Exhibit 99.1
HealthTronics Surgical Services Posts First-Quarter 2003 Results
MARIETTA, Ga.--(BUSINESS WIRE)--May 13, 2003--HealthTronics
Surgical Services, Inc. (Nasdaq:HTRN), a leading provider of minimally
invasive urologic and orthopaedic services, today announced financial
results for the first quarter of 2003.
For the quarter ended March 31, HealthTronics reported net income
of $2.1 million, or $0.18 per diluted share on revenue of $20.9
million. This compares with net income of $1.5 million, or $0.14 per
diluted share, on revenue of $21.0 million for the same period a year
ago. Net income in the recent first quarter included a $1.27 million
after-tax gain on the sale of partnership interests. After-tax
proceeds from the sale of partnership interests and other cash
generated from operations were used to pay down debt. As of March 31,
2003, HealthTronics' total debt outstanding after these payments was
$28.9 million, compared with $38.1 million on December 31, 2002.
"Treatment revenues during the quarter were below our own
expectations, due in part to severe weather across the country and a
physician's strike in New Jersey," said Argil Wheelock, chairman and
CEO. "This was offset, however, by a larger than expected gain on the
sale of partnership interests. Sales of partnership interests enhance
our urologic and orthopaedic provider network and have been and will
continue to be part of our business model."
Other factors affecting first-quarter financial performance
include marketing and physician training expenses related to Food and
Drug Administration approval of the Company's OssaTron(R) high-energy
shock-wave device for the treatment of lateral epicondylitis,
otherwise known as chronic tennis elbow. Higher costs from the
Company's Swiss supplier of equipment resulted in lower gross margins.
"We started our training and marketing efforts for orthopaedic
physicians on lateral epicondylitis shortly after receiving FDA
approval for this indication in mid-March," Wheelock said. "The
expenses related to these efforts will most likely offset any revenues
derived from this indication in 2003. It is important to note that the
OssaTron is the only orthopaedic shock wave device that has been
approved by the FDA for multiple indications, and the device is now
being used effectively to treat both chronic tennis elbow as well as
plantar fasciitis, commonly known as chronic heel pain. Both
treatments have proven to be effective alternatives to traditional
invasive surgery."
Operations
During the first quarter of 2003, HealthTronics' lithotripsy
business performed 7,832 treatments, compared with 8,720 for the
comparable period last year. The year-ago quarter included 1,015
treatments performed by a subsidiary that was sold in July, 2002.
Lithotripsy revenues totaled $13.2 million, compared with $16.7
million the prior year, which included $2.9 million in revenues
generated by the subsidiary that was sold.
HealthTronics' orthopaedic business performed 1,763 treatments
during the first quarter of 2003, an increase of 160% over the 678
treatments performed during the same quarter last year. Orthotripsy(R)
revenues equaled $3.9 million, compared with $2.0 million for the
year-ago period.
The Company's prostate treatment business exhibited continued
strong growth during the first quarter. A total of 866 patients were
treated for either benign or cancerous prostate conditions, compared
with 130 in the first quarter of last year. Revenues were $1.1 million
for the quarter. Prostate treatment revenues for the same period last
year were minimal.
"We believe that our prostate treatment business will grow
significantly in 2003," Wheelock said. "Research presented at the
American Urological Association meeting in April demonstrated
increased clinical validity for both trans-urethral microwave therapy
for benign prostate enlargement and cryosurgery for cancer of the
prostate and kidney. HealthTronics continues to add highly qualified
people to our team to support the growth of our prostate business."
Equipment and consumable sales and service activities accounted
for $2.7 million in revenues, compared with $2.4 million a year ago.
"Assessing our first-quarter performance, the expected expenses
and revenue associated with our recent FDA approval, and the trends in
our Lithotripsy, Orthotripsy and Prostate treatment businesses, we
continue to expect revenue for the year of approximately $100
million," said Wheelock. "Based upon our larger than expected gain
from the sale of partnership interests during this quarter, we are
raising our forecasted earnings per share for 2003 to between $0.69 -
$0.74 for the year."
Conference Call
A conference call for the investment community will be held today,
May 13, at 10:30 a.m. ET. The conference call will be webcast live and
can be accessed via the HealthTronics' website at
http://www.healthtronics.com. An online archive of the conference call
will be available a period of thirty days following the live
broadcast. Individuals who wish to participate in the conference call
may dial in at 877/888-4483 using the conference code "Earnings
Release Q1 2003."
About HealthTronics Surgical Services
HealthTronics Surgical Services, Inc. is one of the nation's
leading providers of non-invasive and minimally invasive surgical
services for certain urologic and orthopaedic conditions. The Company
provides technical and administrative services to physicians,
hospitals and ambulatory surgery centers using extracorporeal shock
wave devices. The primary services offered by the Company are
lithotripsy extracorporeal shock wave treatment, which is a procedure
for treating kidney stones in a non-invasive manner, certain
treatments for benign and cancerous prostate conditions and
Orthotripsy(R) extracorporeal shock wave treatment, which is a
procedure for treating orthopaedic soft tissue disorders in a
non-invasive manner. The Company has operations in approximately 45
states in the U.S. More information about HealthTronics Surgical
Services can be found at the Company's website, www.healthtronics.com.
This press release may contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks,
uncertainties or other factors which may cause actual results,
performance or achievements of HealthTronics Surgical Services to be
materially different from any future results, performance or
achievements express or implied by such forward-looking statements.
Factors that might cause such a difference, include, but are not
limited to those discussed in the Management's Discussion and Analysis
of Financial Condition and Results of Operations in the Company's
Annual Report on Form 10-K for the year ended December 31, 2002, and
in subsequent documents filed by HealthTronics Surgical Services with
the Securities and Exchange Commission.
Condensed Consolidated Statements of Income
Three months ended March 31,
2003 2002
---------------- ----------------
(000's omitted)
Net revenue $20,888 $21,050
Cost of devices, service parts and
consumables 4,260 3,041
Salaries, general and administrative
expenses 9,580 9,031
Depreciation and amortization 1,380 1,541
---------------- ----------------
5,668 7,437
Equity in earnings of unconsolidated
partnerships 259 55
Partnership distributions from cost
based investments 118 144
Gain on sale of investment interest 2,075 --
Gain on sale of property and
equipment 5 157
Interest expense (533) (744)
Interest income 35 45
---------------- ----------------
Income before minority interest and
income taxes 7,627 7,094
Minority interest (4,129) (4,532)
---------------- ----------------
Income before income taxes 3,498 2,562
Provision for income taxes (1,369) (1,024)
---------------- ----------------
Net income $ 2,129 $ 1,538
================ ================
Income per common share:
Basic $ 0.19 $ 0.14
================ ================
Diluted $ 0.18 $ 0.14
================ ================
Weighted average common shares
outstanding:
Basic 11,328 11,054
================ ================
Diluted 11,542 11,368
================ ================
Procedures Performed 1st Quarter 2003 1st Quarter 2002
- -------------------- ---------------- ----------------
Lithotripsy 7,832 8,720
Orthotripsy(R) ESWT 1,763 678
Prostate Treatments 866 130
CONTACT: HealthTronics Surgical Services, Inc.
Argil J. Wheelock
(Chief Executive Officer)
Martin J. McGahan
(Chief Financial Officer)
800/464-3795 or 770/419-0691
www.healthtronics.com