Otix Global Announces Results For Fourth Quarter 2009
SALT LAKE CITY, Feb. 16 /PRNewswire-FirstCall/ -- Otix Global, Inc. (Nasdaq: OTIX), a leading producer of advanced digital hearing aids, today announced results for the fourth quarter and year ended December 31, 2009.
- Achieved record fourth quarter 2009 sales from Rest-of-World segment of $8.4 million; realizing a 13.4 percent organic sales growth compared to the fourth quarter 2008.
- Generated $4.0 million and $2.2 million in operating cash flow for the fourth quarter and full year 2009, respectively.
- Began selling to the Veterans Administration in November 2009.
"I am pleased by the improvement in year-over-year sales in some of our international operations," said Sam Westover, Chairman and CEO. " North America operations continue to be hampered by the slow economy and our results in Germany were clearly impacted by legislative changes. Nevertheless, we remain optimistic about improvements in these operations and we will continue to focus on aligning expenses to revenue. We have several product launches planned in 2010. We have also begun selling our products to the Veterans Administration and we are looking forward to serving the needs of many of our American veterans in the upcoming years."
Net sales from continuing operations for the year ended December 31, 2009 decreased 23.3 percent over the same period in 2008 to $95.8 million. Net sales decreased 25.8 percent in North America, 32.8 percent in Europe, and 2.2 percent for Rest-of-World for the year ended December 31, 2009, compared to 2008. Fourth quarter 2009 net sales from continuing operations of $22.8 million were 16.3 percent lower than fourth quarter 2008 net sales of $27.3 million primarily due to legislative changes in Germany and the challenging global economic environment. North American sales of $7.3 million in the fourth quarter 2009 decreased 21.5 percent from 2008. European sales of $7.1 million in the fourth quarter 2009 decreased 43.2 percent from 2008 primarily as a result of legislative changes in Germany. Rest-of-World sales of $8.4 million in the fourth quarter 2009 were up 53.5 percent from 2008 as a result of organic growth of 13.4 percent and the weaker U.S. dollar.The Company's gross margin from continuing operations for the year ended December 31, 2009 was 60.7 percent compared to 63.2 percent for the year ended December 31, 2008, primarily as a result of the strengthening of the U.S. dollar, lower volume in manufacturing and higher warranty costs due to product mix. Gross profit from continuing operations was $14.4 million in the fourth quarter 2009 which was a decrease of 14.4 percent from 2008, and gross margin from continuing operations for the fourth quarter 2009 of 63.2 percent increased by 1.4 percent compared to 2008 gross margin of 61.8 percent primarily as a result of lower sales returns in North America wholesale, partially offset by lower volume in manufacturing. Selling, general and administrative expense was down 4.0 percent and 16.2 percent for the three and twelve months ended December 31, 2009 compared to same periods in 2008, respectively, due to cost cuts across North America and Europe. Research and development expense was $6.5 million in 2009 compared to $8.3 million in 2008, a year-over-year decline of $1.8 million. Research and development expense in the fourth quarter 2009 of $1.2 million decreased $0.7 million from $1.9 million in the fourth quarter of 2008. Goodwill and definite-lived intangible impairment charges were $30.7 million in 2009 compared to $2.1 million in 2008. We incurred impairment charges of $14.7 million in the first quarter of 2009 as a result of a Germany healthcare legislative change. During the third quarter of 2009 we closed one U.S. retail location and recorded a goodwill and definite-lived intangible impairment of $0.1 million. During the fourth quarter of 2009, based on declining market valuations and sales in our U.S. retail reporting unit, we recorded a $12.4 million goodwill impairment charge and a $3.5 million customer list impairment charge, resulting in a total impairment charge of $15.9 million. For the full year 2009, the Company recorded total restructuring charges of $0.6 million related to cost cutting initiatives. Loss from continuing operations for the year ended December 31, 2009 was $39.3 million or $1.42 per share, as compared with a loss from continuing operations of $3.7 million or $0.14 per share, for the year ended December 31, 2008. Fourth quarter 2009 loss from continuing operations, excluding restructuring charges and goodwill and definite-lived intangibles impairment charges, was $1.8 million or $0.07 per share compared with a fourth quarter 2008 loss of $0.6 million or $0.02 per share; the loss from continuing operations for the year ended 2009 was $8.0 million, or $0.29 per share, compared with income from continuing operations of $0.4 million or $0.02 per share, for the year ended December 31, 2008. As of December 31, 2009, the Company had cash and cash equivalents of $12.2 million. Otix Global designs, develops, manufactures and markets advanced digital hearing aids designed to provide the highest levels of satisfaction for hearing impaired consumers.
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