EXHIBIT 99.1
PRESS RELEASE - BIO-LOGIC SYSTEMS REPORTS SOLID PERFORMANCE IN FISCAL 2003
MUNDELEIN, IL, May 15, 2003 - Bio-logic Systems Corp. (Nasdaq: BLSC), a designer
and marketer of computerized medical electro-diagnostic equipment and
disposables, today reported financial results for the fourth quarter and year
ended February 28, 2003. The company experienced strong international hearing
sales and a significant increase in sales of hearing supplies worldwide.
Fourth Quarter Results
Net sales for the fourth quarter ended February 28, 2003 decreased 3.9 percent
to $7.3 million, compared with $7.6 million for the same quarter a year ago,
which included one-time shipments to the Province of Ontario of $1.1 million.
Gross profit margin increased 3.9 percentage points to 66.2 percent from 62.3
percent, primarily due to lower inventory obsolescence charges and improved cost
management. Total selling, general and administrative expense (SG&A) for the
quarter decreased $284,000 to $3.1 million, or 42.5 percent of sales, compared
to the $3.4 million, or 44.7 percent of sales, reported for the fourth quarter
of fiscal 2002. Research and development (R&D) expense increased $358,000
compared to last year, due to higher spending and lower capitalization of system
and software enhancements.
Operating income for the quarter was $297,000 compared to $292,000 for the same
quarter last year. Net income for the quarter increased 77.0 percent to $347,000
or $0.08 per diluted share, primarily due to the recording of an income tax
benefit, compared to $196,000 or $0.04 per share in the fourth quarter of fiscal
2002.
Full Year Results
For the year ended February 28, 2003, net sales decreased 2.0 percent to $29.3
million, compared with $29.9 million for the prior year, which included a
one-time sale to the Province of Ontario of $4.5 million. The company reported
gross profit margin of 67.2 percent for the year, a 3.8 percentage point
improvement from 63.4 percent for the year ended February 28, 2002. Gross profit
margin increased primarily due to lower inventory obsolescence provisions and
improved cost management. SG&A decreased by $53,000 or 0.4 percent, with the
percent to sales increasing to 43.7 percent from 43.0 percent last year. R&D
increased by $1.1 million or 30.7 percent, due to higher spending and lower
capitalization of expenses.
For fiscal 2003, the company had operating income of $2.0 million compared with
$2.4 million for fiscal 2002. The decline in operating income was due mainly to
higher R&D expense, which was partially offset by higher margins. Net income for
the year, aided by the income tax benefit
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recorded in the fourth quarter, was $1.5 million or $0.34 per share on a diluted
basis, compared with $1.5 million or $0.35 per share for the prior year.
The year was highlighted by several significant accomplishments including:
. Launching of the Navigator(R) Pro MASTER(TM) worldwide for infant
audiological assessment.
. Expansion of sales of our Ear Muffin(TM) over-the-ear earphone to
competitive accounts throughout the world.
. Improved asset management resulting in a $4.3 million increase in
cash.
. Launching of a redesigned Sleepscan(TM) system.
. Winning several prestigious epilepsy monitoring accounts.
. International growth of 17 percent led by sales of hearing systems and
disposables.
Commenting on the business trends and 2003 results, Roderick G. Johnson,
president and chief operating officer stated, "While we fell just short of our
goal of at least matching the prior year's revenues, we did achieve our target
of 10 percent growth in operating income excluding the effects of R&D
capitalization and amortization. This internal target compares the current year
operating income of $2.0 million, less the effects of $0.4 million of
adjustments for R&D capitalization and amortization, to prior year operating
income of $2.35 million, less the effects of $0.9 million of similar
adjustments.
"We are now operating in a mature U.S. market for new hearing screening
equipment, so during the past year our focus intensified on selling hearing
screening disposables and new diagnostic systems. Revenues from supplies,
service, warranty and other non-product system sources now comprise 25 percent
of our total sales compared to 16 percent last year."
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Looking Forward
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Johnson continued, "Our outlook for fiscal 2004 is positive but guarded. We
anticipate a strong response to our new hearing diagnostic products, which are
all based on the same low cost hardware platform. Our marketing efforts will
focus on educating audiologists and other healthcare professionals through two
programs featuring a world-class faculty in which we are hosting a total of 26
seminars throughout the U.S. and several in selected international locations.
The first quarter will not reflect the results of these programs, but we do
expect they will build momentum as the year progresses.
"The launch of the new hearing diagnostic product, MASTER, is a very important
milestone for Bio-logic, expanding the market with a new, state-of-the-art
product offering. The MASTER will be joined by our Stacked ABR and the
redesigned Sleepscan software to help provide us with sufficient momentum to
have a successful year, but the impact of these new products is expected during
the second half of the year.
"With over $10 million in cash and a debt-free balance sheet, we have the
resources to continue to grow the company. In addition, whether considering an
investment in our own products and technologies or a significant acquisition, we
are always mindful of our responsibility to our shareholders to enhance the
value of our company," concluded Johnson.
Bio-logic Systems Corp., headquartered in Mundelein, IL, designs, develops,
assembles and markets computer-based electro-diagnostic systems for use by
hospitals, clinics, universities and physicians. The systems conduct tests that
are typically used by medical practitioners to aid in the diagnosis of certain
neurological disorders, brain disorders and tumors, and sensory disorders,
including audiological and hearing screening and diagnosis.
Except for descriptions of historical facts, this release contains
forward-looking statements that involve known and unknown risks, which may cause
the company's actual results in the future to differ materially from those
currently anticipated. These results include, among others, fluctuations in
sales and operating results; the company's ability to recruit and train the
necessary number of sales representatives and installation technicians; risks
associated with international operations including monetary crisis; regulatory,
competitive and contractual risks; the effects of economic conditions; and the
availability of capital to finance planned growth, as well as other risks
detailed from time to time in the company's filings with the Securities and
Exchange Commission.
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Bio-logic Systems Corp and Subsidiaries
Consolidated Statement of Operations
In Thousands, Except for Per Share Data
Three Months Ended Twelve Months Ended
February 28, February 28,
---------------------- ----------------------
2003 2002 2003 2002
--------- --------- ----------------------
NET SALES $ 7,300 $ 7,618 $ 29,264 $ 29,858
COST OF SALES 2,471 2,868 9,596 10,930
--------- --------- --------- ---------
Gross Profit 4,829 4,750 19,668 18,928
--------- --------- --------- ---------
OPERATING EXPENSES:
Selling, general & administrative 3,143 3,427 12,787 12,840
Research & development 1,389 1,031 4,883 3,737
--------- --------- --------- ---------
Total operating expenses 4,532 4,458 17,670 16,577
--------- --------- --------- ---------
OPERATING INCOME 297 292 1,998 2,351
OTHER INCOME (EXPENSE):
Interest income 36 33 139 200
Interest expense (22) (2) (27) (9)
Miscellaneous (1) (1) (4) (73)
--------- --------- --------- ---------
Total other income 13 30 108 118
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 310 322 2,106 2,469
PROVISION FOR INCOME TAXES (37) 126 656 967
--------- --------- --------- ---------
NET INCOME $ 347 $ 196 $ 1,450 $ 1,502
========= ========= ========= =========
RETAINED EARNINGS, BEGINNING OF PERIOD 13,215 11,916 12,112 10,610
--------- --------- --------- ---------
RETAINED EARNINGS, END OF PERIOD $ 13,562 $ 12,112 $ 13,562 $ 12,112
========= ========= ========= =========
EARNINGS PER SHARE:
Basic $ 0.08 $ 0.05 $ 0.35 $ 0.36
========= ========= ========= =========
Diluted $ 0.08 $ 0.04 $ 0.34 $ 0.35
========= ========= ========= =========
BASIC SHARES OUTSTANDING 4,197,302 4,188,956 4,196,362 4,178,885
DILUTED SHARES OUTSTANDING 4,363,187 4,431,050 4,317,556 4,350,720
SELECTED BALANCE SHEET DATA
As of As of
February 28, February 28,
2003 2002
------------ ------------
Cash and marketable securities $10,678 $ 6,385
Current assets 21,028 19,117
Total assets 25,190 22,942
Current liabilities 6,223 5,131
Long-term obligations 0 0
Shareholders' equity 18,287 17,189