ST. LOUIS, July 23 /PRNewswire-FirstCall/ -- Young Innovations, Inc. today announced results for the quarter and six-months ended June 30, 2008.
Sales for the second quarter of 2008 were $25.9 million, increasing 4.3% over the $24.8 million reported for the second quarter of 2007. Income from operations decreased 11.1% to $5.2 million from $5.8 million in the prior year. Net income for the second quarter decreased 10.7% to $3.1 million from $3.5 million in 2007. Diluted earnings per share for the second quarter of 2008 were $0.38, an increase of 2.7% over the $0.37 reported in the prior year quarter. Diluted earnings per share were affected by equity compensation expense of $0.03 and $0.02 for quarters ended June 30, 2008 and 2007, respectively. Diluted shares outstanding for the quarter declined 12% to 8.2 million, which was primarily due to the repurchase of one million shares by the Company in August 2007.
For the six months ended June 30, 2008, sales were $50.3 million, increasing 5.4% over the $47.7 million reported in the prior year period. Income from operations decreased 7.7% to $9.7 million from $10.5 million in the prior year six-month period. Net income was $5.9 million, decreasing 5.7% from $6.3 million in the prior year. Diluted earnings per share were $0.72 for the six months ended June 30, 2008, an increase of 5.9% from $0.68 in the same period of 2007. Diluted earnings per share were affected by equity compensation expense of $0.06 and $0.03 for the six months ended June 30, 2008 and 2007, respectively. Diluted shares outstanding for the six months ended June 30, 2008 declined 11% to 8.2 million, which was primarily due to the repurchase of one million shares by the Company in August 2007.
The sales increase this quarter reflects solid overall demand for our products and strong sales in our home care product lines driven in part by a preannounced July 1, 2008 price increase. A weaker U.S. dollar also provided a benefit to sales of approximately $270,000. Our selling, general, and administrative expenses increased relative to the prior year, primarily due to ongoing investments in sales and marketing and higher equity compensation expense. Interest expense increased as a result of higher debt levels primarily related to the August 2007 repurchase of one million shares in addition to continued stock buy-back activity during the quarter.
The Company completed its second facility consolidation this year, with two additional facility consolidations expected prior to the end of the year. We also plan to introduce several new products in the next two quarters, and we continue to evaluate acquisitions and other opportunities to expand our product offering.
Overall, we are satisfied with the progress we made in the second quarter while we remain mindful of the overall economic environment as well as continued uncertainty with regard to dealer ordering patterns. As we enter the second half of the year, we are focused on successfully introducing several new products, increasing the effectiveness of our sales and marketing efforts and completing the remaining facility consolidations.
The Company also announced that on July 20, 2008 the Board of Directors declared a quarterly dividend of $0.04 per share payable on September 15, 2008 to all shareholders of record on August 15, 2008.
A conference call has been scheduled for Thursday, July 24, 2008 at 11:00 A.M. Central Time and can be accessed through InterCall at http://audioevent.mshow.com/345989/ or on the Company's website, http://www.ydnt.com/.
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 U.S. manufacturer or distributor of prophy angles and cups, liquid surface disinfectants, dental micro-applicators and obturation units designed for warm, vertical condensation.
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 Statements of Income (In Thousands, Except Earnings Per Share Data) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2008 2007 Change 2008 2007 Change Net Sales $25,903 $24,826 4.3% $50,298 $47,709 5.4% Cost of Goods Sold 12,112 11,247 7.7% 23,569 21,775 8.2% Gross Profit $13,791 $13,579 1.6% $26,729 $25,934 3.1% % of Net Sales 53.2% 54.7% 53.1% 54.4% Selling, General and Administrative Expense $8,639 $7,783 11.0% $17,007 $15,404 10.4% % of Net Sales 33.4% 31.4% 33.8% 32.3% Income from Operations $5,152 $5,796 -11.1% $9,722 $10,530 -7.7% % of Net Sales 19.9% 23.3% 19.3% 22.1% Interest expense, net $326 $157 $745 $403 Other (income) expense, net (40) 62 (365) 18 Income Before Taxes 4,866 5,577 -12.7% 9,342 10,109 -7.6% Provision for Income Taxes 1,765 2,105 3,410 3,816 Net Income $3,101 $3,472 -10.7% $5,932 $6,293 -5.7% % of Net Sales 12.0% 14.0% 11.8% 13.2% Basic Earnings Per Share $0.38 $0.38 0.0% $0.73 $0.69 5.8% Basic Weighted Average Shares Outstanding 8,080 9,125 8,136 9,095 Earnings Per Share (Diluted) $0.38 $0.37 2.7% $0.72 $0.68 5.9% Diluted Weighted Average Shares Outstanding 8,154 9,272 8,226 9,249 Young Innovations, Inc. Consolidated Balance Sheet June 30, 2008 and December 31, 2007 (In Thousands) (Unaudited) June 30 December 31 Assets 2008 2007 Current assets Cash $783 $528 Accounts receivable, net 12,949 13,074 Inventories 15,127 14,381 Other current assets 4,497 4,878 Total current assets 33,356 32,861 Property, plant and equipment, net 33,149 32,992 Goodwill 80,483 77,511 Intangible assets 10,868 11,133 Other assets 4,113 4,271 Total assets $161,969 $158,768 Liabilities and Equity Current liabilities Accounts payable and accrued liabilities $10,249 $7,370 Total current liabilities 10,249 7,370 Long-term debt 34,195 36,646 Long-term secured borrowing 1,936 - Deferred income taxes 11,611 11,414 Total liabilities 57,991 55,430 Stockholders' equity Common stock 102 102 Additional paid-in capital 24,613 25,024 Retained earnings 127,910 122,631 Common stock in treasury, at cost (48,989) (44,595) Accumulated other comprehensive income 342 176 Total stockholders' equity 103,978 103,338 Total liabilities and stockholders' equity $161,969 $158,768
