EXHIBIT 20.3
FOR IMMEDIATE RELEASE Contact: C. Fred Harlow
Chief Financial
Officer
(770) 381-7566
ISOLYSER EXPANDS OREX(C) DEGRADABLES(TM)
MARKET PENETRATION
SECOND QUARTER HIGHLIGHTS
* Substantial increase in sales of OREX(C) products.
* OREX(C) fiber manufacturing equipment acquired.
* Revised Merger Agreement with Microtek Medical, Inc.
(Nasdaq/NM:MTMI)
* Reallowance of two OREX(C) patents.
* Distribution contract with Shared Services Healthcare to
market OREX(C) products to 1,273 hospitals.
* Three-year agreement with MedEcon of Louisville, Kentucky,
for the distribution of operating room towels and lap
sponges manufactured with OREX(C) Degradables(TM) material.
* 18-month distribution agreement with Amerinet, a St. Louis-
based group purchasing organization representing 1,669
hospitals throughout the United States.
* Distribution agreement with Purchase Connection, a wholly-
owned subsidiary of COHR, a Los Angeles-based health care
organization, operating seven regional sales and customer
service sites serving approximately 1,500 group purchasing
customers in 48 states.
NORCROSS, Georgia (July 24, 1996) Isolyser Company, Inc.
(Nasdaq/NM:OREX) today reported results for the second quarter
and six months ended June 30, 1996.
Net sales for the second quarter ended June 30, 1996,
reached $31.1 million, up 96% over 1995 second quarter net sales
of $15.9 million. Net loss for the second quarter was $569,000
or $0.02 per share, compared with net earnings of $27,000 for the
second quarter of 1995. Results for the second quarter of 1995
do not include the operations of White Knight Healthcare, Inc.,
acquired effective September 1, 1995.
Net sales for the first six months of 1996 were $62.1
million, up 122% over the comparable 1995 net sales of $28.0
million. Net loss was $946,000, or $0.03 per share, compared to
a net loss of $118,000, or $0.01 per share, a year ago.
Robert L. Taylor, president and chief executive officer of
Isolyser, said, "We are pleased that OREX(C) Degradables(TM) sales
continued to increase in the second quarter. In July 1996, we
acquired fiber manufacturing equipment which we expect will begin
commercial production in early 1997. We believe this equipment
will allow us to supplement our current supply of fiber materials
and reduce the overall cost for this critical raw material."
Progress to date in commercializing OREX(C) Degradables(TM)
includes offering over 225 OREX(C) catalog items (including both
sterile and non-sterile OREX(C) products), primarily in woven and
non-woven products; OREX(C) Degradables(TM) being purchased by 427
hospitals in procedure trays or packs; and 55 hospitals having
received OREX(C) processors, for a total of 88 hospitals having
received or contracted to receive processors.
The Company announced that shipments for OREX(C) Degradables(TM)
products in the second quarter of 1996 were $2.4 million
(compared with $1.6 million for the first quarter of 1996), which
was the second full quarter in which commercial quantities of
OREX(C) were available.
During the second quarter, the Company increased production
at its Arden and Abbeville OREX(C) plants to levels which fully
absorbed related production costs. However, the Company's
results of operations continue to be impacted by low profit
margins on OREX(C) Degradables(TM) products pending increased
utilization of the Company's existing manufacturing capacity and
the Company's second quarter production of more OREX(C)
Degradables(TM) towels than were sold in the quarter.
Mr. Taylor also said, "We are encouraged with our
performance in the second quarter. It has been a challenge to
develop manufacturing capacity and create demand simultaneously.
While we continue in our effort to improve our manufacturing and
sales, we now believe that most of the difficult start-up phase
is behind us and that enormous potential awaits the comprehensive
introduction of this very special product to the health care
marketplace as well as to other selected industries."
The Company recently announced the execution of a revised
definitive merger agreement under which Microtek Medical, Inc.
would become a wholly-owned subsidiary of Isolyser in a pooling-
of-interest transaction. The revised agreement adjusts the
exchange ratio in order that Microtek shareholders will continue
to receive $16.50 in value of Isolyser common stock for each
share of Microtek common stock, subject to adjustments. Both
Isolyser and Microtek will hold stockholders' meetings to approve
the transaction.
During the quarter, the Company announced that it received
notice from the United States Patent and Trademark Office of
intent to reallow two of the Company's patents concerning methods
of disposing of OREX(C) Degradables(TM) garments and like fabrics and
methods of disposing of OREX(C) Degradables(TM) packaging materials.
These patents were reallowed in response to reexamination
proceedings the Company had pending before the patent office.
With the issuance of the "notice of intent to issue a
reexamination certificate", the patent office has confirmed the
validity of these two patents and permitted Isolyser to prohibit
all others from disposing of fabrics and packaging in the United
States using the method claimed by such patents.
Also during the quarter, the Company announced an agreement
with Shared Services Healthcare, Inc. of Atlanta, Georgia,
pursuant to which Isolyser intends to market a variety of
products manufactured from its revolutionary hot water soluble
OREX(C) Degradables(TM) material. Shared Services Healthcare is a
group purchasing organization representing 1,273 hospitals
throughout the Southeast and Mid-Atlantic states.
Recently, the Company announced the signing of three
contracts which expanded the Company's market potential: A
three-year agreement with MedEcon of Louisville, Kentucky, for
the distribution of operating room towels and lap sponges
manufactured with OREX(C) Degradables(TM) material; an 18-month
agreement with Amerinet, a St. Louis-based group purchasing
organization representing 1,669 hospitals throughout the United
States; and an agreement with Purchase Connection, a wholly-owned
subsidiary of COHR, a Los Angeles-based health care organization,
which operates seven regional sales and customer service sites
serving approximately 1,500 group purchasing customers in 48
states.
Isolyser, based in Norcross, Georgia, has developed and
manufactured OREX(C) Degradables(TM), a series of products made from a
thermoplastic, hot water soluble polymer that can be configured
into an array of products such as woven and non-woven fabrics,
film and thermoformed and extruded items. These products can be
dissolved after use, in hot water in a specially designed OREX(C)
processor similar to a commercial washing machine, for safe
disposal through municipal sewer systems. The Company believes
that this line of products provides protection to the hospital
staff, patient and environment while providing cost-effective
solutions to the problems associated with waste reduction and
disposal.
ISOLYSER COMPANY, INC.
Unaudited Financial Highlights
(In thousands, except for share amounts)
OPERATIONS DATA:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
___________________________________________________________________________
1996 1995 1996 1995
___________________________________________________________________________
Net Sales $ 31,136 $ 15,886 $ 62,144 $ 28,041
Gross 7,763 4,069 14,891 6,694
profit
Loss from (805) (596) (1,793) (1,799)
operations
Net pre-tax (569) 93 (1,212) (207)
income (loss)
Net income (569) 27 (946) (118)
(loss)
Net loss (0.02) -- (0.03) (0.01)
per share
Weighted 30,679 25,758 30,590 25,113
shares
outstanding
1 Results for the first and second quarters of 1995 do not
include White Knight Healthcare, Inc. acquired effective
September 1, 1995.
2 Shares outstanding for the three and six months ended June
30, 1995, have been adjusted for a two-for-one stock
dividend paid on October 2, 1995.
BALANCE SHEET DATA:
JUNE 30, 1996 DECEMBER 31, 1995
________________ __________________
Cash and equivalents $ 33,807 $ 54,508
Other current assets 70,105 56,818
________________ __________________
Total current assets 103,912 111,326
Property and equipment, 66,689 58,447
net
Intangible assets, 36,301 37,830
net
Other assets 939 1,109
_______________ __________________
$ 207,841 $ 208,712
Current liabilities $ 19,643 $ 20,560
Long-term debt 9,346 9,822
Other liabilities 3,951 4,151
_______________ __________________
Other liabilities 32,940 34,533
Total liabilities 174,901 174,179
_______________ __________________
Shareholders' equity $ 207,841 $ 208,712
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