Atrion Reports 2017 Results for Fourth Quarter and Full Year
February 27 2018 - 4:30PM
Atrion Corporation (NASDAQ:ATRI) announced today that for the
fourth quarter of 2017 revenues were $34.0 million compared to
$33.3 million in the same period of 2016, net income was $8.6
million compared to $5.6 million, and diluted earnings per share
were $4.66 compared to $3.00 in the prior-year period. For the full
year 2017 compared to 2016, Atrion increased revenues to $146.6
million from $143.5 million, net income to $36.6 million from $27.6
million, and diluted earnings per share to $19.71 from $14.85.
David Battat, President & CEO, commenting on
the results for the fourth quarter and the full year 2017 as
compared to the prior-year periods said, "We had a solid fourth
quarter with revenues up 2% and operating income up 9%. Full-year
revenues were up 2%, and more importantly operating income was up
5%. I am especially pleased that growth in our fluid delivery and
cardiovascular products more than made up for ongoing customer
issues adversely impacting ophthalmic sales. GAAP net income and
diluted EPS were both up 55% in the 2017 fourth quarter, and up 33%
for the full year.”
Mr. Battat clarified, “Those much higher net
income and EPS results were bolstered by significant and
non-recurring tax benefits. In the first half of 2017, our tax rate
was favorably impacted by the unusual confluence of five years’
worth of employee stock-based compensation exercises. The fourth
quarter tax rate was favorably affected even more by the year-end
passage of the Tax Cuts and Jobs Act of 2017, which reduced future
liabilities on our balance sheet resulting from the accelerated
depreciation we took on about $72 million in capital investments
made over the last seven years. With this one-time, non-cash item,
our effective tax rate for the fourth quarter was a negative 1% as
compared to 28% in the prior-year period. For the full year, the
collective impact of tax benefits resulted in a rate of 14%
compared to 30% in 2016. However, we continue to believe that
pretax metrics are the more appropriate measure of our
performance.” Mr. Battat added, “As had been the case in the prior
seven quarters, we did not engage in open market stock repurchases
during the fourth quarter of 2017. Cash and long and short term
investments increased by $4.6 million in the quarter, and by $20.7
million for the year, to a total of $74.7 million as of December
31, 2017.”
Commenting on future expectations, Mr. Battat
stated, “Following several years of high growth, the Company has
been in a steady state for a couple of years while continuing to
show our typical high returns on equity. We anticipate
working through this relatively flat period in the next year,
returning to progressively higher growth rates as products from the
$28 million of investments in research and development over the
last five years begin to make it through the lengthy processes of
FDA approval and commercial adoption.” Mr. Battat added, “In 2018,
while continuing to report uneven quarterly results, we expect the
full year to show modest improvements in revenues and pretax
income.” Mr. Battat continued, “For the full year, we anticipate an
effective federal and state tax rate of 21%, substantially less
than the 31% average we experienced over the last 10 years.
Ironically, for most 2018 quarters, this new rate will be
significantly higher than the sequential quarterly rates
experienced in 2017 of 13%, 5%, 32%, and a negative 1%.
Understandably, higher tax rates will negatively impact 2018 after
tax net income and EPS comparisons to the prior-year periods. We
will therefore continue to put the spotlight on results not
affected by changes in tax rates.”
Atrion Corporation develops and manufactures
products primarily for medical applications. The Company’s website
is www.atrioncorp.com.
Statements in this press release that are
forward looking are based upon current expectations and actual
results or future events may differ materially. Such
statements include, but are not limited to, Atrion’s expectations
regarding the Company’s growth in 2018 and following years,
quarterly results for 2018, improvements in revenues and pretax
income in 2018, after tax net income and EPS in 2018, and the
Company’s federal and state effective income tax rate in 2018.
Words such as “expects,” “believes,” “anticipates,” “intends,”
"should", "plans," "will" and variations of such words and similar
expressions are intended to identify such forward-looking
statements. Forward-looking statements involve risks and
uncertainties. The following are some of the factors that
could cause actual results or future events to differ materially
from those expressed in or underlying our forward-looking
statements: changing economic, market and business
conditions; acts of war or terrorism; the effects of governmental
regulation; competition and new technologies;
slower-than-anticipated introduction of new products or
implementation of marketing strategies; the Company’s ability to
protect its intellectual property; changes in the prices of raw
materials; changes in product mix; and intellectual property and
product liability claims and product recalls. The foregoing
list of factors is not exclusive, and other factors are set forth
in the Company’s filings with the Securities and Exchange
Commission. The forward-looking statements in this press release
are made as of the date hereof, and we do not undertake any
obligation, and disclaim any duty, to supplement, update or revise
such statements, whether as a result of subsequent events, changed
expectations or otherwise, except as required by applicable
law.
Contact:
Jeffery StricklandVice President and Chief
Financial Officer(972) 390-9800
ATRION CORPORATION |
CONSOLIDATED STATEMENTS OF
INCOME |
(In thousands, except per share
data) |
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
2017(unaudited) |
|
2016(unaudited) |
|
|
2017 |
|
|
|
2016 |
|
Revenues |
$ |
34,024 |
|
$ |
33,294 |
|
|
$ |
146,595 |
|
|
$ |
143,487 |
|
Cost of goods
sold |
|
18,001 |
|
|
18,067 |
|
|
|
75,841 |
|
|
|
75,857 |
|
Gross profit |
|
16,023 |
|
|
15,227 |
|
|
|
70,754 |
|
|
|
67,630 |
|
Operating
expenses |
|
7,730 |
|
|
7,616 |
|
|
|
29,480 |
|
|
|
28,504 |
|
Operating income |
|
8,293 |
|
|
7,611 |
|
|
|
41,274 |
|
|
|
39,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
income |
|
259 |
|
|
134 |
|
|
|
1,065 |
|
|
|
448 |
|
Other income
(expense) |
|
-- |
|
|
-- |
|
|
|
1 |
|
|
|
(308 |
) |
Income before
income taxes |
|
8,552 |
|
|
7,745 |
|
|
|
42,340 |
|
|
|
39,266 |
|
Income tax
benefit (provision) |
|
94 |
|
|
(2,174 |
) |
|
|
(5,747 |
) |
|
|
(11,685 |
) |
Net income |
$ |
8,646 |
|
$ |
5,571 |
|
|
$ |
36,593 |
|
|
$ |
27,581 |
|
|
|
|
|
|
|
|
|
Income per
basic share |
$ |
4.67 |
|
$ |
3.05 |
|
|
$ |
19.82 |
|
|
$ |
15.12 |
|
|
|
|
|
|
|
|
|
Weighted
average basic shares outstanding |
|
1,852 |
|
|
1,825 |
|
|
|
1,846 |
|
|
|
1,824 |
|
|
|
|
|
|
|
|
|
|
$ |
4.66 |
|
$ |
3.00 |
|
|
$ |
19.71 |
|
|
$ |
14.85 |
|
Income per
diluted share |
|
|
|
|
|
|
|
Weighted
average diluted shares outstanding |
|
1,857 |
|
|
1,859 |
|
|
|
1,857 |
|
|
|
1,857 |
|
ATRION CORPORATION |
CONSOLIDATED BALANCE SHEETS |
(In thousands) |
|
|
Dec. 31, |
|
Dec. 31, |
ASSETS |
2017 |
|
2016 |
|
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
30,136 |
|
$ |
20,022 |
Short-term investments |
|
35,468 |
|
|
24,080 |
Total cash and short-term investments |
|
65,604 |
|
|
44,102 |
Accounts receivable |
|
17,076 |
|
|
17,166 |
Inventories |
|
29,354 |
|
|
29,015 |
Prepaid expenses and other |
|
3,199 |
|
|
3,181 |
Total current assets |
|
115,233 |
|
|
93,464 |
|
|
|
|
|
|
Long-term
investments |
|
9,136 |
|
|
9,945 |
|
|
|
|
|
|
Property, plant
and equipment, net |
|
66,369 |
|
|
65,265 |
Other
assets |
|
13,042 |
|
|
13,268 |
|
|
|
|
|
$ |
203,780 |
|
$ |
181,942 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current liabilities |
|
9,622 |
|
|
9,073 |
Line of credit |
|
-- |
|
|
-- |
Other non-current liabilities |
|
9,770 |
|
|
9,881 |
Stockholders’ equity |
|
184,388 |
|
|
162,988 |
|
|
|
|
|
$ |
203,780 |
|
$ |
181,942 |
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