ST. LOUIS, April 30 /PRNewswire-FirstCall/ -- Young Innovations, Inc. today announced results for the quarter ended March 31, 2007.
Sales for the first quarter of 2007 were $22.9 million, an increase of $2.2 million or 10.6% from the $20.7 million reported in the first quarter of 2006. Income from operations declined 15.2% to $4.7 million in the first quarter of 2007 from $5.6 million in the first quarter of 2006. Net income decreased 21.3% to $2.8 million, compared with $3.6 million in the first quarter of 2006. Diluted earnings per share decreased 20.5% in the first quarter of 2007 to $0.31 from $0.39 in the prior year quarter. Diluted earnings per share were affected by equity compensation expense of $0.01 and $0.01 for the quarters ended March 31, 2007 and 2006, respectively.
The results for the quarter were affected by the acquisition of Microbrush, Inc. and Microbrush International, Ltd. (collectively Microbrush) on July 31, 2006 and August 18, 2006, respectively.
Microbrush contributed approximately $3.7 million in sales in the first quarter. The additional sales from Microbrush were partially offset by lower-than-expected sales from new product introductions, ongoing weakness in our panoramic X-ray product line, and a decline in sales to our distributors roughly consistent with our expectations. In addition, increased investments in new product development, personnel and facilities impacted our profitability for the quarter.
Commenting on the quarter, Alfred E. Brennan, Chief Executive Officer, said, "We are disappointed that the results for our X-ray product line and our new product efforts fell below our expectations for the quarter. We remain committed to investing in personnel and infrastructure to support our long-term growth objectives. We expect significant volatility in our results as we respond to the weakness in our X-ray product line and continue to invest in the overall business."
Young Innovations develops, manufactures and markets supplies and equipment used by dentists, dental hygienists, dental assistants and consumers. The Company's product offering includes disposable and metal prophy angles, prophy cups and brushes, dental micro-applicators, panoramic X-ray machines, moisture control products, infection control products, dental handpieces (drills) and related components, endodontic systems, orthodontic toothbrushes, flavored examination gloves, children's toothbrushes, and children's toothpastes. The Company believes it is a leading manufacturer and distributor of prophy angles and cups (used in teeth cleaning and polishing procedures), liquid surface disinfectants, obturation units, and dental micro-applicators in the United States. The Company also believes it is a leading distributor of panoramic X-ray equipment in the United States.
Investors are cautioned that this press release as well as other reports and oral statements by Company officials may contain certain forward-looking statements as defined in the Private Securities Litigation and Reform Act of 1995. Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions and which include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," or similar expressions. These statements are not guaranties of future performance and the Company makes no commitment to update or disclose any revisions to forward-looking statements, or any facts, events or circumstances after the date hereof that may bear upon forward-looking statements. Because such statements involve risks and uncertainties, actual actions and strategies and the timing and expected results thereof may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those disclosed in the Company's Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission.
Young Innovations, Inc.
Consolidated Balance Sheet
March 31, 2007 and December 31, 2006
(In Thousands)
(Unaudited)
March 31 December 31
Assets 2007 2006
Current assets
Cash $1,083 $1,017
Accounts receivable, net 12,049 13,057
Inventories 15,126 14,111
Other current assets 4,489 5,546
Total current assets 32,747 33,731
Property, plant and equipment, net 31,366 29,178
Goodwill 78,331 78,233
Other intangible assets 10,987 11,140
Other assets 4,144 4,306
Total assets $157,575 $156,588
Liabilities and Equity
Current liabilities
Accounts payable and accrued liabilities $7,861 $7,749
Total current liabilities 7,861 7,749
Long-term debt 19,438 21,810
Deferred income taxes 10,086 9,531
Total Liabilities 37,385 39,090
Stockholders' equity
Common stock 90 90
Additional paid-in capital 26,942 29,214
Retained earnings 113,547 111,089
Common stock in treasury, at cost (20,461) (22,939)
Accumulated other comprehensive income 72 44
Total stockholders' equity 120,190 117,498
Total liabilities and stockholders'
equity $157,575 $156,588
Young Innovations, Inc.
Consolidated Statements of Income
(In Thousands, Except Earnings Per Share Data)
(Unaudited)
Three Months Ended
March 31,
2007 2006 Change
Net sales $22,883 $20,683 10.6%
Cost of goods sold 10,528 9,205 14.4%
Gross profit 12,355 11,478 7.6%
% of net sales 54.0% 55.5%
Selling, general and administrative
expenses 7,621 5,894 29.3%
% of net sales 33.3% 28.5%
Income from operations 4,734 5,584 -15.2%
% of net sales 20.7% 27.0%
Interest expense (income), net 246 (142)
Other income, net (44) (53)
Income from operations before
provision for income taxes 4,532 5,779 -21.6%
Provision for income taxes 1,711 2,192 -21.9%
Net income 2,821 3,587 -21.3%
% of net sales 12.3% 17.3%
Basic earnings per share $0.31 $0.40 -22.5%
Basic weighted average shares
outstanding 9,065 8,925
Diluted earnings per share $0.31 $0.39 -20.5%
Diluted weighted average shares
outstanding 9,226 9,240
