BOUNTIFUL, Utah -- Specialized Health Products International, Inc. (OTCBB: SHPI)
--Company achieves profitability ahead of schedule; Net income increases 154%
--Total revenues increase 54%
Specialized Health Products International, Inc. (OTCBB: SHPI), a leader in the design and development of medical safety devices, today reported consolidated financial results for the third quarter and nine months ended September 30, 2004.
Third quarter highlights include:
--Achieves operating income profitability of $174 thousand or 11% of revenue
--Revenue increases 54% year-over-year and 24% sequentially to $1.6 million
--Product revenues improve 141% and operating expenses decrease 15% compared to same period last year
--Receives second patent for SecureLoc(TM) platform technology
Revenues for the third quarter of 2004 were $1.6 million, a sequential increase of 24% from the second quarter of 2004, and an increase of 54% from the $1.1 million recorded in the same period last year. Net income for the quarter increased 154% to $174 thousand compared to a net loss of $322 thousand for the third quarter of 2003. On a diluted earnings per share basis, the Company reached breakeven for the third quarter of 2004 compared to a loss of $(0.02) per diluted share for the third quarter of 2003.
The Company's revenues for the nine months ended September 30, 2004 increased 69% to $4.1 million, compared to $2.4 million in the same period in 2003. Net loss for the nine-month period was $286 thousand, or $(0.01) per diluted share, an improvement of 82% compared to a loss of $1.6 million, or $(0.09) per diluted share, in the same period last year.
"We are extremely pleased with our third quarter results, and that we were able to achieve net income profitability ahead of schedule," commented, Jeff Soinski, President and Chief Executive Officer. "We continued to significantly drive sales and achieved profitability even after investing approximately one-half of our total operating expense in research and development. Our strategy of building a portfolio of innovative medical devices, while maintaining careful control of our operating efficiencies, allowed us to attain our goal of profitability ahead of schedule. The investments we have made are providing increasing returns that benefit our customers, our shareholders and the company."
"We have developed a solid portfolio of innovative technology and are emerging as a leader in the design and development of medical safety devices," Soinski said. "We are in the early stages of experiencing the long-term benefits of our commercialized patented technologies and mining the relationships we have established with leading disposable medical products marketers and distributors."
Mr. Soinski continued, "We continue to focus on research and development and recently received our second patent on our latest medical platform technology SecureLoc(TM). This technology can be applied to a wide range of medical needles currently without a viable safety solution. In addition, we announced our second major product agreement on SecureLoc(TM), a worldwide development and OEM supply agreement with Tyco Healthcare for conventional and safety bone marrow biopsy needles. SecureLoc(TM) has many applications and we will continue to pursue the many sound business opportunities this technology offers."
"As we look to the fourth quarter of 2004 and beyond, we are very excited about our growing portfolio of innovative medical safety devices and look forward to reporting continued improvement in our operating performance," Mr. Soinski concluded.
SHPI will conduct a conference call to discuss third quarter 2004 financial results on Thursday, November 11, 2004, at 4:30 p.m. EST. Investors can listen to the conference call live by dialing (800) 230-1074 in the U.S. and (612) 332-0636 internationally. In addition, the call will be broadcast live over the Internet hosted at www.shpi.com under "Webcast" and will be archived online within one hour after completion of the call. A replay of the call will be available for one week after the event by dialing (800) 475-6701 in the U.S. and (320) 365-3844 internationally and entering access code: 754338.
About Specialized Health Products International, Inc.
SHPI is a leading designer and developer of proprietary safety medical needle products, designed to minimize the risk of accidental needlesticks, which are a leading cause of the spread of blood-borne diseases such as HIV/AIDS and hepatitis B and C. SHPI has two primary platform, patented safety needle technologies that apply to virtually all medical needles used today. SHPI manufactures and markets certain products under its own label. Other products are supplied to third parties on an OEM basis or licensed to leading manufacturers and marketers in the disposable medical products industry. For more information about SHPI, visit the company's web site at www.shpi.com.
This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended. Such statements are subject to risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements. The Company may experience significant fluctuations in future operating results due to a number of economic conditions, risks in product and technology development, the effect of the Company's accounting policies and other risk factors detailed in the Company's SEC filings. These factors and others could cause operating results to vary significantly from those in prior periods and those projected in forward-looking statements. Additional information with respect to these and other factors, which could materially affect the Company and its operations, are included on certain forms the Company files with the Securities and Exchange Commission.
(Financial Tables Follow) SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) ASSETS September 30, December 31, ------ 2004 2003 ------------ ------------ Current assets: Cash and cash equivalents $ 2,040,353 $ 2,405,626 Accounts receivable 815,613 727,615 Inventory 319,171 199,044 Prepaid expenses and other 41,543 167,727 ------------ ------------ Total current assets 3,216,680 3,500,012 ------------ ------------ Property and equipment: Research and development machinery and equipment 361,984 359,525 Office furniture and fixtures 158,085 158,085 Computer equipment and software 199,698 200,177 Leasehold improvements 139,350 139,350 Molds 201,090 201,090 Manufacturing equipment 75,440 69,326 Construction-in-progress 122,756 33,993 ------------ ------------ 1,258,403 1,161,546 Less accumulated depreciation and amortization (881,197) (833,968) ------------ ------------ Net property and equipment 377,206 327,578 ------------ ------------ Intangible assets, net 266,116 235,585 Other assets 27,000 27,000 ------------ ------------ $ 3,887,002 $ 4,090,175 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------- Current liabilities: Accounts payable $ 211,421 $ 229,122 Accrued liabilities 333,322 318,819 Accrual for patent litigation expenses, current portion 650,000 650,000 Deferred revenue, current portion 599,016 795,616 ------------ ------------ Total current liabilities 1,793,759 1,993,557 Accrual for patent litigation expenses, net of current portion 141,365 641,365 Deferred revenue, net of current portion 89,981 371,349 Deferred rent 12,702 11,929 ------------ ------------ Total liabilities 2,037,807 3,018,200 ------------ ------------ Stockholders' equity: Preferred stock, $.001 par value; 30,000,000 shares authorized, 0 and 21,861,369 shares Series A outstanding, respectively - 21,861 Common stock, $.02 par value; 70,000,000 shares authorized, 41,055,348 and 17,831,479 shares issued and outstanding, respectively 821,107 356,630 Additional paid-in capital 38,123,270 37,502,557 Accumulated deficit (37,095,182) (36,809,073) ------------ ------------ Total stockholders' equity 1,849,195 1,071,975 ------------ ------------ $ 3,887,002 $ 4,090,175 ============ ============ SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) --------------------- ----------------------- For the Three Months For the Nine Months Ended September 30 Ended September 30 --------------------- ----------------------- 2004 2003 2004 2003 ---------- ---------- ---------- ------------ Revenue: Product sales and royalties 1,173,564 823,626 3,074,351 1,772,833 Technology fees and licensing revenues 198,906 196,428 596,718 579,240 Development fees and related services 247,866 29,421 391,639 49,896 ---------- ---------- ---------- ------------ Total Revenue 1,620,336 1,049,475 4,062,708 2,401,969 Cost of revenues 378,034 136,979 817,683 338,716 ---------- ---------- ---------- ------------ Gross Profit 1,242,302 912,496 3,245,025 2,063,253 Gross Profit Margin 77% 87% 80% 86% Operating Expenses: Research and Development 526,038 674,853 1,786,503 2,010,400 Sales and Marketing 199,951 308,893 788,324 908,322 General and Administrative 343,478 268,626 984,829 851,002 ---------- ---------- ---------- ------------ Total Operating Expense 1,069,467 1,252,372 3,559,656 3,769,724 ---------- ---------- ---------- ------------ Net Loss from Operations 172,835 (339,876) (314,631) (1,706,471) Other Income (Expense) 1,332 17,971 28,522 79,549 ---------- ---------- ---------- ------------ Net Loss 174,167 (321,905) (286,109) (1,626,922) ========== ========== ========== ============
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