July 27, 2006

For further information contact:     

A. Ernest Whiton
Chief Financial Officer
ZOLL Medical Corporation
978-421-9655

FOR IMMEDIATE RELEASE                                                                          

ZOLL Medical Corporation Announces Record Third Quarter Revenues

Chelmsford, Mass. July 27, 2006 – ZOLL Medical Corporation (NASDAQ: ZOLL), a manufacturer of resuscitation devices and software solutions, today announced record revenues of $64,267,000 for the third quarter of fiscal 2006, an increase of 26% compared to revenues of $51,093,000 for the third quarter of last year.  Net income for the quarter was $2,530,000, compared to $132,000 in the prior-year quarter.  Diluted earnings per share were $0.26 compared to $0.01 in the prior-year quarter.  Ending backlog was approximately $8.5 million.

Third quarter sales to the North American market increased 23% to $48.7 million, compared to $39.4 million for the comparable prior-year quarter.  Sales to the North American hospital market increased 19% to $20.7 million, including an increase in U.S. military shipments of approximately $3.7 million. Sales to the North American pre-hospital market increased 35% to $23.0 million, compared to $17.0 million in the same period last year. North American pre-hospital results include the results of Lifecor, whose assets were acquired during the quarter.  International sales grew by 34% to $15.6 million, as compared to $11.7 million in the same quarter last year.  Shipments of AEDs to all markets increased 38% to $9.5 million, compared to $6.9 million in the prior-year quarter. Total AutoPulse shipments were $2.7 million in the quarter, compared to $1.7 million in the third quarter of the prior year, an increase of 59%.

Richard A. Packer, President and Chief Executive Officer of ZOLL, commented, “During the third quarter we experienced very good sales growth, demonstrating the strengthening of the business as our new products continue to gain momentum.  Operating income continues to improve as we leverage expenses and continue to focus on profitability. ”

Commenting further, Mr. Packer stated, “We are pleased with our progress in North America as a whole and the EMS market in particular. The E Series and the AutoPulse, two new products, continue to gain strength. North American Hospital sales benefited from a $5 million military order received during the quarter. Our military sales have exceeded our expectations for this year. Without military, the North American Hospital sales declined about 3% for the quarter and have grown only about 3% for the year. We continue to work to gain share in that market. International sales were particularly strong this quarter, as we experienced broad penetration across our International markets, highlighted by very good performance in the European continent and the United Kingdom.”

Commenting on specific products, Mr. Packer added, “The AED business continues to grow slowly. Our year-over-year comparison benefited from a poor shipping quarter last year. We are executing our plan to ensure profitability in this market rather than simply chasing sales growth. With regards to the AutoPulse, we made consistent progress during the quarter and achieved good year over year growth. We look for this progress to continue.” 

Mr. Packer concluded, “Overall, the third quarter was another step forward for ZOLL.  We are tracking well to the plan we outlined at the start of the year. We look forward to a successful fourth quarter and the completion of a year that will reestablish our growth and profitability. Looking to FY2007, we continue to plan on modest top-line growth, combined with slow expense growth to yield substantial leverage at the bottom line.”

ZOLL will host a conference call on Thursday, July 27, 2006 at 10:30 a.m. EDT to discuss its third 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, 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, 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 May 12, 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.

Copyright © 2006 ZOLL Medical Corporation.  All rights reserved.  269 Mill Road, Chelmsford, MA 01824-4105. E Series is a trademark of ZOLL Medical Corporation. AED Pro, AutoPulse, and ZOLL are registered trademarks of ZOLL Medical Corporation.   

 

(Financial Results to Follow)


 

 

ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

   July 2,

 2006

October 2,

 2005

ASSETS

 

 

Current assets:

 

 

     Cash and cash equivalents

     $     39,129

     $    36,270

     Short-term investments

18,222

14,553

     Accounts receivable, net

50,043

47,733

     Inventory

37,078

38,637

     Prepaid expenses and other current assets

         7,895

         8,055

Total current assets

        152,367

        145,248

Property and equipment, net

          27,020

          23,492

Other assets, net

        54,300

        50,796

 

 

 $   233,687

 $   219,536

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

Current liabilities:

 

 

     Accounts payable

     $     12,550

     $     9,020

     Accrued expenses and other liabilities

       33,409

       29,088

Total current liabilities

45,959

38,108

Total stockholders’ equity

     187,728

     181,428

 

$   233,687

$   219,536

 


 

 

 

 

ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share)

 

 

 

Three Months Ended

             Nine Months Ended

 

July 2,

2006

   July 3,

 2005

July 2,

2006

   July 3,

 2005

Net sales

$      64,267

$      51,093

$      176,560

$      154,213

Cost of goods sold

27,978

21,660

       77,649

       66,680

Gross profit

36,289

29,433

98,911

87,533

Expenses:

 

 

 

 

     Selling and marketing

20,523

18,826

58,374

57,473

     General and administrative

6,383

4,612

16,252

13,509

     Research and development

6,050

5,824

16,795      

17,472      

     Total expenses

32,956

29,262

91,421     

88,454     

Income (loss) from operations

3,333

171

7,490

(921)

Other income

634

79

1,347

411

Income (loss) before taxes

3,967

250

8,837

(510)

Taxes (benefit)

1,437

118

3,093

(235)      

Net income (loss)

$        2,530

$        132

$        5,744

$        (275)

Earnings (loss) per share:

 

 

 

 

Basic

 $          0.26

   $          0.01

   $          0.60

   $       (0.03)

Diluted

 $          0.26

 $          0.01

 $          0.59

 $       (0.03)

Weighted average common shares:

 

 

 

 

Basic

9,632

9,576

9,626

9,557

Diluted

9,719

9,632

9,704

9,557