[COLORADO MEDTECH LOGO HERE]
EXHIBIT 99.1
FOR IMMEDIATE RELEASE: NEWS
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August 22, 2000 NASDAQ-CMED
COLORADO MEDTECH, INC. ANNOUNCES
FOURTH QUARTER AND FISCAL YEAR-END RESULTS,
MANAGEMENT CHANGES AND STOCK REPURCHASE PROGRAM
BOULDER, Colorado -- Colorado MEDtech, Inc. (NASDAQ -- CMED), a Boulder,
Colorado-based medical products and services company, today announced results
for its fourth quarter and fiscal year ended June 30, 2000, significant
management changes and a stock repurchase program.
Fourth Quarter and Fiscal Year 2000 Results
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The Company recorded fourth quarter net income of $363,000 and earnings per
share, on a diluted basis, of 3 cents prior to a one-time charge of $1,322,000
for the write-off of goodwill in an under-performing subsidiary. The Company's
net loss after this one-time charge was ($959,000) compared to net income of
$2,850,000 in the fourth quarter of the prior year. Sales for the fourth quarter
were $16,996,000 compared to $21,676,000 in the prior year. Earnings per share,
on a diluted basis, for the fourth quarter were a loss of (8) cents per share
after the one-time charges compared to 21 cents in the fourth quarter of the
prior year.
Net income for the year ended June 30, 2000 was $4,968,000 and earnings per
share, on a diluted basis, were 37 cents prior to one-time charges of $1,977,000
consisting of the write-off of goodwill described above and charges taken in the
first and second quarters of $655,000 related to the acquisition of CIVCO
Medical Instruments Co., Inc. and the centralization of the Company's
manufacturing operations. The Company's net income after these one-time charges
was $2,991,000 compared to $9,097,000 in the prior year. Sales for the year were
$74,003,000 compared to $75,723,000 in the prior year. Earnings per share, on a
diluted basis, for fiscal year 2000 were 22 cents after the one-time charges
compared to 69 cents per share in fiscal year 1999.
New Management
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Colorado MEDtech today also announced the appointment of new executive
management and officers. "I am taking decisive action to streamline our
organization and to build Colorado MEDtech into an industry leader. We have
launched a series of actions designed to position the Company for improved
growth, performance and profitability," declared Stephen K. Onody, President and
CEO. "My intent is to focus our business units on increased sales and
profitability, improve performance for our customers and provide enhanced career
opportunities for our employees. The first step, already underway, is to
strengthen and enhance our management team. To that end, we are announcing five
new key executive appointments:
First, the Company has appointed Bill Wood as Senior Vice President,
Product Development and Technology. Mr. Wood's focus is to continue to
strengthen the
Company's engineering and software staff, refine development processes and
improve project execution. Mr. Wood is highly respected in our industry and
has been with the Company for the past twelve years.
Second, Colorado MEDtech has promoted Gregory A. Gould, CPA to the position
of Chief Financial Officer. Mr. Gould has served as Director of Finance of
the Company for the past four years. Prior to joining Colorado MEDtech, he
was with Arthur Andersen LLP.
Third, Colorado MEDtech has appointed Frank Maguire to the post of Chief
Operations Officer. In this new position, Mr. Maguire will be responsible
for Colorado MEDtech's Manufacturing, Human Resources and Management
Information Systems. Mr. Maguire brings significant operational expertise,
having held senior positions with American Hospital Supply Corporation, C.
R. Bard and Baxter Healthcare. At Baxter Healthcare, he was Vice President
and General Manager of Baxter Research Medical as well as a member of
Baxter Healthcare's senior management team.
Fourth, to expand project management expertise, the Company has appointed
Kenneth D. Taylor, Ph.D. as Vice President, General Manager of the research
and development group, RELA. Dr. Taylor has extensive experience in product
development and commercialization. He served as Vice President, Product
Development for Medlogic Global Corp., Vice President, Research and
Development for ValleyLab and Director of Technology for Pfizer Medical
Devices.
Finally, Colorado MEDtech has promoted Richard L. Schoen to the position of
Vice President, Business Development. He was formerly General Manager of
the RELA Diagnostics Division. Mr. Schoen has over twenty-five years of
corporate sales, marketing, strategic planning and general management
experience. Before joining the Company, Mr. Schoen was General Manager for
SmithKline Diagnostics, Inc. and held senior management positions at
Beckman Coulter, Inc."
Stock Repurchase Program
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Colorado MEDtech also announced today that its Board of Directors has authorized
the repurchase of up to 1.2 million shares of its common stock in open market
transactions, including block purchases, or in privately negotiated
transactions. The shares to be repurchased represent up to approximately 10% of
the Company's 12.3 million shares outstanding. The stock may be purchased from
time to time as the Company's financial condition and market conditions permit.
The repurchase program does not include specific price targets and may be
suspended at any time. Depending on financial and market conditions, the program
could be terminated prior to completion. Colorado MEDtech will use some of its
cash on hand to acquire the shares. Repurchased shares will be retired.
Outlook
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"My vision for Colorado MEDtech is that we will be the worldwide leader in
advanced medical products outsourcing including design, development, components
and manufacturing," stated Mr. Onody. "Colorado MEDtech's growth and financial
results for the last few years have been outstanding. In the five years prior to
fiscal year 2000, annual revenue has grown from $24.9 million to $75.7 million
and earnings per share have grown from 27 cents to 69 cents. However, fiscal
year 2000 has been a year of challenge for the Company and our results have been
a major disappointment to the Company and its shareholders."
"Our fiscal year 2001 will be a year in which we will focus on programs to
enhance future growth. One example of such a program is the Company's "OneSource
OutSource(TM)" approach which permits rapid development and product
commercialization for our clients," Mr. Onody said.
"We expect growth during this year to be moderate; we also believe our changes
will take three to four quarters to implement, but we expect to see improved
results starting in the second half of fiscal year 2001 and, at the end of this
period, we believe we will be strongly positioned in our core business and will
be able to resume our aggressive growth during fiscal 2002 and beyond."
"The Board of Colorado MEDtech and I strongly believe that the vision of the
Company continues to be exciting and that growth in our core marketplaces of
therapeutics, diagnostics and imaging equipment remains strong worldwide. More
importantly, as new technologies in software, electronics, mechanics, fluidics
and optics continue to drive new treatments and modalities, the demand for high
technology outsourcing services will continue to grow. It is this market demand
in combination with our technical expertise that drives both our vision and our
confidence in the future."
"Achieving this vision will provide significant benefits to the Company's
shareholders, employees and customers, as well as to the users of the innovative
healthcare products that Colorado MEDtech and its customers produce. I believe
that the marketplace continues to offer us an outstanding opportunity for
revenue and profit growth," Mr. Onody concluded.
Colorado MEDtech, Inc., through its wholly owned subsidiaries and operating
divisions, is a leading full-service provider of advanced medical products and
comprehensive outsourcing services.
Forward-Looking Statements
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The statements in this news release and in the conference call discussed below
that are not historical facts, are forward-looking statements that represent
management's beliefs and assumptions based on currently available information.
Forward-looking statements can be identified by the use of words such as
"believes," "intends," "may," "will," "should," "anticipated" or comparable
terminology or by discussions of strategy. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable, it
cannot assure that these expectations will prove to be correct. Such statements
involve risks and
uncertainties including, but not limited to, the risk that the Company's
existing level of orders may not be indicative of the level or trend of future
orders, the risk that the Company may not successfully complete the work
encompassed by current or future orders, the risk that unforeseen technical or
production difficulties may adversely impact project timing and financial
performance, the risk that the management changes will not produce the desired
results, the risk that acquired companies cannot be successfully integrated with
the Company's existing operations and the risk that a downturn in general
economic conditions or customer budgets may adversely affect research and
development and capital expenditure budgets of potential customers upon which
the Company is dependent. Should one or more of these risks materialize (or the
consequences of such a development worsen), or should the underlying assumptions
prove incorrect, actual results could differ materially from those forecasted or
expected. The Company assumes no duty to update any forward-looking statements.
Conference Call
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Colorado MEDtech will hold a conference call at 10:00 a.m. Eastern time on
August 22, 2000 to discuss its fourth quarter and fiscal year results, its
management changes and its stock repurchase program. To listen to the conference
call, dial 1-800-276-6308. We suggest you call at least five minutes prior to
the start time to ensure you can access the call. A replay of the call will be
available for one week following the call and can be accessed by calling 1-800-
405-2236 pass code 749716.
CONTACTS:
Colorado MEDtech, Inc.
Stephen K. Onody, President and CEO Telephone: 303.530.2660
Gregory A. Gould, CFO Fax: 303.581.1010
Website: www.cmed.com Email: cmedinfo@cmed.com
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COLORADO MEDTECH, INC.
CONDENSED CONSOLIDATED COMBINED BALANCE SHEETS
(UNAUDITED)
June 30, June 30,
2000 1999
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ASSETS
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CURRENT ASSETS:
Cash and cash equivalents $ 8,560,065 $ 8,499,714
Short-term investments 8,190,621 14,394,870
Accounts receivable, net 13,662,053 11,932,749
Inventories, net 8,512,540 5,512,155
Deferred income taxes and other
current assets 3,141,121 2,353,432
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Total current assets 42,066,400 42,692,920
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PROPERTY AND EQUIPMENT, net 4,568,811 4,341,931
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GOODWILL, net 316,337 1,582,039
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LAND, DEFERRED INCOME TAXES
AND OTHER ASSETS 1,340,315 1,354,124
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TOTAL ASSETS $48,291,863 $49,971,014
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES:
Accounts payable $ 5,440,413 $ 5,842,194
Accrued salaries and wages 2,390,201 4,519,996
Accrued product service costs 394,361 313,409
Customer deposits 2,647,132 3,482,841
Other accrued expenses 1,951,128 3,043,878
Income taxes payable - 564,274
Current debt 46,120 590,616
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Total current liabilities 12,869,355 18,357,208
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LONG-TERM DEBT, net 75,218 1,163,711
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SHAREHOLDERS' EQUITY:
Common stock 13,468,486 11,158,446
Retained earnings 21,881,289 19,263,269
Unrealized gain (loss) on available-for-sale investment (2,485) 28,380
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Total shareholders' equity 35,347,290 30,450,095
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $48,291,863 $49,971,014
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-MORE-
COLORADO MEDTECH, INC.
CONDENSED CONSOLIDATED COMBINED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Year Ended
June 30, June 30,
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2000 1999 2000 1999
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SALES AND SERVICE:
Outsourcing Services $ 9,170,575 $13,969,195 $42,467,159 $47,408,235
Medical Products 7,825,152 7,706,587 31,535,944 28,314,372
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Total Sales 16,995,727 21,675,782 74,003,103 75,722,607
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COST OF SALES AND SERVICE:
Outsourcing Services 6,571,501 8,270,353 28,527,446 29,153,336
Medical Products 4,630,395 4,678,742 18,649,757 16,060,924
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Total Cost of Sales 11,201,896 12,949,095 47,177,203 45,214,260
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GROSS PROFIT 5,793,831 8,726,687 26,825,900 30,508,347
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COSTS AND EXPENSES:
Marketing and selling 889,739 962,903 4,065,466 3,748,617
Operating, general and administrative 4,760,460 2,870,932 14,054,321 10,572,752
Research and development 1,104,753 716,301 4,025,567 2,878,396
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Total operating expenses 6,754,952 4,550,136 22,145,354 17,199,765
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EARNINGS FROM OPERATIONS (961,121) 4,176,551 4,680,546 13,308,582
OTHER (EXPENSE) INCOME, net 213,129 189,243 733,008 492,066
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EARNINGS BEFORE
INCOME TAXES (747,992) 4,365,794 5,413,554 13,800,648
Provision for income taxes 211,000 1,516,000 2,423,000 4,704,000
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NET INCOME (LOSS) $ (958,992) $ 2,849,794 $ 2,990,554 $ 9,096,648
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NET INCOME PER SHARE
Basic $ (.08) $ .24 $ .25 $ .79
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Diluted $ (.08) $ .21 $ .22 $ .69
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WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic 12,269,649 11,660,707 12,076,421 11,471,362
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Diluted 12,269,649 13,450,447 13,354,808 13,239,795
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