ZEVEX International Inc. (NASDAQ: ZVXI) reported financial results
for the three and six months ending June 30, 2005. Net income for
the second quarter ending June 30, 2005, was $168,468, or $0.05 per
share, compared with net income of $192,892, or $0.06 per share,
for the same period of 2004. For the six-month period ending June
30, 2005, net income was $213,621, or $0.06 per share, compared
with $401,673, or $0.12 per share, for the same period in 2004.
Revenue for the second quarter ending June 30, 2005, increased nine
percent to $6.8 million, compared with $6.2 million for the second
quarter of 2004. For the six-month period ending June 30, 2005,
revenue grew by three percent to $12.8 million compared with $12.4
million for the same period in 2004. ZEVEX CEO and President David
McNally said, "We are encouraged by the sequential progress we are
making this year in improving our financial performance. Both
revenue and earnings increased over the first quarter of this year.
Revenue for the second quarter improved in both our Applied
Technology and Therapeutics divisions. Applied Technology revenue
increased 11 percent over the second quarter of last year, led by
sales of complete systems, ultrasonic sensors and handpieces that
we produce for a number of medical companies. Therapeutics revenue
increased seven percent over the second quarter of last year,
primarily due to record unit sales of enteral feeding pumps, and,
notably, the new EnteraLite(R) Infinity(TM) model. "We are well
positioned for an even stronger second half, led by sales of
enteral feeding pumps and disposable devices in connection with our
agreement with Numico," McNally concluded. Gross profit for the
second quarter declined to 36 percent compared with 39 percent in
the same quarter of 2004, primarily due to the product mix
delivered during the quarter. In particular, the results for the
second quarter of 2004 included $193,000 more in relatively
high-margin engineering service revenue. Further, the company made
a $67,000 adjustment for obsolete inventory during the second
quarter of 2005. Without these factors, gross profit related to
product sales was approximately 36 percent for both quarters. For
the first six months of 2005, gross profit declined to 36 percent
compared with 38 percent in the first six months of 2004, due to
these same factors. Operating expenses declined as a percent of
sales to 33 percent for the second quarter of 2005 compared with 35
percent for the second quarter of 2004. Selling, general and
administrative expenses declined to 30 percent of sales in the
second quarter of 2005 compared with 32 percent for the same period
of 2004, a result of the company's emphasis on budget control.
Research and development expenses were higher in the second quarter
of 2005 at nearly four percent of sales compared with three percent
of sales for the same period of 2004. For both the six-month
periods ended June 30, 2005, and June 30, 2004, operating expenses
were approximately 34 percent of sales. Selling, general and
administrative expenses were approximately 30 percent of sales for
both periods. R&D expenditures were approximately four and
one-half percent of sales for the two comparable periods.
Conference Call ZEVEX International Inc. invites all those
interested to join the ZEVEX management team for its earnings
conference call for the second quarter ended June 30, 2005. The
call will be held Thursday, Aug. 4, 2005, at 4:30 p.m. EDT (3:30
p.m. Central, 2:30 p.m. Mountain, 1:30 p.m. Pacific). The telephone
numbers for the call are as follows: Domestic: 800-257-6566
International: 303-262-2139 A live webcast and a rebroadcast of the
conference call will be available on the company's Web site at
www.zevex.com and www.streetevents.com. To listen to the live
broadcast, please enter the site 10-15 minutes prior to the call in
order to download any necessary software, and then click on the
"Webcast" icon on the ZEVEX home page to access the call. The
webcast will be archived on both sites. There is no other replay
access to the call. About ZEVEX International ZEVEX International
Inc. (www.zevex.com), founded in 1986, engages in the business of
designing, manufacturing and distributing medical devices through
its divisions and subsidiary. The Therapeutics division
manufactures and markets enteral nutrition delivery devices. The
Applied Technology division designs and manufactures advanced
medical components and systems for medical technology companies.
Forward-Looking Statements Statements made in this press release,
including those relating to anticipated profit growth and other
statements regarding future performance, are forward looking and
are made pursuant to the safe harbor provisions of the Securities
Litigation Reform Act of 1995. Such statements involve risks and
uncertainties that may cause actual results to differ materially
from those set forth in these statements. Among other things, the
company's efforts to improve its sales and margins in its core
businesses may not be effective or such efforts could be more
difficult or expensive than the company currently anticipates.
Further, the company could experience difficulties in its contract
manufacturing process that could delay the receipt of anticipated
revenue. In addition to the foregoing, the economic, competitive,
governmental, technological and other factors identified in the
company's filings with the Securities and Exchange Commission,
including the Form 10-K for the year ended Dec. 31, 2004, may cause
actual results or events to differ materially from those described
in the forward-looking statements in this press release. ZEVEX
INTERNATIONAL INC. CONSOLIDATED INCOME STATEMENT -0- *T Three
Months Ended Six Months Ended June 30, June 30, 2005 2004 2005 2004
(unaudited) (unaudited) (unaudited) (unaudited) Revenue: Product
Sales $6,645,727 $5,878,725 $12,527,181 $11,993,257 Engineering
Services 151,926 345,272 254,636 439,444 ----------- -----------
------------ ------------ Total Revenue 6,797,653 6,223,997
12,781,817 12,432,701 Cost of Sales 4,329,168 3,793,241 8,126,827
7,675,649 ----------- ----------- ------------ ------------ Gross
Profit 2,468,485 2,430,756 4,654,990 4,757,052 Operating Expenses:
Selling, General and Administrative: 2,011,290 2,013,277 3,801,669
3,701,424 Research and Development: 243,972 179,115 565,628 565,643
----------- ----------- ------------ ------------ Total Operating
Expenses 2,255,262 2,192,392 4,367,297 4,267,067 Operating Income
213,223 238,364 287,693 489,985 Other Income (Expense): Interest
and Other Income 13,426 3,070 16,555 4,856 Interest Expense
(58,181) (48,542) (87,992) (89,553) ----------- -----------
------------ ------------ Income Before Income Taxes 168,468
192,892 216,256 405,288 Provision for Income Taxes -- -- (2,635)
(3,615) ----------- ----------- ------------ ------------ Net
Income $168,468 $192,892 $213,621 $401,673 =========== ===========
============ ============ Basic Net Income Per Share $0.05 $0.06
$0.06 $0.12 =========== =========== ============ ============
Weighted Average Shares Outstanding 3,405,322 3,400,964 3,403,155
3,400,964 =========== =========== ============ ============ Diluted
Net Income Per Share: $0.05 $0.06 $0.06 $0.12 ===========
=========== ============ ============ Diluted Weighted Average
Shares Outstanding 3,506,609 3,438,380 3,510,118 3,448,263
=========== =========== ============ ============ *T ZEVEX
INTERNATIONAL INC. CONSOLIDATED BALANCE SHEET -0- *T June 30, Dec.
31, 2005 2004 ASSETS (unaudited) Current assets Cash and cash
equivalents $225,858 $212,859 Designated cash for sinking fund
payment on industrial development bond 46,622 96,042 Accounts
receivable, net of allowances for doubtful accounts of $158,000 and
$192,000 4,311,949 3,563,436 Other receivable -- 35,500 Inventories
4,087,300 4,584,755 Marketable securities 37,800 29,250 Prepaid
expenses and other current assets 135,531 149,690 ------------
------------ Total current assets 8,845,060 8,671,532 Property and
equipment, net 4,407,147 4,345,942 Patents, trademarks and other
intangibles, net 340,252 335,244 Goodwill, net 4,048,264 4,048,264
------------ ------------ Total assets $17,640,723 $17,400,982
============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Accounts payable $1,428,532 $1,949,618 Other
accrued liabilities 736,505 606,734 Bank line of credit 517,405 --
Income taxes payable 2,005 2,005 Current portion of industrial
development bond 100,000 100,000 Current portion of other long-term
debt 54,712 53,246 ------------ ------------ Total current
liabilities 2,839,159 2,711,603 Industrial development bond
1,100,000 1,200,000 Other long-term debt 738,635 766,362
Stockholders' equity Common stock; $.001 par value, 10,000,000
authorized shares, 3,444,704 issued and 3,405,471 outstanding at
June 30, 2005, and Dec. 31, 2004 3,445 3,440 Additional paid-in
capital 16,308,188 16,290,452 Unrealized gain on marketable
securities (9,975) (18,525) Treasury stock, 39,233 shares (at cost)
at June 30, 2005, and Dec. 31, 2004 (89,422) (89,422) Accumulated
deficit (3,249,307) (3,462,928) ------------ ------------ Total
stockholders' equity 12,962,929 12,723,017 ------------
------------ Total liabilities and stockholders' equity $17,640,723
$17,400,982 ============ ============ *T
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