January 25, 2007 Earnings

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 First Quarter Results

Chelmsford, MA, January 25, 2007 – ZOLL Medical Corporation (NASDAQ: ZOLL), a manufacturer of resuscitation devices and software solutions, today announced revenues for the first quarter of fiscal 2007 of $64,641,000, an increase of 17% compared to revenues in the first quarter of last year. Net income for the quarter was $2,352,000, compared to $1,132,000 in the prior year.  Diluted earnings per share were $0.23, compared to $0.12 in the prior year.  Backlog was approximately $9.8 million at the end of the first quarter.

First quarter sales to the North American market were $48.2 million, an increase of 14% compared to $42.2 million for the prior year period.  Sales to the North American hospital market increased 8% to $17.3 million compared to $16.1 million for the same period last year. Sales to the North American pre-hospital market increased 20% to $25.6 million, as compared to $21.4 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 23% to $16.4 million, compared to $13.3 million last year.  Total AutoPulse® sales in all markets increased 83% to $2.7 million for the current quarter, compared to $1.5 million in the prior year.   

Richard A. Packer, President and Chief Executive Officer of ZOLL, commented, “We are very happy with our success this past quarter. Once again we were able to perform ahead of our expectations, which gives us a head start to achieving the objectives we have established for 2007.”

Commenting further, Mr. Packer stated, “We were pleased with the strength of our North American Pre-hospital and International businesses. Both the E Series® and the AutoPulse continue to gain traction in these markets. Our sales teams are getting better at presenting the full ZOLL resuscitation product portfolio. We believe this broader, differentiated product offering is helping us gain new accounts. With the recent addition of Real CPR Help™ technology to the E Series, we will amplify our message that there is more to resuscitation than just the shock.”

“We also note the improved performance of our North American hospital business,” Mr. Packer added. “Revenues increased, in spite of a decrease in military business, on the strength of improved order flow from the core hospital market. The initial reception to the newly launched R Series™ has been favorable, with customers responding well to the “Simple, Smart, and Ready” positioning and features. We were able to generate a modest number of orders this quarter, and we look forward to increasing momentum as we begin to ship initial units this quarter.”

With respect to the AutoPulse, Mr. Packer observed, “The AutoPulse continues to improve in order growth each quarter compared to its comparable prior year period. Shipment growth was outstanding this quarter as we were able to ship much of the backlog we ended with from the prior quarter. Also, we have finally cleared the last regulatory hurdle in Japan for the AutoPulse. We have made our initial shipment to our distribution partner, Nihon Kohden, and we look for great success with the product in Japan. Overall, excitement and acceptance around the AutoPulse continues to build.”

Mr. Packer concluded, “Our first-quarter results exceeded our expectations and we believe we are on track for a strong 2007. With our number one competitor ceasing shipments for a period of time, we expect a positive effect on our business. We are currently trying to assess this situation, and estimate how long they might be out of the market. The longer this situation continues, the greater the potential for ZOLL. As of right now, we expect to spend more in the short term to ramp up our activities, and expect this to benefit us in the latter part of the year. Until we know more, we are thinking that we are on track to achieve results at the top end of the range of objectives we previously outlined for FY2007, with the potential to do better should this situation last for much of the year.”

ZOLL will host a conference call on Thursday, January 25, 2007 at 10:30 a.m. EST to discuss its first 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 Annual Report on Form 10-K filed with the SEC on December 15, 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.

©2007 ZOLL Medical Corporation.  All rights reserved.  269 Mill Road, Chelmsford, MA 01824-4105. Real CPR Help, See-Thru CPR, and R Series are trademarks of ZOLL Medical Corporation.   AutoPulse, E Series, 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)

 

   December 31,

 2006

October 1,

 2006

ASSETS

 

 

Current assets:

 

 

     Cash and cash equivalents

     $     45,053

     $    42,831

     Short-term investments

21,726

20,548

     Accounts receivable, net

60,566

59,078

     Inventory

41,722

37,119

     Prepaid expenses and other current assets

         9,485

         9,010

Total current assets

        178,552

        168,586

Property and equipment, net

          27,204

          26,655

Other assets, net

        55,839

        56,245

 

 

 $   261,595

 $   251,486

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

Current liabilities:

 

 

     Accounts payable

     $     15,554

     $     13,745

     Accrued expenses and other liabilities

       38,208

       42,095

Total current liabilities

53,762

55,840

Total stockholders’ equity

     207,833

     195,646

 

$   261,595

$   251,486

 

 

ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

             Three Months Ended

 

December 31,

2006

   January 1,

 2006

Net sales

$      64,641

$      55,460

Cost of goods sold

       28,371

       24,481

Gross profit

36,270

30,979

Expenses:

 

 

     Selling and marketing

21,061

19,349

     General and administrative

6,176

4,948

     Research and development

6,383      

5,300      

     Total expenses

33,620     

29,597     

Income from operations

2,650

1,382

Other income

661

283

Income before taxes

3,311

1,665

Taxes 

959

533      

Net income

$        2,352

$        1,132

Earnings per share:

 

 

Basic

   $          0.24

   $       0.12

Diluted

 $          0.23

 $       0.12

Weighted average common shares:

 

 

Basic

9,888

9,622

Diluted

10,119

9,694