1st Qtr. Earnings: a 10 cent loss, First Call was a 6 cent loss
NORCROSS, Ga.--(BUSINESS WIRE)--May 9, 1997--Isolyser Company, Inc. (Nasdaq/NM:OREX) today reported first
quarter 1997 sales of $40 million, unchanged from first quarter 1996 sales. The Company incurred a net loss of $3.9 million,
or $0.10 per share, in the first quarter of 1997 versus net income of $437,000, or $0.01 per share, in the first quarter of
1996. Year-earlier results have been restated for the acquisition of Microtek Medical, Inc. in August 1996 on a pooling of
interests basis.
Last month, the Company announced Robert L. Taylor's retirement as Chairman, President and Chief Executive Officer of
Isolyser and the appointment of Gene R. McGrevin as Chairman and acting President. An executive committee of the Board
of Directors was formed to search for a Chief Executive Officer.
Mr. McGrevin attributed the first quarter loss to underutilization of OREX(R) manufacturing facilities, an increase in sales and
marketing expenses due to the build-up of a direct sales force, an increase in general and administrative expenses primarily due
to consulting and auditing expenses, an increase in research and development expense due to the development of fiber and
compounding technology, a decrease in sales due to the reduction of sales to a significant customer of White Knight, and,
finally, an increase in interest expense due to increased borrowings by the Company.
Mr. McGrevin commented, ``Over the past month, management has thoroughly reviewed its operations and business plans.
As a result, a strategic plan and operating plan have been developed in order to position the Company as a global leader of
ecologically beneficial degradable materials, products and services and to improve financial performance.''
As part of these plans, the Company is forming Isolyser Healthcare Group, which will include all worldwide healthcare
operations of Microtek, White Knight, MedSurg and Safety products. Executive Vice President Dan Lee will lead this group.
Mr. Lee will relinquish his Chief Financial Officer position and will be succeeded by Peter Schmitt, Vice President Finance.
Isolyser is also establishing a New Business Development Group, which will explore and develop profitable applications of the
Company's intellectual property. Executive Vice President Les Berry will be responsible for this group.
The Company also named Executive Vice President Travis Honeycutt to the newly created position of Chief Technology
Officer, reflecting the Company's commitment to research and development.
Additional elements of the strategic and operations plan include:
Refocusing OREX(R) marketing efforts on accounts that meet the Company's profitability criteria.
Redirecting sales personnel to concentrate on profitable products and services such as Microtek, Precept 7/8 and
Safety Products and reorganizing marketing and sales efforts to achieve reductions in selling and marketing expenses.
Implementing a previously adopted plan to consolidate conversion manufacturing facilities to achieve manufacturing cost
savings and synchronizing OREX(R) Degradables(TM) manufacturing facilities to more closely reflect demand.
Improving management of working capital to reduce internal cash requirements.
Increasing R&D spending by $1 million annually in order to broaden and strengthen our technology position.
Mr. McGrevin concluded, ``The objectives of our plans are to more effectively focus our effort in the healthcare market,
position the Company to expand its unique OREX(R) Degradables(TM) technology in other market segments, and improve
overall Company profitability. We estimate that our new operating plan will reduce annual operating expenses by at least $5
million.''
This press release contains forward-looking information made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements may be significantly affected by certain risks and
uncertainties described in the Company's annual report on Form 10-K and elsewhere. The Company's actual results could
differ materially from such forward-looking statements.
Isolyser, based in Norcross, Georgia, has developed and manufactures OREX(R) Degradables(TM), a series of products
made from a thermoplastic, hot water soluble polymer that can be configured into an array of products such as woven and
non-woven fabrics, film and thermoformed and extruded items. These products can be dissolved after use, in hot water in a
specially designed OREX 7/8 processor similar to a commercial washing machine, for safe disposal through municipal sewer
systems. The Company believes that this line of products provides protection to the hospital staff, patient and environment
while providing cost-effective solutions to the problems associated with waste reduction and disposal.
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