Exhibit 99.1
FOR IMMEDIATE RELEASE: |
| Friday, June 4, 2004 |
CONTACT: |
| Vicki L. Benne |
|
| Chief Financial Officer |
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| Isco, Inc. |
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| (402) 465-2097 |
ISCO REPORTS THIRD QUARTER FISCAL 2004 RESULTS
Lincoln, NE—Isco, Inc. (Nasdaq: ISKO) reported net income for the third quarter ended April 23, 2004, of $0.9 million or $0.16 per diluted share, on sales of $18.1 million, compared with net income of $0.2 million, or $0.04 per diluted share, on sales of $15.1 million for the same period last year. Net income during the first nine months of fiscal 2004 was $3.1 million, or $0.52 per diluted share, on sales of $52.6 million, compared with net income of $0.6 million, or $0.11 per diluted share, on sales of $44.8 million for the same period a year ago.
Reviewing the recent results, Doug Grant, president and chief operating officer, commented, “We are extremely pleased with our quarter and year-to-date results. We reached record highs in both orders and sales this past quarter. Net orders and net sales for the quarter were $19.0 and $18.1 million, respectively. For the nine months, net orders were $51.5 million and net sales were $52.6 million, increases of 17.2 percent and 17.4 percent, respectively, over the previous year.”
Net sales from Isco's three major product lines of samplers, chromatography, and flow meters were $41.0 million for the nine-month period, an increase of 20 percent over the prior year. Sales from all three lines contributed to the increase. Revenues from our other products and services were $11.6 million for the same period, up 11 percent over the prior year driven by international sales of process monitoring products. Domestic sales of $35.9 million were up 11 percent over the prior year and international sales of $16.7 million were up 34 percent over the prior year.
Income from operations for the first nine months was $4.1 million or 7.8% of net sales compared with $0.4 million or 0.9% of net sales for the same period a year ago. The improvement was driven by $4.5 million of additional gross margin dollars generated by increased sales. The gross margin, as a percentage of sales, increased to 53.7% from 53.0%. The improvement included the negative impact of the first quarter write-off of inventory associated with the divestiture of the supercritical fluid extraction (SFE) product line. The improvement over the prior year was due to favorable shifts in product line mix and benefits from manufacturing cost improvements.
Operating expenses were $24.2 million for the nine-month period, an increase of $0.8 million over the prior year. The increase was driven by variable expenses associated with increased sales, as well as, $0.5 million of charges associated with the pending merger with Teledyne Technologies, Inc. On a percentage of sales basis, operating expenses were 45.9%, down 6.2% from the previous year's level.
Cash and investments increased by $4.8 million to $19.5 million at April 23, 2004 from the beginning of the year. The increase in cash was driven by cash flows from operations of $6.9 million offset by debt repayments and cash dividend payments. Cash flows generated by operations of $6.9 million in the current year compares to cash flows generated of $0.3 million in the prior year. The improvement was driven by increased earnings, reduced investment in inventory which included the write-off of the SFE inventory, and changes in income taxes.
Doug Grant further commented, “We are very pleased with our continued ability to out perform the previous year in both sales and operational income on a quarter over quarter basis and for the nine-month period. Our efforts have driven increased sales across all active product lines and our continued focus on operational improvements have contributed to improved gross margins and reduced operating expenses as a percentage of sales. We remain somewhat cautious about our ability to sustain the current year's growth in orders and operating income performance into the next quarter due to the potential impact of the continued pace of the global economic recovery and the short-term impact of activities and expenses associated with the pending merger with Teledyne Technologies, Inc.”
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 November 2003 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.
ISCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
| Three months ended |
| Nine months ended |
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(Amounts in thousands, except per |
| Apr 23 |
| Apr 25 |
| Apr 23 |
| Apr 25 |
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Net sales |
| $ | 18,093 |
| $ | 15,057 |
| $ | 52,633 |
| $ | 44,813 |
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Cost of sales |
| 7,965 |
| 7,358 |
| 24,358 |
| 21,048 |
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| 10,128 |
| 7,699 |
| 28,275 |
| 23,765 |
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Operating expenses: |
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Selling, general, and administrative |
| 7,187 |
| 5,975 |
| 19,154 |
| 18,512 |
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Research and engineering |
| 1,661 |
| 1,602 |
| 5,016 |
| 4,837 |
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| 8,848 |
| 7,577 |
| 24,170 |
| 23,349 |
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Income from operations |
| 1,280 |
| 122 |
| 4,105 |
| 416 |
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Other income: |
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Investment income |
| 127 |
| 108 |
| 447 |
| 440 |
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Interest expense |
| (38 | ) | (52 | ) | (118 | ) | (179 | ) | ||||
Other, net |
| 42 |
| 50 |
| 143 |
| 136 |
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| 131 |
| 106 |
| 472 |
| 397 |
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Income before income taxes |
| 1,411 |
| 228 |
| 4,577 |
| 813 |
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Provision for income taxes |
| 470 |
| 6 |
| 1,494 |
| 170 |
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Net income |
| $ | 941 |
| $ | 222 |
| $ | 3,083 |
| $ | 643 |
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Basic earnings per share |
| $ | 0.16 |
| $ | 0.04 |
| $ | 0.54 |
| $ | 0.11 |
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Diluted earnings per share |
| $ | 0.16 |
| $ | 0.04 |
| $ | 0.52 |
| $ | 0.11 |
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Cash dividends declared per share |
| $ | 0.06 |
| $ | 0.06 |
| $ | 0.18 |
| $ | 0.18 |
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Weighted average number of shares outstanding (basic) |
| 5,739 |
| 5,704 |
| 5,733 |
| 5,686 |
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Additional shares assuming exercise of common stock equivalents and dilutive stock options |
| 180 |
| 139 |
| 166 |
| 158 |
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Weighted average number of shares outstanding (diluted) |
| 5,919 |
| 5,843 |
| 5,899 |
| 5,844 |
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ISCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(Amounts in thousands) |
| Apr 23 |
| Jul 25 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
| $ | 1,895 |
| $ | 5,383 |
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Short-term investments |
| 2,965 |
| 4,629 |
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Accounts receivable (net) |
| 10,882 |
| 10,590 |
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Inventories |
| 8,901 |
| 9,489 |
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Refundable income taxes |
| — |
| 303 |
| ||
Deferred income taxes |
| 991 |
| 812 |
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Other current assets |
| 611 |
| 417 |
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Total current assets |
| 26,245 |
| 31,623 |
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Property and equipment (net) |
| 12,972 |
| 13,768 |
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Long-term investments |
| 14,659 |
| 4,717 |
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Other assets |
| 4,367 |
| 4,327 |
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Total assets |
| $ | 58,243 |
| $ | 54,435 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
| $ | 1,698 |
| $ | 1,222 |
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Accrued expenses |
| 3,700 |
| 3,698 |
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Income taxes payable |
| 980 |
| — |
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Short-term borrowing |
| 2,313 |
| 2,113 |
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Current portion of long-term debt |
| 32 |
| 503 |
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Total current liabilities |
| 8,723 |
| 7,536 |
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Deferred income taxes |
| 606 |
| 532 |
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Long-term debt, less current portion |
| 590 |
| 584 |
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Shareholders' equity |
| 48,324 |
| 45,783 |
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Total liabilities and shareholders' equity |
| $ | 58,243 |
| $ | 54,435 |
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