November 15, 2007 - ZOLL Announces Record Annual Results

INVESTOR CONTACT:

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

ZOLL Medical Corporation Announces Record Annual Results

Record Revenues and Profits for the Year

Chelmsford, MA, November 15, 2007 – ZOLL Medical Corporation (Nasdaq GS: ZOLL), a manufacturer of resuscitation devices and software solutions, today announced that fiscal 2007 revenues increased 21% to $309,451,000, compared to fiscal 2006 revenues of $255,633,000.  Net income for the year increased 50% to $16,662,000, compared to $11,140,000 in the prior year.  Diluted earnings per share increased 42% to $0.81, compared to $0.57 in the prior year. Share and per share data reflect a 2-for-1 stock split which became effective on February 20, 2007. Backlog was approximately $24.3 million at the end of the fiscal year, which includes approximately $7.5 million related to the recent order from the State of California.

Annual sales to the North American market increased by 19% to $237.4 million, compared to $199.1 million for the prior year.  Sales to the North American hospital market increased 9% to $85.3 million, compared to $78.1 million last year. Excluding military sales, North American hospital sales increased 26% from $58.3 million to $73.4 million. Military sales were $11.9 million, compared to $19.8 million in the prior year period.  Sales to the North American pre-hospital market increased 29% to $131.2 million, compared to $101.7 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 27% to $72.1 million, compared to $56.5 million last year.  AutoPulse® sales in all markets increased 47% to $14.7 million for the year, compared to $10.0 million in the prior year.   

Fourth-quarter revenues for fiscal year 2007 increased 25% to $92.8 million, compared to $74.2 million in the fourth quarter of last year.  Net income increased 26% to $6.8 million, compared to $5.4 million in the prior-year period, and diluted earnings per share increased 22% to $0.33 per share, compared to $0.27 in the fourth quarter of last year. 

Fourth quarter sales to the North American market increased 25% to $74.1 million, compared to $59.2 million in the fourth quarter of 2006.  Sales to the North American hospital market increased 45% to $30.8 million, compared to $21.2 million in the fourth quarter of last year.  Sales to the military were $6.7 million, compared to $4.8 million in the prior year. Sales to the North American pre-hospital market increased 15% to $38.0 million, compared to the same period last year.  International sales increased by 25% to $18.7 million, compared to $15.0 million in the fourth quarter last year.  Total AutoPulse shipments to all markets increased by 48% to $5.0 million, compared to $3.4 million in the fourth quarter of the prior year.

Richard A. Packer, President and Chief Executive Officer of ZOLL, commented, “We completed a very strong Fiscal Year 2007 with an outstanding fourth quarter.  Sales growth exceeded 25% in every part of our business, except for the military. Success was achieved throughout the world, with International sales continuing to exceed expectations. All products: professional defibs, AEDs, AutoPulse and data management software grew strongly throughout the year. At the bottom line we also made significant progress, achieving record profits. We continue to leverage previous investments, and our profitability continues to expand.”

Commenting further on the full year, Mr. Packer stated, “Our success in the International market was driven by increased professional defibrillator sales. The growth was primarily a function of the continued success of our M Series® product, with the R Series™ and E Series® just starting to get traction in this market. We gained momentum in the latter part of the year in the North American Hospital market, which we attribute to the compelling new features of the R Series product and the hospitals’ growing focus on CPR. More than one-third of professional hospital defibrillator orders in the second half of fiscal 2007 were for the R Series. We are more than satisfied with this ramp-up of the R Series. Gains in the pre-hospital market were largely driven by increased volume of our AEDs, data management products and a full year of the LifeVest product.”

With respect to specific products, Mr. Packer noted, “AutoPulse sales increased 48% for the quarter and similarly for the year. Both the International and North American hospital markets’ acceptance of this product accelerated this year with sales more than doubling in each market. We believe the outlook for the AutoPulse remains strong. Likewise, AED sales throughout the company continued to accelerate, with a 51% growth rate this past quarter. Clearly, we were aided by our largest competitor’s inability to ship product in the U.S. for a significant part of the year.  However, the growth of our business goes well beyond this effect, and is just a small part of why we have achieved both higher-than-expected results and a very strong backlog.”

“In another exciting development during the fourth quarter,” Mr. Packer added, “we purchased the assets of a catheter-based hypothermia company which was ceasing operation. As a result of the continued strength in our business, we felt we could seize this opportunity to build on our vision of a broader resuscitation related product portfolio. We believe the company had the best technology in the emerging therapeutic hypothermia market, and an extensive intellectual property portfolio. Therapeutic hypothermia for post-resuscitation care has been on our roadmap for a number of years, and we view this modest $5.8 million investment as an incremental step in strengthening our resuscitation strategy.”

Mr. Packer concluded, “Our annual and fourth-quarter results exceeded our expectations. We ended the year with a record backlog of approximately $24 million. We believe the strength of our product offerings will drive continued revenue growth in fiscal 2008.  We expect to continue to grow our bottom line at a healthy rate while at the same time making incremental investments in new product areas that will boost longer term growth rates.”

ZOLL will host a conference call on Thursday, November 15, 2007 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, 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 revenues related to AutoPulse sales,  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 10, 2007. 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 © 2007 ZOLL Medical Corporation.  All rights reserved.  269 Mill Road, Chelmsford, MA 01824-4105. AutoPulse, M Series, E Series, Lifecor and ZOLL are registered trademarks of ZOLL Medical Corporation.  R Series is a trademark of ZOLL Medical Corporation.  

 

ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

   September 30,
2007

October 1,
2006

ASSETS

 

 

Current assets:

 

 

     Cash and cash equivalents

     $     37,631

     $    42,831

     Short-term investments

19,767

20,548

     Accounts receivable, net

78,086

59,078

     Inventory, net

57,929

37,119

     Prepaid expenses and other current assets

         11,809

         9,010

Total current assets

        205,222

        168,586

Property and equipment, net

          32,504

          26,655

Other assets, net

        81,712

        56,245

 

 

 $   319,438

 $   251,486

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

Current liabilities:

 

 

     Accounts payable

     $     21,860

     $     13,745

     Accrued expenses and other liabilities

       61,792

       42,095

Total current liabilities

83,652

55,840

Total stockholders’ equity

     235,786

     195,646

 

$   319,438

$   251,486

 

 

ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)  

 

Three Months Ended

              Twelve Months Ended

 

September 30,
2007

   October 1,
2006

September 30,
2007

   October 1,
2006

Net sales

$      92,785

$      74,178

$      309,451

$      255,633

Cost of goods sold

41,623

32,653

       140,664

       116,399

Gross profit

51,162

41,525

168,787

139,234

Expenses:

 

 

 

 

     Selling and marketing

26,243

21,194

91,855

78,366

     General and administrative

6,829

6,165

26,203

22,417

     Research and development

8,202

6,599

28,686      

23,394      

     Total expenses

41,274

33,958

146,744    

124,177    

Income from operations

9,888

7,567

22,043

 15,057

Other income

778

735

3,591

2,082

Income before taxes

10,666

8,302

25,634

17,139

Tax expense

3,841

2,906

8,972

5,999      

Net income

$        6,825

$        5,396

$        16,662

$        11,140

Earnings per share:

 

 

 

 

Basic

 $          0.33

   $          0.28

   $          0.82

   $        0.58

Diluted

 $          0.33

 $          0.27

 $          0.81

 $        0.57

Weighted average common shares:

 

 

 

 

Basic

20,463

19,362

20,208

19,286

Diluted

20,860

19,658

20,678

19,442

 

Certain prior period amounts have been reclassified to conform to the current period presentation with no impact on either net income or earnings per share.