<DOCUMENT>
<TYPE>EX-99.1
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<FILENAME>a4763839ex991.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
Exhibit 99.1
ZOLL Medical Corporation Announces Record Annual Revenues
Reports Fourth Quarter Results
CHELMSFORD, Mass.--(BUSINESS WIRE)--Nov. 11, 2004--ZOLL Medical
Corporation (NASDAQ: ZOLL), a manufacturer of resuscitation devices
and software solutions, today announced record annual revenues of
$211,785,000, an increase of 15% as compared to annual revenues of
$184,603,000 last year. Net income for the year decreased 30% to
$8,956,000 as compared to $12,850,000 in the prior year.
Annual sales to the North American market grew by 23% to $170.5
million as compared to $138.5 million for the prior year. Sales to the
North American hospital market increased 39% to $88.1 million as
compared to $63.6 million last year. Sales to the North American
pre-hospital market increased 13% to $62.4 million, as compared to
$55.4 in the prior year. International revenues decreased by 10% to
$41.3 million as compared to $46.1 million last year. AED Plus(TM)
sales increased 61% to $30.4 million for the year, as compared to
$18.8 million in the prior year.
Fourth quarter revenues of $55,728,000 also set a record,
reflecting 11% growth over the fourth quarter of 2003. Net income of
$2,145,000 or $0.23 per share decreased 56% as compared to the prior
year fourth quarter. These results were in line with guidance given
earlier this month.
Fourth quarter sales to the North American market grew to $46.8
million, an increase of 19% as compared to the fourth quarter of 2003.
Sales to the North American hospital market increased 37% to $25.8
million as compared to the fourth quarter of last year. Sales to the
North American pre-hospital market increased 3% to $16.2 million as
compared to the same period last year. International sales decreased
by 17% to $9.0 million as compared to the fourth quarter last year.
AED Plus(TM) product sales increased by 68% to $8.8 million as
compared to $5.3 million in the prior year.
Regarding the fourth quarter, as previously disclosed, the Company
had approximately $2.5 million of additional orders in the quarter
that it planned to ship but was unable to do so due to unexpected unit
configurations. Also, as previously discussed, a higher volume of low
parameter hospital business, resulting in lower overall prices,
reduced gross margins to 56% from 58% a year ago. Other income was
lower than the prior year reflecting foreign exchange rate
fluctuations. The tax rate was reduced to 30% for the year and 17% for
the quarter as fixed research and development credits and export tax
incentives were applied to lower than expected income before tax.
Richard A. Packer, President and Chief Executive Officer of ZOLL,
commented, "We were disappointed with our fourth quarter results and
our overall year. We did not achieve the results we desired, in spite
of significant investments in both sales and marketing, and R&D. We
have yet to make these investments payoff. However, there were a
number of areas of the business that performed better than expected
during the year. We were particularly pleased with our continued
strong performance in the North American hospital market. Sales grew
in excess of 39% overall, and 18% with all military sales excluded. We
continue to standardize large U.S. hospitals on the M Series(TM)
product line due to its superior features and our proprietary biphasic
technology."
"Sales of our AED Plus(TM) product were also outstanding", Mr.
Packer continued, "as shipments increased over 60% in both the
comparable prior year quarter and fiscal year. This result was
significantly better than our stated goal of 50%. It is clear that we
are continuing to take market share. The strength of our distribution
has grown throughout the year. We believe customers are increasing
their understanding of the benefits the AED Plus(TM) product
provides."
Commenting further, Mr. Packer observed, "Throughout the year, and
again in the fourth quarter, our results in International have been
disappointing. We believe we have lost ground in Europe and have made
several management changes to address the situation. We expect
improved performance in 2005, particularly in the second half, as
these changes have their desired effect. Also, softness continues in
the U.S. EMS market due to state budget deficits. This tight market
has reduced our ability to gain market share in this important market.
However, we are cautiously optimistic that we will see an improvement
in spending in the second half of fiscal 2005 and that pent up demand
will provide an additional boost."
"Moving beyond the core business, in 2004 we made significant
progress in our efforts to move the company beyond defibrillation, and
develop a broader resuscitation portfolio," Mr. Packer said. "We have
achieved good early results from our acquisition of the Infusion
Dynamics business. We look for acceleration of this business as we
obtain a CE Mark and take the Power Infuser(R) fluid resuscitation
product to militaries around the world. Even more significant, our
recent acquisition of Revivant adds a whole new growth dimension to
ZOLL. We believe technology related to improving CPR for victims in
cardiac arrest represents a market potential in line with the current
professional defibrillator market, which currently stands at over $650
million. We expect the AutoPulse(TM) product to lead the way in the
development of this market, and create selling synergies for ZOLL that
we have not experienced in the past."
Looking forward, Mr. Packer noted, "As we absorb the Revivant
acquisition we anticipate some transition issues, particularly in
balancing selling efforts on AutoPulse(TM) with those on other
products. As stated earlier, we have made changes in International but
it will take some time to get back on track. As a result of these
issues, primarily having an impact on the first half of 2005, we
expect annual earnings for 2005 to be in the range of $1.35 to $1.55
per share. We continue to anticipate a sharp improvement in results as
we move to the second half of 2005 due to acceleration of the
AutoPulse(TM) and improvement of International performance. While we
also expect the U.S. EMS market to improve in the second half, we are
not yet anticipating the full impact of a recovery in our guidance."
Mr. Packer concluded, "The long term growth and profitability
prospects for ZOLL have never been better. We have a proven business
model that is profitable and can support high growth. Our balance
sheet is strong and we continue to generate cash from operations. Our
business can be unpredictable at times but it is built on solid
fundamentals and will perform over the longer term. Investments made
in 2004 that have hurt our bottom line this year should provide a
boost in 2005. I have not been this enthusiastic about the ZOLL
product pipeline and the position of our distribution since we
introduced our rectilinear biphasic technology on the heels of the M
Series(TM) launch. We expect to build significant momentum in 2005 and
are prepared for continued growth in 2006 and beyond."
About ZOLL Medical Corporation
ZOLL Medical Corporation (NASDAQ: ZOLL) designs, manufactures,
markets, and/or sells non-invasive resuscitation devices and software
solutions. They include pacing and defibrillation devices (ZOLL's M
Series(TM) and AED Plus(TM), and Lifecor, Inc.'s LifeVest(TM) Wearable
Defibrillator), circulatory assist devices (Advanced Circulatory
Systems, Inc.'s ResQPOD(TM) Circulatory Enhancer and Revivant
Corporation's AutoPulse(TM)); and a fluid resuscitation product called
the Power Infuser(R), manufactured by Infusion Dynamics, a division of
ZOLL. These devices help healthcare professionals, emergency medical
service providers, and first responders diagnose and treat victims of
trauma, as well as sudden cardiac arrest.
Additionally, through its subsidiary ZOLL Data Systems, ZOLL
designs and markets software that automates the collection and
management of both clinical and non-clinical data. With direct
operations, international offices, and business partners in all of 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, anticipated growth in the North American EMS market, our
anticipated spending levels, anticipated revenue growth in the
International market and the AED market, our outlook for the remainder
of the year and future years 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 August 18, 2004, including the future performance of the direct
sales operations, as well as uncertainties regarding the market
acceptance and profitability of the ZOLL AED Plus(TM) and the
AutoPulse(TM) product, the length and severity of the current economic
slowdown and its impact on capital spending budgets, the reduction in
overall capital equipment expenditures in the hospital and
pre-hospital markets, the impact of governmental budget restraints on
the purchase of capital equipment, the continued war in the Middle
East, the impact of the war on terrorism, the integration and
successful operation of Revivant business, 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) 2004 ZOLL Medical Corporation. All rights reserved.
269 Mill Road, Chelmsford, MA 01824-4105. AED Plus, M Series, 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. The AutoPulse Resuscitation System
is a trademark of Revivant Corporation. ZOLL is a registered trademark
of ZOLL Medical Corporation. All trademarks are property of their
respective owners.
(Financial Results to Follow)
ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 3, September 28,
2004 2003
------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 40,685 $ 40,780
Short-term investments 18,325 19,992
Accounts receivable, net 51,038 47,906
Inventory 31,702 34,388
Prepaid expenses and other current assets 7,273 5,042
---------- ----------
Total current assets 149,023 148,108
Property and equipment, net 24,220 23,046
Other assets, net 33,949 20,942
---------- ----------
$ 207,192 $ 192,096
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 12,321 $ 12,204
Accrued expenses and other liabilities 21,917 22,399
---------- ----------
Total current liabilities 34,238 34,603
Deferred income taxes 2,008 1,502
Total stockholders' equity 170,946 155,991
---------- ----------
$ 207,192 $ 192,096
========== ==========
ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS
(In thousands, except per share and share data)
Three Months Ended Twelve Months Ended
October 3, September 28, October 3, September 28,
2004 2003 2004 2003
--------------------------------------------------
Net sales $ 55,728 $ 50,206 $ 211,785 $ 184,603
Cost of goods sold 24,792 20,936 92,545 81,477
----------- ----------- ----------- -----------
Gross profit 30,936 29,270 119,240 103,126
Expenses:
Selling and
marketing 18,999 15,247 74,342 59,461
General and
administrative 4,668 3,106 15,108 12,404
Research and
development 4,650 3,840 18,376 14,115
----------- ----------- ----------- -----------
Total expenses 28,317 22,193 107,826 85,980
Income from
operations 2,619 7,077 11,414 17,146
Other income
(expense) (47) 188 1,323 2,033
----------- ----------- ----------- -----------
Income before taxes 2,572 7,265 12,737 19,179
Taxes 427 2,398 3,781 6,329
----------- ----------- ----------- -----------
Net income $ 2,145 $ 4,867 $ 8,956 $ 12,850
=========== =========== =========== ===========
Earnings per share:
Basic $ 0.23 $ 0.54 $ 0.97 $ 1.42
=========== =========== =========== ===========
Diluted $ 0.23 $ 0.53 $ 0.96 $ 1.40
=========== =========== =========== ===========
Weighted average
common shares:
Basic 9,290,000 9,060,000 9,191,000 9,030,000
Diluted 9,390,000 9,212,000 9,304,000 9,204,000
CONTACT: ZOLL Medical Corporation
A. Ernest Whiton, 978-421-9655
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