SAFESKIN HALTED AGAIN!
Safeskin halted again after the bell, restates 1998 earnings:
Safeskin restates 1998 results
SAN DIEGO, April 6 (Reuters) - Safeskin Corp., a maker of disposable
latex and synthetic gloves, on Tuesday restated its 1998 earnings,
reducing its earnings per share for the year by $0.04.
The company said in a statement the restated results included negative
and positive adjustments to the previously announced 1998 and fourth
quarter 1998 results and a restatement of third quarter results.
The net effect of the negative and positive adjustments to 1998 financial results was a
reduction of $0.04 in previously reported earnings per share, of which $0.03 was a
restatement of third quarter results. After all adjustments 1998 revenues were up 27 percent
over 1997 and earnings before one-time charges were up 38 percent.
The company said in March that distributor inventories were higher than it previously
believed which necessitated an increase in its rebate reserve for the third and fourth quarters
of 1998.
The rebate reserve increase, coupled with certain other negative and positive accounting
adjustments to 1998 financial statements, made it appropriate to reflect several individual
line-item changes.
The company said the three major accounting adjustments were:
--an increase in its rebate reserve by about $5.3 million due to higher than expected
distributor inventory levels which reduced 1998 sales by about two percent;
--a non-cash accounting charge of about $3 million relating to the extension of vesting and
exercise periods for previously granted stock options for certain former officers in connection
with the execution of separation, non-competition and non-solicitation agreements;
--a reduction of cost of goods sold by about $2.8 million chiefly due to reducing higher than
required reserves for freight and customs duty expenses and obsolete inventory.
In addition its previously announced one-time manufacturing consolidation charge of $15
million was reduced by about $0.8 million.
Safeskin Corporation
SELECTED FINANCIAL DATA
(Dollars in Thousands, Except Per Share Amounts)
For the Quarters Ended For the Twelve Months Ended
12/31/98 12/31/97 12/31/98 12/31/97
OPERATIONS
Net Sales $59,878 $49,985 $231,784 $182,998
Cost of Goods Sold
28,341 27,751 110,746 102,229
Gross Profit 31,537 22,234 121,038 80,769
Operating Expenses
17,204 10,667 61,424 38,042
Restructuring and
Other Unusual
Charges(a) 14,331 -- 14,331 --
Income from
Operations 2 11,567 45,283 42,727
Other Expense (Income)
958 (1,760) (59) (3,522)
Income (Loss) Before Income
Tax Provision (956) 13,327 45,342 46,249
Income Tax Provision
(2) 1,330 3,473 4,999
Net (Loss) Income (954) 11,997 41,869 41,250
Net Income
(Excluding Restructuring
and Other Unusual
Charges) 14,227 11,997 57,050 41,250
Net Income Per Share,
Diluted (Including
Restructuring and
Other Unusual
Charges) (0.02) 0.20 0.70 0.70
Net Income Per Share,
Diluted (Excluding
Restructuring and
Other Unusual
Charges) 0.24 0.20 0.95 0.70
Weighted Average
Common Shares
Outstanding
58,167,466 60,053,756 60,119,564 58,537,694
(a) Includes a one-time charge of about $14 million to consolidate manufacturing activities to
Thailand. In addition, the Company took a charge of about $1 million related to the write-off
of capitalized finance costs. Net income per share is disclosed both excluding and including
the effects of these charges. |
