EXHIBIT 99.1
FOR IMMEDIATE RELEASE
VALLEY FORGE SCIENTIFIC REPORTS
FIRST QUARTER FISCAL 2004 OPERATING RESULTS
OAKS, Pa., February 11, 2004 -- Valley Forge Scientific Corp. (NASDAQ: VLFG;
BSE: VLF), a leading developer of bipolar electrosurgical systems, today
announced operating results for the first quarter of fiscal 2004 ended December
31, 2003.
Sales for the quarter of $1,199,469 were 18% greater than sales of
$1,019,942 for the first quarter of fiscal 2003. Net income for the quarter of
$72,979, or $.01 per basic and diluted share, was 82% greater than net income of
$40,139, or $.01 per basic and diluted share, for the first quarter of fiscal
2003.
Sales for the quarter reflect an increase in sales volume of our Bident(R)
Bipolar Tissue Management System to $170,049, or 14% of our sales, from no sales
in the comparable period in fiscal 2003. Sales of our neurosurgical products to
Codman & Shurtleff, Inc. during the quarter were approximately constant with
sales volume for the first quarter of 2003.
For the quarter, cost of sales was $555,304, or 46% of sales, as compared
to $529,272, or 52% of sales, for the first quarter of fiscal 2003. Gross margin
was 54% for the quarter as compared to 48% for the first quarter of fiscal 2003.
The difference in gross margin is attributable to an increase in direct sales of
our dental products, changes in product mix and increased sales levels.
Selling, general and administrative expenses increased to $398,337, or 33%
of sales, as compared to $330,618, or 32% of sales, for the first quarter of
fiscal 2003. Selling, general and administrative expenses reflect increased
selling and marketing expenses incurred in connection with implementing the
sales and marketing efforts for the Bident(R) Bipolar Tissue Management System.
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Research and development expenses were $113,895, or 10% of sales, for the
quarter as compared to $89,338, or 9% of sales, for the first quarter of the
2003 fiscal year. The increase was primarily related to the development of our
next generation neurosurgical generator and instrumentation.
"In the first quarter of fiscal 2004, we saw a greater contribution from
the sales of our dental products as leads we received during fiscal 2003 began
to turn into sales. We are continuing the training of the largest dental
distributors of our dental products on the uses of the Bident(R) Bipolar Tissue
Management System and are providing marketing support to the distributors
through print advertisements, active participation in tradeshows and
informational CD-ROMs. We expect sales of our dental products in fiscal 2004 to
be at greater levels than reported in fiscal 2003, however, sales may fluctuate
from quarter-to-quarter based on the timing of orders we receive from
distributors and direct sales," said Jerry Malis, President and CEO of Valley
Forge Scientific Corp.
"During the quarter, we began production of a new irrigation unit for
neurosurgery, and we feel that sales volume of our neurosurgery products should
increase in fiscal 2004 and beyond as we complete the next generation of
neurosurgical generator and disposable instrumentation. We expect to have these
products ready for introduction into the market in the first six months of
calendar 2004."
Management of Valley Forge Scientific will discuss the first quarter of the
2004 fiscal year and financial results on Wednesday, February 11, 2004 in a
conference call scheduled for 10:30 a.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 5349042 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 5349042, approximately two hours following the conclusion of
the call through Wednesday, February 25, 2004. International callers can access
this replay at (706) 645-9291.
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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, our 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, our 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
Unaudited
For the Three
Months Ended
-------------------------
12/31/03 12/31/02
---------- ----------
Net Sales $1,199,469 $1,019,942
Gross Profit $ 644,165 $ 490,670
Selling, general and $ 398,337 $ 330,618
administrative expenses
Research and development expenses $ 113,895 $ 89,338
Operating Income $ 121,858 $ 60,639
Provision for Income Taxes $ 54,548 $ 29,489
Net Income $ 72,979 $ 40,139
Basic income per share $ 0.01 $ 0.01
Diluted income per share $ 0.01 $ 0.01
Common shares outstanding:
Basic 7,913,712 8,013,875
Diluted 7,965,977 8,043,858
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.