November 16, 2006

INVESTOR CONTACT:

A. Ernest Whiton
Chief Financial Officer
ZOLL Medical Corporation
+1 (978) 421-9655

MEDIA CONTACT:

Diane Egan
ZOLL Medical Corporation
+1 (978) 421-9637
degan@zoll.com

           

ZOLL Medical Corporation Announces Annual Results

 

Chelmsford, MA, November 16, 2006 – ZOLL Medical Corporation (NASDAQ: ZOLL), a manufacturer of resuscitation devices and software solutions, today announced that fiscal 2006 revenues increased 18% to $248,849,000 as compared to fiscal 2005 revenues of $211,340,000.  Net income for the year increased to $11,140,000, compared to $1,963,000 in the prior year.  Diluted earnings per share were $1.15, compared to $0.20 in the prior year.  Backlog was approximately $13.4 million at the end of the fourth quarter.

Annual sales to the North American market increased by 18% to $192.3 million, compared to $162.7 million for the prior year.  Sales to the North American hospital market increased 8% to $75.6 million compared to $70.3 million last year. Sales to the North American pre-hospital market increased 34% to $97.4 million, as compared to $72.8 million in the prior year.  North American pre-hospital results include the results of ZOLL Lifecor, whose assets were acquired in April 2006. International revenues increased by 16% to $56.5 million, compared to $48.6 million last year.  AutoPulse® sales in all markets increased 33% to $10.0 million for the year, compared to $7.5 million in the prior year.   

Fiscal year 2006 fourth-quarter revenues increased by 27% to $72.3 million, compared to $57.1 million in the fourth quarter of last year.  Net income increased 141% to $5.4 million, compared to $2.2 million in the prior-year period, and diluted earnings per share increased 139% to $0.55 per share, compared to the prior-year fourth-quarter’s amount of $0.23. 

Fourth quarter sales to the North American market increased 22% to $57.3 million compared to $46.8 million in the fourth quarter of 2005.  Sales to the North American hospital market decreased 7% to $20.5 million compared to $22.1 million in the fourth quarter of last year.  Sales to the North American pre-hospital market increased 61% to $31.9 million, including the results of ZOLL Lifecor, as compared to the same period last year.  International sales increased by 46% to $15.0 million compared to $10.3 million in the fourth quarter last year.  Total AutoPulse shipments to all markets increased by 35% to $3.4 million compared to $2.5 million in the fourth quarter of the prior year.

Richard A. Packer, President and Chief Executive Officer of ZOLL, commented, “We are pleased to have completed the year in such a strong fashion.  We executed end-of-quarter shipments particularly well, yielding additional revenue and significant incremental profitability.”

Commenting further, Mr. Packer stated, “We were particularly pleased with the strength of our North American EMS and International businesses. Our gains were driven by increased traction of both the E Series™ and the AutoPulse. In the North American Hospital market, annual revenues were up only modestly for the year, driven by growth in our military business. However, with the recent launch of our new R Series™ platform, targeted solely at the Hospital market, we believe our performance will dramatically improve this coming year. The R Series offers a OneStep™ System of cable and electrode that simplifies deployment of pacing and defibrillation therapy. The product offers smart tools that can help clinicians improve CPR performance. With more than 40 self checks, it is designed to be ready when needed for a code. Its motto is ‘Simple, Smart and Ready’. We are very excited about the launch of this product.”

With respect to the AutoPulse, Mr. Packer observed, “The AutoPulse is receiving a lot of enthusiasm in the marketplace and continues to improve its penetration. Orders increased 70% year-over-year and the fourth quarter increased 86% compared to the prior-year quarter.  As a result, we ended the year with our first significant backlog of AutoPulse.”

Mr. Packer concluded, “Our annual and fourth-quarter results exceeded our expectations. Fiscal 2006 was a big step forward for ZOLL. We believe the continued success of the E Series, the AutoPulse, and the introduction of our new R Series product should continue to drive revenue and profit growth in 2007. Our outlook for next year is positive as we have previously stated. We continue to plan for enough top line growth, coupled with tight expense control, to drive strong profit growth.”

ZOLL will host a conference call on Thursday, November 16, 2006 at 10:30 a.m. EST to discuss its fourth quarter financial results. This conference call will be accessible on the Company’s home page at www.zoll.com . Recorded replays of this conference call will be available on the web page beginning later that day.

About ZOLL Medical Corporation

ZOLL Medical Corporation is committed to developing technologies that help advance the practice of resuscitation. With products for pacing, defibrillation, circulation (with ZOLL’s See-Thru CPR™ and Real CPR Help™ technologies), ventilation, and fluid resuscitation, ZOLL provides a comprehensive set of technologies that help clinicians, EMS professionals, and lay rescuers resuscitate sudden cardiac arrest or trauma victims. ZOLL also designs and markets software that automates the documentation and management of both clinical and non-clinical information.

ZOLL markets and sells its products in more than 140 countries. The Company has direct operations, distributor networks, and business partners throughout the U.S., Canada, Latin America, Europe, the Middle East and Africa, Asia, and Australia.  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, our belief regarding business growth and future performance, 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 11, 2006. You should not place undue reliance on the forward-looking statements in this press release, and the Company disavows any obligation to update or supplement those statements in the event of any changes in the facts, circumstances, or expectations that underlie those statements.

©2006 ZOLL Medical Corporation.  All rights reserved.  269 Mill Road, Chelmsford, MA 01824-4105. E Series, R Series, and OneStep are trademarks of ZOLL Medical Corporation.   AutoPulse, Lifecor and ZOLL are registered trademarks 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 1,

 2006

   October 2,

 2005

ASSETS

 

 

Current assets:

 

 

     Cash and cash equivalents

     $     42,831

     $     36,270

     Short-term investments

20,548

14,553

     Accounts receivable, net

59,078

47,733

     Inventory

37,119

38,637

     Prepaid expenses and other current assets

         9,010

         8,055

Total current assets

        168,586

        145,248

Property and equipment, net

26,655

          23,492

Other assets, net

        56,245

        50,796

 

 

 $   251,486

 $   219,536

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

Current liabilities:

 

 

     Accounts payable

     $     13,745

     $     9,020

     Accrued expenses and other liabilities

       42,095

       29,088

Total current liabilities

55,840

38,108

Total stockholders’ equity

     195,646

     181,428

 

$   251,486

$   219,536

 

 

ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS

(In thousands, except per share data)

 

             Three Months Ended

 

    Twelve  Months Ended

 

 

        October  1,

        2006

   October  2,

   2005

      October  1,

      2006

   October  2,

    2005

Net sales

$      72,289

$      57,127

$    248,849  

$    211,340  

Cost of goods sold

       30,916

       25,645

108,565     

92,325     

Gross profit

41,373

31,482

140,284

119,015

Expenses:

 

 

 

 

     Selling and marketing

21,042

18,365

79,416

75,838

     General and administrative

6,165

5,158

22,417

18,667

     Research and development

     6,599      

5,424      

23,394      

22,896      

     Total expenses

33,806     

28,947     

125,227    

117,401    

Income from operations

7,567

2,535

15,057

1,614

Other income

735    

     161

     2,082

     572

Income before taxes

8,302

2,696

17,139

2,186

Taxes

2,906

458      

5,999

223

Net income

$        5,396

$        2,238

 $      11,140    

 $      1,963    

Earnings per share:

 

 

 

 

Basic

   $          0.56

   $          0.23

 $        1.16

 $        0.21

Diluted

 $          0.55

 $          0.23

 $       1.15

 $        0.20

Weighted average common shares:

 

 

 

 

Basic

9,681

9,590

9,643

9,565

Diluted

9,829

9,648

9,721

9,630

             

 

Record Revenues and Strong Profit Growth