EXHIBIT 99
FOR IMMEDIATE RELEASE
VALLEY FORGE SCIENTIFIC REPORTS
FISCAL 2003 AND FOURTH QUARTER OPERATING RESULTS
OAKS, Pa., December 8, 2003 -- Valley Forge Scientific Corp. (NASDAQ: VLFG; BSE:
VLF), a leading developer of bipolar electrosurgical systems, today announced
operating results for fiscal 2003 and fourth quarter ended September 30, 2003.
Sales for the 2003 fiscal year were $4,474,308 and net income for the year
was $108,925, or $0.01 per basic and diluted share. For the 2002 fiscal year,
sales were $5,021,931 and net income was $380,528, or $0.05 per basic and
diluted share.
Sales for the fourth quarter of fiscal 2003 were $1,083,358 as compared to
$1,153,449 for the same period in 2002. Net income for the quarter was $1,840,
or $0.00 per basic and diluted share, as compared to $44,751, or $0.01 per basic
and diluted share for the fourth quarter of fiscal 2002.
For the 2003 fiscal year, cost of sales was $2,264,902, or 51% of sales, as
compared to $2,463,209, or 49% of sales, for the 2002 fiscal year. Gross margin
was 49 percent for the year as compared to 51 percent for fiscal 2002. Selling,
general and administrative expenses increased to $1,523,751, or 34 percent of
sales, as compared to $1,503,001, or 30% of sales, for the prior fiscal year.
Selling, general and administrative expenses reflect increased selling and
marketing expenses incurred in connection with implementing the sales and
marketing plan for the Bident(R) Bipolar Tissue Management System.
Research and development expenses increased by approximately 36% to
$489,930 for 2003 fiscal year as compared to $360,111 for the 2002 fiscal year.
The increase was primarily related to our reaching the final stages of
development of our new surgical irrigator system, increased resources directed
towards the development of a new generator and instrumentation for neurosurgery
as well as reaching the final stages of development on a new generator and
disposable instrumentation for use in areas other than neurosurgery.
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During the year, 127,600 shares of common stock were repurchased at cost of
$173,316 pursuant to the company's stock repurchase plan, which was approved by
our Board of Directors in August 2002. To date, Valley Forge has repurchased
154,100 shares of common stock under the plan, leaving a balance of 45,900
shares that are available for repurchase under the plan.
"Sales of our neurosurgical products to Codman & Shurtleff, Inc. decreased
by approximately 5% in fiscal 2003. This was primarily due to reduced sales of
generators in anticipation of the release of a new neurosurgical generator and
instrumentation. In addition to the new irrigation unit and related disposable
tubing sets, which are now in production, we anticipate completing the new
neurosurgical generator and disposable instrumentation in the first six months
of calendar 2004," said Jerry Malis, President and CEO of Valley Forge
Scientific Corp.
"We feel that sales volume of our neurosurgery products should increase in
fiscal 2004 and beyond. We recently extended the term of our distribution
agreement with Codman & Shurtleff, Inc. from December 31, 2003 to March 31,
2004, under the same terms of our existing distribution agreement, to provide
more time to continue discussions with Codman & Shurtleff, Inc. on the terms of
a new distribution agreement for our existing products as well as other products
and disposable instruments, which are and will be ready for introduction into
the market."
"In the fourth quarter of fiscal 2003, our sales of dental products were
relatively constant with sales in the third quarter, but still not at acceptable
levels. In the first quarter of fiscal 2004, we will begin to see better results
as the leads we are receiving start to turn into sales. With our new dental
product manager, we are targeting marketing efforts with the key dental
distributors of our dental products, which is supplemented by advertisements in
leading dental magazines, informational CD-ROMS, and participating at trade
shows. As an example of our recent marketing efforts, at the New York dental
conference, which lasted four days and concluded last week, we held numerous
demonstrations of our dental products for both dentists and dental dealers. In
addition, the New York Dental Society sponsored a hands-on course on Bident(R)
bipolar surgery given by Dr. Ian Shuman, who has written extensively on our
system. There was a morning and afternoon session and both were filled to
capacity."
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"During the year, we expended additional funds on several new products for
neurosurgery as well as in connection with a development agreement we entered
into with Stryker Corporation for a product outside of the neurosurgery and
dental markets. We recently extended the term of that development agreement
until February 28, 2004."
Management of Valley Forge Scientific will discuss 2003 fiscal year and
fourth quarter financial results on Monday, December 8, 2003 in a conference
call scheduled for 4:45 p.m. ET. Those who wish to participate in the conference
call may do so by calling (877) 356-9134 approximately 10 minutes prior to the
start time and providing confirmation code 4371681 to the conference operator.
For callers outside the United States, the number is (706) 643-3775. An
audiotape replay will be available by telephone at (800) 642-1687, confirmation
code 4371681, approximately two hours following the conclusion of the call
through Monday, December 22, 2003. International callers can access this replay
at (706) 645-9291.
Valley Forge Scientific has established itself as a leading developer and
manufacturer of bipolar electrosurgical systems and related instrumentation.
Based on its DualWave(TM) technology, these systems provide surgeons with the
ability to safely cut and coagulate tissue in the most critical areas of the
brain and spinal cord. Based on technology developed in conjunction with Leonard
I. Malis, MD, Professor and Chairman Emeritus of the Mount Sinai School of
Medicine Department of Neurosurgery, the Malis(R) bipolar electrosurgery systems
are considered to be the gold standard worldwide for use in the central nervous
system. For more information on DualWave(TM) technology, Malis(R) bipolar
electrosurgery systems, or other Valley Forge Scientific products, please visit
our Web site at http://www.vlfg.com.
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VALLEY FORGE SCIENTIFIC CORP.
Financial Highlights
For the Fiscal For the Three
Year Ended Months Ended
----------------------- -----------------------
9/30/03 9/30/02 9/30/03 9/30/02
---------- ---------- ---------- ----------
Net Sales $4,474,308 $5,021,931 $1,083,358 $1,153,449
Operating Expenses 2,053,979 1,926,722 467,753 481,893
Operating Income 155,427 632,000 5,816 67,769
Provision for (Benefit of) 57,953 274,583 (7,188) 33,248
Income Taxes
Net Income 108,925 380,528 1,840 44,751
Basic income per share $ 0.01 $ 0.05 $ 0.00 $ 0.01
Diluted income per share $ 0.01 $ 0.05 $ 0.00 $ 0.01
Common shares outstanding
Basic 7,960,676 8,067,286 7,913,712 8,067,286
Diluted 7,986,179 8,154,570 7,945,075 8,154,570
Forward-Looking Statements
Statements in this press release regarding our expectations for product in the
final stages of research and development, acceptance of our products in the
marketplace, new products and alliances, and any other statements in this press
release that refer to Valley Forge Scientific's estimated or anticipated future
results are forward-looking statements. All forward-looking statements in this
press release reflect Valley Forge Scientific's current analysis of existing
trends and information and represent Valley Forge Scientific's judgment only as
of the date of this press release. Actual results may differ from current
expectations based on a number of factors affecting Valley Forge Scientific's
business, including but not limited to competitive, regulatory and market
conditions; the performance of new products and the continued acceptance of
current products; the execution of strategic initiatives and alliances; the
market penetration by third parties who distribute and sell Valley Forge
Scientific's products; Valley Forge Scientific's ability to maintain a
sufficient supply of products; product liability claims; and the uncertainties
associated with intellectual property protection for these products. In
addition, matters generally affecting the domestic and global economy can affect
Valley Forge Scientific's results. Therefore, the reader is cautioned not to
rely on these forward-looking statements. Valley Forge Scientific disclaims any
intent or obligation to update these forward-looking statements.
Additional information concerning these and other risk factors may be found in
previous financial press releases issued by Valley Forge Scientific and Valley
Forge Scientific's public periodic filings with the Securities and Exchange
Commission, including Valley Forge Scientific's Form 10-K for the year ended
September 30, 2003.