NEW BRIGHTON, Minn., Nov. 3 /PRNewswire-FirstCall/ -- Compex Technologies reported today consolidated revenue increased 28% to $27.6 million for its first fiscal quarter of 2006 ended September 30, 2005, compared with $21.7 million a year earlier. Net income for the quarter was $1.4 million or $0.11 diluted earnings per share compared with net income of $229,000 or $0.02 diluted earnings per share in the comparable quarter a year ago.
U.S. Medical revenue for the quarter was $18.0 million, up 37% from $13.2 million in the same period last year. U.S. Consumer revenue was $3.5 million, up from $925,000 in the first fiscal quarter of 2005. International revenue was $6.1 million, down from $7.5 million in the same quarter of 2005.
Gross profit margin for the quarter was 67%, compared with 68% last year. This was primarily due to increases in both our U.S. Consumer revenue and our U.S. Medical wholesale revenue as a percent of total revenue, which carry a lower margin than our direct U.S. Medical and International product revenues. Operating expenses for the quarter were $15.9 million, an increase of 11% over the $14.3 million recorded for the same period last year. The increase was primarily attributed to U.S. Medical, reflecting the continued success of our physician-based selling strategy, the addition of SpectraBrace, and the implementation of FAS 123(R).
Compex Chairman and CEO Dan W. Gladney said, “We had excellent results in our U.S. Medical business, our largest operating segment, posting a 37% revenue gain to $18.0 million. Our U.S. Medical wholesale business had a particularly strong quarter as a result of large OEM revenues to a single customer. We were also pleased with the contribution from SpectraBrace, which we acquired in June 2005.
“We recorded the first significant contribution from our U.S. Consumer business, which accounted for over 12% of total company revenue. We continue to invest in this segment with expectations of continued growth through additional retailers and promotion.
“We still face a highly competitive selling environment in our European markets, particularly in Italy,” Gladney said. “Our European results were ahead of our projections, but still down significantly from the same period last year. In anticipation of softer results, we trimmed expenses accordingly and just recently launched our T.V. ad campaign in Italy.”
Looking forward, the company said its targets for diluted earnings per share for the fiscal year ending June 30, 2006 remain in the range of $0.32 to $0.35 with revenues of $106 million to $110 million. The foregoing statement regarding annual targets is forward-looking and actual results may differ materially. These are the company’s targets, not predictions of actual performance.
Compex Technologies has scheduled an investor conference call at 1 p.m. Eastern Time today, Nov. 3, 2005, to discuss the quarterly results and to answer questions. To participate in the live call, domestic callers should dial (866) 453-5550 and enter PIN 1213129. International callers should dial (678) 460-1860 and use the same PIN. A telephone replay will be available until 11 p.m. Eastern Time on Nov. 17 by dialing (866) 453-6660 and reference number 207542.
An investment profile on Compex Technologies, Inc. may be found at http://www.hawkassociates.com/compex/profile.htm.
About Compex Technologies
Compex Technologies is a worldwide leader in designing and manufacturing transcutaneous electrical nerve stimulation and electrical muscle stimulation (EMS) products used for pain management, rehabilitation, fitness and sports performance enhancement in clinical, home healthcare, sports and occupational medicine settings. Compex is the first U.S. company to offer consumers EMS technology in FDA-cleared, over-the-counter products for sports performance enhancement, improved physical fitness and general well being. Detailed information about Compex may be found on the websites http://www.compextechnologies.com and http://www.slendertone.com.
For investor relations information, contact CFO Scott Youngstrom at (800) 676-6489, or Frank Hawkins or Julie Marshall, Hawk Associates, at (305) 451- 1888, e-mail: info@hawkassociates.com.
Copies of Compex press releases, price quotes, SEC filings, analyst reports and other valuable information for investors may be found on the website http://www.hawkassociates.com and http://www.americanmicrocaps.com.
Cautionary Statement: All statements other than historical facts included in this release regarding future operations, and particularly on the outlook for fiscal year 2006, are subject to the risks inherent in predictions and “forward-looking statements.” These statements are based on the beliefs and assumptions of management of Compex Technologies and on information currently available to management. Nevertheless, these forward-looking statements should not be construed as guarantees of future performance. They involve risks, uncertainties and assumptions identified in Compex Technologies filings with the SEC, including, but not limited to:
-- The increasing reliance on results of international operations; -- The effect of fluctuating exchange rates on international results; -- Compex Technologies’ substantial balances of third-party billing business and resulting accounts receivable and the sensitivity of its results to the accuracy of its reserve for uncollectible receivables; -- Changes in, and Compex Technologies’ compliance with, regulation and industry practice that affects the rates at which its products are reimbursed, the way it manufactures its products and the documentation which it submits for reimbursement; -- The U.S. consumer market for electrical stimulation products is new and developing; -- Our ability in the United States to establish consumer demand with a limited marketing budget and secure contracts with significant retailers; -- Negative publicity about electrical stimulation products; -- World events that affect the economies of the countries in which its products are sold; and -- Other factors that affect the industry in which Compex Technologies functions. COMPEX TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS June 30, September 30, ASSETS 2005 2005 CURRENT ASSETS Cash and cash equivalents $3,044,158 $3,201,715 Receivables, less reserves of $19,250,165 and $18,988,214 37,268,582 38,760,097 at June 30, 2005 and September 30, 2005, respectively Inventories 15,353,472 14,782,380 Deferred tax assets 6,108,627 6,105,622 Prepaid expenses 3,217,406 3,081,203 Total current assets 64,992,245 65,931,017 Property, plant, and equipment, net 5,902,780 6,687,361 Goodwill, net 16,630,871 16,617,285 Other intangible assets, net 1,636,682 1,552,415 Deferred tax assets 13,396 - Other assets 142,617 144,114 Total assets $89,318,591 $90,932,192 LIABILITIES & STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Notes payable $7,500,000 $9,000,000 Current maturities of long-term debt 1,614,596 2,907,149 Accounts payable 7,421,609 5,756,080 Accrued liabilities - Payroll 2,719,545 2,078,874 Commissions 1,073,365 1,223,796 Income taxes 1,368,679 1,440,266 Other 4,735,831 4,991,772 Total current liabilities 26,433,625 27,397,937 LONG-TERM LIABILITIES Long-term debt 4,127,019 2,889,318 Deferred tax liabilities 438,734 476,108 Total liabilities 30,999,378 30,763,363 STOCKHOLDERS’ EQUITY Common stock, $.10 par value: 30,000,000 shares authorized; 1,252,688 1,262,569 issued and outstanding 12,526,880 and 12,625,693 shares at June 30, 2005 and September 30, 2005, respectively Preferred stock, no par value: 5,000,000 shares authorized; - none issued and outstanding Additional paid in capital 33,440,966 34,123,005 Unearned compensation on restricted stock (47,329) (38,533) Accumulated other non-owner changes in equity 1,142,604 939,755 Retained earnings 22,530,284 23,882,033 Total stockholders’ equity 58,319,213 60,168,829 Total liabilities and stockholders’ equity $89,318,591 $90,932,192 COMPEX TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended September 30 (unaudited) 2004 2005 Net sales and rental revenue $21,653,738 $27,643,988 Cost of sales and rentals 6,914,618 9,137,806 Gross profit 14,739,120 18,506,182 Operating expenses: Selling and marketing 9,843,630 11,349,730 General and administrative 3,744,533 4,019,880 Research and development 722,535 539,784 Total operating expenses 14,310,698 15,909,394 Income from operations 428,422 2,596,788 Other income (expense): Interest expense (79,585) (230,860) Other 30,886 3,821 Income before income taxes 379,723 2,369,749 Income tax provision 151,000 1,018,000 Net income $228,723 $1,351,749 Net income per common and common equivalent share Basic $0.02 $0.11 Diluted $0.02 $0.11 Weighted average number of shares outstanding Basic 12,454,107 12,592,325 Diluted 13,020,849 12,592,325
Compex Technologies
CONTACT: Scott Youngstrom, CFO of Compex Technologies, 1-800-676-6489;Frank Hawkins or Julie Marshall, both of Hawk Associates for CompexTechnologies, +1-305-451-1888, or info@hawkassociates.com
Web site: http://www.compextechnologies.com/
