ZOLL Medical Corporation (NasdaqGS: ZOLL), a manufacturer of resuscitation devices and software solutions, today announced that revenues for the second quarter of fiscal 2010 increased 15% to $107.1 million, compared to revenues in the second quarter of last year of $92.7 million. Revenue results included a positive foreign exchange impact of approximately $2.2 million, compared to the second quarter of fiscal 2009. The results also included approximately $4.0 million of revenue derived from the Temperature Management business, whose assets were acquired from Alsius Corporation in May 2009. Net income was $3.7 million for the quarter, an increase of 105%, compared to $1.8 million in the prior year. Diluted earnings per share were $0.17, compared to $0.08 in the prior year. Backlog at the end of the second quarter was approximately $22.2 million, as compared to approximately $8.0 million at the end of Q2 2009.
“Q2 was another solid quarter for ZOLL. We are pleased with our overall revenue growth. Our revenue growth in Q2 was primarily driven by growth in the LifeVest and the inclusion of the Temperature Management business.”
Second quarter sales to the North American market were $81.0 million, an increase of 16%, compared to $70.1 million for the prior-year period. Sales to the North American hospital market, including $2.3 million related to the Temperature Management business, increased 41% to $24.7 million, compared to $17.5 million for the same period last year. North American hospital revenues included US Military/Big Government sales of $4.0 million in the second quarter of fiscal 2010, compared to $1.4 million for the same period in the prior year. Excluding Military and Temperature Management, North American hospital sales increased 15%, compared to the same period last year. Sales to the North American pre-hospital market increased 6% to $49.9 million, compared to $47.1 million in the prior year. International sales, including $1.7 million related to the Temperature Management business, increased 15% to $26.1 million, compared to $22.7 million last year. LifeVest® revenues increased 59% to $16.7 million. Total AutoPulse® sales increased 12% to $4.5 million, compared to $4.0 million in the second quarter of last year.
Gross margin for the second quarter was 55%, compared to 52% in the second quarter of fiscal 2009. The increase primarily reflected improved pricing in the North American core defibrillator business. Other contributors included a positive impact from foreign exchange on foreign sales and an increased mix of sales from the LifeVest product, partially offset by the inclusion of our Temperature Management product sales.
Richard A. Packer, Chief Executive Officer of ZOLL, commented, "Q2 was another solid quarter for ZOLL. We are pleased with our overall revenue growth. Our revenue growth in Q2 was primarily driven by growth in the LifeVest and the inclusion of the Temperature Management business."
Commenting further on the year, Mr. Packer stated, "While the North American Hospital and EMS environments continue to face spending constraints, we are pleased to see our second consecutive quarter in which our core North American hospital defibrillator revenues have grown relative to the comparable quarter in the prior year. The Military business also had good revenues compared to the prior year. Excluding the positive impact of foreign exchange rates and the Temperature Management business, our International operations were relatively consistent with the prior year."
Mr. Packer concluded, "On an overall basis, the year is progressing well. The LifeVest and Temperature Management businesses are providing good growth opportunities. We expect our level of profitability to grow as we gain leverage in these high-growth businesses. We are pleased that we were able to exceed our earnings objective for Q2 while also building our backlog. While Q2 was definitely another step in the right direction, we remain cautiously optimistic on the recovery of our core defibrillator business. Accordingly, we are not changing our expectations for the second half of 2010, although we now expect total year earnings to be in the mid-80 cents range, reflecting our strong Q2."
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