two cents.
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Safeskin Reports Results for First Quarter of 1999, in Line With Revised Estimates
April 21, 1999 08:00 AM
SAN DIEGO, April 21 /PRNewswire/ -- Safeskin Corporation (SFSK), a leading developer and manufacturer of high-quality, powder-free, disposable latex and synthetic gloves for the healthcare, high-technology and scientific industries, today reported results for its 1999 first quarter ended March 31, 1999.
In line with Safeskin's March 11, 1999 announcement, which stated that sales and earnings would be below analysts' expectations, the Company reported net quarterly sales of $41.8 million, a decrease of 22 percent compared to first quarter sales for the prior year of $53.3 million.
Net income for the quarter was approximately $1.0 million, or $.02 per diluted share. This compares to $13.3 million, or $.22 per diluted share, in the same period a year earlier.
Gross profit margin declined to 49 percent in the first quarter of 1999 compared to 52 percent in the same quarter a year ago, primarily reflecting a higher proportion of international sales.
Operating expenses of $15.8 million in the first quarter of 1999, increased to 38 percent of sales compared to 25 percent in the prior year period. The higher 1999 percentage is principally a result of the lower quarterly sales. First quarter 1999 operating expenses actually declined by $1.5 million from the fourth quarter 1998 period.
Other expense in the first quarter of 1999 of $3.3 million included approximately $1.7 million in net interest expense and $1.6 million relating to the impact of foreign exchange. This compares to net other income of $339,000 in the first quarter of 1998. Roughly $1 million of the foreign exchange expense related to a weaker Thai baht, which should positively impact future quarters' manufacturing costs.
"We believe that the higher medical distributor inventories in the U.S., which prompted our lower sales and earnings in the first quarter, have largely adjusted to expected levels," said Richard Jaffe, chairman, president and chief executive officer of Safeskin. "In addition, we have entered into strategic agreements, which should lead to enhanced long-term relationships with our top two distributors, McKessonHBOC Medical and Owens & Minor. We have agreed to share information which we believe over time should enable each company to lower costs and improve customer fill rates.
"While we are disappointed to have reported such uncharacteristic financial numbers for Safeskin this quarter, we do firmly believe that we have a number of positive events to report," Mr. Jaffe continued. "We are pleased to tell you that our first shipments are being made to Kaiser Permanente and Continuum Health Partners. Additionally, Safeskin's PFS(TM) surgical glove received an enthusiastic reception at the Association of Operating Room Nurses Congress in late March, and we have several evaluations of the new glove underway around the country." |
