Wednesday January 15 5:35 PM EDT
Sparta Surgical Corp., Announces Results for Its Third Quarter and Nine
Months Period
PLEASANTON, Calif., Jan. 15 /PRNewswire/ -- Sparta Surgical Corp , today
announced unaudited results for its three months ended November 30, 1996
("Third Quarter Fiscal 1997") and nine months ended November 30, 1996
("Nine Months Fiscal 1997 ").
On December 7, 1995, the Company sold its medical product line, which
consisted primarily of wound care gauze dressings, to Tecnol Medical
Products, Inc. ("Tecnol"), which resulted in the Company's elimination
of the medical product line from its business operations approximately
three months before the year ended February 29, 1996. Therefore, the
results for the two periods are not strictly comparable.
Net sales for the Third Quarter Fiscal 1997 were $581,683, a decrease of
$967,643 from net sales of $1,549,326 for the same period last year. The
net sales decrease during the Nine Months Fiscal 1997 is primarily
attributed to a decrease of $939,182 in medical product sales which
resulted from the sale of the Company's medical product line in December
1995. Sales for its surgical and electrotherapy products remained
relatively constant from the same period last year. The net loss for the
Third Quarter Fiscal 1997 was $359,194 as compared to a net loss of
$1,108 for the same period last year. The decrease in net income is
primarily due to a one time $160,000 expense related to the settlement
of a litigation.
Net sales for the Nine Months Fiscal 1997 were $1,639,314, a decrease of
$3,610,955 from net sales of $5,250,269 for the same period last year.
The net sales decrease during the Nine Months Fiscal 1997 is the result
of a decrease of $3,151,932 in medical product sales which resulted from
the sale of the Company's medical product line in December 1995, a
decrease of $88,647 in surgical product sales from $995,157 to $906,510
and a decrease of $370,376 in electrotherapy product sales from
$1,103,180 to $732,804 primarily attributed to the completion in July
1995 of a one year $500,000 contract.
Net loss for the Nine Months Fiscal 1997 was $1,767,820 or $.42 per
share. The loss is primarily due to the decrease in net sales and the
corresponding decrease in gross profit coupled with a one time $855,712
litigation settlement expense and legal expenses in the approximate
amount of $190,000 which were incurred in connection with various
litigation proceedings. In addition, the Company increased its sales and
marketing expenses in an effort to broaden its customer base and target
new independent sales representatives and distributors for each of its
product lines.
In an effort to increase sales, on November 1, 1996 the Company entered
into a non-binding letter of intent for the acquisition of substantially
all of the operating assets of Orion Life Systems, Inc. and its wholly
owned subsidiary, Orion Medical Products, Inc. ("Orion"). Orion
specializes in contract manufacturing, packaging, and sterilization of
medical devices and single-use procedure trays as well as manufacturing
and marketing its own line of urological, respiratory, and I.V. therapy
disposable products. Based in Wheeling, a suburb of Chicago, Illinois,
Orion is a privately held company which for its most recent fiscal year
ended December 31, 1996, recorded sales in excess of $5.25 million.
Statements, either written or oral, which express the Company's
expectation for the future with respect to financial performance or
operating strategies can be identified as forward-looking statements.
These statements are made to provide the public with management's
assessment of the Company's business. Caution must be taken to consider
these statements in light of a number of factors discussed in the
Company's filings with the Securities and Exchange Commission. In the
event such factors do not occur as management anticipates, actual
results could differ materially from the expectations expressed in any
forward-looking statements.
Sparta Surgical Corporation develops, manufactures and markets specialty
surgical and non-invasive electrotherapy devices to the health care
industry worldwide. Sparta's specialty surgical products include
critical care hospital disposables, microsurgical hand-held instruments
and facial reconstructive plating systems for use in General,
Ophthalmic, Ear, Nose, Throat, Plastic, and Oral Maxillofacial surgical
procedures. In addition, Sparta offers a full line of patented and
proprietary transcutancous electrical nerve stimulation devices,
supplies and accessories used to relieve chronic and acute pain for use
by physicians, physical therapists and their patients.
SPARTA SURGICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
November 30, November 30,
1996 1995 1996 1995
Net Sales(a) $ 581,683 $1,549,326 $1,639,314 $5,250,269
Net Income (Loss) (359,194) (1,108) (1,767,820) 42,359
Preferred Stock
Dividends (3,509) (5,839) (96,594) (44,184)
Net Income (Loss)
Applicable to
Common
Shareholders $(362,703) $ (6,947) $(1,864,414) $ (1,825)
Weighted Average
Number of Primary
Common Shares
Outstanding 4,562,022 3,773,853 4,396,540 3,592,508
Net Income (Loss)
Per Primary Common
Share $ (.08) $ -- $ (.42) $ --
(a) Net sales adjusted to reflect the disposition of the medical product
line were $610,144 and $2,098,337 for the three and nine months ended
November 30, 1995, respectively. Therefore, the results of these two
periods are not strictly comparable. SOURCE Sparta Surgical Corp. |
