Company Press Release
Exactech Says Non-Recurring Losses Will Cause Q3 Net Income To Be Below Prior Year
GAINESVILLE, Fla., Oct. 1 /PRNewswire/ -- Exactech, Inc. (Nasdaq:EXAC) said today that it expects net income in the third quarter of 1997 to be significantly lower than last year, primarily due to non-recurring losses associated with a write-off of the company's investment in its Italian subsidiary Techmed. The company said it expects revenue growth for the quarter to be consistent with revenue growth in the first two quarters of the year. Sales revenue for the first six months was up 22%. Exactech plans to release its third quarter results on Oct. 30.
Chairman and CEO William Petty said, ``As a result of this write-off, our earnings per share results for the quarter will be adversely affected. Nevertheless we expect Exactech to be profitable for the quarter and our revenue growth will again be healthy. We believe these actions are prudent in clearing the way for resumption of future profit growth.''
Timothy Seese, president and COO of Exactech, said, ``We expect to recognize approximately $200,000 in pre-tax losses and expenses associated with the write-off of the remaining investment in the subsidiary and all receivables held from Techmed. As a result of this action, we will not record any further losses that may occur at Techmed. In the quarter, we also have an additional $85,000 in unplanned legal expenses. This includes expenses associated with preparation of our defense against a complaint filed by a competitor alleging patent infringement. This complaint was previously disclosed. Patent counsel has reviewed the patent file and materials resulting from the interference proceedings and reaffirmed their opinion that we do not infringe on the competitor's patent.''
Seese also said that, ``In another complaint, a sales organization in the northeast has alleged that Exactech induced several independent sales agents to breach their employment agreements when Exactech contracted with these agents to sell our products. The plaintiff is seeking an unspecified monetary award and punitive damages in the amount to be determined at trial. The plaintiff has also asked that the company be enjoined from soliciting plaintiff's employees and interfering with their customer relationships. Exactech denies the allegations and will defend itself vigorously. A hearing is scheduled at the Superior Court of New Jersey on Oct. 8, where Exactech will request that the complaint be dismissed.''
Based in Gainesville, Fla., Exactech develops, manufactures and markets orthopaedic implant devices and related surgical instruments to hospitals and physicians. The company's orthopaedic implant devices are used to replace joints which have deteriorated as a result of injury or diseases such as arthritis.
Exactech contracts with independent sales agents to market its products in the United States and in nine countries in Europe, Asia and Latin America.
Copies of EXAC press releases, SEC filings, current price quotes and other valuable information for investors may be found on the website hawkassociates.com.
This release contains various forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 which represent the company's expectations or beliefs concerning future events of the company's financial performance. These forward looking statements are further qualified by important factors that could cause actual results to differ materially from those in the forward looking statements. These factors include the effect of competitive pricing, the company's dependence on the ability of third party manufacturers to produce components on a basis which is cost-effective to the company, market acceptance of the company's products and the effects of government regulation. Results actually achieved may differ materially from expected results included in these statements.
SOURCE Exactech, Inc. |
