Exhibit 99.1
FOR IMMEDIATE RELEASE: |
| Thursday, November 6, 2003 | ||
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CONTACT: |
| Vicki L. Benne | ||
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| Chief Financial Officer | ||
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| Isco, Inc. | ||
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| (402) 465-2097 | ||
ISCO REPORTS FOURTH QUARTER AND FISCAL 2003 RESULTS
Lincoln, NE—Isco, Inc. (Nasdaq: ISKO) reported results for the fourth quarter and the year ended July 25, 2003. Net earnings for the fourth quarter of 2003 were $632,000, or $0.11 per diluted share, on net sales of $16.1 million compared to earnings of $736,000 or $0.12 per diluted share, on net sales of $15.1 million for the same period last year.
For the full year 2003, net earnings were $1.3 million or $0.22 per diluted share, on net sales of $60.9 million compared to earnings of $2.4 million or $0.41 per diluted share, on net sales of $59.1 million for the previous fiscal year.
“Fiscal 2003 was a difficult and challenging year for Isco,” said Doug Grant, president and chief operating officer. “While we were pleased that we achieved net sales growth over the prior year of 2.8 percent in a tough environment, the growth was less than our plan. The year was significantly impacted by the continuation of a global economic slowdown that produced tight municipal and industrial budgets, and resulted in constrained spending by our customers. Positive signs related to possibly improving market conditions were stronger orders and sales in the fourth quarter of the year. The strong fourth quarter orders resulted in a 7.3 percent year-over-year orders increase, and net sales increased in the fourth quarter over the prior year fourth quarter by 6.5 percent.
“Net earnings for the year were lower than the prior year. Earnings were impacted both by the lower than expected net sales and by our commitment to invest significant resources in the SWIFT® chromatography and process monitoring product and market development strategic initiatives. While we generated additional gross margin of $1.6 million in fiscal 2003, this was not sufficient to cover the $2.9 million in additional operating expenses. The year-over-year increase in expenses were driven by increased investments of $1.8 million in the above mentioned strategic initiatives, increased focused sales and marketing expenses, and general year-over-year cost increases. While net earnings for the current fiscal quarter were lower than the fourth quarter of fiscal 2002, operating income was $1.1 million or over twice that of the prior year’s fourth quarter due to the strong quarterly net sales.
Grant further commented, “While fiscal 2003 results were below expectations, we did take two significant actions that we expect will drive improved operating performance in fiscal 2004 and beyond. First, a review of our organization structure resulted in the elimination of a number of positions, and reduced our total employment. Second, we decided to divest our Supercritical Fluid Extraction (SFE) product line due to its lack of strategic fit and low sales. This divestiture, which we hope to complete during fiscal 2004, will allow us to realign resources to become more focused on the major areas of our business. In addition, related to our SWIFT® strategic initiative, we recently reached legal settlements on all licensing arrangements, thus allowing us to return our full attention to the development of this product line.”
Comments included in this News Release may include “forward-looking statements” within the meaning of the federal securities laws. These statements as to anticipated future results are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ markedly from those projected or discussed here. Such risks and uncertainties are detailed in Isco, Inc.’s Annual Report on Form 10-K filed with the SEC in October 2002 and are incorporated herein by reference. Isco, Inc. cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date hereof.
News releases and other information regarding Isco, Inc. may be found at
www.isco.com on the Internet.
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ISCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
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| Three months |
| Twelve months |
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(Amounts in thousands, except per share data) |
| Jul 25 |
| Jul 26 |
| Jul 25 |
| Jul 26 |
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Net sales |
| $ | 16,068 |
| $ | 15,094 |
| $ | 60,881 |
| $ | 59,199 |
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Cost of sales |
| 7,349 |
| 7,030 |
| 28,397 |
| 28,302 |
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| 8,719 |
| 8,064 |
| 32,484 |
| 30,897 |
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Operating expenses: |
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Selling, general, and administrative |
| 6,045 |
| 6,024 |
| 24,557 |
| 22,496 |
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Research and engineering |
| 1,593 |
| 1,535 |
| 6,430 |
| 5,608 |
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| 7,638 |
| 7,559 |
| 30,987 |
| 28,104 |
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Income from operations |
| 1,081 |
| 505 |
| 1,497 |
| 2,793 |
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Other income (expense): |
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Investment income |
| 80 |
| 152 |
| 520 |
| 676 |
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Interest expense |
| (51 | ) | (63 | ) | (230 | ) | (278 | ) | ||||
Other, net |
| (84 | ) | (50 | ) | 52 |
| 29 |
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| (55 | ) | 39 |
| 342 |
| 427 |
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Income before income taxes |
| 1,026 |
| 544 |
| 1,839 |
| 3,220 |
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Provision for income taxes |
| 394 |
| (192 | ) | 564 |
| 786 |
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Net income |
| $ | 632 |
| $ | 736 |
| $ | 1,275 |
| $ | 2,434 |
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Basic earnings per share |
| $ | 0.11 |
| $ | 0.13 |
| $ | 0.22 |
| $ | 0.43 |
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Diluted earnings per share |
| $ | 0.11 |
| $ | 0.12 |
| $ | 0.22 |
| $ | 0.41 |
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Cash dividends declared per share |
| $ | 0.06 |
| $ | 0.05 |
| $ | 0.24 |
| $ | 0.15 |
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Weighted average number of shares outstanding (basic) |
| 5,726 |
| 5,671 |
| 5,696 |
| 5,665 |
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Additional shares assuming exercise of common stock equivalents & dilutive stock options |
| 163 |
| 241 |
| 167 |
| 223 |
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Weighted average number of shares outstanding (diluted) |
| 5,889 |
| 5,912 |
| 5,863 |
| 5,888 |
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3
ISCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(Amounts in thousands) |
| July 25 |
| July 26 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
| $ | 5,383 |
| $ | 633 |
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Short-term investments |
| 4,629 |
| 5,646 |
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Accounts receivable (net) |
| 10,590 |
| 9,901 |
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Inventories |
| 9,489 |
| 9,046 |
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Refundable income taxes |
| 303 |
| — |
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Deferred income taxes |
| 812 |
| 1,345 |
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Other current assets |
| 417 |
| 1,136 |
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Total current assets |
| 31,623 |
| 27,707 |
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Property and equipment (net) |
| 13,768 |
| 14,535 |
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Long-term investments |
| 4,717 |
| 9,334 |
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Other assets |
| 4,327 |
| 4,302 |
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Total assets |
| $ | 54,435 |
| $ | 55,878 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
| $ | 1,222 |
| $ | 1,303 |
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Accrued expenses |
| 3,698 |
| 4,057 |
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Income taxes payable |
| — |
| 176 |
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Short-term borrowing |
| 2,113 |
| 1,909 |
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Current portion of long-term debt |
| 503 |
| 1,131 |
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Total current liabilities |
| 7,536 |
| 8,576 |
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Deferred income taxes |
| 532 |
| 720 |
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Long-term debt, less current portion |
| 584 |
| 1,006 |
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Shareholders’ equity |
| 45,783 |
| 45,576 |
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Total liabilities and shareholders’ equity |
| $ | 54,435 |
| $ | 55,878 |
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