April 28, 2011 - ZOLL Announces Second Quarter Results

INVESTOR CONTACT:

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

ZOLL Medical Corporation Announces Second Quarter Results

Record Second Quarter Revenue and Earnings

April 28, 2011CHELMSFORD, MASS.–ZOLL Medical Corporation (Nasdaq GS: ZOLL), a manufacturer of resuscitation devices and related software solutions, today announced that revenues for the second quarter of fiscal 2011 increased 14% to $122.5 million, compared to revenues in the second quarter of last year of $107.1 million.  Net income increased 65% to $6.0 million for the quarter, compared to $3.7 million in the prior year.  Diluted earnings per share grew 59% to $0.27, compared to $0.17 in the prior year. Backlog at the end of the second quarter was approximately $29 million, as compared to $13 million at the end of Q1 2011 and $22 million at the end of Q2 2010.

Second quarter sales to the North American market were $63.2 million, a decrease of 2%, compared to $64.3 million for the prior-year period.  Sales to the North American hospital market included U.S. Military/Big Government sales of $3.3 million in the second quarter of fiscal 2011, compared to $4.0 million for the same period in the prior year.  Excluding this military business, core North American hospital sales increased 4% to $27.1 million compared to $26.2 million in the prior year.  Sales to the North American pre-hospital market decreased 4% to $32.7 million, compared to $34.2 million last year.  International revenues increased by 25% to $32.7 million, compared to $26.1 million in the same period in the prior year.  LifeVest® revenues increased 60% to $26.6 million.

From a product perspective, total Temperature Management sales increased 52% to $6.1 million, compared to $4.0 million in the same period last year.  Total AutoPulse® sales decreased 34% to $3.0 million, compared to $4.5 million in the second quarter of last year. 

Gross margin for the second quarter was 58%, compared to 55% in the second quarter of fiscal 2010.  The increase primarily reflected an increased mix of higher margin LifeVest revenue and a particularly favorable mix of International revenue from the Company's direct subsidiaries.

Richard A. Packer, Chief Executive Officer of ZOLL, commented, "Q2 was a very strong quarter for ZOLL with good growth, as expected, from our LifeVest business.  In addition, we were pleased to see higher than expected performance from our International business.  This performance was broad-based geographically and included both core defibrillator products and our newer Temperature Management products."

Commenting further on the second quarter, Mr. Packer stated, "We were also happy to see continued improvement in our gross margin.  As the LifeVest revenue growth exceeds our corporate average growth, we should continue to see a positive impact on our gross margins. Q2 was particularly strong in our International direct business and that helped a lot." He added, "Our backlog growth in Q2 reflected the improving overall business strength of our Company."

Mr. Packer concluded, "We expected to build momentum as we moved through the year and, as you can see from our results, our bottom line is running ahead of plan.  Q2 was a robust quarter overall, even though not all areas of the business are growing at this point.  Based on our strength in the first half of fiscal 2011 and our strong backlog entering the back half of the year, we believe we will modestly exceed the high end of our earnings expectations for fiscal 2011.”

ZOLL will host a conference call on Thursday, April 28, 2011 at 5:00 p.m. EDT to discuss its second 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 develops and markets medical devices and related software solutions that help advance emergency care and save lives, while increasing clinical and operational efficiencies.  With products for defibrillation and monitoring, circulation and CPR feedback, data management, fluid resuscitation, and therapeutic temperature management, ZOLL provides a comprehensive set of technologies which help clinicians, EMS and fire professionals, and lay rescuers treat victims needing resuscitation and critical care.

A NASDAQ Global Select company and a Forbes 100 Most Trustworthy Company for the past three years, ZOLL develops and manufactures its products in the United States, in California, Colorado, Illinois, Massachusetts, Pennsylvania, and Rhode Island. More than 400 direct sales and service representatives, 1,100 business partners, and 200 independent representatives serve our customers in over 140 countries around the globe. For more information, visit www.zoll.com.

Certain statements contained in this press release, including statements regarding the anticipated development of the Company's business,  our belief regarding revenues,  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 17, 2010. 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.

© 2011 ZOLL Medical Corporation.  All rights reserved.  269 Mill Road, Chelmsford, MA 01824-4105. AutoPulse, LifeVest, and ZOLL are registered trademarks of ZOLL Medical Corporation.  All trademarks are property of their respective owners. 

ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

  April 3, 2011

October 3, 2010

ASSETS

 

 

Current assets:

 

 

     Cash and cash equivalents

     $     55,743 

     $     59,058

     Short-term investments

 1,660

 3,203

     Accounts receivable, net

93,515 

99,543

     Inventory

69,314 

69,958

     Prepaid expenses and other current assets

        25,720

        24,649

Total current assets

        245,952

        256,411

Property and equipment, net

          59,328

          49,923

Other assets, net

       122,066

       124,436

 

 

 $    427,346

 $    430,770

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

Current and other liabilities:

 

 

     Accounts payable

     $     20,041

     $     22,801

     Accrued expenses and other liabilities

      73,901

       94,391

Total liabilities

 93,942

117,192

Total stockholders’ equity

     333,404

     313,578

 

$   427,346

$   430,770

 

ZOLL MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

 

    Three Months Ended

                      Six Months Ended

 

April 3,

2011

April 4,

2010

April 3,

2011

April 4,

2010

Net sales

$    122,495

$    107,058

$      235,657

$      212,270

Cost of goods sold

51,132

48,358

       102,944

       97,399

Gross profit

71,363

58,700

132,713

114,871

Expenses:

 

 

 

 

     Selling and marketing

39,240

32,472

74,022

64,083

     General and administrative

11,843

9,403

22,215

18,914

     Research and development

11,099

11,292

21,937      

22,655      

     Total expenses

62,182

53,167

118,174    

105,652    

Income from operations

  9,181

  5,533

 14,539

 9,219

Other income

453

248

  717

  226

Income before taxes

9,634

5,781

 15,256

 9,445

Tax expense

  3,613

  2,125

5,332

3,479

Net income

$        6,021

$        3,656

$        9,924

$        5,966

Earnings per share:

 

 

 

 

Basic

 $          0.28

 $          0.17

   $          0.46

   $          0.28

Diluted

 $          0.27

 $          0.17

 $          0.45

 $          0.28

Weighted average common shares:

 

 

 

 

Basic

21,747

21,369

21,666

21,292

Diluted

22,467

21,759

22,294

21,625