IOMED, Inc. Reports First Quarter Fiscal 2006 Results

SALT LAKE CITY, Nov. 1 /PRNewswire-FirstCall/ -- IOMED, Inc. today reported financial results for the first quarter of fiscal 2006, which ended September 30, 2005. First quarter earnings per diluted share were $0.04 and cash flow from operations was $544,000.

First Quarter Results

For the quarter ended September 30, 2005, sales were $2,828,000 compared with $3,017,000 a year ago. Lower product sales were primarily a result of a reduction in average selling prices stemming from a shift in sales to national distributors. Gross margin for the first quarter of fiscal 2006 was 61% versus 62% a year ago.

Total operating expenses of $1,490,000 decreased 4% from the prior-year quarter. This reduction was due primarily to lower facility costs.

IOMED reported net income of $288,000, or $0.04 per diluted share, for the first quarter of fiscal 2006 compared with net income of $326,000, or $0.04 per diluted share, for the first quarter of fiscal 2005. Pursuant to new accounting rules which became effective for the company beginning this quarter, net income in the current period was impacted by a non-cash charge of $35,000 related to compensation expense associated with previously granted stock options.

The Company generated operating cash flow of $544,000 for the first quarter of fiscal 2006. Total net cash flow was $634,000. As of September 30, 2005, working capital increased 6% to $9.6 million, long-term debt decreased 13% to $728,000 and total equity increased 5% to $10.3 million. Cash and cash equivalents were $8.9 million.

Management Comments

“We are pleased with our success in managing expenses during the quarter and the positive effects on net income and operating cash flow,” said Robert J. Lollini, President and CEO. “Net income grew by over $250,000 from the fourth quarter of fiscal 2005 to the first quarter of fiscal 2006. Improvements in operating efficiencies continue to result in significant contributions to net income and operating cash flow. As sales stabilize in fiscal 2006, we expect these operating efficiencies to enable us to build cash and equity, while continuing to fund new product and market development.”

IOMED is a leader in developing, manufacturing and marketing active drug delivery systems used primarily to treat acute local inflammation in the physical and occupational therapy and sports medicine markets. The Company is pursuing opportunities to advance its position as a provider of quality, innovative non-invasive medical products that improve patient healthcare. IOMED seeks to accomplish this by expanding its product line, distributing new products, developing strategic partnerships, and through acquisitions. To find out more about IOMED, Inc. , visit our website at www.iomed.com.

The statements contained in this news release that are not purely historical are forward-looking statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and include IOMED’s beliefs, expectations or intentions regarding its future operations and financial condition. All forward-looking statements included in this news release are made as of the date hereof and are based upon information available to IOMED as of such date. IOMED assumes no obligation to update any forward-looking statement. It is important to note that actual outcomes could differ materially from those in such forward-looking statements. Readers should also refer to the risk factors and other disclosures set forth in IOMED’s filings with the Securities Exchange Commission, including Forms 10-K, 10-Q and 8-K.

INCOME STATEMENTS Three Months Ended September 30, 2005 2004 (unaudited) Product sales $2,828,000 $3,017,000 Cost of products sold 1,111,000 1,144,000 Gross profit 1,717,000 1,873,000 Operating costs and expenses: Selling, general and administrative 1,267,000 1,284,000 Research and product development 223,000 266,000 Total operating costs and expenses 1,490,000 1,550,000 Operating income 227,000 323,000 Other income (expense): Interest expense (23,000) (36,000) Interest income and other, net 84,000 39,000 Net income $288,000 $326,000 Income per share: Basic $0.04 $0.05 Diluted $0.04 $0.04 Shares used in the computation of income per share: Basic 6,677,000 6,585,000 Diluted 7,792,000 7,648,000 Consolidated Balance Sheets September 30, June 30, 2005 2005 (unaudited) (audited) Cash and cash equivalents $8,927,000 $8,293,000 Working capital, net $9,576,000 $9,032,000 Restricted cash $509,000 $585,000 Total assets $12,573,000 $12,538,000 Long-term obligations $728,000 $836,000 Accumulated deficit $(31,444,000) $(31,732,000) Shareholders’ equity $10,345,000 $9,868,000 STATEMENTS OF CASH FLOWS Three Months Ended September 30, 2005 2004 (unaudited) Cash flows from operating activities Net income $288,000 $326,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 99,000 223,000 Other non-cash charges 35,000 -- Changes in operating assets and liabilities: Accounts receivable 308,000 194,000 Inventories 105,000 133,000 Prepaid expenses 11,000 (79,000) Trade accounts payable 29,000 (154,000) Other accrued liabilities (331,000) 167,000 Net cash provided by operating activities 544,000 810,000 Cash flows from investing activities Net purchases of equipment and furniture -- (8,000) Cash flows from financing activities Change in restricted cash balance 76,000 86,000 Proceeds from issuance of common shares 154,000 -- Payments on long-term obligations (140,000) (164,000) Net cash provided by (used in) financing activities 90,000 (78,000) Net increase in cash and cash equivalents 634,000 724,000 Cash and cash equivalents at beginning of period 8,293,000 7,338,000 Cash and cash equivalents at end of period $8,927,000 $8,062,000

IOMED, Inc.

CONTACT: Robert J. Lollini, President & CEO, +1-801-975-1191, or InvestorRelations, Betsy Truax, +1-801-975-1191, ext. 411, info@iomed.com, both ofIOMED, Inc.

MORE ON THIS TOPIC