Exhibit 99.1
FOR IMMEDIATE RELEASE
INTRICON REPORTS 2007 FIRST-QUARTER RESULTS
Strong Sales Driven by 138 Percent Growth in Medical
and Robust Hearing-health Performance
ST. PAUL, Minn. — April 25, 2007 — IntriCon Corporation (AMEX: IIN), a designer, developer, manufacturer and distributor of miniature and micro-miniature medical and electronics products, today announced financial results for its 2007 first quarter ended March 31, 2007.
For the first quarter, the company reported sales of $14.6 million, a 23 percent increase from sales of $11.8 million for the 2006 first quarter. IntriCon delivered first-quarter net income of $28,000, or $0.01 per diluted share, which included stock option expense of $73,000, or $0.01 per diluted share. This is a significant improvement from a net loss of $141,000, or $0.03 per diluted share, for the 2006 first quarter, which included stock option expense of $44,000, or $0.01 per diluted share.
“Substantial gains in our medical and hearing-health businesses helped deliver strong quarterly sales,” said Mark S. Gorder, president and chief executive officer of IntriCon. “High demand from leading OEMs combined with the ramp-up of new projects drove the increase. We are very pleased with the great start to 2007.”
Business Update
For the first quarter, IntriCon’s 23 percent sales increase was driven primarily by year-over-year gains in medical and hearing-health of approximately 138 percent and 13 percent, respectively. Professional audio declined by 5 percent due to project timing; new professional audio projects are expected to gain traction in the current quarter. Electronics decreased 8 percent from the first quarter of 2006, due primary to lower demand from one customer.
Said Gorder, “Excluding electronics, revenue from the company’s core businesses of medical, hearing-health and professional audio were up a combined 32 percent from the fiscal 2006 first quarter. Going forward, we plan to further develop our existing relationships with major medical OEMs, as well as forge new relationships, to continue to grow this rapidly expanding market opportunity.”
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IntriCon Corporation 2007 First-Quarter Results
April 25, 2007
Page 2
Recently, IntriCon entered into an agreement to acquire substantially all of the assets (other than real estate) of privately held Tibbetts Industries, Inc., a designer and manufacturer of components used in hearing aids and medical devices. Tibbetts, based in Camden, Maine, makes magnetic telecoils and miniature electro-acoustic transducers, including receivers and microphones. Tibbetts also offers products that support technical surveillance by security agencies. The acquisition is expected to be completed in May 2007, subject to Tibbetts’ shareholder approval and other customary closing conditions.
Said Gorder, “Our acquisition of Tibbetts gives IntriCon access to key components that go into ear-worn communication devices used in hearing health, medical and professional audio products such as hearing aids, and ear-worn headsets and microphones. With IntriCon’s established wireless and digital signal processing expertise, and the new markets and opportunities this transaction brings, we feel that we can leverage Tibbetts’ expertise, technologies and products across our three core markets to further grow IntriCon.”
Concluded Gorder, “We’re beginning 2007 with momentum in both sales and new-product introductions. By focusing on our core markets, which continue to perform well, we expect to achieve ongoing success as we move forward.”
About IntriCon Corporation
Headquartered in Arden Hills, Minn., IntriCon Corporation designs, develops and manufactures miniature and micro-miniature medical and electronic products. The company is focused on four key markets: medical, hearing health, professional audio and communications, and electronics. IntriCon has facilities in the United States, Asia and Europe. The company’s common stock trades under the symbol “IIN” on the American Stock Exchange. For more information about IntriCon, visit www.intricon.com.
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IntriCon Corporation 2007 First-Quarter Results
April 25, 2007
Page 3
Forward-Looking Statements
Statements made in this release and in IntriCon’s other public filings and releases that are not historical facts or that include forward-looking terminology such as “may”, “will”, “believe”, “expect”, “should”, “optimistic” or “continue” or the negative thereof or other variations thereon are “forward-looking statements” within the meaning of the Securities Exchange Act of 1934 as amended. These forward-looking statements include, without limitation, statements concerning the proposed acquisition and its benefits, future growth, future financial condition and performance, prospects, and the positioning of IntriCon to compete in chosen markets. These forward-looking statements are affected by known and unknown risks, uncertainties and other factors that are beyond the IntriCon’s control, and may cause IntriCon’s actual results, performance or achievements to differ materially from the results, performance and achievements expressed or implied in the forward-looking statements. These risks, uncertainties and factors include, without limitation, the risk that the planned acquisition may not close on the terms agreed upon or at all, risks related to the acquisition, including unanticipated liabilities and expenses, the risk that IntriCon may not be able to achieve its long-term strategy, weakening demand for products of the company due to general economic conditions, possible non-performance of developing technological products, the volume and timing of orders received by the company, changes in the mix of products sold, competitive pricing pressures, availability of electronic components for the company’s products, ability to create and market products in a timely manner, competition by competitors with more resources than the company, foreign currency risks arising from the company’s foreign operations and other risks detailed from time to time in the company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2006. The company disclaims any intent or obligation to publicly update or revise any forward-looking statements, regardless of whether new information becomes available, future developments occur or otherwise.
Contacts | |
At IntriCon: Scott Longval, CFO 651-604-9526 slongval@intricon.com | At Padilla Speer Beardsley: Matt Sullivan/Marian Briggs 612-455-1700 msullivan@psbpr.com / mbriggs@psbpr.com |
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IntriCon Corporation 2007 First-Quarter Results
April 25, 2007
Page 4
IntriCon Corporation
Consolidated Condensed Statements of Operations
(Unaudited)
| | Three Months Ended | |
| | March 31,
2007 | | March 31,
2006 | |
Sales, net | | $ | 14,579,267 | | $ | 11,836,133 | |
| | | | | | | |
Costs of sales | | | 11,368,010 | | | 9,069,723 | |
| | | | | | | |
Gross profit | | | 3,211,257 | | | 2,766,410 | |
| | | | | | | |
Operating expenses: | | | | | | | |
Selling expense | | | 842,766 | | | 902,421 | |
General and administrative expense (a) | | | 1,420,264 | | | 1,305,409 | |
Research and development expense | | | 732,681 | | | 568,983 | |
Total operating expenses | | | 2,995,711 | | | 2,776,813 | |
| | | | | | | |
Operating income (loss) | | | 215,546 | | | (10,403 | ) |
| | | | | | | |
Interest expense | | | (153,277 | ) | | (156,527 | ) |
Interest income | | | 38,736 | | | 21,893 | |
Equity in loss of partnership | | | (20,000 | ) | | — | |
Other expense, net | | | (25,737 | ) | | (34,285 | ) |
| | | | | | | |
Income (loss) before income taxes | | | 55,268 | | | (179,322 | ) |
Income tax expense (benefit) | | | 27,760 | | | (37,913 | ) |
| | | | | | | |
Net income (loss) | | $ | 27,508 | | $ | (141,409 | ) |
| | | | | | | |
| | | | | | | |
Earnings per share: | | | | | | | |
Basic and diluted | | $ | .01 | | $ | (.03 | ) |
| | | | | | | |
Average shares outstanding: | | | | | | | |
Basic | | | 5,196,903 | | | 5,151,942 | |
Diluted | | | 5,358,986 | | | 5,151,942 | |
(a) | General and administrative expense includes $73,073 and $44,261 of non-cash stock option expense related to the adoption of FAS 123(R) for the three months ended March 31, 2007 and 2006, respectively. |
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IntriCon Corporation 2007 First-Quarter Results
April 25, 2007
Page 5
IntriCon Corporation
Consolidated Condensed Balance Sheets
(Unaudited)
Assets | | | | | |
| | March 31, 2007 | | December 31, 2006 | |
| | (unaudited) | | | | |
Current assets | | | | | | | |
| | | | | | | |
Cash | | $ | 743,794 | | $ | 599,459 | |
| | | | | | | |
Restricted cash | | | 60,158 | | | 60,158 | |
| | | | | | | |
Accounts receivable, less allowance for doubtful accounts of $216,000 at 2007 and $246,000 at 2006 | | | 7,759,799 | | | 8,456,450 | |
| | | | | | | |
Inventories | | | 9,677,273 | | | 9,030,615 | |
| | | | | | | |
Refundable income taxes | | | 74,338 | | | 103,587 | |
| | | | | | | |
Note receivable from sale of discontinued operations, less allowance of $375,000 at 2007 and 2006 | | | 300,000 | | | 300,000 | |
| | | | | | | |
Other current assets | | | 226,511 | | | 235,418 | |
| | | | | | | |
| | | | | | | |
Total current assets | | | 18,841,873 | | | 18,785,687 | |
| | | | | | | |
Property, plant and equipment | | | | | | | |
Machinery and equipment | | | 29,532,592 | | | 28,767,904 | |
Less: accumulated depreciation | | | 22,440,337 | | | 21,994,344 | |
| | | | | | | |
Net property, plant and equipment | | | 7,092,255 | | | 6,773,560 | |
| | | | | | | |
Long-term note receivable from sale of discontinued operations | | | — | | | 75,000 | |
| | | | | | | |
Goodwill | | | 5,927,181 | | | 5,927,181 | |
| | | | | | | |
Investment in partnership | | | 1,780,000 | | | 1,800,000 | |
| | | | | | | |
Other assets, net | | | 959,917 | | | 920,051 | |
| | | | | | | |
| | $ | 34,601,226 | | $ | 34,281,479 | |
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IntriCon Corporation 2007 First-Quarter Results
April 25, 2007
Page 6
IntriCon Corporation
Consolidated Condensed Balance Sheets
(Unaudited)
Liabilities and Shareholders’ Equity | | March 31, 2007 | | December 31, 2006 | |
| | (unaudited) | | | |
Current liabilities | | | | | | | |
| | | | | | | |
Checks written in excess of cash | | $ | 1,349,563 | | $ | 661,756 | |
| | | | | | | |
Current maturities of long-term debt | | | 1,137,271 | | | 952,730 | |
| | | | | | | |
Accounts payable | | | 3,658,739 | | | 5,161,450 | |
| | | | | | | |
Income taxes payable | | | 179,022 | | | 173,810 | |
| | | | | | | |
Deferred gain on building sale | | | 110,084 | | | 110,084 | |
| | | | | | | |
Short term partnership payable | | | 260,000 | | | 260,000 | |
| | | | | | | |
Other accrued liabilities | | | 2,844,178 | | | 3,021,201 | |
| | | | | | | |
| | | | | | | |
Total current liabilities | | | 9,538,857 | | | 10,341,031 | |
| | | | | | | |
Long term debt, less current maturities | | | 4,903,963 | | | 3,830,461 | |
| | | | | | | |
Other post-retirement benefit obligations | | | 1,036,331 | | | 1,063,744 | |
| | | | | | | |
Long term partnership payable | | | 1,280,000 | | | 1,280,000 | |
| | | | | | | |
Note payable, net of current portion (Amecon) | | | 515,720 | | | 515,720 | |
| | | | | | | |
Deferred income taxes | | | 79,273 | | | 79,273 | |
| | | | | | | |
Accrued pension liability | | | 616,829 | | | 628,569 | |
| | | | | | | |
Deferred gain on building sale | | | 908,194 | | | 935,715 | |
| | | | | | | |
Total non-current liabilities | | | 9,340,310 | | | 8,333,482 | |
| | | | | | | |
| | | | | | | |
Total liabilities | | | 18,879,167 | | | 18,674,513 | |
| | | | | | | |
Commitments and contingencies | | | | | | | |
Shareholders’ equity | | | | | | | |
Common shares, $1 par; 10,000,000 shares authorized;
5,710,235 and 5,706,235 shares issued; 5,194,481 and 5,190,481 outstanding | | | 5,710,235 | | | 5,706,235 | |
| | | | | | | |
Additional paid-in capital | | | 12,417,561 | | | 12,339,988 | |
| | | | | | | |
Accumulated deficit | | | (961,997 | ) | | (989,505 | ) |
| | | | | | | |
Accumulated other comprehensive loss | | | (178,662 | ) | | (184,674 | ) |
| | | | | | | |
Less: 515,754 common shares held in treasury, at cost | | | (1,265,078 | ) | | (1,265,078 | ) |
| | | | | | | |
Total shareholders’ equity | | | 15,722,059 | | | 15,606,966 | |
| | | | | | | |
| | $ | 34,601,226 | | $ | 34,281,479 | |
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