Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT:
Joseph W. Kaufmann
President and Chief Executive Officer
(610) 524-0188
KENSEY NASH ANNOUNCES EPS OF $0.23 FOR SECOND QUARTER, UP 44% FROM
PRIOR YEAR; INCREASES GUIDANCE FOR FISCAL YEAR
-Also Reports 30% Increase In Revenues For Its Second Fiscal Quarter-
EXTON, PA, January 20, 2004 -- Kensey Nash Corporation (Nasdaq: KNSY) today
announced record earnings of $0.23 per share for its second fiscal quarter of
2004, ahead of its previous guidance of $0.19 to $0.20. These earnings were up
44% from the $0.16 reported a year ago. Total revenues for the second quarter
increased 30% to $13.7 million compared to $10.5 million in the prior year
period. Net sales increased 26% to $8.0 million from $6.4 million in the
comparable quarter of the prior fiscal year. Royalty income from Angio-Seal(TM)
sales increased 42% to $5.6 million from $3.9 million. Net income for the
quarter increased 54% to $2.8 million compared to $1.8 million for the prior
year period.
During the quarter, the Company generated cash from operations of $2.9 million
offset by cash used for share repurchases totaling $3.0 million and capital
spending of $1.3 million, resulting in cash and investments at December 31, 2003
of $52.1 million. Total assets were $89.0 and stockholders' equity was $83.5
million at the quarter's end. The company has no long-term debt.
The following table summarizes the results for the Company for the three months
ended December 31, 2003 compared to the three months ended December 31, 2002:
------------------------------------- -------------- ------------- -----------
Percentage
(millions, except per share data) December 31, December 31, Change
2003 2002
------------------------------------- -------------- ------------- -----------
Net Sales $8.0 $6.4 26%
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Royalty Income $5.6 $3.9 42%
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Total Revenues $13.7 $10.5 30%
------------------------------------- -------------- ------------- -----------
Operating Income $3.9 $2.5 53%
------------------------------------- -------------- ------------- -----------
Net Income $2.8 $1.8 54%
------------------------------------- -------------- ------------- -----------
Earnings Per Share $0.23 $0.16 44%
------------------------------------- -------------- ------------- -----------
Wghtd Avg Diluted Shares Outstanding 12.2 11.4 7%
------------------------------------ -------------- ------------- -----------
Total revenues for the six months ended December 31, 2003 increased 34% to $26.1
million compared to $19.4 million in the prior year period. Net sales increased
33% to $15.4 million from $11.5 million in the comparable six months of the
prior fiscal year. Royalty income increased 38% to $10.4 million from $7.6
million. Net income for the six months increased 63% to $5.3 million, or $0.43
per share, compared to $3.2 million, or $0.29 per share, for the prior year
period.
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"We are extremely pleased to report these results, which significantly exceeded
our expectations due to the continued robust growth of our Angio-Seal royalties
and biomaterials products sales," commented Joseph W. Kaufmann, President and
CEO of Kensey Nash. "Angio-Seal(TM) royalty revenues were at a record level as
St. Jude Medical continued to grow the vascular closure market and maintained
their leadership position."
"Our biomaterials business continues to expand as well. This quarter we had
exceptionally strong growth in the orthopaedics segment, which was up 126% over
last year. Looking ahead, I expect that our collaboration with Orthovita will
begin to contribute to the revenue growth in the coming quarters. We are pleased
to report that VITOSS scaffold FOAM material, co-developed by Kensey Nash,
recently received 510(K) clearance from the FDA. Orthovita is planning to use
the recent clearance as a basis for a wide array of products, the first of which
is scheduled to be launched at the American Academy of Orthopaedic Surgeons in
March 2004. Kensey Nash will manufacture the products and will receive a royalty
on all of the products sold," he added.
During the quarter, the Company also continued to progress toward completion of
the PRIDE trial of TriActiv(R) Balloon Protected Flush Extraction System in the
U.S. The Company is on track for its regulatory submission to the FDA in the
current quarter and will target a U.S. launch at the Transcatheter
Cardiovascular Therapeutics meeting (TCT) in September. "As we approach
conclusion of our trial, this is a very exciting time for our company,"
commented Mr. Kaufmann. "The TriActiv trial has been a big investment for us,
and we are confident that this proprietary technology platform will provide our
company with a significant opportunity for future growth. We will continue to
invest in the evolution and improvement of the features and ease of use of the
TriActiv as we move forward and concentrate on broadening the potential
indications for the device," he concluded.
For the third quarter of fiscal year 2004, the Company is estimating total
revenues to be in the range of $14.0 to $14.3 million. Included in this
estimate, net sales are expected to be in the range of $8.3 to $8.5 million and
royalties are expected to be approximately $5.6 to $5.7 million. The Company
continues to anticipate the decline in the Angio-Seal royalty rate from the
current 9% to 6% at the start of its fourth fiscal quarter. The Company's
estimate for earnings per share for its third fiscal quarter ending March 31,
2004 is $0.24 to $0.25 per share, which would be more than 40% higher than the
same quarter a year ago. For the fiscal year ending June 30, 2004, revenues are
expected to exceed $53 million and the Company is raising its guidance for
earnings per share to a range of $0.88 to $0.92.
The Company will be holding a conference call to discuss the second quarter
earnings results on Wednesday, January 21, 2004 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 1-612-332-0932. A replay of the
call will also be available starting January 21, 2004 at 2:30 PM Eastern until
Monday, January 26 at 11:59 PM Eastern by calling 800-475-6701, access code
716066. 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 was a pioneer
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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 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.
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 third 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), 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)
Three Months Six Months
Ended December 31, Ended December 31,
------------------------------ ------------------------------
2003 2002 2003 2002
------------------------------ ------------------------------
Revenues:
Net sales .............................................. $ 8,041,754 $ 6,403,114 $15,353,705 $11,515,631
Research and development ............................... 91,807 207,940 327,108 364,632
Royalty income ......................................... 5,583,696 3,935,182 10,423,291 7,554,492
----------- ----------- ----------- -----------
Total revenues .................................... 13,717,257 10,546,236 26,104,104 19,434,755
----------- ----------- ----------- -----------
Operating costs and expenses:
Cost of products sold .................................. 3,537,701 2,932,136 6,879,831 5,320,590
Research and development ............................... 4,247,574 3,463,961 8,325,555 6,554,716
Selling, general and administrative .................... 2,072,275 1,634,708 4,032,365 3,205,181
----------- ----------- ----------- -----------
Total operating costs and expenses ................ 9,857,550 8,030,805 19,237,751 15,080,487
----------- ---------- ---------- ----------
Income from operations ..................................... 3,859,707 2,515,431 6,866,353 4,354,268
Interest and other income, net ............................. 273,682 225,015 546,034 602,488
----------- ----------- ----------- -----------
Pre-tax income ............................................. 4,133,389 2,740,446 7,412,387 4,956,756
Income tax expense ......................................... 1,364,018 947,092 2,135,773 1,713,371
----------- ---------- ---------- ----------
Net income ................................................. $ 2,769,371 $ 1,793,354 $ 5,276,614 $ 3,243,385
=========== =========== =========== ===========
Income per common share, assuming dilution ................. $ 0.23 $ 0.16 $ 0.43 $ 0.29
=========== =========== =========== ===========
Weighted average common shares outstanding ................. 12,238,446 11,403,487 12,278,990 11,338,233
=========== =========== =========== ===========
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KENSEY NASH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, June 30,
2003 2003
------------ ------------
Assets
Current assets:
Cash, cash equivalents and investments .... $ 52,083,252 $ 48,411,397
Trade receivables ......................... 2,748,778 3,760,286
Other receivables ......................... 5,961,234 5,149,497
Inventory ................................. 4,183,530 3,481,322
Prepaids and other assets ................. 2,080,432 2,564,179
Deferred tax asset, current ............... 501,038 2,097,147
------------ ------------
Total current assets ................. 67,558,264 65,463,828
------------ ------------
Property, plant and equipment, net ............. 14,565,051 13,399,717
Acquired puncture closure patents, net ......... 2,542,136 2,673,648
Deferred tax asset, non-current ................ 1,017,513 1,017,513
Goodwill ....................................... 3,284,303 3,284,303
------------ ------------
Total assets ................................... $ 88,967,267 $ 85,839,009
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses ..... $ 4,671,777 $ 5,038,025
Current portion of debt ................... 645,415 836,989
Deferred revenue .......................... 166,169 195,060
------------ ------------
Total current liabilities ............ 5,483,361 6,070,074
------------ ------------
Long-term debt ................................. -- 219,147
------------ ------------
Total stockholders' equity ..................... 83,483,906 79,549,788
------------ ------------
Total liabilities and stockholders' equity ..... $ 88,967,267 $ 85,839,009
============ ============
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