Valley Forge Scientific Reports Third Quarter/Nine Month Fiscal
2004 Operating Results OAKS, Pa., Aug. 12 /PRNewswire-FirstCall/ --
Valley Forge Scientific Corp. (NASDAQ:VLFG)(BSE:VLF), a leading
developer of bipolar electrosurgical systems, today announced
operating results for the third quarter and first nine months of
fiscal 2004 ended June 30, 2004. Sales for the quarter of
$1,274,389 were 18% greater than sales of $1,081,872 for the third
quarter of fiscal 2003. Net income for the quarter was $65,006, or
$0.01 per basic and diluted share, as compared to $37,353, or $0.01
per basic and diluted share, for the third quarter of fiscal 2003.
Sales for the first nine months of $3,606,629 were 6% greater than
sales of $3,390,950 for the first nine months of fiscal 2003. Net
income for the first nine months was $145,564, or $0.02 per basic
and diluted share, as compared to net income of $107,085, or $0.01
per basic and diluted share, for the first nine months of fiscal
2003. Sales for the quarter reflect an increase in the sales volume
of neurosurgical products to Codman & Shurtleff, Inc. and an
increase in sales volume of dental products through direct sales to
customers and through dental product dealers. Sales for the quarter
and nine months also reflect sales to Stryker Corporation of
$120,000 and $135,000, respectively, as compared to no sales in
fiscal 2003. For the quarter, sales to Codman & Shurtleff, Inc.
accounted for $1,040,814, or 82% of sales, as compared to
$1,007,700, or 93% of sales, for the comparable period of fiscal
2003. For the first nine months, sales to Codman & Shurtleff,
Inc. were $3,041,790, or 84% of sales, as compared to $3,200,225,
or 94% of sales, for the first nine months of fiscal 2003. Included
in sales to Codman & Shurtleff, Inc. for the first nine months
of fiscal 2004 is a one-time payment of $57,920 in the second
quarter of fiscal 2004 that Codman & Shurtleff, Inc. made to
satisfy its minimum purchase obligation under the first three month
extension of an existing distribution agreement. For the quarter,
sales of dental products increased to $109,697, or 9% of sales,
from $48,951, or 5% of sales, for the comparable period in fiscal
2003. For the first nine months, sales volume for dental products
was $398,563, or 11% of sales, as compared to $135,659, or 4% of
sales, for the comparable period in fiscal 2003. For the quarter,
gross margin was 51% of sales, as compared to 54% of sales for the
third quarter of fiscal 2003, and gross margin was 53% of sales for
the first nine months as compared to 51% of sales for the
comparable period of fiscal 2003. The difference in gross margin as
a percentage of sales is attributable to an increase in sales of
dental products and changes in product mix, and for the nine months
ended June 30, 2004, the $57,920 payment by Codman & Shurtleff,
Inc. in the second quarter of fiscal 2004. Selling, general and
administrative (SG&A) expenses for the quarter were $417,699,
or 33% of sales, as compared to $378,932, or 35% of sales, for the
third quarter of fiscal 2003. For the nine months, SG&A
expenses were $1,286,244, or 36% of sales, as compared to
$1,194,982, or 35% of sales, for the comparable period in fiscal
2003. Research and development (R&D) expenses were $114,754, or
9% of sales, for the quarter as compared to $151,513, or 14% of
sales, for the third quarter of the 2003 fiscal year. For the first
nine months, R&D expenses were $355,662, or 10% of sales, as
compared to $361,020, or 11% of sales, for the comparable period in
fiscal 2003. The reduction in research and development expenses in
the third quarter of fiscal 2004 was primarily due to the
completion of a new neurosurgical irrigator, which was introduced
into the market in the first quarter of fiscal 2004. "In the third
quarter of fiscal 2004, we saw sales volume increases in our
neurosurgical products and dental products as compared to the
comparable periods in fiscal 2003. We also saw a contribution from
sales to Stryker Corporation for evaluation samples of a new
product we developed pursuant to a development agreement, and in
the third quarter, we received 510(k) approval from the Food and
Drug Administration to market this new product," said Jerry Malis,
President and CEO of Valley Forge Scientific Corp. "In conjunction
with our planning for fiscal 2005 and beyond, we are reviewing
alternatives to broaden the markets for our products as well as
increase market penetration and shareholder value. We expect to
reach a conclusion and report to our shareholders before the end of
our September 30, 2004 fiscal year." Management of Valley Forge
Scientific will discuss the third quarter and first nine months of
the 2004 fiscal year and financial results on Thursday, August 12,
2004 in a conference call scheduled for 10:30 a.m. ET. Those who
wish to participate in the conference call may do so by calling
(877) 356-9134 approximately 10 minutes prior to the start time and
providing confirmation code 9184721 to the conference operator. For
callers outside the United States, the number is (706) 643-3775. An
audiotape replay will be available by telephone at (800) 642-1687,
confirmation code 9184721, approximately two hours following the
conclusion of the call through August 26, 2004. International
callers can access this replay at (706) 645-9291. Valley Forge
Scientific has established itself as a leading developer and
manufacturer of bipolar electrosurgical systems and related
instrumentation. Based on its DualWave(TM) technology, these
systems provide surgeons with the ability to safely cut and
coagulate tissue in the most critical areas of the brain and spinal
cord. Based on technology developed in conjunction with Leonard I.
Malis, MD, Professor and Chairman Emeritus of the Mount Sinai
School of Medicine Department of Neurosurgery, our bipolar
electrosurgery systems are considered to be the gold standard
worldwide for use in the central nervous system. For more
information on DualWave(TM) technology, our bipolar electrosurgery
systems, or other Valley Forge Scientific products, please visit
our Web site at http://www.vlfg.com/. FROM: Carol Cartwright Senior
Director, Client Services MCS (800) 477-9626 COMPANY CONTACT: Jerry
Malis CEO and President 136 Green Tree Rd., Ste. 100 P.O. Box 1179
Oaks, PA 19456 E-MAIL: PHONE: (610) 666-7500 FAX: (610) 666-7565
NASDAQ: VLFG BSE: VLF VALLEY FORGE SCIENTIFIC CORP. Financial
Highlights Unaudited For the Three For the Nine Months Ended Months
Ended 6/30/04 6/30/03 6/30/04 6/30/03 Net sales $1,274,389
$1,081,872 $3,606,629 $3,390,950 Gross profit $652,321 $583,749
$1,917,393 $1,735,837 Selling, general and administrative expenses
$417,699 $378,932 $1,286,244 $1,194,982 Research and development
expenses $114,754 $151,513 $355,662 $361,020 Operating income
$109,721 $43,230 $245,191 $149,611 Provision for income taxes
$50,583 $12,680 $116,553 $65,141 Net income $65,006 $37,353
$145,564 $107,085 Basic income per share $0.01 $0.01 $0.02 $0.01
Diluted income per share $0.01 $0.01 $0.02 $0.01 Common shares
outstanding: Basic 7,913,712 7,938,302 7,913,712 7,976,503 Diluted
7,994,955 7,963,052 7,979,467 8,000,052 Sales Highlights Unaudited
The table below sets forth total sales and sales by medical field
of our "Generators, Irrigators and Other Products" and our
"Disposable Accessories" for the three and nine months ended June
30, 2004, as compared to the three and nine months ended June 30,
2003. Sales of "Generators, Irrigators and Other Products" in
"Other Fields" represent sales to Stryker Corporation, and sales of
"Disposable Accessories" in "Other Fields" represent sales to
Boston Scientific Corporation and direct sales to hospitals. For
the Three For the Nine Months Ended Months Ended 6/30/04 6/30/03
6/30/04 6/30/03 Generators, Irrigation and Other Products
Neurosurgery Field $503,852 $543,349 $1,552,478 $1,611,085 Dental
Field $85,125 $48,751 $341,755 $129,960 Other Fields $120,000 --
$135,000 -- Total: $708,977 $592,100 $2,029,233 $1,741,045
Disposable Accessories Neurosurgery Field $508,306 $406,532
$1,313,030 $1,385,168 Dental Field $24,572 $200 $56,809 $6,907
Other Fields $1,963 $18,980 $30,218 $40,252 Total: $534,841
$425,712 $1,400,057 $1,432,327 Forward-Looking Statements
Statements in this press release regarding our expectations for our
products or products we are developing, introduction of products
into the marketplace, acceptance of our products in the
marketplace, new products and alliances, and any other statements
in this press release that refers to Valley Forge Scientific's
estimated or anticipated future results are forward-looking
statements within the meaning of the Private Securities Litigation
Act of 1995. All forward-looking statements in this press release
reflect Valley Forge Scientific's current analysis of existing
trends and information and represent Valley Forge Scientific's
judgment only as of the date of this press release. Actual results
may differ from current expectations based on a number of factors
affecting Valley Forge Scientific's business, including but not
limited to competitive, regulatory and market conditions; the
performance of new products and the continued acceptance of current
products; the execution of strategic initiatives and alliances; the
market penetration by third parties who distribute and sell Valley
Forge Scientific's products; Valley Forge Scientific's ability to
maintain a sufficient supply of products; product liability claims;
and the uncertainties associated with intellectual property
protection for these products. In addition, matters generally
affecting the domestic and global economy can affect Valley Forge
Scientific's results. Therefore, the reader is cautioned not to
rely on these forward-looking statements. Valley Forge Scientific
disclaims any intent or obligation to update these forward-looking
statements. Additional information concerning these and other risk
factors may be found in Valley Forge Scientific's public periodic
filings with the Securities and Exchange Commission, including
Valley Forge Scientific's Form 10-K for the year ended September
30, 2003. DATASOURCE: Valley Forge Scientific Corp. CONTACT: Carol
Cartwright, Senior Director, Client Services of MCS,
1-800-477-9626; or Jerry Malis, CEO and President of Valley Forge
Scientific Corp., +1-610-666-7500, or fax, +1-610-666-7565, Web
site: http://www.vlfg.com/
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