EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT:
Joseph W. Kaufmann
President and Chief Executive Officer
(610) 524-0188
KENSEY NASH REPORTS RECORD RESULTS FOR THE FOURTH QUARTER AND FISCAL
YEAR
-FOURTH QUARTER REVENUE INCREASED 64% OVER PRIOR YEAR-
EXTON, PA, AUGUST 13, 2003 -- Kensey Nash Corporation (Nasdaq: KNSY) today
announced record revenue for the fourth quarter and fiscal year ended June 30,
2003, driven by both strong net sales and Angio-Seal(TM) royalty income growth.
Total revenues for the fourth quarter increased 64% to $13.2 million compared to
$8.1 million in the comparable period last year. Net sales increased 87% to $8.3
million from $4.4 million in the prior year quarter. Royalty income increased
36% to $4.6 million from $3.4 million in the prior year quarter. Operating
income increased 74% to $3.1 million from $1.8 million, and reflects the
strength of the company's core business. Net income for the quarter was $3.6
million, an increase of 150% from the previous year fourth quarter, or $0.30 per
share including a $0.10 per share net effect of a research and development tax
credit.
During the fourth quarter, the Company recorded a research and development tax
credit of $1.5 million. The tax credit relates to qualified research and
development activities of the Company, both historic and for the current year.
Associated with the tax credit project, the Company also recorded $325,000 of
professional service fees as a component of selling, general and administrative
expense during the quarter. The net effect of the tax credit offset by the
professional fees was $0.10 per share for the fourth quarter and fiscal year
ended June 30, 2003.
The balance sheet continued to strengthen during the fiscal year, and at June
30, 2003 the Company reported $85.8 million of total assets, $79.5 million of
stockholders' equity and only $1.1 million of total debt. During the fourth
fiscal quarter the Company generated cash from operations of $2.6 million and
reported $48.4 million of cash and investments at June 30, 2003.
The following table summarizes the results for the company for the three months
ended June 30, 2003 compared to the three months ended June 30, 2002:
- ------------------------------- -------------------------- -------------------------- ---------------------
($ MILLIONS, EXCEPT PER SHARE THREE MONTHS ENDED THREE MONTHS ENDED PERCENTAGE
DATA) JUNE 30, 2002 JUNE 30, 2003 CHANGE
- ------------------------------- -------------------------- -------------------------- ---------------------
Net Sales $4.4 $8.3 87%
- ------------------------------- -------------------------- -------------------------- ---------------------
Royalty Income $3.4 $4.6 36%
- ------------------------------- -------------------------- -------------------------- ---------------------
Total Revenues $8.1 $13.2 64%
- ------------------------------- -------------------------- -------------------------- ---------------------
Operating Income $1.8 $3.1 74%
- ------------------------------- -------------------------- -------------------------- ---------------------
Earnings Per Share $0.13 $0.30 131%
- ------------------------------- -------------------------- -------------------------- ---------------------
For the fiscal year ended June 30, 2003, total revenues increased 53% to $44.4
million compared to $29.0 million in the prior year. Included in the revenue
number, net sales increased 55% to $27.1 million from $17.5 million and royalty
income increased 52% to $16.3 million from $10.8 million. Operating income for
the fiscal year increased 91% to $10.3 million from $5.4 million in the previous
year. The Company reported $8.8 million of net income, or $0.76 per share,
including a $0.10 per share net effect of the research and development tax
credit. Gross margin on net sales increased to 55% during the year, compared to
53% in the prior year.
-5-
The following table summarizes the results for the Company for the fiscal year
ended June 30, 2003 compared to the fiscal year ended June 30, 2002:
- ------------------------------- -------------------------- -------------------------- ---------------------
($ MILLIONS, EXCEPT PER SHARE FISCAL YEAR ENDED FISCAL YEAR ENDED PERCENTAGE
DATA) JUNE 30, 2002 JUNE 30, 2003 CHANGE
- ------------------------------- -------------------------- -------------------------- ---------------------
Net Sales $17.5 $27.1 55%
- ------------------------------- -------------------------- -------------------------- ---------------------
Royalty Income $10.8 $16.3 52%
- ------------------------------- -------------------------- -------------------------- ---------------------
Total Revenues $29.0 $44.4 53%
- ------------------------------- -------------------------- -------------------------- ---------------------
Operating Income $5.4 $10.3 91%
- ------------------------------- -------------------------- -------------------------- ---------------------
Earnings Per Share $0.41 $0.76 85%
- ------------------------------- -------------------------- -------------------------- ---------------------
"We concluded our fiscal year significantly exceeding our original growth
targets of 30% for both revenue and net income, and that is most gratifying,"
commented Joe Kaufmann, President and CEO of Kensey Nash Corporation. "The
fourth quarter was extremely positive for our company with continued revenue and
earnings growth. Record Angio-Seal(TM) device royalty income of $4.6 million
increased 10% sequentially from the March quarter, as St. Jude Medical continued
their outstanding performance," he added.
"Biomaterials sales of $8.2 million continued to be strong in the quarter.
Cardiology and sports medicine products established record sales for both the
fourth quarter and fiscal year. Our TriActiv(R) System sales remain at modest
levels in Europe as we are continuing to build contacts in the field and
establish our presence in the market. We believe we are in a good position to
substantially increase TriActiv sales in our fiscal 2004, with additional
distribution arrangements and the launch of our new version of the TriActiv
System. In the U.S., we are continuing to enroll patients in our PRIDE clinical
trial to support a U.S. regulatory approval," he concluded.
For the first quarter of fiscal year 2004, the Company is increasing its
forecast and now expects total revenues to be in the range of $11.7 to $12.3
million, approximately 32% to 38% higher than the comparable quarter in fiscal
2003. Included in this estimate, net sales are expected to be in the range of
$7.0 to $7.5 million and royalties are expected to be approximately $4.4 to $4.6
million. The Company's estimate for earnings per share for its first fiscal
quarter ending September 30 is $0.16 to $0.17 per share. The Company expects to
continue to earn a research and development tax credit in 2004 and future fiscal
years, and estimates its effective tax rate will decline from its current rate
of approximately 34.5% prior to these credits to approximately 32% to 33% going
forward.
A live webcast of the fiscal year end conference call will be broadcast August
14, 2003 at 11:00 AM eastern time. Please visit the financial information page
at www.kenseynash.com for the link. To participate in the conference call,
interested parties may call 651-224-7472. A replay of the call will also be
available starting August 14, 2003 at 2:30 PM Eastern until August 19, 2003 at
midnight eastern time by calling 800-475-6701, access code 694021.
Kensey Nash Corporation has significant expertise and experience in designing,
developing, manufacturing and processing proprietary absorbable biomaterials
products for the cardiology, orthopedics, drug and biologics delivery,
periodontal/dental and wound care markets. The Company is also a leader in the
development of cardiovascular medical technology devices for arterial puncture
closure. The Company's TriActiv(R) BallooN Protected Flush Extraction System for
the treatment of saphenous vein graft disease is available for sale in the
European Union and is in clinical trials in the United States. Angio-Seal is a
trademark of St. Jude Medical, Inc.
The TriActiv System is designed to prevent heart attacks during the treatment of
saphenous vein grafts (SVGs) in patients who previously received coronary bypass
surgery, but now have blockages in the grafts. The device incorporates three
features to address the common problem of distal embolization - a protection
balloon guidewire, a flush catheter, and an extraction system to remove debris
from the grafts.
-6-
This press release contains forward-looking statements that reflect the
Company's current expectations about its prospects and opportunities, including,
without limitation, the revenue and earnings guidance provided by the Company
for its first quarter of fiscal 2004. The Company tried to identify these
forward looking statements by using words such as "expects," "anticipates,"
"estimates," "plans", "will", "forecasts", or similar expressions, but these
words are not the exclusive means for identifying such statements. The Company
cautions that a number of risks, uncertainties, and other important factors
could cause the Company's actual results to differ materially from those in the
forward-looking statements including, without limitation, St. Jude Medical's
success in marketing the Angio-Seal(TM) device, demand for and the Company's
ability to develop and manufacture biomateriAL products, including
Angio-Seal(TM) components, clinical and marketing success of the TriActiv(R)
System, additiONal regulatory approvals, and competition from other technologies
in the marketplace. For a more detailed discussion of these and other factors,
please see the Company's SEC filings. Except as expressly required by the
federal securities laws, the Company undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new information,
changed circumstances or future events or for any other reason.
The Company also cautions that results of operations in any past period should
not be considered indicative of the results to be expected for future periods.
Fluctuations in operating results may also result in fluctuations in the price
of the Common Stock.
- FINANCIAL INFORMATION TO FOLLOW -
-7-
KENSEY NASH CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
THREE MONTHS FISCAL YEAR
ENDED JUNE 30, ENDED JUNE 30,
---------------------------- ---------------------------
2003 2002 2003 2002
---------------------------- ---------------------------
Revenues:
Net sales $ 8,306,671 $ 4,441,694 $ 27,071,992 $ 17,502,194
Research and development 351,395 286,415 962,706 765,268
Royalty income 4,591,111 3,372,846 16,316,956 10,761,127
---------------------------- ---------------------------
Total revenues 13,249,177 8,100,955 44,351,654 29,028,589
---------------------------- ---------------------------
Operating costs and expenses:
Cost of products sold 3,592,521 1,936,682 12,152,601 8,214,321
Research and development 4,244,632 2,905,116 14,490,116 10,782,706
Selling, general and administrative 2,353,616 1,497,443 7,443,940 4,670,215
---------------------------- ---------------------------
Total operating costs and expenses 10,190,769 6,339,241 34,086,657 23,667,242
---------------------------- ---------------------------
Income from operations 3,058,408 1,761,714 10,264,997 5,361,347
Interest and other income, net 236,430 429,418 1,070,818 1,678,085
---------------------------- ---------------------------
Pre-tax income 3,294,838 2,191,132 11,335,815 7,039,432
Income tax (benefit) expense (289,489) 755,941 2,549,480 2,428,604
---------------------------- ---------------------------
Net income $ 3,584,327 $ 1,435,191 $ 8,786,335 $ 4,610,828
============================ ===========================
Income per common share, assuming dilution $ 0.30 $ 0.13 $ 0.76 $ 0.41
============================ ===========================
Weighted average common shares outstanding 11,978,161 11,358,706 11,498,473 11,256,177
============================ ===========================
-8-
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
JUNE 30, JUNE 30,
2003 2002
ASSETS
Current assets:
Cash, cash equivalents and investments $48,411,397 $31,874,263
Trade receivables 3,760,286 3,331,046
Other receivables 5,149,497 3,645,617
Officer loan - 1,882,369
Inventory 3,481,322 2,518,924
Prepaids and other assets 2,564,179 1,160,834
Deferred tax asset, current 2,069,074 1,306,693
----------- -----------
Total current assets 65,435,755 45,719,746
----------- -----------
Property, plant and equipment, net 13,399,717 11,310,928
Acquired puncture closure patents, net 2,673,648 2,936,674
Deferred tax asset, non-current 1,045,586 1,615,584
Goodwill 3,284,303 3,284,303
Restricted investments - 2,113,072
----------- -----------
Total assets $85,839,009 $66,980,307
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 5,038,025 $ 2,810,845
Current portion of debt 836,989 978,902
Deferred revenue 195,060 293,035
----------- -----------
Total current liabilities 6,070,074 4,082,782
----------- -----------
Long-term debt 219,147 1,330,484
----------- -----------
Total stockholders' equity 79,549,788 61,567,041
----------- -----------
Total liabilities and stockholders' equity $85,839,009 $66,980,307
=========== ===========
-9-