Press Release For Release February 8, 2005 at 8:00 am EST
Compex Technologies Q2 Revenue Up 12% to Record $25.2M; Net Income $1M or $0.08 Diluted EPS
Six Month Revenue Up 13% to $46.9M, Diluted EPS $0.10
New Brighton, MN – February 8, 2005 —Compex Technologies (Nasdaq: CMPX) reported today consolidated revenue for the second fiscal quarter ended December 31, 2004 increased 12% to a record $25.2 million compared with $22.5 million in the comparable quarter a year earlier. Net income for the quarter was $1 million or $0.08 diluted earnings per share compared with net income of $1.2 million or $0.10 diluted earnings per share in the second quarter a year ago.
Revenue for the six months ended Dec. 31, 2004 rose 13% to $46.9 million compared with $41.6 million in the comparable period last year. Net income for the first half of the fiscal year was $1.3 million or $0.10 per diluted share compared with $1.6 million or $0.13 per diluted share in the comparable six month period of fiscal year 2004.
Revenue during the second quarter in the U.S. Medical Division was up 13% to $14.9 million compared with $13.3 million in the second quarter of fiscal 2004. U.S. Consumer Division revenue grew to $1.5 million from $220,000 a year ago and was up from $925,000 for the first quarter of fiscal 2005. International Division revenue was $8.8 million compared with $9 million in the second fiscal quarter a year ago.
Gross margin in the fiscal second quarter was 66.4% of revenue compared with 68.1% last year. The decrease in margin reflects a change in the overall revenue mix toward more U.S. Consumer Division line of products, which carry a lower margin than the Medical Division and international products.
-more-
Page 2 Compex Technologies
Operating expenses for the quarter increased to $14.9 million, an increase of 14% over the $13.1 million recorded for the same period last year. The increase is primarily due to the promotion and advertising expenses associated with our U.S. consumer product launches and our continued commitment to the U.S. Medical Division by increasing our number of direst sales representatives to support our physician-base selling model.
Compex President and CEO Dan W. Gladney said, “We recorded another strong quarter in our U.S. Medical Division, which represents about 60% of our net revenue. This also represented a 19% sequential gain over U.S. Medical Division revenue in the first fiscal quarter. This was primarily attributable to strong volume sales growth in our direct unit sales and rental business and a slight increase in our accessories and supplies reflecting results from the ongoing growth of our direct medical sales force.
“U.S. Consumer Division revenue was $1.5 million in the quarter compared with $220,000 a year ago. The sales during the recent quarter reflect good holiday sales, which were in line with our expectations. The bulk of these sales were driven through our two major distribution partners, The Home Shopping Network and General Nutrition Centers.
“International Division revenue for the quarter was $8.8 million compared with $9 million during the comparable quarter a year earlier. Unit sales fell below prior year, but this was partially offset by a 5% favorable impact of exchange rates.”
Compex Technologies has scheduled an investor conference call at 1 p.m. Eastern time, February 8, 2005, to discuss first quarter results and to answer questions.
To participate in the live call, domestic callers should dial (866) 453-5550 and enter PIN 4402212. International callers should dial (678) 460-1860 and use the same PIN. A telephone replay will be available until 11 p.m. Eastern time on February 22 by dialing (866) 453-6660 and reference number 156833.
An investment profile on Compex Technologies, Inc. may be found at http://www.hawkassociates.com/compex/profile.htm.
About Compex Technologies Compex Technologies is a worldwide leader in designing and manufacturing transcutaneous electrical nerve stimulation and electrical muscle stimulation (EMS) products used for pain management, rehabilitation, fitness and sports performance enhancement in clinical, home healthcare, sports and occupational medicine settings. Compex is the first U. S. company to offer consumers EMS technology in FDA-cleared, over-the-counter products for sports-performance enhancement, improved physical fitness and general well being. Detailed information about Compex may be found on the websites http://www.compextechnologies.com andhttp://www.slendertone.com.
-more-
Page 3 Compex Technologies
For investor relations information contact CFO Scott Youngstrom at (800) 676-6489 or Frank Hawkins or Julie Marshall, Hawk Associates at (305) 852-2383, e-mail: info@hawkassociates.com.
Copies of Compex press releases, price quotes, SEC filings, analyst reports and other valuable information for investors may be found on the website http://www.hawkassociates.com.
Cautionary Statement: All statements other than historical facts included in this release regarding future operations, and particularly on the outlook for 2004, are subject to the risks inherent in predictions and “forward-looking statements.” These statements are based on the beliefs and assumptions of management of Compex Technologies and on information currently available to management. Nevertheless, these forward-looking statements should not be construed as guarantees of future performance. They involve risks, uncertainties, and assumptions identified in Compex Technologies filings with the SEC, including, but not limited to:
•
The increasing reliance on results of international operations;
•
The effect of fluctuating exchange rates on international results;
•
Compex Technologies substantial balances of third-party billing business and resulting accounts receivable and the sensitivity of its results to the accuracy of its reserve for uncollectible receivables;
•
Changes in, and Compex Technologies compliance with, regulation and industry practice that affects the rates at which its products are reimbursed, the way it manufactures its products, and the documentation which it submits for reimbursement;
•
The United States consumer market for electrical stimulation products is new and developing;
•
Our ability in the United States to establish consumer demand with a limited marketing budget and secure contracts with significant retailers;
•
Negative publicity about electrical stimulation products;
•
World events that affect the economies of the countries in which its products are sold; and
•
Other factors that affect the industry in which Compex Technologies functions.
—Tables to Follow—
COMPEX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30,
December 31,
ASSETS
2004
2004
CURRENT ASSETS
(unaudited)
Cash and cash equivalents
$
3,198,832
$
2,722,206
Receivables, less reserves of $17,665,865 and $19,142,456
28,802,468
34,690,767
at June 30, 2004 and December 31, 2004, respectively
Inventories, net
12,990,417
14,114,528
Deferred tax assets
6,008,936
6,008,936
Prepaid expenses
3,646,300
3,416,948
Total current assets
54,646,953
60,953,385
Property, plant, and equipment, net
4,798,656
5,606,495
Goodwill
15,501,566
15,985,994
Other intangible assets, net
908,841
778,843
Deferred tax assets
224,679
318,509
Other assets
128,701
149,317
Total assets
$
76,209,396
$
83,792,543
LIABILITIES & STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt
$
1,268,910
$
1,807,159
Notes payable
2,200,000
6,500,000
Accounts payable
5,678,181
6,289,066
Accrued liabilities -
Payroll
1,990,591
1,744,486
Commissions
917,068
1,156,579
Income taxes
1,731,444
1,238,320
Other
3,377,681
4,515,602
Total current liabilities
17,163,875
23,251,212
LONG-TERM LIABILITIES
Long-term debt
2,436,200
1,353,600
Deferred tax liabilities
278,286
345,062
Total liabilities
19,878,361
24,949,874
STOCKHOLDERS’ EQUITY
Common stock, $.10 par value: 30,000,000 shares authorized;
1,242,574
1,245,660
issued and outstanding 12,425,747 and 12,456,607 shares
at June 30, 2004 and December 31, 2004, respectively
Preferred stock, no par value: 5,000,000 shares authorized;
—
—
none issued and outstanding
Additional paid in capital
32,887,912
33,147,197
Unearned compensation on restricted stock
(119,370
)
(81,674
)
Accumulated other non-owner changes in equity
2,340,916
3,295,437
Retained earnings
19,979,003
21,236,049
Total stockholders' equity
56,331,035
58,842,669
Total liabilities and stockholders' equity
$
76,209,396
$
83,792,543
COMPEX TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Six Months Ended
December 31
December 31
(unaudited)
(unaudited)
2003
2004
2003
2004
Net sales and rental revenue
$
22,464,599
$
25,212,349
$
41,620,865
$
46,866,088
Cost of sales and rentals
7,160,507
8,467,434
13,597,753
15,382,052
Gross profit
15,304,092
16,744,915
28,023,112
31,484,036
Operating expenses:
Selling and marketing
8,769,570
10,353,246
16,871,091
20,196,876
General and administrative
3,719,596
3,933,364
7,021,317
7,677,895
Research and development
646,673
656,892
1,275,150
1,379,427
Total operating expenses
13,135,839
14,943,502
25,167,558
29,254,198
Income from operations
2,168,253
1,801,413
2,855,554
2,229,838
Other income (expense):
Interest expense
(142,868
)
(104,232
)
(296,611
)
(183,817
)
Other
22,198
15,142
77,797
46,025
Income before income taxes
2,047,583
1,712,323
2,636,740
2,092,046
Income tax provision
819,000
684,000
1,054,000
835,000
Net income
$
1,228,583
$
1,028,323
$
1,582,740
$
1,257,046
Net income per common and common equivalent share
Basic
$
0.11
$
0.08
$
0.14
$
0.10
Diluted
$
0.10
$
0.08
$
0.13
$
0.10
Weighted average number of shares outstanding
Basic
11,561,292
12,454,759
11,293,216
12,454,433
Diluted
12,593,070
12,912,695
12,217,516
12,968,667
We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.
