EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT:
Joseph W. Kaufmann
President and Chief Executive Officer
(610) 524-0188
KENSEY NASH REPORTS FIRST QUARTER RESULTS,
ANNOUNCES EARNINGS OF $0.20 PER SHARE, UP 58% OVER PRIOR YEAR PERIOD,
REVENUES OF $12.4 MILLION, UP 39% FROM PRIOR YEAR PERIOD
EXTON, PA, OCTOBER 15, 2003 -- Kensey Nash Corporation (Nasdaq: KNSY) today
announced earnings of $0.20 per share for its first fiscal quarter of 2004.
Continued strong net sales and Angio-Seal(TM) royalty income led to a 39%
increase in total revenue to $12.4 million for the first fiscal quarter compared
to $8.9 million in the prior year period. Net sales increased 43% to $7.3
million from $5.1 million in the comparable quarter of the prior fiscal year,
while royalty income increased 34% to $4.8 million from $3.6 million in the
prior year period. Operating income increased 64% to $3.0 million for the
quarter and reflects the strength of the Company's core business. Net income for
the quarter increased 73% to $2.5 million, or $0.20 per share, including a $0.02
per share net effect of an additional research and development tax credit. This
additional credit is based upon completion of the study that was performed to
determine the amount of the claim.
During the first quarter the Company recorded a research and development tax
credit of approximately $300,000. This is in addition to the $1.5 million tax
credit recorded in the fourth quarter of fiscal 2003 and represents the final
portion of the credit. The tax credits relate to qualified research and
development activities of the Company, both historic and for the current year.
Related to the tax credit project, the Company also recorded an additional
$50,000 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 $0.02 per share for the first fiscal
quarter.
During the quarter, the Company generated cash from operations of $5.9 million
and reported $53.8 million of cash and investments at September 30, 2003. In
addition, at the end of the September quarter total assets were $90.4 million
while total debt was only $900,000.
The following table summarizes the results for the Company for the three months
ended September 30, 2003 compared to the three months ended September 30, 2002:
<Table>
<Caption>
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PERCENTAGE
($ MILLIONS, EXCEPT PER SHARE DATA) SEPTEMBER 30, 2003 SEPTEMBER 30, 2002 CHANGE
- -------------------------------------------------------------------------------------------------------------------
Net Sales $ 7.3 $5.1 43%
- -------------------------------------------------------------------------------------------------------------------
Royalty Income $ 4.8 $3.6 34%
- -------------------------------------------------------------------------------------------------------------------
Total Revenues $12.4 $8.9 39%
- -------------------------------------------------------------------------------------------------------------------
Operating Income $ 3.0 $1.8 64%
- -------------------------------------------------------------------------------------------------------------------
Net Income $ 2.5 $1.5 73%
- -------------------------------------------------------------------------------------------------------------------
Earnings Per Share $ 0.20 $0.13 58%
- -------------------------------------------------------------------------------------------------------------------
</Table>
"We are pleased to report an excellent start to our fiscal year 2004 with first
quarter results of $0.20 per share, including the net effect of the R&D tax
credit, exceeding our previous guidance of $0.16 to $0.17," commented Joseph W.
Kaufmann, president and CEO of Kensey Nash Corporation. "Sales of our
biomaterials products increased 43% over last year's comparable quarter, driven
primarily by sales of cardiology, spine and sports medicine products. Angio-Seal
royalties were exceptionally strong, increasing 34% from the prior year period
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and 5% sequentially, demonstrating the continued success of the Angio-Seal as
the market leader in the expanding vascular closure market. During the quarter,
St. Jude Medical launched the new Angio-Seal STS Plus platform and also
announced the introduction of the Angio-Seal products into the Japanese market.
As a result of the continuing success of the Angio-Seal and the prospects for
ongoing growth, we are now estimating our Angio-Seal royalty rate will decline
from the current 9% to 6% at the start of our fourth fiscal quarter rather than
the previous mid-fourth quarter estimate," he added.
"Sales of our TriActiv(R) System in Europe were up 9% over the prior year
quarter and while continuing to grow, remain below our previous expectations. We
will be launching a new version of the TriActiv in Europe in our third quarter
which will substantially improve ease of use. We are confident in our embolic
protection balloon technology and expect European sales will expand in the
second half of our fiscal year. We continued to progress with enrollment in our
PRIDE clinical trial in pursuit of U.S. regulatory approval of our TriActiv
System," Mr. Kaufmann continued. "Based on our latest projection, we expect
enrollment, follow-up and FDA submission will be completed over the next four
months. This timeframe is slightly longer than previously anticipated. At the
TCT conference in September, we had a successful live case presented in which a
physician utilized our second-generation TriActiv device, the device we intend
to market in the U.S. During this case the TriActiv was used to treat an
occluded saphenous vein graft in less than three minutes without any adverse
event. We have also successfully initiated our clinical testing of the TriActiv
in conjunction with carotid stenting. The device used in the study is an
extension of the core TriActiv technology and is used to provide protection from
potential stroke-causing emboli by actively removing debris during carotid
stenting procedures," Mr. Kaufmann concluded.
For the second quarter of fiscal year 2004, the Company is estimating total
revenues to be in the range of $12.7 to $13.1 million, approximately 20% to 24%
higher than the comparable quarter in the previous year. Included in this
estimate, net sales are expected to be in the range of $7.7 to $8.0 million and
royalties are expected to be approximately $5.0 to $5.2 million. The Company's
estimate for earnings per share for its second fiscal quarter ending December 31
is $0.19 to $0.20 per share. The Company is raising its original guidance for
earnings per share for the fiscal year 2004 from an $0.80 to $0.85 range to
$0.84 to $0.88 per share, including the $0.02 effect of the R&D tax credit.
The Company will be holding a conference call to discuss the first quarter
earnings results on Thursday, October 16, 2003 at 11:00 AM eastern time. A live
webcast of the conference call will be broadcast. Please visit the investor
relations page at www.kenseynash.com for the link. To participate in the
conference call, interested parties may call 612-332-0107. A replay of the call
will also be available starting October 16, 2003 at 2:30 PM Eastern until
Tuesday, October 21, 2003 at midnight eastern time by calling 800-475-6701,
access code 680524. A recording of the broadcast will be available on the Kensey
Nash website.
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, surgical 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.
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. Angio-Seal is a trademark of St. Jude Medical, Inc.
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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 second fiscal quarter and fiscal 2004. The Company tried to identify
these forward looking statements by using words such as "believe", "expects,"
"forecasts", "anticipates," "estimates," "plans", "should" 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 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-
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KENSEY NASH CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<Table>
<Caption>
THREE MONTHS
ENDED SEPTEMBER 30,
--------------------------------
2003 2002
--------------------------------
Revenues:
Net sales $ 7,311,950 $ 5,112,518
Research and development 235,301 156,692
Royalty income 4,839,595 3,619,310
--------------------------------
Total revenues 12,386,846 8,888,520
--------------------------------
Operating costs and expenses:
Cost of products sold 3,342,131 2,388,454
Research and development 4,077,981 3,090,755
Selling, general and administrative 1,960,090 1,570,473
--------------------------------
Total operating costs and expenses 9,380,202 7,049,682
--------------------------------
Income from operations 3,006,644 1,838,838
Interest and other income, net 272,353 377,474
--------------------------------
Pre-tax income 3,278,997 2,216,312
Income tax (benefit) expense 771,755 766,280
--------------------------------
Net income $ 2,507,242 $ 1,450,032
================================
Income per common share, assuming dilution $ 0.20 $ 0.13
================================
Weighted average common shares outstanding 12,308,645 11,254,700
================================
</Table>
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KENSEY NASH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<Table>
<Caption>
SEPTEMBER 30, JUNE 30,
2003 2003
---------------- ----------------
ASSETS
Current assets:
Cash, cash equivalents and investments $ 53,789,465 $ 48,411,397
Trade receivables 2,295,119 3,760,286
Other receivables 5,215,608 5,149,497
Inventory 3,794,969 3,481,322
Prepaids and other assets 1,870,376 2,564,179
Deferred tax asset, current 2,524,452 2,097,147
---------------- ----------------
Total current assets 69,489,989 65,463,828
---------------- ----------------
Property, plant and equipment, net 14,031,087 13,399,717
Acquired puncture closure patents, net 2,607,892 2,673,648
Deferred tax asset, non-current 1,017,513 1,017,513
Goodwill 3,284,303 3,284,303
---------------- ----------------
Total assets $ 90,430,784 $ 85,839,009
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 5,698,667 $ 5,038,025
Current portion of debt 852,683 836,989
Deferred revenue 226,067 195,060
---------------- ----------------
Total current liabilities 6,777,417 6,070,074
---------------- ----------------
Long-term debt - 219,147
---------------- ----------------
Total stockholders' equity 83,653,367 79,549,788
---------------- ----------------
Total liabilities and stockholders' equity $ 90,430,784 $ 85,839,009
================ ================
</Table>
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