EX-99.1 2 intricon064097_ex99-1.htm PRESS REALEASE DATED OCTOBER 25, 2006 Exhibit 99.1 to IntriCon Corporation Form 8-K dated October 25, 2006

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

INTRICON REPORTS 2006 THIRD-QUARTER RESULTS

Sales Up 5 Percent from Prior Year; Net Income Rises Significantly

 

ST. PAUL, Minn. — October 25, 2006 — IntriCon Corporation (AMEX: IIN), a designer, developer, manufacturer and distributor of miniature and micro-miniature medical and electronic products, today announced financial results for its third quarter ended September 30, 2006.

For the third quarter, the company reported sales of $12.5 million, up 5 percent from sales of $11.9 million for the 2005 third quarter. IntriCon delivered 2006 third-quarter net income of $438,000, or $0.08 per diluted share, up significantly from net income of $125,000, or $0.02 per diluted share, for the year-ago period. The 2006 third-quarter net income includes stock option expense of $56,000, or $0.01 per diluted share, due to the 2006 adoption of FAS 123(R).

“We’re pleased to report a sizeable year-over-year earnings increase in the 2006 third quarter,” said Mark S. Gorder, president and chief executive officer of IntriCon. “In addition, we posted a solid sales gain, fueled primarily by strong performances in professional audio and electronics. During the quarter, we further enhanced company leadership with the addition of a new independent director. Our team remains committed to investing in new customer projects, while making expense management progress.”

For the nine-month period, IntriCon reported sales of $37.5 million, an increase of 13 percent from 2005 nine-month sales of $33.3 million. Net income for the 2006 nine months was $719,000, or $0.13 per diluted share, compared to $653,000, or $0.12 per diluted share, for the 2005 period. Due to the 2006 adoption of FAS 123(R) a charge of $150,000, or $0.03 per diluted share, in stock option expense has been recognized in the current year.

On a continuing operations only basis, IntriCon recorded 2006 third-quarter net income of $453,000, or $0.08 per diluted share, an increase over net income from continuing operations of $174,000, or $0.03 per diluted share, for the prior-year period. For the 2006 nine months, the company posted net income from continuing operations of $762,000, or $0.14 per diluted share, versus $594,000, or $0.11 per diluted share, for the 2005 nine months.

 

 

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IntriCon Corporation 2006 Third-Quarter Results
October 25, 2006
Page 2

 

 

Business Update

                For the third quarter, IntriCon’s sales were up 5 percent from prior year. For the nine-month period, sales rose 13 percent over the prior year nine months with increases coming in all four markets: professional audio grew 19 percent; medical rose 7 percent; hearing health increased 4 percent; and electronics was up more than 37 percent, with the company’s acquisition of Amecon in late 2005.

Said Gorder, “Year to date, we delivered increases over the prior year in all four of our chosen markets. While project timing may impact quarterly sequential comparisons, we’re achieving positive long-term growth on both the top and bottom lines.”

During the quarter, IntriCon named Philip N. Seamon to its board of directors. Seamon brings more than 30 years of corporate finance and operational consulting experience. With his addition to the company’s board, IntriCon now has five board members, four of whom are independent under applicable SEC and American Stock Exchange guidelines.

Concluded Gorder, “Our growth strategy continues to be further developing our core product lines by investing in strategic research and development opportunities combined with accelerated new product introductions. We’re encouraged by the success we’re seeing across the company, and we remain committed to growing by increasing business with existing customers and attracting new customers.”

 

About IntriCon Corporation

Headquartered in Arden Hills, Minn., IntriCon Corporation designs, develops and manufactures miniature and micro-miniature medical and electronic products. The company is focused on four key markets: medical, hearing health, professional audio and communications, and electronics. IntriCon has facilities in the United States, Asia and Europe. The company’s common stock trades under the symbol “IIN” on the American Stock Exchange. For more information about IntriCon, visit www.intricon.com.

 

 

 

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IntriCon 2006 Third-Quarter Results
October 25, 2006
Page 3

 

 

Forward-Looking Statements

Statements made in this release and in IntriCon’s other public filings and releases that are not historical facts or that include forward-looking terminology such as “may”, “will”, “believe”, “expect”, “should”, “optimistic” or “continue” or the negative thereof or other variations thereon are “forward-looking statements” within the meaning of the Securities Exchange Act of 1934 as amended. These forward-looking statements include, without limitation, statements concerning future growth, future financial condition and performance, prospects, and the positioning of the company to compete in chosen markets. These forward-looking statements are affected by known and unknown risks, uncertainties and other factors that are beyond the company’s control, and may cause the company’s actual results, performance or achievements to differ materially from the results, performance and achievements expressed or implied in the forward-looking statements. These risks, uncertainties and factors include, without limitation, the risk that the company may not be able to achieve its long-term strategy, weakening demand for products of the company due to general economic conditions, possible non-performance of developing technological products, the volume and timing of orders received by the company, changes in the mix of products sold, competitive pricing pressures, availability of electronic components for the company’s products, ability to create and market products in a timely manner, competition by competitors with more resources than the company, foreign currency risks arising from the company’s foreign operations and other risks detailed from time to time in the company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended December 31, 2005. The company disclaims any intent or obligation to publicly update or revise any forward-looking statements, regardless of whether new information becomes available, future developments occur or otherwise.

 

Contacts

At IntriCon:

At Padilla Speer Beardsley:

Scott Longval, CFO

Marian Briggs/Matt Sullivan

651-604-9526

612-455-1700

slongval@intricon.com

mbriggs@psbpr.com / msullivan@psbpr.com

 








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IntriCon 2006 Third-Quarter Results
October 25, 2006
Page 4

 

IntriCon Corporation

Consolidated Condensed Statements of Operations

(Unaudited)

 

Three Months Ended
September 30,
2006
September 30,
2005
Sales, net     $ 12,487,832   $ 11,896,464  
 
Costs of sales    9,614,058    8,989,356  
   
 
Gross profit    2,873,774    2,907,108  
 
Operating expenses:  
Selling expense    848,499    826,852  
General and administrative expense (a)    1,177,860    1,291,753  
Research and development expense    256,678    479,549  
   
  Total operating expenses    2,283,037    2,598,154  
 
Operating income    590,737    308,954  
 
Interest expense    (91,394 )  (65,679 )
Interest income    16,842    16,310  
Other (expense) income, net    (10,401 )  11,587  
   
 
Income from continuing operations before
    Income taxes    505,784    271,172  
Income taxes expense    52,856    96,993  
   
 
Income from continuing operations    452,928    174,179  
 
Loss from discontinued  
    operations, net of income taxes    (14,655 )  (48,732 )
   
 
Net income   $ 438,273   $ 125,447  
   
 
Net earnings (loss) per share:  
  Basic:
     Continuing operations   $ .09   $ .03  
     Discontinued operations    (.01 )  (.01 )
   
    $ .08   $ .02  
   
 
  Diluted:
     Continuing operations   $ .08   $ .03  
     Discontinued operations    (.00 )  (.01 )
   
     Net income   $ .08   $ .02  
   
 
Average shares outstanding:
       Basic    5,157,925    5,132,692  
       Diluted    5,413,277    5,384,767  

(a)   General and administrative expense includes $56,166 of non-cash stock option expense related to the adoption of FAS 123(R).

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IntriCon 2006 Third-Quarter Results
October 25, 2006
Page 5

 

 

IntriCon Corporation

Consolidated Condensed Statements of Operations

(Unaudited)

 

Nine Months Ended
September 30,
2006
September 30,
2005
Sales, net     $ 37,532,457   $ 33,284,010  
 
Costs of sales    28,372,969    24,583,421  
   
 
Gross profit    9,159,488    8,700,589  
 
Operating expenses:  
Selling expense    2,620,031    2,515,066  
General and administrative expense (a)    3,804,666    3,828,688  
Research and development expense    1,437,499    1,245,303  
   
  Total operating expenses    7,862,196    7,589,057  
 
Operating income    1,297,292    1,111,532  
 
Interest expense    (392,570 )  (285,344 )
Interest income    56,482    34,892  
Other expense/income, net    (71,345 )  118,341  
   
 
Income from continuing operations before
    Income taxes    889,859    979,421  
Income taxes expense    127,874    385,414  
   
 
Income from continuing operations    761,985    594,007  
Income (loss) from discontinued  
    operations, net of income taxes    (42,630 )  58,609  
   
 
Net income   $ 719,355   $ 652,616  
   
 
Net earnings (loss) per share:  
  Basic:
     Continuing operations   $ .15   $ .11  
     Discontinued operations    (.01 )  .01  
   
    $ .14   $ .12  
   
 
 Diluted:
     Continuing operations   $ .14   $ .11  
     Discontinued operations    (.01 )  .01  
   
     Net income   $ .13   $ .12  
   
 
Average shares outstanding:
       Basic    5,154,633    5,130,373  
       Diluted    5,490,606    5,202,814  

(a)   General and administrative expense includes $149,512 of non-cash stock option expense related to the adoption of FAS 123(R).

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IntriCon 2006 Third-Quarter Results
October 25, 2006
Page 6

 

 

IntriCon Corporation

Consolidated Condensed Balance Sheets

(Unaudited)

 

Assets September 30, 2006 December 31, 2005
(unaudited)
Current assets            
 
    Cash   $ 597,177   $ 1,109,402  
 
    Restricted cash    60,158    60,158  
 
    Accounts receivable, less allowance for doubtful accounts of  
       $268,000 in 2006 and $370,000 in 2005    7,173,429    6,925,357  
 
    Inventories    7,845,034    6,950,243  
 
    Refundable income taxes    93,241    77,143  
 
    Other current assets    402,992    454,053  
   
 
       Total current assets    16,172,031    15,576,356  
 
Property, plant and equipment
       Land        170,500  
       Buildings        1,732,914  
       Machinery and equipment    28,051,040    26,423,956  
   
     28,051,040    28,327,370  
       Less: accumulated depreciation    22,059,956    21,455,955  
   
 
         Net property, plant and equipment    5,991,084    6,871,415  
 
Note receivable from sale of discontinued operations, less  
     allowance of $296,000    453,923    503,923  
 
Goodwill    5,867,239    5,754,219  
 
Other assets, net    723,426    929,474  
   
 
    $ 29,207,703   $ 29,635,387  
   




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IntriCon 2006 Third-Quarter Results
October 25, 2006
Page 7

 

 

Liabilities and Shareholders’ Equity September 30, 2006 December 31, 2005
(unaudited)
Current liabilities            
 
    Checks written in excess of cash   $ 818,662   $ 397,999  
 
    Current maturities of long-term debt    716,549    888,531  
 
    Accounts payable    3,247,666    3,136,555  
 
    Income taxes payable    224,823    298,914  
 
    Deferred gain on building sale    118,036      
 
Other accrued liabilities    2,898,987    2,669,684  
   
 
      Total current liabilities    8,024,723    7,391,683  
 
Long term debt, less current maturities    2,320,241    5,319,181  
 
Other post-retirement benefit obligations    1,370,312    1,516,939  
 
Note payable, net of current portion    769,081    646,530  
 
Deferred income taxes    29,535    37,725  
 
Accrued pension liability    655,025    633,818  
 
Deferred gain on building sale    1,032,815      
   
 
Total non-current liabilities    6,177,009    8,154,193  
 
 
      Total liabilities    14,201,732    15,545,876  
 
Commitments and contingencies
 
Shareholders’ equity  
Common shares, $1 par; 10,000,000 shares authorized;
    5,677,068 and 5,665,568 shares issued; 5,161,314 and
    5,149,814 outstanding    5,677,068    5,665,568  
 
    Additional paid-in capital    12,223,777    12,053,590  
 
    Accumulated deficit    (1,432,662 )  (2,152,017 )
 
    Accumulated other comprehensive loss    (197,134 )  (212,552 )
 
    Less: 515,754 common shares held in treasury, at cost    (1,265,078 )  (1,265,078 )
   
 
         Total shareholders’ equity    15,005,971    14,089,511  
   
 
    $ 29,207,703   $ 29,635,387  
   

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