EX-99.1 2 b411394_ex99-1.txt PRESS RELEASE Exhibit No. 99.1 PRESS RELEASE FOR INFORMATION CONTACT: Scott D. Kantor Chief Financial Officer Datascope Corp. 14 Philips Parkway Montvale, NJ 07645 (201) 307-5409 www.datascope.com ----------------- FOR IMMEDIATE RELEASE: DATASCOPE REPORTS HIGHER RESULTS FOR THE SECOND QUARTER 2006 Montvale, New Jersey, January 30, 2006 . . . Datascope Corp. (Nasdaq: DSCP) reported net earnings for the second quarter of fiscal 2006 ended December 31, 2005 of $4.5 million, or 29 cents per diluted share, after giving effect to a special charge of $1.8 million after tax, equivalent to 12 cents per diluted share. Net earnings in the second quarter last year were $3.7 million or 24 cents per diluted share. Sales for the quarter increased to $92.5 million compared to $82.7 million last year as a result of continued sales increases in patient monitoring and cardiac assist products. Sales in the second quarter of the current year were reduced by unfavorable foreign exchange of $1.3 million. The special charge in the quarter of $1.8 million after tax relates to the postponement of the launch of the X-Site(R) vascular closure device in the United States. On a pretax basis, the special charge was $2.7 million and comprises $1.6 million to write-off X-Site inventory and tooling, $0.7 million for purchase commitments and contract termination costs, and $0.4 million for severance and other one-time benefits in connection with the reduction of the workforce in the Interventional Products Division. The workforce reduction is expected to save approximately $4 million on an annualized basis. As reported previously, last year, approximately $6.1 million of Panorama(TM) central monitoring system shipments (corresponding to 17 cents per share of net earnings) were recognized in the third fiscal quarter rather than in the second quarter because validation of a new software release was not completed in the second quarter. In the six months ended December 31, 2005, net earnings were $10.5 million or 69 cents per diluted share compared to $8.4 million or 55 cents per diluted share last year. Sales in the six-month period were $180.8 million compared to $163.0 million a year ago; unfavorable foreign exchange translation decreased sales by $1.3 million. Sales of patient monitoring products increased 27% to $41.8 million in the second quarter of fiscal 2006. If the $6.1 million Panorama sales were included in last year's second quarter, sales would have been 7% above last year. Unfavorable foreign exchange translation decreased sales by $0.4 million. Orders for Panorama systems reached a record level in the current year's second quarter. Continued sales increases of non-invasive blood pressure monitors including the Duo(TM) monitor, and sales of the Anestar(R) anesthesiology delivery system and Masimo SET(R)(1) pulse oximetry sensors also contributed to sales growth. Sales of cardiac assist products were $37.5 million, 10% higher than last year. Unfavorable foreign exchange translation decreased sales by $0.6 million. Worldwide shipments of balloon pumps, principally the company's CS100(R) automatic balloon pump, set a record. International unit shipments of intra-aortic balloons also set a record. As reported on January 3, 2006, Datascope acquired assets and technology of Ethicon's Clearglide(R) endoscopic vessel harvesting (EVH) product line. Ethicon is a Johnson & Johnson company. EVH is a less-invasive alternative to surgical harvesting of blood vessels for use in coronary bypass. The benefits of EVH include far less trauma and reduced leg wound complications. The EVH product line will be integrated with the Cardiac Assist Division which markets its products to cardiac surgeons who perform coronary artery bypass procedures. The EVH market is estimated at $70 million annually, based on an estimated 40% penetration of EVH in coronary bypass. Datascope believes that its strength in the cardiac surgery market, and its plans for product improvement should lead to significant growth of the cardiac assist business. Second quarter sales of interventional products were $5.6 million, 22% below last year, as sales of vascular closure devices continued to decline. As in prior periods, the decline was partially offset by sales of non-closure products. These grew 51% to account for 30% of total interventional product sales, double that of last year. The launch of the X-Site suture-based vascular closure device is now projected for the second quarter of fiscal 2007. The introduction of On-Site(TM), our new collagen-based vascular closure device remains on schedule for the current quarter. InterVascular sales at $7.1 million were 11% below last year, primarily due to the shift from direct sales to lower priced sales to InterVascular's exclusive U.S. distributor, W. L. Gore & Associates, Inc. (Gore), which became effective on May 1, 2005. Despite distributor pricing to Gore, InterVascular's profitability increased because costs associated with direct selling in the United States were eliminated. Other factors contributing to InterVascular's 11% sales decline were the effects of competitive pressure on pricing in the European countries in which we sell directly, and unfavorable foreign exchange translation of $0.3 million. The Board of Directors declared a special cash dividend of $1.00 per share on November 30, 2005 and a quarterly cash dividend of 7 cents per share on December 8, 2005. The dividends were paid on January 18, 2006 to shareholders of record on December 27, 2005. Datascope's news releases and other company information, including specific details about its January 31, 2006 conference call and webcast (at 12:00 noon, EST, call in number: (800)-816-3086), can be found on the company's website, www.datascope.com. Datascope Corp. is a diversified medical device company that manufactures (itself or through agreements with unaffiliated companies) and markets proprietary products for clinical health care markets in interventional cardiology and radiology, cardiovascular and vascular surgery, anesthesiology, emergency medicine and critical care. --------------- (1) Masimo SET is a registered trademark of Masimo Corporation. This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Many of these risks cannot be predicted or quantified and are at least partly outside our control, including the risk that the EVH product and plans for product improvement will not lead to significant growth of the cardiac assist business, that the introductions of X-Site and On-Site will be delayed and that market conditions may change, particularly as the result of competitive activity in the markets served by the company. Additional risks are the company's dependence on certain unaffiliated suppliers (including single source manufacturers) for patient monitoring, cardiac assist and interventional products, continued demand for the company's products, rapid and significant changes that generally characterize the medical device industry and the ability to continue to respond to such changes, the uncertain timing of regulatory approvals, as well as other risks detailed in documents filed by Datascope with the Securities and Exchange Commission. DATASCOPE CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share amounts)
SIX MONTHS ENDED THREE MONTHS ENDED DECEMBER 31, DECEMBER 31, ---------------------------------------- --------------------------------------- 2005 2004 2005 2004 ------------------ ------------------ ----------------- ------------------ NET SALES $ 180,800 $ 163,000 $ 92,500 $ 82,700 Cost of sales 77,265 65,424 39,838 33,472 Cost of sales, special charge 2,444 -- 2,444 -- ------------------ ------------------ ----------------- ------------------ Gross profit 101,091 97,576 50,218 49,228 OPERATING EXPENSES: Research and development expenses 18,146 17,368 9,381 8,732 Selling, general and administrative expenses 69,348 68,754 34,863 35,329 Special gain (810) -- -- -- ------------------ ------------------ ----------------- ------------------ 86,684 86,122 44,244 44,061 ------------------ ------------------ ----------------- ------------------ OPERATING EARNINGS 14,407 11,454 5,974 5,167 Other (income) expense: Interest, net (1,000) (886) (513) (361) Other, net 1,071 285 402 313 ------------------ ------------------ ----------------- ------------------ 71 (601) (111) (48) ------------------ ------------------ ----------------- ------------------ EARNINGS BEFORE TAXES ON INCOME 14,336 12,055 6,085 5,215 Taxes on income 3,829 3,617 1,634 1,497 ------------------ ------------------ ----------------- ------------------ NET EARNINGS $ 10,507 $ 8,438 $ 4,451 $ 3,718 ================== ================== ================= ================== Earnings per share, basic $0.71 $0.57 $0.30 $0.25 ================== ================== ================= ================== Weighted average common shares outstanding, basic 14,816 14,793 14,834 14,794 ================== ================== ================= ================== Earnings per share, diluted $0.69 $0.55 $0.29 $0.24 ================== ================== ================= ================== Weighted average common shares outstanding, diluted 15,140 15,234 15,162 15,256 ================== ================== ================= ==================
DATASCOPE CORP. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share amounts)
Dec 31, JUNE 30, 2005 2005 --------------------- --------------------- Assets Current Assets: Cash and cash equivalents $ 17,721 $ 12,188 Short-term investments 29,759 30,384 Accounts receivable less allowance for doubtful accounts of $2,538 and $2,279 76,197 74,145 Inventories, net 56,617 54,626 Prepaid income taxes -- 645 Prepaid expenses and other current assets 8,195 11,157 Current deferred taxes 6,220 5,294 --------------------- --------------------- Total Current Assets 194,709 188,439 Property, Plant and Equipment, net of accumulated depreciation of $87,118 and $82,427 84,873 87,648 Long-term Investments 22,568 22,813 Intangible Assets 20,680 20,908 Goodwill 4,065 4,065 Other Assets 33,048 33,209 --------------------- --------------------- $ 359,943 $ 357,082 ===================== ===================== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 18,407 $ 18,850 Dividends payable 15,913 1,036 Accrued expenses 15,012 16,283 Accrued compensation 13,118 15,335 Short-term debt -- 4,000 Deferred revenue 3,232 3,975 Income taxes payable 882 -- ----------------- ------------------ Total Current Liabilities 66,564 59,479 Other Liabilities 32,124 31,738 Commitments and Contingencies Stockholders' Equity: Preferred stock, par value $1.00 per share: Authorized 5,000 shares; Issued, none -- -- Common stock, par value $.01 per share: Authorized, 45,000 shares; Issued, 18,349 and 18,256 shares 183 183 Additional paid-in capital 91,610 88,773 Treasury stock at cost, 3,465 and 3,460 shares (105,319) (105,175) Retained earnings 286,062 292,524 Accumulated other comprehensive loss: Cumulative translation adjustments (3,579) (2,713) Minimum pension liability adjustments (7,503) (7,503) Unrealized loss on available-for-sale securities (199) (224) --------------------- --------------------- Total Stockholders' Equity 261,255 265,865 --------------------- --------------------- $ 359,943 $ 357,082 ===================== =====================