News
MTS Medication Technologies Announces Results
ST. PETERSBURG, FLORIDA - November 6, 2007 - MTS Medication Technologies (AMEX:MPP) (www.mts-mt.com) today announced results for the second quarter and six months ended September 30, 2007.
Second Quarter Results
Net sales for the second quarter increased 9.3% to $14.1 million from $12.9 million in the same period of the prior year. Second quarter net income available to common stockholders rose 37.9% to $775,000, or $.12 per diluted common share, compared with $563,000 or $0.09 per diluted common share in the same period of the prior year.
Net sales in the U.S. from consumable products and prepackaging equipment in the second quarter increased 8.7% compared with the same period of the prior year. Second quarter net sales from OnDemand® and MedLockerTM systems decreased 50.8% compared with the same period of the prior year. Net sales in Europe were up 47% in the second quarter compared with the prior year period.
Gross margin for the second quarter was 41.4% compared with 38.2% for the same period in the prior year. Gross margins increased primarily due to changes in product mix between machines and various forms of consumable products.
SG&A expenses for the second quarter were $3.8 million compared with $3.2 million for the same period of the prior year. SG&A expenses increased primarily due to higher costs in Europe associated with personnel added to accommodate the growth in business opportunities as well as the additional overhead costs associated with operations in Germany that were acquired in February 2007.
Second quarter operating profit increased 36.4% to $1.5 million compared with $1.1 million in the prior year primarily due to higher gross profit realized on higher net sales.
Six-Month Results
Net sales for the six months ended September 30, 2007 increased 18.4% to $28.9 million from $24.4 million in the same period of the prior year. Net income available to common stockholders increased 37.7% to $1.3 million, or $0.19 per diluted share, compared with $944,000, or $0.15 per diluted common share, in the prior year.
Net sales in the U.S. from consumable products and prepackaging equipment for the six months ended September 30, 2007 increased 11.9% compared with the same period of the prior year. Net sales from OnDemand and MedLocker systems increased 51.6% compared with the same period of the prior year. Net sales in Europe were up 44.3% for the six-month period compared with the prior year period.
Gross margin for the six months ended September 30, 2007 was 39.1% compared with 37.8% for the same period in the prior year. This increase in gross margin was primarily caused by changes in product mix between machines and various forms of consumable products as well as additional product margin contributed by higher sales of consumable products.
SG&A expenses were $7.6 million compared with $6.2 million for the same period of the prior year. This increase was primarily due to higher selling costs, employee severance arrangements, automation support costs and increased costs associated with European operations.
Operating profit for the six months ended September 30, 2007 increased 31.6% to $2.5 million compared with $1.9 million in the same period of the prior year primarily due to higher gross profit realized on higher net sales.
Todd Siegel, President and Chief Executive Officer, says, “Our financial results for the second quarter and six months have been positively impacted by strong growth in our core long-term care consumable product sales and continued growth in Europe. The acquisition that we made in Germany last year is contributing to our penetration of the European markets and enhancing our profitability.
“We have now delivered six OnDemand machines at various pharmacy sites under the agreement we signed with our largest customer in April 2007. We expect that $17 million in revenue associated with this agreement should begin to be recognized in our third and fourth quarters and continue through fiscal year 2009. In addition, we currently have four OnDemand systems to be installed at other customer locations in the U.S. and Europe during the second half of this fiscal year and several other systems that are in the final stage of contract discussions.
“We believe our entry into the nutrition market is making excellent progress as we advanced our relationship with Douglas Labs with the recent sale of an OnDemand Multi-Med system that they have been using under the joint Market Development Agreement. We believe this exhibits their commitment to grow “Simply YoursTM” into a featured program in their product line. We are also conducting substantive discussions with several large retail pharmacy and nutritional companies about introducing compliance packaging to their customers and believe an additional trial with a large retailer will begin this fiscal year.
Siegel concluded, “As we look forward to the second half of fiscal 2008, we anticipate continued growth in our core long-term care market, strong results from our European operations and revenue associated with the OnDemand machine installations we have in process.”
Notice of Conference Call
Management of the Company will host a conference call Wednesday, November 7, 2007 at 8:30 A.M. EDT. To access the conference call, please telephone 888-459-5609 and enter 9408492 for the conference ID number. A digital replay will be available and may be accessed by visiting the Company’s web site at www.mts-mt.com.
About the Company
Founded in 1984, MTS Medication Technologies (www.mts-mt.com) is an international provider of medication compliance packaging systems designed to improve medication dispensing and administration. MTS manufactures automated packaging machines and related consumables for prescription medications and nutritional supplements. The Company serves approximately 8,000 pharmacies worldwide.