Young Innovations, Inc. Announces Results for 4th Quarter and the Year and Declares Dividend
(Nasdaq: YDNT) today announced results for the quarter and year ended
31, 2008
Sales for the fourth quarter of 2008 were
of 2007. Income from operations decreased 5.0% from
fourth quarter of 2007 to
income declined 13.0% to
fourth quarter of 2007. Diluted earnings per share decreased 7.0% in the
fourth quarter of 2008 to
effective tax rate for the fourth quarter of 2008 was 33.2%, lower than
expected primarily as a result of an adjustment to true-up the full year
effective rate. This tax adjustment resulted in a
earnings per share for the quarter. Diluted earnings per share in the fourth
quarter of 2007 included a
income earned at our operations in
also affected by equity compensation expense of
Sales for the year ended
from
from
year 2008 was
Diluted earnings per share were
2008
were increased by
Diluted earnings per share were also affected by equity compensation expense
of
Consistent with the third quarter, fourth quarter demand for our
consumable products continued to be strong and was offset by weak performance
in our diagnostic product line. Our consumable products, which include our
preventive, infection control, applicator and home care product lines, posted
solid growth in the quarter. Our diagnostic product line posted disappointing
results, with revenue
We believe this product line continues to be negatively affected by on-going
economic uncertainty, as we witnessed a significant increase in purchase
deferrals. A stronger U.S. dollar negatively impacted sales by approximately
benefit to sales of approximately
The gross margin for the quarter was negatively impacted by product mix
and by an adjustment implemented in the quarter which reallocated
approximately
into cost of goods sold. Because this adjustment was a reallocation of a full
year of expense in the fourth quarter, it impacted the comparability of the
fourth quarter gross margin to prior periods and made the fourth quarter gross
margin lower than it would have been had we made the adjustment over the
course of the year; the adjustment had no effect on the quarter’s operating
margin. We were generally pleased with the operating margin for the quarter,
as we carefully managed expenses given the uncertain economic environment,
adjusted staffing levels in certain areas of the business and began to realize
the benefits of the facility consolidations we have implemented over the past
two years.
We continued to make progress in implementing our strategy in the fourth
quarter. We added new products to several of our product lines, including a
fully integrated digital panoramic X-ray unit that complements the existing
film-based units in the diagnostic line. The homecare product line expanded
its offering of flavored examination gloves and pre-pasted toothbrushes and
the endodontic product line launched an improved obturation device. We expect
to launch a number of new products in 2009. We also continued to improve
operating efficiencies by completing four facility consolidations over the
course of the year in addition to the six consolidations completed during
2007.
Overall, we were pleased with the results posted by our consumable product
lines. We believe that our diagnostic product line will continue to be
challenged during the on-going period of economic uncertainty. Accordingly,
we have taken aggressive steps to appropriately reduce the cost structure used
to support the product line. Despite the challenges in the diagnostic product
line we are cautiously optimistic about the prospects for our consumable
product lines. We are continually evaluating the appropriate actions to
manage our business through a challenging economic time and remain confident
in our ability to do so. We currently believe that the operating efficiencies
we have implemented, including the recent facility consolidations, have the
Company well positioned to adapt to the current environment. We currently
expect these operating efficiencies to strengthen our 2009 gross and operating
margins compared to full-year 2008 results. We expect the 2009 effective tax
rate to be in the 35% to 36% range.
The Company also announced that the Board of Directors declared a
quarterly dividend of
2009
A conference call has been scheduled for
http://tinyurl.com/yiq4earnings 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 Twelve Months Ended
December 31, December 31,
2008 2007 Change 2008 2007 Change
Net Sales $23,923 $25,041 -4.5% $99,143 $97,402 1.8%
Cost of Goods Sold $11,519 11,948 -3.6% $46,847 45,623 2.7%
Gross Profit $12,404 $13,093 -5.3% $52,296 $51,779 1.0%
% of Net Sales 51.8% 52.3% 52.7% 53.2%
Selling, General and
Administrative Expense $7,581 8,014 -5.4% $32,543 31,019 4.9%
% of Net Sales 31.7% 32.0% 32.8% 31.8%
Income from Operations 4,823 5,079 -5.0% 19,753 20,760 -4.9%
% of Net Sales 20.2% 20.3% 19.9% 21.3%
Interest expense, net 263 348 1,332 1,109
Other (income) expense,
net (82) (10) (465) 41
Income Before Taxes 4,642 4,741 -2.1% 18,886 19,610 -3.7%
Provision for Income
Taxes 1,541 1,176 6,705 6,677
Net Income $3,101 $3,565 -13.0% $12,181 $12,933 -5.8%
% of Net Sales 13.0% 14.2% 12.3% 13.3%
Basic Earnings Per
Share $0.40 $0.43 -7.0% $1.52 $1.46 4.1%
Basic Weighted Average
Shares Outstanding 7,812 8,214 $7,999 $8,828
Earnings Per Share
(Diluted) $0.40 $0.43 -7.0% $1.51 $1.44 4.9%
Diluted Weighted
Average Shares
Outstanding 7,832 8,373 $8,069 8,982
Young Innovations, Inc.
Consolidated Balance Sheet
December 31, 2008 and December 31, 2007
(In Thousands)
December 31 December 31
Assets 2008 2007
Current assets
Cash $536 $528
Accounts receivable, net 10,421 13,074
Inventories 16,486 14,381
Other current assets 4,759 4,878
Total current assets 32,202 32,861
Property, plant and equipment, net 32,905 32,992
Goodwill 80,334 77,511
Intangible assets 10,602 11,133
Other assets 3,402 4,271
Total assets $159,445 $158,768
Liabilities and Equity
Current liabilities
Accounts payable and accrued liabilities $8,709 $7,370
Total current liabilities 8,709 7,370
Long-term debt 29,349 36,646
Long-term secured borrowing 1,281 -
Deferred income taxes 13,829 11,414
Total liabilities 53,168 55,430
Stockholders' equity
Common stock 102 102
Additional paid-in capital 25,336 25,024
Retained earnings 133,531 122,631
Common stock in treasury, at cost (52,673) (44,595)
Accumulated other comprehensive income (19) 176
Total stockholders' equity 106,277 103,338
Total liabilities and stockholders' equity $159,445 $158,768
SOURCE Young Innovations, Inc.