Atrion Reports Third Quarter Results
GAAP EPS up 50%, Adjusted EPS up 25%
ALLEN, TX -- 11/07/2007 -- Atrion Corporation (NASDAQ: ATRI) today announced
that for the third quarter of 2007, revenues were up 10% and diluted
earnings per share were up 50% compared to the results for third quarter of
2006. After the adjustments described below, diluted earnings per share
were up 25%.
Commenting on the Company's performance for the third quarter compared to
the same quarter of the prior year, Emile A. Battat, Chairman and CEO,
said, "We are very pleased with the increase in revenues in the third
quarter, more than half of which came from our fluid delivery products.
This increase, coupled with improved manufacturing efficiencies, gave us
the substantial growth in earnings for the third quarter."
Mr. Battat added "During the quarter two significant events occurred. The
first was a dispute resolution resulting in a net gain after expenses of
$1.4 million. The second was the termination of certain legacy pension
plans effective December 31, 2007, replacing all former defined benefit
plans with a single enhanced 401(k) plan. These legacy plans have long
been a source of future uncertainty because their costs can vary
substantially from year to year depending on both prevailing stock market
and interest rate conditions. For example a hypothetical 15% decline in
pension asset valuation would require about a $1 million contribution from
the Company. Given recent interest rate cuts and stock market declines,
the theoretical exposure could be magnified because the lower the interest
rate, the greater the future amount of the pension liability. Our desire
to manage risk responsibly resulted in the decision to terminate these
plans. On an expense basis, termination of these plans results in a
non-cash charge of approximately $1.35 million. Under pension accounting
rules, however, the Company is only allowed to record a net curtailment and
settlement loss of $329,000 in the most recent quarter. The remaining $1
million charge can only be recorded when pension accounts are settled in
late 2008 or early 2009 when final government approvals are received.
Excluding the impact of both of these events, our diluted earnings per
share would have been $1.72, a 25% increase rather than the reported 50%."
Commenting on a significant milestone reached in the third quarter, Mr.
Battat stated that "We are especially gratified that one year after moving
into our new Florida facility, which took us over two years to plan and
construct at a cost of $24 million, the Company has now fully repaid all of
its borrowings and is once again totally debt free."
Atrion's revenues for the quarter ended September 30, 2007 totaled
$21,315,000 compared with $19,290,000 in the same period in 2006. On a
diluted per share basis, earnings for the period increased to $2.07 as
compared to $1.38 in the same quarter of last year. Operating income for
the third quarter totaled $5,795,000 compared to $3,186,000 in last year's
third quarter.
Revenues for the first nine months of 2007 of $67,552,000 were 13% higher
than revenues of $59,641,000 in the comparable nine month period in 2006.
Diluted earnings per share for the first nine months of 2007 were $5.49
versus $3.99 in the first nine months of 2006. Last year's results
included $.08 per share from discontinued operations.
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 future contributions to the Company's 401(k) plan
and the effects of terminating the Company's pension plans. Words such as
"expects," "believes," "anticipates," "intends," 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,
------------------ ------------------
2007 2006 2007 2006
-------- -------- -------- --------
Revenues $ 21,315 $ 19,290 $ 67,552 $ 59,641
Cost of goods sold 12,210 11,803 38,468 36,033
-------- -------- -------- --------
Gross profit 9,105 7,487 29,084 23,608
Operating expenses:
Pension charges 329 -- 329 --
Dispute resolution (1,398) -- (1,398) --
Other operating expenses 4,379 4,301 14,195 13,244
-------- -------- -------- --------
Total operating expenses 3,310 4,301 13,126 13,244
-------- -------- -------- --------
Operating income 5,795 3,186 15,958 10,364
Interest income/(expense), net (23) (53) (221) (32)
Other income/(expense), net -- (4) -- (26)
-------- -------- -------- --------
Income from continuing operations
before provision for income taxes 5,772 3,129 15,737 10,306
Income tax provision (1,662) (433) (4,873) (2,685)
-------- -------- -------- --------
Income from continuing operations 4,110 2,696 10,864 7,621
Gain on disposal of discontinued
operations -- -- -- 165
-------- -------- -------- --------
Net income $ 4,110 $ 2,696 $ 10,864 $ 7,786
======== ======== ======== ========
Income per basic share:
Income from continuing operations $ 2.17 $ 1.45 $ 5.77 $ 4.13
Gain on disposal of discontinued
operations -- -- -- .09
-------- -------- -------- --------
Net income per basic share $ 2.17 $ 1.45 $ 5.77 $ 4.22
======== ======== ======== ========
Weighted average basic shares
outstanding 1,895 1,858 1,883 1,846
======== ======== ======== ========
Income per diluted share:
Income from continuing operations $ 2.07 $ 1.38 $ 5.49 $ 3.91
Gain on disposal of discontinued
operations -- -- -- .08
-------- -------- -------- --------
Net income per diluted share $ 2.07 $ 1.38 $ 5.49 $ 3.99
======== ======== ======== ========
Weighted average diluted shares
outstanding 1,988 1,960 1,980 1,951
======== ======== ======== ========
ATRION CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
Sept. 30, Dec. 31,
ASSETS 2007 2006
----------- -----------
(Unaudited)
Current assets:
Cash and cash equivalents $ 1,045 $ 333
Accounts receivable 10,422 10,542
Inventories 17,727 17,115
Prepaid expenses 1,029 1,530
Deferred income taxes 738 1,138
----------- -----------
Total current assets 30,961 30,658
Property, plant and equipment, net 53,570 51,442
Other assets 12,433 13,672
----------- -----------
$ 96,964 $ 95,772
=========== ===========
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities 8,462 6,923
Line of credit -- 11,399
Other non-current liabilities 6,433 6,555
Stockholders equity 82,069 70,895
----------- -----------
$ 96,964 $ 95,772
=========== ===========
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(In thousands, except per share data)
Three Months
Ended
Sept. 30, 2007
--------------
Earnings per diluted share:
GAAP EPS $ 2.07
Less Adjustments (calculated below) .35
--------------
Adjusted diluted EPS $ 1.72
Adjustments Calculation:
Dispute resolution $ 1,398
Pension charges (329)
--------------
Net positive adjustments 1,069
Income taxes on adjustments (374)
--------------
Adjustments to net income $ 695
Diluted shares outstanding 1,988
Diluted EPS Adjustment $ .35