<DOCUMENT>
<TYPE>EX-99.I
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<FILENAME>a4938299ex99-1.txt
<DESCRIPTION>ZOLL MEDICAL EXHIBIT 99.1
<TEXT>
Exhibit 99.1
ZOLL Medical Corporation Announces Third Quarter Results;
Revenue Declines in Spite of Higher Order Growth
CHELMSFORD, Mass.--(BUSINESS WIRE)--July 26, 2005--ZOLL Medical
Corporation (NASDAQ: ZOLL), a manufacturer of resuscitation devices
and software solutions, today announced third quarter revenues of
$51,093,000, a decrease of 6% as compared to revenues of $54,454,000
for the comparable prior year quarter. Net income for the quarter
decreased to $132,000 or 1 cent per diluted share as compared to
$2,572,000 or 28 cents per diluted share in the third quarter of the
prior year.
Overall orders grew approximately 14% compared to the same period
a year ago. As previously disclosed, the Company was unable to ship
all orders received during the third quarter. Backlog at the end of
the third quarter totaled approximately $7 million as compared to
approximately $2 million at the beginning of the quarter. The Q3
ending backlog included a significant M Series(TM) hospital order,
totaling just under $2 million, and almost $2 million of shippable AED
orders that could not be produced and shipped within the quarter.
Shipments to the North American market decreased 11% to $39.4
million as compared to $44.1 million for the comparable prior year
period. North American hospital revenues decreased to $17.4 million as
compared to $21.7 million in the third quarter of last year, including
an approximate $3.7 million decline in shipments of defibrillator
products to the U.S. military. Sales to the North American
pre-hospital market decreased 3% to $17.0 million, as compared to
$17.6 million in the comparable prior year period. International
revenues increased 13% to $11.7 million as compared to $10.3 million
in the third quarter of last year. Shipments of AED's decreased by 12%
to $6.9 million as compared to $7.8 million in the same period last
year due to the unexpected increase in backlog. Had all unit orders
been shipped, AED revenues would have increased by approximately 17%
over the prior year period. Total shipments of AutoPulse(TM) were
approximately $1.7 million for the quarter, up modestly from the
previous quarter.
Richard A. Packer, President and Chief Executive Officer of ZOLL,
commented, "Although we were disappointed with our revenue and
earnings results for the quarter, our order growth was reasonable at
14% overall. Given the significant change in our backlog I believe it
is necessary to consider order growth when assessing the business this
quarter. Orders in the North American hospital market grew 22%, so we
have seen continued progress in that market. In the North American
pre-hospital market total orders grew 7%. Excluding orders for the
AutoPulse, North American pre-hospital orders were essentially
unchanged. We expect to see improved performance in this market with
the introduction of our new E Series(TM) product. In International, we
continue to be pleased with our progress as orders grew approximately
17%. So taken in total our order rate was acceptable."
Commenting further Mr. Packer stated, "As previously discussed we
intend to use our backlog to help us improve our execution with
end-of-quarter shipments. This will be a positive outcome from the
disappointing Q3 shipping results."
Commenting on the future, Mr. Packer added, "Although we had much
higher hopes for the ramp-up of the AutoPulse, we believe the product
will grow significantly in the coming quarters. We need to focus on
converting the high level of interest in the AutoPulse into
accelerated purchasing activity. We believe this will occur with
increased product awareness, successful usage and time for customer's
budget cycles to provide funding. In addition we are very excited
about the launch of the E Series, a new defibrillator that we believe
will have specific appeal for the EMS market. We have completed our
launch of this product to our U.S. EMS sales force and have initiated
the launch internationally. The reception from our sales force and
early customer reviews has been very encouraging. Specific features
driving this excitement include the ruggedness of the product,
suitcase-style design, display technology, multiple battery choices
and an innovative approach to cable management. We believe this
product will compare very favorably to competitive offerings and allow
us to regain momentum in the EMS market."
Mr. Packer concluded, "While the recent performance of the Company
has not been what we had hoped, a number of things are coming together
which bode very well for ZOLL in 2006. Our defibrillator R&D pipeline
is providing exciting new products with the recently released AED Pro
and the brand new E Series. Combined with the AutoPulse we have a
powerful combination with which to drive EMS growth. The AutoPulse is
allowing us to penetrate new accounts around the world, and momentum
will build with time. Our changes in International personnel and
distribution are taking hold and yielding improved performance. We
continue to make progress in the AED market and our efforts are
beginning to yield more profitable growth. We believe we will be very
well positioned to drive operating leverage as we move through 2006."
About ZOLL Medical Corporation
ZOLL Medical Corporation (NASDAQ: ZOLL) is committed to developing
technologies that help advance the practice of resuscitation. With
products for pacing, defibrillation, circulation, ventilation, and
fluid resuscitation, ZOLL provides a comprehensive set of technologies
that can help clinicians, EMS professionals, and lay rescuers
resuscitate sudden cardiac arrest or trauma victims. ZOLL also designs
and markets software that automates the documentation and management
of both clinical and non-clinical data.
ZOLL has operations in the United States, Canada, the United
Kingdom, Germany, France, The Netherlands, Australia, and Austria.
With direct operations, international offices, and business partners
in all the world's major markets, ZOLL markets and sells its products
in more than 140 countries. For more information, visit www.zoll.com
or call +1 (978) 421-9655.
Certain statements contained in this press release, including
statements regarding the anticipated development of the Company's
business, expectations concerning future product revenues and
financial results and other statements contained herein regarding
matters that are not historical facts, are "forward-looking"
statements (as defined in the Private Securities Litigation Reform Act
of 1995). Because such statements are subject to risks and
uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors that
could cause actual results to differ materially from those expressed
or implied by such forward-looking statements include, but are not
limited to, those factors discussed in the section entitled "Risk
Factors" in the Company's Quarterly Report on Form 10-Q filed with the
SEC on May 13, 2005, including the future performance of the direct
sales operations, as well as uncertainties regarding the market
acceptance and profitability of the ZOLL AED Plus, the AED Pro, the E
Series, the Power Infuser and the AutoPulse, the length and severity
of economic slowdown and their impact on capital spending budgets, the
potential reductions in overall capital equipment expenditures in the
hospital and pre-hospital markets, the impact of the acquisition of
Revivant, the impact of the war on terrorism, the potential disruption
in the transportation industry on the Company's supply chain and
product distribution channels, and the desire or ability of other
parties to purchase the Company's products.
Copyright (C) 2005 ZOLL Medical Corporation. All rights reserved.
269 Mill Road, Chelmsford, MA 01824-4105. AED Plus, M Series,
AutoPulse, and Power Infuser are trademarks of ZOLL Medical
Corporation. The LifeVest System is a trademark of Lifecor, Inc. The
ResQPOD is a trademark of Advanced Circulatory Systems, Inc. ZOLL is a
registered trademark of ZOLL Medical Corporation. All trademarks are
property of their respective owners.
ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
July 3, October 3,
2005 2004
----------------------
ASSETS
Current assets:
Cash and cash equivalents $ 43,209 $ 40,685
Short-term investments 6,484 18,325
Accounts receivable, net 41,068 51,038
Inventory 42,315 31,702
Prepaid expenses and other current assets 7,131 7,273
---------- -----------
Total current assets 140,207 149,023
Property and equipment, net 23,208 24,221
Other assets, net 49,365 33,948
---------- -----------
$ 212,780 $ 207,192
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,006 $ 12,321
Accrued expenses and other liabilities 26,621 21,917
---------- -----------
Total current liabilities 34,627 34,238
Deferred income taxes 0 2,008
Total stockholders' equity 178,153 170,946
---------- -----------
$ 212,780 $ 207,192
========== ===========
ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share)
Three Months Ended Nine Months Ended
July 3, July 4, July 3, July 4,
2005 2004 2005 2004
-------------------------------------------------
Net sales $ 51,093 $ 54,454 $ 154,213 $ 156,057
Cost of goods sold 21,660 23,356 66,680 67,753
------------ ------------ ----------- -----------
Gross profit 29,433 31,098 87,533 88,304
Expenses:
Selling and
marketing 18,826 19,351 57,473 55,343
General and
administrative 4,612 3,703 13,509 10,440
Research and
development 5,824 4,706 17,472 13,726
------------ ------------ ----------- -----------
Total expenses 29,262 27,760 88,454 79,509
Income (loss) from
operations 171 3,338 (921) 8,795
Other income 79 500 411 1,370
------------ ------------ ----------- -----------
Income (loss)
before taxes 250 3,838 (510) 10,165
Taxes (benefit) 118 1,266 (235) 3,354
------------ ------------ ----------- -----------
Net income (loss) $ 132 $ 2,572 $ (275)$ 6,811
============ ============ =========== ===========
Earnings per share:
Basic $ 0.01 $ 0.28 $ (0.03)$ 0.74
============ ============ =========== ===========
Diluted $ 0.01 $ 0.28 $ (0.03)$ 0.73
============ ============ =========== ===========
Weighted average
common shares:
Basic 9,576 9,211 9,557 9,158
Diluted 9,632 9,316 9,557 9,283
CONTACT: ZOLL Medical Corporation
A. Ernest Whiton, 978-421-9655
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