EXHIBIT 99.1
Atrion Reports Third Quarter Results
Diluted EPS Increased by 20%
ALLEN, Texas--(BUSINESS WIRE)--Nov. 6, 2006--Atrion Corporation
(Nasdaq/NM:ATRI) announced today that for the third quarter of 2006
diluted earnings per share were up 20% compared to the results of the
third quarter of 2005. Revenues in the third quarter increased by 5%
from the same prior-year period.
Commenting on the Company's results, Emile A. Battat, Chairman and
CEO, said, "We are very pleased that the efforts of the last two years
to plan, construct, and relocate our Florida operations were
successfully accomplished. We are gratified that the three-month
staged transition of our manufacturing operations was completed as
planned. We are delighted with our new world-class facility, and look
forward to taking advantage of the opportunities to enhance quality,
increase efficiency, automate assembly processes, and expand
capacity."
Mr. Battat added, "During the third quarter we expensed the cost
of the move and certain equipment and supplies relating to the move.
In addition, beginning in September we began depreciating the new
facility, and expensing the related interest and higher utility costs.
These charges and expenses, the majority of which were one-time items,
adversely impacted our pretax income from continuing operations by
approximately $400,000. Including these expenses, our pretax income
for the quarter was essentially unchanged compared with that of the
same period last year. Without these expenses, our pretax income from
continuing operations for the quarter would have been 14% higher than
in the same period last year. We anticipate that higher charges for
depreciation, property tax and utilities associated with our new
facility will add about $1.0 million to operating expenses annually as
compared to operating costs, including rent, at the old facility. In
addition, our interest expense over at least the next four quarters
will be higher than in the comparable quarters in the one-year period
ended September 30, 2006 as a result of increased borrowings under our
line of credit to partially fund the cost of the new facility. By the
end of next year, we anticipate that growth in income from increased
revenues will more than make up for these additional costs, leading to
significant contributions to the bottom line in 2008 and subsequent
years."
Comparing other results for the third quarter of 2006 to the third
quarter of 2005, Mr. Battat added, "Revenues from fluid delivery and
cardiovascular products, which represent a growing majority of our
total sales, were up 15%. On the other hand, revenues from ophthalmic
products were down 14% reflecting the slow recovery experienced by
certain customers in the sale of their specific products and related
kitting business. We anticipate that revenues from this line of
products will return to normal levels in the fourth quarter of this
year." Mr. Battat further stated that: "a recent review of our R&D tax
credits for 2005 and prior-year tax returns showed that we were
entitled to higher credits than we had claimed. Primarily as a result
of this adjustment, our tax rate for the quarter fell to 14% from 28%
in the third quarter of 2005. Assuming that Congress extends the
provisions for R&D tax credits, our tax rate for the fourth quarter is
anticipated to approximate 26% compared to 29% in the same period last
year."
Atrion's revenues for the quarter ended September 30, 2006 were
$19,290,000 compared with $18,338,000 for the same period in 2005. On
a diluted per share basis, net income for the period increased to
$1.38 as compared to $1.15 in the same quarter of last year.
Revenues for the first nine months of 2006 increased 8% to
$59,641,000 from $55,085,000 for the same period in 2005. Net income
for the first nine months of 2006 was $3.99 per diluted share versus
$3.56 in 2005, a 12% increase, with gains from discontinued operations
of $.08 per share in 2006 and $.09 in 2005.
Atrion Corporation designs, develops, manufactures, sells and
distributes products and components primarily to medical markets
worldwide.
The statements in this press release that are forward-looking are
based upon current expectations and actual results or future events
may differ materially. Such statements include, but are not limited
to, Atrion's expectations regarding the increase in annual operating
expenses, the increase in interest expense, increased revenues in the
future, growth in income from increased revenues offsetting additional
cost from the new facility and leading to significant contributions to
net income in 2008 and subsequent years, revenues from ophthalmic
products returning to normal levels in the fourth quarter of 2006 and
the Company's tax rate for the fourth quarter of 2006. Words such as
"expects," "believes," "anticipates," "intends," "will," and "should"
and variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements involve
risks and uncertainties. The following are some of the factors that
could cause actual results or future events to differ materially from
those expressed in or underlying our forward-looking statements:
changing economic, market and business conditions; acts of war or
terrorism; the effects of governmental regulation; competition and new
technologies; slower-than-anticipated introduction of new products or
implementation of marketing strategies; the Company's ability to
protect its intellectual property; changes in the prices of raw
materials; changes in product mix; and intellectual property and
product liability claims and product recalls. The foregoing list of
factors is not exclusive, and other factors are set forth in the
Company's filings with the SEC.
ATRION CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -----------------
2006 2005 2006 2005
---------- -------- -------- --------
Revenues $19,290 $18,338 $59,641 $55,085
Cost of goods sold 11,803 11,377 36,033 33,297
---------- -------- -------- --------
Gross profit 7,487 6,961 23,608 21,788
Operating expenses 4,301 3,850 13,244 12,127
---------- -------- -------- --------
Operating income 3,186 3,111 10,364 9,661
Interest expense, net (53) (11) (32) (29)
Other income/(expense), net (4) 2 (26) 10
---------- -------- -------- --------
Income from continuing operations
before provision for income
taxes 3,129 3,102 10,306 9,642
Income tax provision (433) (861) (2,685) (2,999)
---------- -------- -------- --------
Income from continuing operations 2,696 2,241 7,621 6,643
Gain on disposal of discontinued
operations -- -- 165 165
---------- -------- -------- --------
Net income $2,696 $2,241 $7,786 $6,808
========== ======== ======== ========
Income per basic share:
Income from continuing
operations $1.45 $1.23 $4.13 $3.73
Gain on disposal of
discontinued operations -- -- .09 .09
---------- -------- -------- --------
Net income per basic share $1.45 $1.23 $4.22 $3.82
========== ======== ======== ========
Weighted average basic shares
outstanding 1,858 1,829 1,846 1,781
========== ======== ======== ========
Income per diluted share:
Income from continuing
operations $1.38 $1.15 $3.91 $3.47
Gain on disposal of
discontinued operations -- -- .08 .09
---------- -------- -------- --------
Net income per diluted share $1.38 $1.15 $3.99 $3.56
========== ======== ======== ========
Weighted average diluted shares
outstanding 1,960 1,953 1,951 1,915
========== ======== ======== ========
ATRION CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
Sept. 30, Dec. 31,
ASSETS 2006 2005
----------- --------
(Unaudited)
Current assets:
Cash and cash equivalents $234 $525
Accounts receivable 9,541 8,291
Inventories 18,278 17,705
Prepaid expenses 1,053 832
Deferred income taxes 620 620
----------- --------
Total Current Assets 29,726 27,973
Property, plant and equipment, net 50,493 35,254
Other assets 15,102 15,243
----------- --------
$95,321 $78,470
=========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities 8,808 8,226
Line of credit 11,647 2,529
Other non-current liabilities 6,030 5,820
Stockholders' equity 68,836 61,895
----------- --------
$95,321 $78,470
=========== ========
CONTACT: Atrion Corporation
Jeffery Strickland, 972-390-9800
Vice President and Chief Financial Officer