Wednesday May 12, 8:31 am Eastern Time
Company Press Release
PolyMedica Announces Record Results FY1999 Revenues Up 42% to $105 Million, Recurring EPS Up 36% to $0.68
Accelerating Shipments Drive Record Fourth Quarter Performance
WOBURN, Mass.--(BUSINESS WIRE)--May 12, 1999-- PolyMedica Corporation (Nasdaq: PLMD - news) solidified its position as the No. 1 provider of direct-to-consumer diabetes supplies with record shipments in both the fourth quarter and in fiscal year 1999. Accelerating customer demand created business momentum accompanied by record revenue and earnings for the fiscal fourth quarter and year ended March 31, 1999.
For fiscal 1999, net revenues rose 42% to $104.8 million from $73.8 million generated in the prior fiscal year. Pre-tax income from ongoing operations increased 48% to $10.9 million in fiscal 1999. This solid performance reflects the decision by management to launch a marketing program to attract the 2 million Type II diabetics who first became Medicare-eligible for testing supplies on July 1, 1998.
Net income from recurring operations increased 36% to $6.7 million, or $0.68 per diluted share, for fiscal 1999, from $4.9 million, or $0.50 per diluted share, for fiscal 1998. The Company generated positive operating cash flow of $539,000 in fiscal 1999, a sharp turnaround from a $9.9 million operating cash outflow in fiscal 1998. Revenue and net income growth, accompanied by positive cash flow, exceeded management's publicly stated targets.
The Company shipped to a record number of customers in the fiscal fourth quarter, continuing its pattern of nine consecutive quarters of profitable growth. For the fiscal 1999 fourth quarter, net revenues rose 42% to $30.6 million from $21.6 million in the year earlier. Net income was $2.1 million, or $0.22 per diluted share, compared to $1.5 million, or $0.15 per diluted share, in the same period of the prior fiscal year.
''Clearly we are pleased with our year end and fourth quarter results,'' commented Chairman and CEO Steven J. Lee. ''We are particularly gratified with our across-the-board progress and our strategy of providing consumers with the benefits of home delivery of specialty medical products. Our proprietary database of diabetic seniors in the U.S., specialized customer service systems and a highly trained service force accustomed to assisting seniors with chronic medical conditions are helping to gain growing acceptance in the marketplace. We expect to continue our expansion in diabetes and other related direct-to-consumer categories.
''The Company is enhancing its Web site, developing an interactive disease management system, and increasing its visibility on search engines as part of an effort to explore the potentials of E-commerce. In addition, to support the accelerating growth of our direct-to-consumer business, the Company has purchased a 66,000 square foot facility in St. Lucie county, FL. This facility will be state-of-the-art both in terms of design and technology to further serve the needs of our diabetic customers.''
The company continues to lead its OTC market segment with its popular, high gross margin AZO brand line of female urinary tract discomfort products. In April 1999, PolyMedica began shipments of two new AZO brand products. AZO Menopause(TM) relieves both direct and associated symptoms from hot flashes. There are approximately 30 million women in the menopausal age range of 40-59. AZO Confidence(TM) provides temporary relief of incontinence, which affects approximately 25% of women between the ages of 21 and 64.
PolyMedica is best known through its subsidiaries and product lines. The Company's Liberty Medical Supply, Inc. subsidiary is the leading direct mail provider of diabetes testing supplies to seniors who have Medicare coverage. Liberty offers approximately 200 brand-name products from a full range of manufacturers. The Company's AZO line of products has risen to a 47% share of the over-the-counter female urinary tract discomfort market. PolyMedica also is the leading manufacturer and distributor of private-label digital thermometers and has the number two overall market position in thermometers.
For more information on PolyMedica, please contact our web site at polymedica.com.
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, changes in Medicare reimbursement, fluctuations in customer demand, management of rapid growth, intensity of competition from other healthcare product vendors, timing and acceptance of new product introductions, general economic conditions and regulatory changes, as well as other especially relevant risks detailed in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the period ended March 31, 1998 and its Quarterly Reports on Form 10-Q for the periods ended June 30, September 30, and December 31, 1998, and the information set forth herein should be read in light of such risks. The Company assumes no obligation to update the information contained in this press release.
POLYMEDICA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Year Ended
-------------------- -------------------
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
--------- --------- --------- ---------
Net revenues $30,550 $21,556 $104,825 $73,825
Cost of product sales 13,841 10,648 49,605 35,575
------ ------ ------ ------
Gross margin 16,709 10,908 55,220 38,250
Operating expenses 12,802 8,179 42,185 28,826
------ ----- ------ ------
Operating income 3,907 2,729 13,035 9,424
Other income and expense:
Gain on sale of wound
care business -- -- 1,597 4,126
Investment income 76 122 434 629
Interest expense (678) (646) (2,555) (2,688)
----- ----- ------- ------
(602) (524) (524) 2,067
Income before tax provision 3,305 2,205 12,511 11,491
Income tax provision 1,184 715 4,867 3,872
----- --- ----- -----
Net income $ 2,121 $ 1,490 $ 7,644 $ 7,619
===== ====== ===== =====
Net income per weighted
average share, basic $ .23 $ .17 $ .86 $ .88
===== ===== ===== =====
Net income per weighted
average share, diluted $ .22 $ .15 $ .78 $ .79
===== ==== ===== =====
Weighted average shares
outstanding, basic 9,063 8,778 8,898 8,652
Weighted average shares
outstanding, diluted 9,772 9,937 9,786 9,691
Supplemental information:
Gain on sale of wound care
business -- -- $ 1,597 $ 4,126
Provision for income taxes
related to gain -- -- 621 1,390
--- -----
Gain on sale, net of income
taxes -- -- $ 976 $ 2,736
===== ===== ===== =====
Net income per weighted
average share, basic,
related to gain on sale of
wound care business -- -- $ .11 $ .32
===== ===== ===== =====
Net income per weighted
average share, diluted,
related to gain on sale of
wound care business -- -- $ .10 $ .29
===== ===== ===== =====
Net income, excluding gain
on sale of wound care
business $ 2,121 $ 1,490 $ 6,668 $ 4,883
===== ===== ===== =====
Net income per weighted
average share, basic,
excluding gain on sale of
wound care business $ .23 $ .17 $ .75 $ .56
===== ===== ===== =====
Net income per weighted
average share, diluted,
excluding gain on sale of
wound care business $ .22 $ .15 $ .68 $ .50
===== ===== ===== =====
POLYMEDICA CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, March 31,
1999 1998
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 10,191 $ 6,440
Accounts receivable -- trade, net 32,251 21,207
Inventories 6,909 4,857
Deferred tax asset 2,708 2,075
Prepaid expenses and other current assets 721 845
--- ---
Total current assets 52,780 35,424
Property, plant, and equipment, net 6,856 6,285
Intangible assets, net 37,278 39,555
Direct response advertising, net 15,678 10,899
Other assets, net 347 238
--- ---
Total assets $112,939 $ 92,401
======= ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable -- trade $ 12,527 $ 8,221
Accrued expenses 4,781 3,805
Senior debt and notes payable 3,083 2,329
----- -----
Total current liabilities 20,391 14,355
Senior debt and notes payable, net 17,583 20,577
Revolving credit facility 4,000 --
Deferred income taxes 7,920 4,541
----- -----
Total liabilities 49,894 39,473
Shareholders' equity 63,045 52,928
------ ------
Total liabilities and
shareholders' equity $112,939 $ 92,401
======= ======
--------------------------------------------------------------------------------
Contact:
PolyMedica Corporation, Woburn
Eric G. Walters
Chief Financial Officer
781/933-2020
or
VMW, Inc., New York
Sylvia A. Dresner
Senior Vice President
212/616-6161
VMWinc@banet.net |
