
 
 
 
 2008   
 
2007 
 
                   % CHANGE
 
Anesthesia 
$
20,629   
$
19,876    3.8 %   
Respiratory/critical care 
12,041   
11,528    4.5    
Sleep/ventilation 
17,021   
12,929    31.6    
Interventional cardiology/radiology 
7,604   
6,957    9.3    
Pharmaceutical technology 
 
3,389 
 
 
3,117 
 
8.7
 
  
Net Revenues 
$
60,684   
$
54,407    11.5 %   

Anesthesia net revenues increased by 3.8% due primarily to sales of the Company’s new products, enFlow® and SteeLiteTM, as well as to sales growth of Infusable®, the Company’s patented pressure infusor. Sleep/ventilation net revenues increased by 31.6% due to sales growth in the iSleep 20iTM intelligent CPAP and the VivoTM 40 bi-level ventilator as well as from an acquisition at Sleep Services of America.

 

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The table below shows gross profit margins for each of the Company’s segments. The total gross profit margin increased to 53.5% in the third quarter of fiscal 2008 from 52.5% in the same quarter in the prior year.

 
GROSS PROFIT MARGIN BY BUSINESS SEGMENT
 
 
FOR THE THREE MONTHS ENDED JUNE 30,
  
 
  2008     2007    
Anesthesia  56.2 %    52.4 %   
Respiratory/critical care  57.5     54.6    
Sleep/ventilation  50.2     54.0    
Interventional cardiology/radiology  54.8     57.9    
Pharmaceutical technologies  36.5     27.5    
Total gross profit margin  53.5 %    52.5 %   

Net revenues for the first nine months of fiscal 2008 increased by 11.8% to $173,057,000 compared with $154,773,000 in the comparable period last year.

For the nine month period ended June 30, 2008, net income increased by 12.3% to $27,654,000 compared with $24,520,000 for the prior year. Diluted earnings per share increased by 13.0% to $2.08 for the nine-month period ended June 30, 2008 compared with $1.84 for the nine month period ended June 30, 2007.

Following are the net revenues by business segment for the nine months ended June 30, 2008 and 2007.

($ Thousands) 
 
NET REVENUES BY BUSINESS SEGMENT
   
FOR THE NINE MONTHS ENDED JUNE 30,
 
   
2008 
 
2007 
 
% CHANGE
Anesthesia   
$
59,888   
$
56,453    6.1 % 
Respiratory/critical care   
35,246   
34,780    1.3  
Sleep/ventilation   
48,377   
35,354    36.8  
Interventional cardiology/radiology   
20,440   
19,796    3.3  
Pharmaceutical technologies   
 
9,106 
 
 
8,390 
 
8.5
 
Net Revenues   
$
173,057   
$
154,773    11.8 % 

Terry Wall, President and CEO of Vital Signs, commented, “I am pleased with the fiscal third quarter sales and earnings performance. Our Anesthesia and Sleep Ventilation segments’ sales growth benefitted from new product introductions. Two new single-patient-use anesthesia products, the enFlow® blood and fluid warmer and SteeLiteTM laryngoscope blade, introduced at the end of December continue to gain sales momentum. The third quarter performance also reflects our continuing cost-improvement initiatives as the gross profit margin increased by 100 basis points compared with last year.”

 

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On July 24, 2008 Vital Signs and General Electric’s GE Healthcare unit announced that they entered into a definitive merger agreement for GE to acquire Vital Signs at a price of $74.50 per share. The transaction is subject to customary conditions, including Vital Signs’ shareholder approval and regulatory approvals in the United States and other foreign countries. The merger is expected to close in the calendar fourth quarter of 2008. The details of the transaction are included in Vital Signs’ Form 8-K and exhibits filed with the SEC on July 24, 2008.

All non-historical statements in this press release, including statements regarding the pending transaction with GE, 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 the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement, the inability to complete the merger due to the failure to obtain shareholder approval or the failure to satisfy other conditions to the completion of the merger, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the failure to receive other required regulatory approvals, general economic conditions, industry specific conditions and the possibility that Vital Signs may be adversely affected by other economic, business, and/or competitive factors, as well as other risks and uncertainties disclosed in Vital Signs’ 2007 Annual Report on Form 10-K filed with the SEC.

Vital Signs, Inc. and its subsidiaries design, manufacture, and market primarily single-patient-use medical products for the anesthesia and respiratory/critical care markets. Vital Signs also provides devices and services for the diagnosis and 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.

IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT:

In connection with the proposed merger, Vital Signs will file a proxy statement and other relevant materials with the Securities and Exchange Commission (the “SEC”). BEFORE MAKING ANY VOTING DECISION WITH RESPECT TO THE PROPOSED MERGER, INVESTORS AND SHAREHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND THE PARTIES TO THE MERGER. Investors and shareholders may obtain a free copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC’s website at www.sec.gov. Vital Signs’ shareholders and other interested parties will also be able to obtain, without charge, a copy of the proxy statement and other relevant documents (when available) by directing a request by mail to the company at 20 Campus Road, Totowa, New Jersey, 07512 or by telephone to 973-790-1330. Vital Signs and its directors and officers may be deemed to be participants in the solicitation of proxies from Vital Signs’ shareholders with respect to the merger. Information about Vital Signs’ directors and officers and their ownership of Vital Signs common stock is set forth in the Vital Signs proxy statements and Annual Reports on Form 10-K previously filed with the SEC, and will be set forth in the proxy statement relating to the proposed merger when it becomes available.

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
 
NINE MONTHS ENDED
 
 
JUNE 30, 
 
JUNE 30, 
 
 
2008
2007
2008
2007
 
Gross revenues 
$
79,796  
$
73,046  
$
229,424    
$
210,029  
    Rebates 
(18,769 ) 
(18,072 ) 
(55,351 )   
(52,332 ) 
    Other deductions 
 
( 343
) 
 
( 567
) 
 
(1,016
)   
 
(2,924
) 
 
Net revenues 
60,684  
54,407  
173,057    
154,773  
Cost of goods sold and services 
   
   
     
   
    provided 
 
 28,216  
25,818  
 
81,428
   
 
74,623
 
Gross Profit 
32,468  
28,589  
91,629    
80,150  
 
Expenses: 
   
   
     
   
    Selling, general and administrative 
17,049  
14,609  
47,627    
41,110  
    Research and development 
2,503  
2,053  
7,399    
5,651  
    Interest and other (income)/expense, net 
 
(1,783
) 
 
(1,496
) 
 
(5,611
)   
 
(4,209
) 
Income from continuing operations 
   
   
     
   
    Before income taxes and minority interest 
14,699  
13,423  
42,214    
37,598  
Provision for income taxes 
 
 4,892  
4,505  
14,147    
12,270  
Income from continuing operations before 
   
   
     
   
    minority interest 
9,807  
8,918  
28,067    
25,328  
Minority interest 
 
 118  
 
 277  
 
 521    
 
 773  
Income from continuing operations 
9,689  
8,641  
27,546    
24,555  
(Loss) Income from discontinued operations, 
   
   
     
   
    net 
 
(4
) 
 
(16
) 
 
108
   
 
(35
) 
Net income 
$
9,685  
$
8,625  
$
27,654    
$
24,520  
 
Earnings (loss) per common share: 
   
   
     
   
Basic: 
   
   
     
   
    Income per share from continuing 
   
   
     
   
    operations 
$
0.73  
$
0.65  
$
2.07    
$
1.86  
    Discontinued operations 
 
—
 
 
—
 
 
0.01
   
 
( 0.01
) 
    Net earnings 
$
0.73
 
$
0.65
 
$
2.08
   
$
1.85
 
Diluted: 
   
   
     
   
    Income per share from continuing 
   
   
     
   
    operations 
$
0.73  
$
0.65  
$
2.07    
$
1.85  
    Discontinued operations 
 
—
 
 
—
 
 
0.01
   
 
( 0.01
) 
    Net earnings 
$
0.73
 
$
0.65
 
$
2.08
   
$
1.84  
Basic weighted average number of shares 
13,294  
13,233  
13,291    
13,223  
Diluted weighted average number of shares 
13,313  
13,274  
13,316    
13,272  

 

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     VITAL SIGNS, INC.
FINANCIAL HIGHLIGHTS

BALANCE SHEET SUMMARY

(In thousands of dollars) 
 
June 
September 
   
30, 2008 
30, 2007 
   
Unaudited 
Audited 
             
Cash and cash equivalents   
$
132,080   
$
48,920 
Short-term investments   
-   
86,671 
Accounts receivable   
40,339   
36,915 
Inventory   
23,254   
19,778 
Other current assets   
 
7,507 
 
 
8,982 
Current assets   
$
203,180   
$
201,266 
 
Long-term investments   
25,127   
- 
Other non-current assets   
 
129,670 
 
 
129,678 
Total assets   
$
357,977 
 
$
330,944 
 
 
Current liabilities   
$
18,215   
$
17,826 
Non-current liabilities   
 
2,046 
 
 
 - 
Total Liabilities   
$
20,261   
$
18,312 
 
Non-controlling share in subsidiary   
7,228   
6,051 
Shareholders equity   
 
330,488 
 
 
306,581 
Total liabilities and shareholders equity   
$
357,977 
 
$
330,944 

 

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