MINNEAPOLIS, Feb. 13 /PRNewswire-FirstCall/ -- Sterion Incorporated , a Minneapolis-based medical products and emergency services company today reported results for the first fiscal quarter ended December 31, 2003. Sales for the first quarter ended, December 31, 2003 were $2,383,762 a 6.96% increase over the $2,228,737 in sales reported for the first quarter ended December 31, 2002.
Net loss for the first quarter ended December 31, 2003, was $16,979 or $(.01) per diluted share, compared to a net loss of $43,068 in the year earlier, or $.02 per diluted share. First quarter operating income increased to a profit of $2,850 compared to a loss of $31,403 for the first quarter of last year. The company's gross margin percentage declined over the first quarter of last year to 35.5% from 50.5%. The decline is mainly the result of increased private-label business and the transition to contract manufacturing margin for the instrument container system business. The overall increase in operating income in the result of the company's continuing efforts to reduce operating expenses.
First quarter results also include the company's recently-formed LifeSafe Services, Inc. subsidiary. LifeSafe acquired certain assets and liabilities of SOS International, a subsidiary of Complient Corporation effective November 26, 2003. During the quarter, LifeSafe collected $200,072 in cash for service contract fees. The majority of this amount, $127,371 was recorded as deferred revenue and will be recognized as revenue over the contract service periods, generally from 3 to 12 months. Given the deferral nature of service subscription fees, it is expected that both realized and deferred revenue will increase in future periods.
Commenting on the first-quarter results, Kenneth Brimmer, company CEO, noted, "Although we showed only modest growth in revenue for the quarter, we continued to make important progress in several areas. Our private-label business grew significantly increasing 121% during the first quarter of 2003 from the year ago period. We expect that ongoing cost-reduction efforts will improve the bottom-line results in the future. Finally, our LifeSafe business is performing as expected and we look forward to an increased contribution to profitability from this business in future periods."
Sterion Incorporated, headquartered in Minnesota, develops, manufactures, assembles and markets single-use disposable medical products and the company through its LifeSafe Services subsidiary provides emergency oxygen and related services to over 4000 customers. The company's Surgidyne Division markets surgical wound drainage products offering innovative solutions to surgical wound care. Sterion also provides contract manufacturing services to a major medical equipment corporation for its surgical instrument container sterilization system.
Sterion Incorporated common stock is traded on the Nasdaq SmallCap Market under the symbol STEN. More information about Sterion is available at the Company's website: http://www.sterion.com/ .
Except for historical information contained herein, the disclosures in this news release are forward-looking statements that could be affected by certain risks and uncertainties, and actual results may differ materially, depending on a variety of factors. These risks are described in the Company's Annual Report on Form 10-KSB for the year ended September 30, 2003.
Sterion Incorporated and subsidiaries
Condensed Consolidated Statements of Operations
For the Three Months
Ended December 31,
Net sales $2,383,762 $2,228,737
Cost of goods sold 1,538,020 1,102,231
Gross profit 845,742 1,126,506
Selling, general and administrative expenses 842,892 1,157,909
Operating income 2,850 (31,403)
Interest expense (32,910) (34,756)
Investment income 4,081 91
Income before Taxes (25,979) (66,068)
Provision for (benefit from) income taxes (9,000) (23,000)
Net income (loss) $(16,979) $(43,068)
Net income (loss) per share:
Basic $(.01) $(.02)
Diluted $(.01) $(.02)
Weighted average shares outstanding:
Basic 1,738,618 1,729,537
Diluted 1,738,618 1,729,537
Sterion Incorporated and subsidiaries
Condensed Consolidated Balance Sheets
Dec. 31, 2003 Sept. 30, 2002
ASSETS (unaudited) (audited)
Cash and cash equivalents $619,062 $1,762,819
Accounts receivable, net 1,447,081 996,229
Inventory, net 3,098,274 3,176,910
Other current assets 550,055 412,901
Total current assets 5,714,472 6,348,859
Property and equipment, net 3,744,084 1,568,847
Other assets 1,851,950 515,895
Total assets $11,310,506 $8,433,601
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $3,085,278 $1,150,670
Long-term obligations, less current
maturities 2,011,049 1,236,933
Deferred income taxes 44,000 44,000
Shareholders' equity 6,170,179 6,001,998
Total liabilities and shareholders'
equity $11,310,506 $8,433,601