NORCROSS, Ga.--(BUSINESS WIRE)--Aug. 4, 1997--Isolyser Company, Inc. (Nasdaq/NM:OREX) today reported results for the second quarter and six months ended June 30, 1997. Net sales for the second quarter increased to $42.4 million from $40.9 million for the second quarter ended June 30, 1996. Loss from operations for the second quarter was $2.7 million as compared with income from operations of $887,000 a year ago. Net loss for the second quarter was $3.6 million, or $0.09 per share, as compared with net income of $268,000, or $0.01 per share, a year ago. Net sales for the six month period were $82.4 million as compared with net sales of $81.0 million for the six months ended June 30, 1996. Loss from operations for the six month period was $5.8 million as compared with income from operations of $1.5 million a year ago. Net loss for the six month period was $7.5 million, or $0.19 per share, as compared with net income of $706,000, or $0.02 per share, a year ago. Year-earlier results have been restated for the acquisition of Microtek Medical, Inc. in August 1996 on a pooling-of-interests basis. Peter A. Schmitt, chief financial officer of Isolyser, said, "The second quarter loss was primarily attributable to underutilization of the Company's OREX(R) manufacturing facilities consistent with the Company's previous announced operating plan to synchroznize manufacturing to more closely reflect demand and to reduce inventory and thereby improve cash flow. As compared with the quarter ended March 31, 1997, the Company reduced its operating loss by approximately $449,000, reduced its net loss by approximately $344,000, and improved its cash flow by generating approximately $1.7 million from operations during the second quarter as compared with a use of $3.6 million in operations during the first quarter of 1997. The Company's operating results include approximately $392,000 in nonrecurring severance costs associated with the realignment of our sales and marketing efforts which will improve operating results over the long term by reducing operating expenses." Gene R. McGrevin, chairman and acting president of Isolyser, said, "We have already begun to realize benefits of the implementation of our business plan outlined in the Company's May 9, 1997, press release. Most significantly, we reduced our outstanding debt by $7.9 million during the second quarter as a result of our improved cash flow." Mr. McGrevin continued, "Although we have made significant progress towards achieving our number one priority -- improving cash and reducing debt -- it will require more time to dramatically improve our quarter-to-quarter operating results and to more broadly commercialize our OREX(R) technology. In order to achieve these critical goals, we are investing significant resources in focused programs, information technology and key personnel." In conclusion, Mr. McGrevin added, "We still have significant challenges to overcome. These include utilization of capacities at our two base material plants in Arden, North Carolina, and Abbeville, South Carolina, while reducing excess inventory." 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 ecologically safe 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(R) processor similar to a commercial washing machine, for safe disposal through municipal sewer systems. The Company believes that its products provide protection to people and the environment while providing cost-effective solutions to the problems associated with waste reductions and disposal. *T
ISOLYSER COMPANY, INC. Unaudited Financial Highlights (In thousands, except for share data)
Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996
Net sales $ 42,434 $ 40,879 $ 82,437 $81,024 Gross profit 9,472 12,695 18,629 24,176 Income (loss) from operations (2,652) 887 (5,753) 1,543 Net income (loss) (3,566) 268 (7,476) 706 Net income (loss) per share (0.09) 0.01 (0.19) 0.02 Weighted shares outstanding 38,922 39,089 38,885 38,912
Balance Sheet Data: June 30, December 31, 1997 1996
Cash and cash equivalents $ 10,275 $ 20,925 Other current assets 92,517 94,077 Total current assets 102,792 115,002 Property, plant and equipment, net 75,225 76,010 Other assets 58,215 59,923 $ 236,232 $ 250,935
Current liabilities $ 20,024 $ 24,683 Long-term liabilities 43,409 47,028 Other liabilities 365 420 Total liabilities 63,798 72,131 Shareholders' equity 172,434 178,804 $ 236,232 $ 250,935
(1) Long-term debt includes $37,415 outstanding on June 30, 1997, under the Company's senior credit facility. At June 30, 1997, the Company was not in compliance with the net income and net worth covenants contained in such credit facility. The Company is in the process of obtaining a waiver of such covenant violations and has accordingly classified such indebtedness as long-term, although no assurances can be provided that the Company will in fact receive such waiver. The failure to obtain such waiver would require that such indebtedness be classified as a current liability.
CONTACT: Isolyser Co. Inc. Peter A. Schmitt, 770/582-6363 |
