ZOLL Medical Corporation (ZOLL Medical), a cardiovascular devices company, has reported revenues of $92.71 million for the second quarter of fiscal 2009, down 7%, compared with the revenues of $99.16 million in the year-ago quarter. It has also reported net income of $1.78 million, or $0.08 per share, for the second quarter of fiscal 2009, compared with the net income of $5.65 million, or $0.27 per share, in the year-ago quarter.
Second quarter sales to the North American market were $70 million, a decrease of 6% compared to $74.6 million for the prior-year period. Sales to the North American hospital market decreased 37% to $17.5 million, compared to $27.9 million for the same period last year. North American hospital revenues included US Military/Big Government sales of $1.4 million in Q2 of 2009, compared to $3.7 million in Q2 of 2008. Sales to the North American pre-hospital market increased 15% to $47.1 million, compared to $41.0 million in the prior year. International sales decreased 8% to $22.7 million, compared to $24.6 million in the prior year, including the impact from foreign exchange. LifeVest revenues increased 78% to $10.5 million. Total AutoPulse sales increased 18% to $4.0 million, compared to $3.4 million in the second quarter of last year.
Gross margin for the second quarter was 52%, compared to 54% in the second quarter of fiscal 2008. The primary reason for the decrease was the result of a stronger US dollar relative to the prior-year quarter.
Commenting on second quarter results, Richard A. Packer, chief executive officer of ZOLL Medical, stated, “Unlike the first quarter of fiscal 2009, when we over-performed in our pre-hospital and International markets, our performance in those markets during Q2 was not enough to offset the reduced spending we continued to see in the North American hospital market. In addition, we received very little military business during the quarter. Taken together, and combined with the foreign exchange headwind, which cost us about 12 cents when compared to last year’s rates, we achieved only modest results this quarter.”
“With respect to specific products,” Packer noted, “we continued to see excellent growth from our LifeVest business as that business continues to accelerate. Our AutoPulse growth was solid compared to Q2 of last year, although we note that orders were down modestly on a sequential basis, presumably due to the tight capital spending environment. However, we continued to see growth from our data management business despite the current difficult economy. Finally, AED revenues were down from a year ago, as expected, as much of the spending on public access AEDs has slowed.”
Packer added, “Looking forward, we continue to see only very modest results in 2009. We expect continued constraints in capital equipment spending and a significant foreign exchange headwind. However, in spite of these challenges, we will continue to push forward to accelerate the expansion of our LifeVest sales force and we look forward to adding revenue in 2009 from our pending acquisition of the Alsius temperature management product line, as previously discussed. Where appropriate, we continue to reduce spending on our core business to help fund these investments. We anticipate that these investments will help us establish a very strong competitive position in markets which we believe will offer significant long-term growth and profit opportunities for ZOLL.”
Packer concluded, “Q2 was an obvious disappointment for us. However, we are taking the actions now which will position us well in our core markets. Our profitability will improve significantly when capital spending eventually picks up and overall business conditions improve. In addition, given our strong balance sheet, we continue to move aggressively to build strength in higher growth markets that have the potential to yield significantly higher levels of profitability. As we plow through the current rough conditions, we are focused on building a much larger, more profitable Company which will be the clear leader in resuscitation.”