Arrow International, Inc. (NASDAQ:ARRO), Reading, Pa., has reported net sales of $113.2 million for the fiscal quarter ended November 30, 2004, an increase of 9.8%, or $10.1 million, versus its prior fiscal year first quarter. Net income for the quarter was $13.6 million compared to $14.4 million in the first quarter of fiscal year 2004, a decrease of 5.5%. Adjusting for certain special items, as described below, net income was $15.5 million compared to $14.4 million in the prior fiscal year quarter, an increase of 7.6%. Diluted earnings per share were $0.31 compared to $0.33 in the first fiscal quarter of 2004 ($0.35 compared to $0.33 diluted earnings per share in the prior fiscal year period when adjusted for the special items).
Arrow's Chairman and CEO, Carl G. Anderson, Jr., stated, "The company moved forward in the first fiscal quarter of 2005 with significant growth in revenue, especially in the international markets. The first quarter fiscal year 2005 core growth rate of our base business, adjusted for favorable exchange rates and excluding Stepic distributed products, was +9.4% versus the prior year period. This core growth rate is roughly in line with our fourth quarter of fiscal year 2004."
Summary of Comparative Results, as Adjusted for Special Items:
Results of total company operations, excluding special items which include: research and development expenses for second generation LionHeart(TM) components incurred in the first quarter of fiscal year 2005, restructuring charges related to consolidation of certain manufacturing facilities and the relocation of its European Distribution Center incurred in the first quarter of fiscal year 2005, and step-up of inventory purchased from AB Medica S.p.A. in the first quarter of fiscal 2005.
(1) In the first quarter of fiscal year 2005, the company incurred research and development expenses of $1.0 million, or $0.01 diluted earnings per share, for development of the second generation power system and controller for the Arrow LionHeart(TM), the company's fully implantable Left Ventricular Assist System (LVAS). The company's remaining investment in the LionHeart(TM) includes $3.0 million of components and open purchase commitments usable with either the first or second generation electronics and $2.3 million in manufacturing equipment.
(2) In August 2004, the company initiated the consolidation of its operations at its Winston-Salem, NC and San Antonio, TX facilities into existing...