Atrion Reports Fourth Quarter and Full Year 2012 Results

ALLEN, TX--(Marketwire - February 19, 2013) - Atrion Corporation (NASDAQ: ATRI) announced today that revenues were up 12% for the fourth quarter and up 1% for the full year 2012 compared to the quarter and year ended December 31, 2011. Revenues for the fourth quarter of 2012 were $28.5 million compared to $25.5 million in the same period of 2011. For the quarter ended December 31, 2012, diluted earnings per share were down 9% compared to the fourth quarter of 2011. For the full year 2012, Atrion’s revenues increased to $119.1 million from $117.7 million in 2011. Net income per diluted share of $11.66 in 2012 was 9% lower than net income per diluted share of $12.82 in 2011, as described below.

Commenting on the Company’s performance, David A. Battat, President & CEO, said, “I am pleased that all our major product categories exhibited higher revenues in the recently concluded quarter, with overall sales up 12% compared to the same period in the prior year.” Mr. Battat cautioned that, “A proper evaluation of our earnings requires consideration of two tax anomalies. Our 2011 earnings were positively impacted by R&D tax credits earned that year. Legislation authorizing 2012 R&D tax credits was enacted too late to allow the benefits of these credits to be reflected in our 2012 results. In addition, as previously reported, an IRS arbitration panel ruled in our favor in 2012 and granted us 100% of the R&D tax credits for 2006-2008 that had been disallowed by the regional IRS office, resulting in a substantial one-time tax credit in 2012. These anomalies distort the 2012 to 2011 comparisons of GAAP after tax earnings and diluted EPS. As a result, we have chosen to highlight operating income in our review as it excludes tax considerations.”

Mr. Battat continued, “Operating income declined 8% for the quarter compared to last year’s period. As forecasted in our February 2012 press release, operating income for the first two quarters in 2012 showed double-digit declines compared to the prior year, and then tapered to single-digit declines in the final two quarters of 2012. For the full year, revenues were essentially flat, with operating income down 12%. This decline, in part, reflects an increase of over 30% in R&D expenditures and an additional $1.1 million in depreciation and amortization charges. We anticipate similar increases in 2013 to bolster the development of new products and platform technologies. Even after factoring in these expenditures, we expect to grow our operating income in 2013.” Mr. Battat concluded, “I am happy to report that we finished the year with cash and long and short term securities of $44.6 million, after returning to stockholders $24.5 million in regular and special dividends and an additional $5.3 million in the repurchases of 26,562 shares of our common stock.”

Atrion Corporation develops and manufactures products primarily for medical applications. The Company’s website is www.atrioncorp.com.

Statements in this press release that are forward looking are based upon current expectations and actual results or future events may differ materially. Such statements include, but are not limited to, Atrion’s expectations regarding the Company’s efforts to bolster the development of new products and platform technologies, research and development and depreciation charges in 2013 and the Company’s operating income in 2013. Words such as “expects,” “believes,” “anticipates,” “intends,” “should”, “plans,” “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements involve risks and uncertainties. The following are some of the factors that could cause actual results or future events to differ materially from those expressed in or underlying our forward-looking statements: changing economic, market and business conditions; acts of war or terrorism; the effects of governmental regulation; competition and new technologies; slower-than-anticipated introduction of new products or implementation of marketing strategies; the Company’s ability to protect its intellectual property; changes in the prices of raw materials; changes in product mix; and intellectual property and product liability claims and product recalls. The foregoing list of factors is not exclusive, and other factors are set forth in the Company’s filings with the Securities and Exchange Commission.

 ATRION CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, ----------------------- ----------------------- 2012 2011 2012 2011 ----------- ----------- ----------- ----------- Revenues $ 28,497 $ 25,519 $ 119,062 $ 117,704 Cost of goods sold 15,754 12,815 62,922 57,697 ----------- ----------- ----------- ----------- Gross profit 12,743 12,704 56,140 60,007 Operating expenses 5,704 5,073 22,514 21,839 ----------- ----------- ----------- ----------- Operating income 7,039 7,631 33,626 38,168 Interest income 387 302 1,447 1,295 Other income -- 9 2 12 ----------- ----------- ----------- ----------- Income before income taxes 7,426 7,942 35,075 39,475 Income tax provision (2,532) (2,554) (11,446) (13,437) ----------- ----------- ----------- ----------- Net income $ 4,894 $ 5,388 $ 23,629 $ 26,038 =========== =========== =========== =========== Income per basic share $ 2.42 $ 2.67 $ 11.72 $ 12.90 =========== =========== =========== =========== Weighted average basic shares outstanding 2,019 2,016 2,016 2,019 =========== =========== =========== =========== Income per diluted share $ 2.42 $ 2.65 $ 11.66 $ 12.82 =========== =========== =========== =========== Weighted average diluted shares outstanding 2,022 2,030 2,027 2,031 =========== =========== =========== =========== ATRION CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) Dec. 31, Dec. 31, ASSETS 2012 2011 ----------- ----------- (Unaudited) (Unaudited) Current assets: Cash and cash equivalents $ 7,999 $ 24,590 Short-term investments 8,182 20,279 ----------- ----------- Total cash and short-term investments 16,181 44,869 Accounts receivable 13,054 11,223 Inventories 23,779 24,582 Prepaid expenses and other 3,110 2,313 Deferred income taxes 623 755 ----------- ----------- Total current assets 56,747 83,742 Long-term investments 28,433 10,336 Property, plant and equipment, net 59,268 56,370 Other assets 11,362 11,447 ----------- ----------- $ 155,810 $ 161,895 =========== =========== LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities 7,208 10,043 Line of credit -- -- Other non-current liabilities 13,774 13,338 Stockholders’ equity 134,828 138,514 ----------- ----------- $ 155,810 $ 161,895 =========== ===========