To save your time I paste the news release here. We also need to spread the word!
PolyMedica First Quarter Net Income Increases 56% On a 48%
Sales Gain
July 1 Medicare Changes Expand Diabetes Market
WOBURN, Mass.--(BUSINESS WIRE)--July 21, 1998-- PolyMedica Corporation (AMEX:PM -
news), a market leader in direct mail diabetes supplies to Medicare eligible seniors as well as over-the-
counter urinary tract discomfort products and private-label thermometers, today reported record
fiscal first quarter results for the period ended June 30, 1998.
First quarter sales rose 48% to $20.7 million, from $14.0 million in the fiscal first quarter a year
earlier. Operating income increased 47% to $2.7 million, from $1.8 million in the prior year. Net
income climbed 56% to $1.3 million, or $0.13 per share (diluted), from $831,000, or $0.09 per share
(diluted), in the first quarter of fiscal l998.
Commenting on the first quarter performance, PolyMedica's Chairman and CEO Steven J. Lee said,
''Our sales and earnings growth reflects continuing strong demand for our targeted medical products
and services. This demand, in combination with an expanding marketplace, enabled PolyMedica to
report earnings that have reached the upper end of management's earlier estimates for the quarter.''
''During the quarter, we focused aggressively on shortening the accounts receivable cycle. The
average days outstanding for receivables declined significantly, and the balance in accounts receivable
declined to $17.2 million from $21.2 million as of June 30,1998 and March 31, 1998, respectively.
This reduction was the major contributor to the increase in cash at the end of the quarter,'' he added.
Mr. Lee pointed out that the Company's Liberty Medical Supply subsidiary further strengthened its
position during the quarter as the leading direct mail distributor of diabetes testing supplies to seniors.
Liberty's market expanded significantly on July 1, 1998 when Medicare reimbursement was extended
to non-insulin using (Type II) diabetics, a group of about 2 million patients.
''Over the past few months, we have been capitalizing on Liberty's extensive database of respondents
to its TV advertising to contact Type II diabetics who previously were not eligible for Medicare
coverage. This effort, combined with our current TV campaign which alerts viewers to the expansion
of Medicare coverage, has established a clear competitive edge for Liberty in the Type II diabetes
testing and treatment market,'' he said.
During the quarter, PolyMedica's Consumer Healthcare group continued to expand its dominant OTC
market positions in its popular, high gross margin AZO brand line of female urinary tract discomfort
products and its private-label digital thermometer lines. These consumer products are distributed to an
extensive network of retail outlets. AZO TEST STRIPS, a home diagnostic test for urinary tract
infections introduced in the fourth quarter of fiscal 1998, continued to gain national distribution in
leading retail drug outlets throughout the US. PolyMedica's Professional Products Group, which
primarily sells a broad line of prescription urology products, continued to generate high gross
margins and strong cash flow. This unit's established pharmaceutical products, most of which are
manufactured in-house, are distributed to retail and hospital pharmacies across the country.
''We are off to a strong start for fiscal 1999. The outlook for the rest of the year and beyond remains
very bright as PolyMedica continues to succeed in high growth, underserved sectors of the healthcare
market,'' Mr. Lee noted.
PolyMedica is best known through its subsidiaries and product lines. The Company's Liberty Medical
Supply, Inc. subsidiary is the leading direct mail distributor 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 over a 45% 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, please visit our web site at www.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 year
ended March 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
(UNAUDITED)
(In thousands, except per share amounts)
Three Months Ended June 30,
1998 1997
Net product sales $ 20,661 $ 13,958
Cost of product sales 9,921 6,728
Gross margin 10,740 7,230
Operating expenses:
Selling, general
and administrative 8,020 5,288
Research and development 42 123
8,062 5,411
Income from operations 2,678 1,819
Other income and expense:
Investment income 114 139
Interest expense (637) (698)
(523) (559)
Income before income taxes 2,155 1,260
Income tax provision 862 429
Net income $ 1,293 $ 831
Net income per weighted
average share:
Basic $ 0.15 $ 0.10
Diluted $ 0.13 $ 0.09
Weighted average shares,
basic 8,789 8,426
Weighted average shares,
diluted 9,771 9,021
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POLYMEDICA CORPORATION
CONSOLIDATED BALANCE SHEET
(In thousands)
June 30, March 31,
1998 1998
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 9,759 $ 6,440
Accounts receivable --
trade, net 17,190 21,207
Inventories 5,716 4,857
Deferred tax asset 2,075 2,075
Prepaid expenses and other
current assets 1,877 845
Total current assets 36,617 35,424
Property, plant & equipment, net 6,563 6,285
Intangible assets, net 38,986 39,555
Direct response advertising, net 12,801 10,899
Other assets, net 233 238
Total assets $ 95,200 $ 92,401
Liabilities & Shareholders' Equity
Current liabilities:
Accounts payable -- trade $ 7,911 $ 8,221
Accrued expenses 4,643 3,805
Senior debt and notes payable 2,329 2,329
Total current liabilities 14,883 14,355
Senior debt and notes payable,
net 20,599 20,577
Deferred income taxes 5,403 4,541
Total liabilities 40,885 39,473
Shareholders' equity 54,315 52,928
Total liabilities &
shareholders' equity $ 95,200 $ 92,401 |
