EX-99.1 2 intricon073046_ex99-1.htm PRESS RELEASE DATED JULY 24, 2007 Exhibit 99.2 to IntriCon Corporation Form 8-K dated July 24, 2006

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

INTRICON REPORTS ROBUST 2007 SECOND-QUARTER RESULTS

Core Businesses Drive Strong Performance

 

ST. PAUL, Minn. — July 24, 2007 — IntriCon Corporation (AMEX: IIN), a designer, developer, manufacturer and distributor of miniature and micro-miniature medical and electronics products, today announced financial results for its 2007 second quarter ended June 30, 2007.

For the second quarter, the company reported net sales of $16.9 million, a 28 percent increase from sales of $13.2 million for the 2006 second quarter. IntriCon delivered second-quarter net income of $527,000, or $0.10 per diluted share. This is a 20 percent increase from net income of $424,000, or $0.08 per diluted share, for the 2006 second quarter. The 2007 sales and net income include approximately one month of results from the late-May 2007 acquisition of Tibbetts Industries, Inc.

“Our medical business continues to perform very well, driven by increasing OEM demand for miniature, body-worn devices,” said Mark S. Gorder, president and chief executive officer of IntriCon. “Also contributing to second-quarter results were significant gains in hearing health and professional audio. Combined, our core medical, hearing-health and professional audio businesses delivered top-line, second-quarter growth of 38 percent.”

For the six-month period, IntriCon reported sales of $31.5 million and net income of $554,000, or $0.10 per diluted share. This compares to 2006 six-month sales of $25.0 million and net income of $282,000, or $0.05 per diluted share.

During the second quarter, IntriCon announced that it secured $14.5 million in new senior credit facilities with LaSalle Bank to finance the purchase of Tibbetts Industries, refinance existing debt and meet working capital requirements. Second-quarter and six-month results contain a $180,000, or $0.03 per diluted share, charge related to the refinancing of the credit facility. Management believes the favorable new terms will enhance IntriCon’s financial flexibility and strengthen the company in both the short- and long-term.

Excluding the impact of Tibbetts, IntriCon reported 2007 second-quarter net sales of $16.1 million and net income of $563,000, or $0.10 per diluted share. Again, excluding Tibbetts, net sales totaled $30.7 million for the six-month period with net income of $590,000, or $0.11 per diluted share.

 

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IntriCon Corporation 2007 Second-Quarter Results

July 24, 2007

Page 2

 

Business Update

For the second quarter, IntriCon’s core businesses increased 38 percent year-over-year. The company’s non-core electronics business decreased 10 percent from the second quarter of 2006.

Said Gorder, “The addition of Tibbetts provides us with significant incremental gains in both our medical and professional audio businesses. We believe the benefits of this acquisition will eventually carry over to hearing health, where we expect to incorporate Tibbetts’ pioneering magnetic telecoil and miniature transducer technology into key hearing aid components.

“Tibbetts’ surveillance capabilities also expand our markets to include security products—which are reflected in our professional audio performance. Security products, though currently a small percentage of our overall business, are seeing increasing demand in today’s post-9/11 climate.”

According to Gorder, IntriCon’s growth strategies also potentially include further acquisitions that are consistent with the company’s mission. In addition, IntriCon will work to accelerate new product development, further commit to research and development initiatives, and incorporate proprietary technology in all devices.

Concluded Gorder, “Our strategic, core-market focus on high-tech, body-worn devices is proving effective from both a top- and bottom-line perspective. By launching new products that use proprietary IntriCon design and technology, we believe we’re creating new opportunities and driving the business forward.”

 

About IntriCon Corporation

Headquartered in Arden Hills, Minn., IntriCon Corporation designs, develops and manufactures miniature and micro-miniature medical and electronics 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.

 

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 the benefits of the new credit facility and the Tibbetts acquisition, future growth and expansion,

 

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IntriCon Corporation 2007 Second-Quarter Results

July 24, 2007

Page 3

 

future financial condition and performance, prospects, and the positioning of IntriCon to compete in chosen markets. These forward-looking statements are affected by known and unknown risks, uncertainties and other factors that are beyond IntriCon’s control, and may cause IntriCon’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, risks related to the Tibbetts acquisition, including unanticipated liabilities and expenses, the risk that IntriCon 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, 2006. 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

Matt Sullivan/Marian Briggs

651-604-9526

612-455-1700

slongval@intricon.com

msullivan@psbpr.com / mbriggs@psbpr.com

 













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IntriCon Corporation 2007 Second-Quarter Results

July 24, 2007

Page 4

 

IntriCon Corporation

Consolidated Condensed Statements of Operations

(Unaudited)

 

 

 

Three Months Ended

 

 

 

June 30,
2007

 

June 30,
2006

 

Sales, net

 

$

16,937,697

 

$

13,208,492

 

 

 

 

 

 

 

 

 

Costs of sales

 

 

12,731,182

 

 

9,689,188

 

 

 

 

 

 

 

 

 

Gross profit

 

 

4,206,515

 

 

3,519,304

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling expense

 

 

962,872

 

 

869,111

 

General and administrative expense (a)

 

 

1,613,217

 

 

1,321,397

 

Research and development expense

 

 

650,777

 

 

611,838

 

Total operating expenses

 

 

3,226,866

 

 

2,802,346

 

 

 

 

 

 

 

 

 

Operating income

 

 

979,649

 

 

716,958

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(333,129

)

 

(144,649

)

Interest income

 

 

12,047

 

 

17,747

 

Equity in loss of partnership

 

 

(60,000

)

 

 

Other income (expense), net

 

 

35,788

 

 

(28,758

)

Income before income taxes

 

 

634,355

 

 

561,298

 

Income tax expense

 

 

107,511

 

 

112,931

 

Income from continuing operations

 

 

526,844

 

 

448,367

 

Loss from discontinued operations, net of income tax expense

 

 

 

 

(25,876

)

 

 

 

 

 

 

 

 

Net income

 

$

526,844

 

$

422,491

 

 

 

 

 

 

 

 

 

Income (loss) per share:

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

Continuing operations

 

$

.10

 

$

.09

 

Discontinued operations

 

 

 

 

(.01

)

 

 

$

.10

 

$

.08

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

Continuing operations

 

$

.10

 

$

.08

 

Discontinued operations

 

 

 

 

(.00

)

 

 

$

.10

 

$

.08

 

 

 

 

 

 

 

 

 

Average shares outstanding:

 

 

 

 

 

 

 

Basic

 

 

5,200,137

 

 

5,155,425

 

Diluted

 

 

5,455,743

 

 

5,462,396

 

 

(a)

General and administrative expense includes $68,626 and $49,085 of non-cash stock option expense related to the adoption of FAS 123® at June 30, 2007 and 2006, respectively.

 

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IntriCon Corporation 2007 Second-Quarter Results

July 24, 2007

Page 5

 

IntriCon Corporation

Consolidated Condensed Statements of Operations

(Unaudited)

 

 

 

Six Months Ended

 

 

 

June 30,
2007

 

June 30,
2006

 

Sales, net

 

$

31,516,964

 

$

25,044,626

 

 

 

 

 

 

 

 

 

Costs of sales

 

 

24,099,192

 

 

18,758,911

 

 

 

 

 

 

 

 

 

Gross profit

 

 

7,417,772

 

 

6,285,715

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling expense

 

 

1,805,638

 

 

1,771,532

 

General and administrative expense (a)

 

 

3,033,481

 

 

2,626,806

 

Research and development expense

 

 

1,383,458

 

 

1,180,821

 

Total operating expenses

 

 

6,222,577

 

 

5,579,159

 

 

 

 

 

 

 

 

 

Operating income

 

 

1,195,195

 

 

706,556

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(486,406

)

 

(301,176

)

Interest income

 

 

50,783

 

 

39,640

 

Equity in loss of partnership

 

 

(80,000

)

 

 

Other income (expense), net

 

 

10,051

 

 

(60,944

)

Income before income taxes

 

 

689,623

 

 

384,076

 

Income tax expense

 

 

135,271

 

 

75,018

 

Income from continuing operations

 

 

554,352

 

 

309,058

 

Loss from discontinued operations, net of income tax expense

 

 

 

 

(27,975

)

 

 

 

 

 

 

 

 

Net income

 

$

554,352

 

$

281,083

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) per share:

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

Continuing operations

 

$

.11

 

$

.06

 

Discontinued operations

 

 

 

 

(.01

)

 

 

$

.11

 

$

.05

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

Continuing operations

 

$

.10

 

$

.06

 

Discontinued operations

 

 

 

 

(.01

)

 

 

$

.10

 

$

.05

 

 

 

 

 

 

 

 

 

Average shares outstanding:

 

 

 

 

 

 

 

Basic

 

 

5,198,542

 

 

5,152,914

 

Diluted

 

 

5,410,192

 

 

5,439,651

 

 

(a) General and administrative expense includes $141,699 and $93,346 of non-cash stock option expense related to the adoption of FAS 123(R) at June 30, 2007 and 2006, respectively.

 

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IntriCon Corporation 2007 Second-Quarter Results

July 24, 2007

Page 6

 

IntriCon Corporation

Consolidated Condensed Balance Sheets

(Unaudited)

 

Assets

 

June 30, 2007

 

December 31, 2006

 

 

 

(unaudited)

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

1,016,976

 

$

599,459

 

 

Restricted cash

 

 

60,158

 

 

60,158

 

 

 

 

 

 

 

 

 

Accounts receivable, less allowance for doubtful accounts of $253,000 at 2007 and $246,000 at 2006

 

 

9,526,446

 

 

8,456,450

 

 

 

 

 

 

 

 

 

Inventories

 

 

10,033,727

 

 

9,030,615

 

 

 

 

 

 

 

 

 

Refundable income taxes

 

 

40,636

 

 

103,587

 

 

 

 

 

 

 

 

 

Note receivable from sale of discontinued operations, less allowance of $225,000 at 2007 and 2006

 

 

225,000

 

 

300,000

 

Other current assets

 

 

364,840

 

 

235,418

 

 

 

 

 

 

 

 

 

Total current assets

 

 

21,267,783

 

 

18,785,687

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 

 

 

 

 

Machinery and equipment

 

 

36,123,100

 

 

28,767,904

 

Less: accumulated depreciation

 

 

27,567,369

 

 

21,994,344

 

 

 

 

 

 

 

 

 

Net property, plant and equipment

 

 

8,555,731

 

 

6,773,560

 

 

 

 

 

 

 

 

 

Long-term note receivable from sale of discontinued operations

 

 

 

 

75,000

 

 

 

 

 

 

 

 

 

Goodwill

 

 

7,942,582

 

 

5,927,181

 

 

 

 

 

 

 

 

 

Investment in partnership

 

 

1,720,000

 

 

1,800,000

 

 

 

 

 

 

 

 

 

Other assets, net

 

 

1,687,411

 

 

920,051

 

 

 

 

 

 

 

 

 

 

 

$

41,173,507

 

$

34,281,479

 

 

 

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IntriCon Corporation 2007 Second-Quarter Results

July 24, 2007

Page 7

 

IntriCon Corporation

Consolidated Condensed Balance Sheets

(Unaudited)

 

Liabilities and Shareholders’ Equity

 

June 30, 2007

 

December 31, 2006

 

 

 

(unaudited)

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Checks written in excess of cash

 

$

974,522

 

$

661,756

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt

 

 

1,469,403

 

 

952,730

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

4,282,460

 

 

5,161,450

 

 

 

 

 

 

 

 

 

Income taxes payable

 

 

125,497

 

 

173,810

 

 

 

 

 

 

 

 

 

Deferred gain on building sale

 

 

110,084

 

 

110,084

 

 

 

 

 

 

 

 

 

Short term partnership payable

 

 

260,000

 

 

260,000

 

 

 

 

 

 

 

 

 

Other accrued liabilities

 

 

3,828,983

 

 

3,021,201

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

11,050,949

 

 

10,341,031

 

 

 

 

 

 

 

 

 

Long term debt, less current maturities

 

 

9,458,234

 

 

3,830,461

 

 

 

 

 

 

 

 

 

Other post-retirement benefit obligations

 

 

991,500

 

 

1,063,744

 

 

 

 

 

 

 

 

 

Long term partnership payable

 

 

1,280,000

 

 

1,280,000

 

 

 

 

 

 

 

 

 

Note payable, net of current portion (Amecon)

 

 

515,720

 

 

515,720

 

 

 

 

 

 

 

 

 

Deferred income taxes

 

 

79,273

 

 

79,273

 

 

 

 

 

 

 

 

 

Accrued pension liability

 

 

588,833

 

 

628,569

 

 

 

 

 

 

 

 

 

Deferred gain on building sale

 

 

880,673

 

 

935,715

 

 

 

 

 

 

 

 

 

Total non-current liabilities

 

 

13,794,233

 

 

8,333,482

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

24,845,182

 

 

18,674,513

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

Common shares, $1 par; 10,000,000 shares authorized;
5,713,535 and 5,706,235 shares issued; 5,197,781 and 5,190,481 outstanding

 

 

5,713,535

 

 

5,706,235

 

Additional paid-in capital

 

 

12,490,343

 

 

12,339,988

 

 

 

 

 

 

 

 

 

Accumulated deficit

 

 

(435,153

)

 

(989,505

)

 

 

 

 

 

 

 

 

Accumulated other comprehensive loss

 

 

(175,322

)

 

(184,674

)

 

 

 

 

 

 

 

 

Less: 515,754 common shares held in treasury, at cost

 

 

(1,265,078

)

 

(1,265,078

)

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

 

16,328,325

 

 

15,606,966

 

 

 

 

 

 

 

 

 

 

 

$

41,173,507

 

$

34,281,479

 

 

 

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