SCIMED EARNINGS ADVANCE 49.6% IN FY 1993, BOOSTED BY OPERATING EFFICIENCIES AND LOWER LITIGATION COSTS; SALES FOR YEAR MOVE FORWARD 21.1% TO $222.7 MIL.
This article was originally published in The Gray Sheet
Executive SummaryScimed's earnings advanced 49.6% to $51.4 mil. for the year ended Feb. 28 on sales of $222.7 mil., which were up 21.1% from the prior year. The company noted in an April 5 release announcing the figures that "improved operating efficiencies, lower sales and marketing expenses as a percent of sales, and lower litigation expense" contributed to the gain. The reduction in litigation expense is presumably due to the November 1991 settlement of patent litigation with Lilly's Advanced Cardiovascular Systems subsidiary over Scimed's Express rapid exchange angioplasty catheter. Scimed still, however, is embroiled in patent litigation with Pfizer subsidiary Schneider over the Express ("The Gray Sheet" Oct. 12, 1992, In Brief) and a shareholder suit brought against the company last August ("The Gray Sheet" Aug. 17, 1992, In Brief). Earnings for the year were "adversely impacted by royalty payments, increased investments in research and development, and slightly lower gross margins due to changes in sales mix, startup manufacturing costs in Belgium and amortization of license fees," according to the company. The Belgian manufacturing operations are expected to help Scimed reduce its royalty payments to ACS; under the settlement agreement, Scimed pays ACS royalties only on sales of Express catheters that are manufactured or sold in the U.S. ("The Gray Sheet" Dec. 2, 1991, p. 1). Scimed noted that during the year, the firm "introduced more than 10 new coronary and peripheral angioplasty products" and "expanded its patent portfolio and the technological depth of its manufacturing and research and development operations." The firm also noted that it "continued to strengthen its sales and marketing organization worldwide." For the fourth quarter, Scimed reported sales of $60.3 mil., a 24.7% increase over the fourth quarter 1991. Fourth quarter earnings reached $15.5 mil., a gain of 25.8%.
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