FOR IMMEDIATE RELEASE
- ---------------------
INTRICON REPORTS 2006 FIRST-QUARTER RESULTS;
SALES UP 21 PERCENT OVER PRIOR-YEAR PERIOD
ST. PAUL, MINN. -- APRIL 26, 2006 -- INTRICON CORPORATION (AMEX: IIN), a
designer, developer, manufacturer and distributor of miniature and
micro-miniature medical and electronic products, today announced financial
results for its first quarter ended March 31, 2006.
For the first quarter, the company reported sales of $11.8 million, up
from $9.8 million for the 2005 first quarter, a gain of 21 percent. Sales also
rose sequentially from $11.2 million for a 6 percent increase from sales
reported in the fourth quarter of 2005. IntriCon had a net loss for the 2006
first quarter of $141,000, or $0.03 per share, versus earnings of $210,000, or
$0.04 per share, for the year-ago period, which included income from
discontinued operations of $464,000. The current year loss includes $44,000, or
$0.01 per share, due to the 2006 adoption of FAS 123(R) expensing for stock
options.
"We are pleased with the strong demand we saw for our products in the
first quarter, which represents a great start for the year. The company's small
loss stems primarily from new project inefficiencies," said Mark S. Gorder,
president and chief executive officer of IntriCon. "We expect improvement going
forward."
For the 2006 three-month period, IntriCon recorded a loss from
continuing operations of $141,000, or $0.03 per share, improved from a loss from
continuing operations of $254,000, or $0.05 per share, for the prior-year
period.
BUSINESS UPDATE
As previously reported, the company closed on the acquisition of the
Amecon Corporation in the fourth quarter of 2005. This business has now been
successfully integrated into the company's existing electronic components
facility in Anaheim, Calif.
Recently, IntriCon and CEO Mark Gorder were named finalists in the 2006
Ernst & Young Entrepreneur of the Year(R) competition, which recognizes
outstanding entrepreneurs who are building and leading dynamic and growing
businesses.
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IntriCon 2006 First-Quarter Results
April 26, 2006
Page 2
Gorder stated: "All of our employees can be proud of this recognition.
The nomination is an acknowledgement of the company's turnaround, which was
propelled by solid sales gains in key markets after we divested non-core
operations. IntriCon is now focused on four markets: medical, hearing health,
professional audio and electronics.
"We expect further growth by concentrating on our core product lines
and accelerating the pace of new product introductions, which combined with our
continued customer relationships and cost reductions, should lead to ongoing
success as we move forward," Gorder concluded.
ABOUT INTRICON CORPORATION
Headquartered in Arden Hills, Minn., the 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.
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 future growth, future financial condition and
performance, prospects, the positioning of the company to compete in chosen
markets. These forward-looking statements are affected by known and unknown
risks, uncertainties and other factors that are beyond the company's control,
and may cause the company'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 company 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
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IntriCon 2006 First-Quarter Results
April 26, 2006
Page 3
Exchange Commission, including the Annual Report on Form 10-K for the year ended
December 31, 2005. 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.
CONTACT:
IntriCon Corporation, St. Paul, MN
Bill Kullback
Chief Financial Officer
651-604-9638
BKullback@intricon.com
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IntriCon 2006 First-Quarter Results
April 26, 2006
Page 4
INTRICON CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
March 31, March 31,
2006 2005
------------ ------------
Sales, net ....................................... $ 11,836,133 $ 9,786,174
Costs of sales ................................... 9,069,723 7,403,802
------------ ------------
Gross profit ..................................... 2,766,410 2,382,372
Operating expenses:
Selling expense .................................. 902,421 803,598
General and administrative expense (a) ........... 1,305,409 1,252,414
Research and development expense ................. 568,983 406,934
------------ ------------
Total operating expenses ....................... 2,776,813 2,462,946
Operating loss ................................... (10,403) (80,574)
Interest expense ................................. (156,527) (112,043)
Interest income .................................. 21,893 --
Other expense, net ............................... (34,285) (34,916)
------------ ------------
Loss from continuing operations before
Income taxes ................................. (179,322) (157,701)
Income taxes expense (benefit) ................... (37,913) 95,824
------------ ------------
Loss from continuing operations .................. (141,409) (253,525)
Income from discontinued
operations, net of income taxes .............. -- 463,756
Net income (loss) ................................ $ (141,409) $ 210,231
============ ============
Net earnings (loss) per share (basic and diluted):
Continuing operations ....................... $ (.03) $ (.05)
Discontinued operations ..................... -- .09
------------ ------------
Net income (loss) ........................... $ (.03) $ .04
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Average shares outstanding:
Basic and diluted ......................... 5,151,942 5,129,214
(a) General and administrative expense includes $44,261 of non-cash stock
option expense related to the adoption of FAS 123(R).
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April 26, 2006
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INTRICON CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
2006 2005
----------- -----------
(unaudited)
Current assets
Cash ........................................................... $ 892,171 $ 1,109,402
Restricted cash ............................................... 60,158 60,158
Accounts receivable, less allowance for doubtful accounts of
$380,000 in 2006 and $370,000 in 2005 ...................... 6,568,789 6,925,357
Inventories .................................................... 6,922,968 6,950,243
Refundable income taxes ........................................ 64,717 77,143
Other current assets ........................................... 413,148 454,053
----------- -----------
Total current assets ........................................ 14,921,951 15,576,356
Property, plant and equipment
Land ........................................................ 170,500 170,500
Buildings ................................................... 1,732,914 1,732,914
Machinery and equipment ..................................... 26,887,737 26,423,956
----------- -----------
28,791,151 28,327,370
Less: accumulated depreciation .............................. 21,897,378 21,455,955
----------- -----------
Net property, plant and equipment ......................... 6,893,773 6,871,415
Note receivable from sale of discontinued operations, less allowance
of $296,000 ................................................... 503,923 503,923
Goodwill
5,867,239 5,754,219
Other assets, net .................................................. 898,404 929,474
----------- -----------
$29,085,290 $29,635,387
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April 26, 2006
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March 31, December 31,
2006 2005
LIABILITIES AND SHAREHOLDERS' EQUITY ------------ ------------
(unaudited)
Current liabilities
Checks written in excess of cash ....................................... $ 369,565 $ 397,999
Current maturities of long-term debt ................................... 632,799 888,531
Accounts payable ....................................................... 3,431,592 3,136,555
Income taxes payable ................................................... 248,730 298,914
Customers' advance payments on contracts ............................... -- 59,210
Other accrued liabilities .................................................. 2,339,450 2,610,474
------------ ------------
Total current liabilities ............................................ 7,022,136 7,391,683
Long term debt, less current maturities .................................... 5,141,154 5,319,181
Other post-retirement benefit obligations .................................. 1,466,782 1,516,939
Note payable, net of current portion ....................................... 769,080 646,530
Deferred income taxes ...................................................... 42,725 37,725
Accrued pension liability .................................................. 641,395 633,818
------------ ------------
Total liabilities .................................................... 15,083,272 15,545,876
Commitments and contingencies
Shareholders' equity
Common shares, $1 par; 10,000,000 shares authorized; 5,667,068 and 5,665,568
shares issued; 5,151,314 and 5,149,814
outstanding ............................................................ 5,667,068 5,665,568
Additional paid-in capital ............................................. 12,100,651 12,053,590
Accumulated deficit .................................................... (2,293,426) (2,152,017)
Accumulated other comprehensive loss ................................... (207,197) (212,552)
Less: 515,754 common shares held in treasury, at cost .................. (1,265,078) (1,265,078)
------------ ------------
Total shareholders' equity ........................................ 14,002,018 14,089,511
------------ ------------
$ 29,085,290 $ 29,635,387
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