MONTVALE, N.J., Nov. 6, 2008 (GLOBE NEWSWIRE) -- Datascope Corp. (Nasdaq:DSCP) today reported that sales in the first quarter of fiscal 2009 increased 17% to $56.2 million, compared to $48.0 million in the first quarter last year. Favorable foreign currency translation contributed $1.1 million to revenues.
GAAP net earnings from continuing operations* in the first quarter of fiscal 2009 were $4.0 million, or $0.25 per diluted share, after deducting after-tax special charges of $1.0 million, or $0.06 per diluted share, for expenses related to the pending acquisition by Getinge AB of Datascope Corp. The first quarter of fiscal 2009 continued to be burdened by the fees associated with the transitional manufacturing of Cardiac Assist balloon pumps at Datascope's former Patient Monitoring ("PM") facility of about $342 thousand per month. The fee started at the time of the sale of the PM business and will continue through January 2009. GAAP net earnings from continuing operations in the first quarter last year were $11.9 million, or $0.76 per diluted share, after including an after-tax special gain of $7.8 million or $0.50 per diluted share.
Non-GAAP net earnings from continuing operations in the first quarter of fiscal 2009 increased 23% to $5.0 million, or $0.31 per diluted share from $4.1 million, or $0.26 per diluted share last year. Higher non-GAAP earnings from continuing operations in the first quarter reflect strong sales growth in both Cardiac Assist and Vascular Products and higher interest income.
The effective tax rate on non-GAAP earnings from continuing operations in the first quarter of fiscal 2009 was 38.6% compared to 35.0% in the first quarter last year. The tax rate in the first quarter this year does not reflect the benefit of the R&D tax credit for fiscal 2009 or the favorable impact of the retroactive provisions of the Emergency Economic Stabilization Act of 2008 ("EESA"), which reinstated the R&D tax credit to January 1, 2008, because the new law was passed after the end of the first quarter of fiscal 2009.
Commenting on the Company's first quarter results, Dr. Antonino Laudani, Datascope's COO, stated, "The positive results of the first quarter continue to reflect our undivided focus on our cardiovascular business, and the implementation of our plans to support the growth of counterpulsation in the United States and in the rest of the world. Our high-margin counterpulsation balloon product line continued to grow and our vascular graft line performed very well as we continue to gain market share and expand our presence in developing markets."
The Company projects sales growth of 3% in the second quarter of fiscal 2009. The moderate projected rate of growth reflects the unfavorable effect of the strengthening U.S. dollar and comparison to last year's second quarter, which included initial inventory sales to Datascope's new distributor in Japan. Excluding foreign currency translation, the projected sales increase would be 6%.
The Company projects GAAP second quarter fiscal 2009 diluted earnings per share from continuing operations of $0.40 - $0.42 per share. Projected operating results in the second quarter include a tax rate of 33.8%, which reflects the benefit of the R&D tax credit for fiscal 2009 and the favorable impact of the retroactive provisions of the EESA to January 1, 2008.
In October 2008, we relocated the manufacture of balloon pumps from the former PM facility to our own 90,000 square foot facility in Mahwah, N. J.
First Quarter Sales Discussion
Cardiac Assist Products: First quarter sales increased 14% to a record $45.3 million, primarily reflecting continued strong growth in international markets. Worldwide balloon pump sales increased 22% and intra-aortic balloons (IAB's) increased 9%, driven by the continued worldwide market acceptance of the CS300(tm) balloon pump and the Sensation 7 Fr. catheter. Worldwide sales of the Safeguard manual assist device increased 20%. Favorable foreign currency translation contributed $0.6 million to Cardiac Assist sales in the first quarter.
Vascular Products: First quarter sales rose 29% to $10.4 million, as sales of vascular grafts and peripheral vascular stent products grew 34% and 16%, respectively. Increased vascular graft sales reflect higher sales in international markets and increased sales to our exclusive U.S. distributor. Favorable foreign currency translation increased sales by $0.5 million in the first quarter.
Gain on sale of Discontinued Interventional Products Business
On August 6, 2008, the Company completed the sale of its vascular closure business, including all assets related to its VasoSeal(r), On-Site(tm), and X-Site(r) devices and its collagen operation, to St. Jude Medical, Inc. (NYSE:STJ). In the first quarter of fiscal 2009, we recognized a gain on sale of the IP business of $0.6 million, net of tax. This transaction completed Datascope's previously announced plan to exit the vascular closure market and phase out its Interventional Products business.
Non-GAAP Measures
Datascope prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP. In an effort to provide investors with additional information regarding the Company's results and to provide a meaningful period-over-period comparison of the Company's financial performance, the Company uses non-GAAP financial measures as defined by the Securities and Exchange Commission. The differences between U.S. GAAP and non-GAAP financial measures are reconciled below. In presenting comparable results, the Company discloses non-GAAP financial measures when it believes such measures will be useful to investors, analysts and other interested parties in evaluating the Company's underlying business performance on a comparable basis with past and future reported earnings per share.
