ZVXI Zevex International (MM)

ZEVEX International Inc. (NASDAQ:ZVXI): Revenue for third quarter up by 28% to $10.4 million year-over-year Revenue for first nine months up by 51% to $31.5 million year-over-year Net income for first nine months was $3.4 million, or $0.55 per share CEO raises projection for year-over-year revenue growth in 2006 to 35% ZEVEX International Inc. (NASDAQ: ZVXI) reported financial results for the three- and nine-month periods ended September 30, 2006. Revenue for the third quarter of 2006 increased by 28% to $10.4 million, compared to revenue of $8.1 million for the third quarter of 2005. Net income for the third quarter of 2006 was $419,000, or $0.07 per share, compared to $785,000, or $0.15 per share, for the third quarter of 2005. Operating income decreased to $706,000, or 7% of revenue, in the third quarter of 2006, compared to $805,000, or 10% of revenue, for the third quarter of 2005. David J. McNally, ZEVEX�s President and CEO, said, �Based upon the progress that we have made in revenue growth during the first nine months of 2006, we are raising our projection for year-over-year revenue growth in 2006 to 35%. We have achieved strong revenue growth through the first nine months of 2006, and we believe that we can continue to achieve year-over-year growth during the fourth quarter.� Therapeutics Division Revenue Total revenue from the Therapeutics Division for the third quarter of 2006 increased by more than 56%, to $7.4 million, compared to $4.7 million for the third quarter of 2005. Outside the U.S., international Therapeutics revenue from the sale of pumps, disposable set components, and pump servicing increased by 139%, to $3.9 million, compared to $1.6 million for the third quarter of 2005. This increase was due primarily to increased sales to the Company�s largest customer and international distribution partner, Nutricia Clinical. Within the U.S., domestic Therapeutics revenue increased by 14% to $3.6 million, compared to $3.1 million for the third quarter of 2005. During the first nine months of 2006, revenue from the Therapeutics Division increased by 85%, to $20.7 million, compared to $11.2 million for the first nine months of 2005. International Therapeutics revenue from the sale of pumps, disposable set components, and pump servicing increased by 297%, to $11 million, compared to $2.8 million for the first nine months of 2005. Domestic Therapeutics Division revenue increased by 15%, to $9.7 million, compared to $8.4 million for the first nine months of 2005. Sales from the Therapeutics Division accounted for 71% of total revenue for the third quarter of 2006 and 66% of total revenue for the first nine months of 2006. Applied Technology Division Revenue Total revenue from the Applied Technology Division for the third quarter of 2006 decreased by 11%, to $3 million, compared to $3.4 million for the third quarter of 2005. Specifically, revenue from sensors and handpieces decreased by 7% to $2.5 million, from $2.7 million for the third quarter of 2005. Revenue from systems declined 39% to $360,000, from $590,000 for the third quarter of 2005. These decreases in revenue from sensors and handpieces, as well as systems, were due to the normal fluctuations in demand in this division. Revenue from engineering services increased by 35% to $180,000, compared to $135,000 for the third quarter of 2005. During the first nine months of 2006, revenue from the Applied Technology Division increased by 11%, to $10.8 million, compared to $9.7 million for the first nine months of 2005. Specifically, revenue from sensors and handpieces increased by 21%, to $8.7 million, compared to $7.2 million for the first nine months of 2005. Revenue from systems declined by 35%, to $1.4 million, from $2.2 million for the first nine months of 2005. Again, this decrease in systems revenue is due to the normal fluctuations in demand in this division. Revenue from engineering services increased by 99%, to $620,000, compared to $310,000 for the first nine months of 2005. Sales from the Applied Technology Division accounted for 29% of total revenue for the third quarter of 2006 and 34% of total revenue for the first nine months of 2006. Operating Income Operating income for the third quarter of 2006 decreased to $705,000, or 7% or revenue, compared to $804,000, or 10% or revenue, for the third quarter of 2005. This decrease was primarily the result of a $500,000 increase in operating expenses, including sales and marketing, research and development, and general and administrative expenses. Operating income increased to $2.7 million, or 8% of revenue, for the first nine months of 2006, compared to $1.1 million, or 5% of revenue, for the first nine months of 2005. This increase is primarily the result of increased revenue in 2006 and the resulting increase in gross profit, which was partially offset by increases in general and administrative, sales and marketing, and research and development expenses. Net Income Net income for the third quarter of 2006 was $419,000, or $0.07 per share, compared to $785,000, or $0.15 per share, for the third quarter of 2005. This decrease is due primarily to a $297,000 increase in tax expense, together with increased general and administrative, sales and marketing, and research and development expenses. Net income for the first nine months of 2006 was $3.4 million, or $0.55 per share, compared to $1 million, or $0.19 per share for the first nine months of 2005. Notably, net income for the first nine months of 2006 includes $948,000 (net of legal fees), received as a settlement payment from a patent infringement lawsuit. Furthermore, net income for the first nine months of 2006 includes benefits for income taxes from reversals of a valuation allowance, which reduced the Company�s tax expenses during the first and second quarters of 2006. Mr. McNally continued, �We are pleased by the continued revenue growth of our Therapeutics Division. International revenue growth in that division continues to be excellent, primarily driven by sales of Flocare� Infinity� portable feeding pumps, disposable set components, and pump service that we provide to our largest customer and international distribution partner, Nutricia Clinical. Our domestic Therapeutics sales team drove sales growth of 14% during the quarter, based upon the continued strength of our EnteraLite� Infinity� and EnteraLite� portable feeding pumps, as well as our stationary pumps. �We are pleased that the revenue from our Applied Technology Division has increased by 11% during the first nine months of 2006, compared to the same period of 2005. During the third quarter of 2006, however, we experienced a revenue decline of $375,000, compared to the third quarter of 2005. We primarily attribute this decrease to a temporary decline in demand from one of our largest sensor customers, which we expect will increase again during the next two quarters. Further, it is not unusual for us to experience fluctuations, from time to time, in the demand from some of our largest Applied Technology Division customers. In order to mitigate these fluctuations, our strategy is to continue to expand and diversify both our customers and our products. In this regard, we believe that the strong revenue from our engineering services for the third quarter and for the first nine months of 2006, indicates that revenue from this division will likely grow in the future. �We are delighted to report record net income for the first nine months of 2006,� continued Mr. McNally. �Our gross margins as a percentage of sales, however, declined from 38% during the third quarter of 2005 to 34% during the third quarter of 2006. This decrease was the result of the product mix during the quarter, which included significant low-margin revenue from the servicing of pumps within our Therapeutics Division. In the first half of 2007, however, we believe that we can recapture the overall decline in our gross margins from both higher margin revenue in our Applied Technology Division and from on-going cost reduction programs in our Therapeutics Division. During the third quarter, our net income was also impacted by taxes and increased general and administrative expenses, as well as by our increased investments in sales and marketing, and research and development. �I would like to remind investors that the large tax benefits that we enjoyed through 2005 and during the first half of 2006 have expired. This quarter�s results reflect the impact of taxes on our earnings. Further, we reiterate that our initial compliance activities related to the internal control requirements of Sarbanes Oxley 404 will lead to additional expenses during the fourth quarter of this year. We also expect to incur expenses of approximately $100,000 during the fourth quarter related to stock option and restricted stock unit awards, as we did in the third quarter. In view of these factors, and barring any unforeseen circumstances, we expect to achieve operating profit of 7% to 9% in the next quarter.� Tables to Follow ZEVEX INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS � Three months ended Nine months ended September 30, September 30, 2006� 2005� 2006� 2005� (unaudited) (unaudited) � (unaudited) (unaudited) Revenue: Product sales $10,260,922� $7,985,249� $30,857,138� $20,512,430� Engineering services 181,558� 151,974� 654,315� 406,610� Total revenue 10,442,480� 8,137,223� 31,511,453� 20,919,040� � Cost of sales 6,932,666� 5,056,861� 20,562,223� 13,183,688� Gross profit 3,509,814� 3,080,362� 10,949,230� 7,735,352� � Operating expenses: General and administrative 1,273,201� 1,125,484� 3,999,423� 3,254,096� Selling and marketing 1,043,698� 819,716� 3,072,871� 2,492,773� Research and development 487,017� 330,242� 1,211,263� 895,870� Total operating expenses 2,803,916� 2,275,442� 8,283,557� 6,642,739� � Operating income 705,898� 804,920� 2,665,673� 1,092,613� � Other income (expense): Interest and other income 40,242� 12,337� 64,310� 28,892� Patent infringement settlement -� -� 947,760� -� Interest expense (30,749) (31,774) (100,867) (119,766) Income before income taxes 715,391� 785,483� 3,576,876� 1,001,739� � Provision for income taxes (296,859) -� (196,970) (2,635) � Net income $ 418,532� $ 785,483� $ 3,379,906� $ 999,104� � � Basic net income per share $ 0.07� $ 0.15� $ 0.61� $ 0.20� � Weighted average shares outstanding 5,633,149� 5,110,936� 5,502,806� 5,106,823� � Diluted net income per share $ 0.07� $ 0.15� $ 0.55� $ 0.19� � Diluted weighted average shares outstanding 6,323,146� 5,363,213� 6,189,496� 5,297,835� ZEVEX INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS � September 30, December 31, 2006� 2005� ASSETS (unaudited) � � � Current assets Cash and cash equivalents $ 3,362,761� $ 1,284,218� Designated cash for sinking fund payment on industrial development bond 65,509� 89,037� Accounts receivable, net of allowance for doubtful accounts of $129,000 at September 30, 2006 and $130,000 at December 31, 2005 7,430,511� 5,641,229� Inventories 5,454,909� 4,586,418� Deferred income taxes 511,634� -� Prepaid expenses and other current assets 515,438� 213,612� Total current assets 17,340,762� 11,814,514� � Property and equipment, net 4,562,326� 4,639,136� Patents, trademarks and other intangibles, net 341,182� 348,467� Goodwill, net 4,048,264� 4,048,264� Deferred income taxes, non-current 204,692� -� Total assets $ 26,497,226� $ 20,850,381� � LIABILITIES AND STOCKHOLDERS' EQUITY � Current liabilities Accounts payable $ 2,690,273� $ 2,462,071� Other accrued liabilities 1,506,773� 1,293,876� Deferred revenue -� 52,081� Current portion of industrial development bond 100,000� 100,000� Current portion of other long-term debt 58,557� 56,219� Total current liabilities 4,355,603� 3,964,247� � Industrial development bond 1,000,000� 1,100,000� Other long-term debt 665,928� 710,143� � Stockholders' equity Common stock; $.001 par value, 22,000,000 authorized shares, 5,692,543 issued and 5,633,841 outstanding at September 30, 2006 and 5,349,890 issued and 5,291,040 outstanding at December 31, 2005 � � 5,692� 5,350� Additional paid in capital 18,746,436� 16,719,396� Unrealized loss on marketable securities (5,850) -� Treasury stock, 58,702 shares (at cost) at September 30, 2006 and 58,850 shares (at cost) at December 31, 2005 (89,085) (89,422) Retained earnings (accumulated deficit) 1,818,502� (1,559,333) Total stockholders' equity 20,475,695� 15,075,991� Total liabilities and stockholders' equity $ 26,497,226� $ 20,850,381� CONFERENCE CALL ZEVEX International Inc. invites all those interested to join the ZEVEX management team for its earnings conference call for the third quarter ended September 30, 2006. The call will be held Tuesday, October 31, 2006 at 2:30 p.m. Mountain Time (4:30 p.m. Eastern, 3:30 p.m. Central, and 1:30 p.m. Pacific). The telephone numbers for the call are as follows: Domestic: 1-800-257-7087 International: 1-303-262-2138 A live webcast and a rebroadcast of the conference call will be available on the Company�s website at www.zevex.com. To listen to the live broadcast, please enter the site 10-15 minutes prior to the call in order to download any necessary software. ABOUT ZEVEX ZEVEX International, Inc., (www.zevex.com), founded in 1986, is a diversified medical device company committed to creating products that transform life with patented and proprietary medical device technologies � from sensors and surgical tools to medical electronic systems. Forward-Looking Statements Statements made in this press release, including those relating to anticipated growth and other statements regarding future performance, are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Among other things, the Company�s efforts to improve its sales and margins in its core businesses may not be effective or such efforts could be more difficult or expensive than the Company currently anticipates. Moreover, the Company could experience delays in orders for its contract manufacturing products or in the launch of planned new products that could delay the receipt of anticipated revenue. In addition to the foregoing, the economic, competitive, governmental, technological and other factors identified in the Company�s filings with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2005, may cause actual results or events to differ materially from those described in the forward-looking statements in this press release. ZEVEX International Inc. (NASDAQ:ZVXI): -- Revenue for third quarter up by 28% to $10.4 million year-over-year -- Revenue for first nine months up by 51% to $31.5 million year-over-year -- Net income for first nine months was $3.4 million, or $0.55 per share -- CEO raises projection for year-over-year revenue growth in 2006 to 35% ZEVEX International Inc. (NASDAQ: ZVXI) reported financial results for the three- and nine-month periods ended September 30, 2006. Revenue for the third quarter of 2006 increased by 28% to $10.4 million, compared to revenue of $8.1 million for the third quarter of 2005. Net income for the third quarter of 2006 was $419,000, or $0.07 per share, compared to $785,000, or $0.15 per share, for the third quarter of 2005. Operating income decreased to $706,000, or 7% of revenue, in the third quarter of 2006, compared to $805,000, or 10% of revenue, for the third quarter of 2005. David J. McNally, ZEVEX's President and CEO, said, "Based upon the progress that we have made in revenue growth during the first nine months of 2006, we are raising our projection for year-over-year revenue growth in 2006 to 35%. We have achieved strong revenue growth through the first nine months of 2006, and we believe that we can continue to achieve year-over-year growth during the fourth quarter." Therapeutics Division Revenue Total revenue from the Therapeutics Division for the third quarter of 2006 increased by more than 56%, to $7.4 million, compared to $4.7 million for the third quarter of 2005. Outside the U.S., international Therapeutics revenue from the sale of pumps, disposable set components, and pump servicing increased by 139%, to $3.9 million, compared to $1.6 million for the third quarter of 2005. This increase was due primarily to increased sales to the Company's largest customer and international distribution partner, Nutricia Clinical. Within the U.S., domestic Therapeutics revenue increased by 14% to $3.6 million, compared to $3.1 million for the third quarter of 2005. During the first nine months of 2006, revenue from the Therapeutics Division increased by 85%, to $20.7 million, compared to $11.2 million for the first nine months of 2005. International Therapeutics revenue from the sale of pumps, disposable set components, and pump servicing increased by 297%, to $11 million, compared to $2.8 million for the first nine months of 2005. Domestic Therapeutics Division revenue increased by 15%, to $9.7 million, compared to $8.4 million for the first nine months of 2005. Sales from the Therapeutics Division accounted for 71% of total revenue for the third quarter of 2006 and 66% of total revenue for the first nine months of 2006. Applied Technology Division Revenue Total revenue from the Applied Technology Division for the third quarter of 2006 decreased by 11%, to $3 million, compared to $3.4 million for the third quarter of 2005. Specifically, revenue from sensors and handpieces decreased by 7% to $2.5 million, from $2.7 million for the third quarter of 2005. Revenue from systems declined 39% to $360,000, from $590,000 for the third quarter of 2005. These decreases in revenue from sensors and handpieces, as well as systems, were due to the normal fluctuations in demand in this division. Revenue from engineering services increased by 35% to $180,000, compared to $135,000 for the third quarter of 2005. During the first nine months of 2006, revenue from the Applied Technology Division increased by 11%, to $10.8 million, compared to $9.7 million for the first nine months of 2005. Specifically, revenue from sensors and handpieces increased by 21%, to $8.7 million, compared to $7.2 million for the first nine months of 2005. Revenue from systems declined by 35%, to $1.4 million, from $2.2 million for the first nine months of 2005. Again, this decrease in systems revenue is due to the normal fluctuations in demand in this division. Revenue from engineering services increased by 99%, to $620,000, compared to $310,000 for the first nine months of 2005. Sales from the Applied Technology Division accounted for 29% of total revenue for the third quarter of 2006 and 34% of total revenue for the first nine months of 2006. Operating Income Operating income for the third quarter of 2006 decreased to $705,000, or 7% or revenue, compared to $804,000, or 10% or revenue, for the third quarter of 2005. This decrease was primarily the result of a $500,000 increase in operating expenses, including sales and marketing, research and development, and general and administrative expenses. Operating income increased to $2.7 million, or 8% of revenue, for the first nine months of 2006, compared to $1.1 million, or 5% of revenue, for the first nine months of 2005. This increase is primarily the result of increased revenue in 2006 and the resulting increase in gross profit, which was partially offset by increases in general and administrative, sales and marketing, and research and development expenses. Net Income Net income for the third quarter of 2006 was $419,000, or $0.07 per share, compared to $785,000, or $0.15 per share, for the third quarter of 2005. This decrease is due primarily to a $297,000 increase in tax expense, together with increased general and administrative, sales and marketing, and research and development expenses. Net income for the first nine months of 2006 was $3.4 million, or $0.55 per share, compared to $1 million, or $0.19 per share for the first nine months of 2005. Notably, net income for the first nine months of 2006 includes $948,000 (net of legal fees), received as a settlement payment from a patent infringement lawsuit. Furthermore, net income for the first nine months of 2006 includes benefits for income taxes from reversals of a valuation allowance, which reduced the Company's tax expenses during the first and second quarters of 2006. Mr. McNally continued, "We are pleased by the continued revenue growth of our Therapeutics Division. International revenue growth in that division continues to be excellent, primarily driven by sales of Flocare(R) Infinity(R) portable feeding pumps, disposable set components, and pump service that we provide to our largest customer and international distribution partner, Nutricia Clinical. Our domestic Therapeutics sales team drove sales growth of 14% during the quarter, based upon the continued strength of our EnteraLite(R) Infinity(R) and EnteraLite(R) portable feeding pumps, as well as our stationary pumps. "We are pleased that the revenue from our Applied Technology Division has increased by 11% during the first nine months of 2006, compared to the same period of 2005. During the third quarter of 2006, however, we experienced a revenue decline of $375,000, compared to the third quarter of 2005. We primarily attribute this decrease to a temporary decline in demand from one of our largest sensor customers, which we expect will increase again during the next two quarters. Further, it is not unusual for us to experience fluctuations, from time to time, in the demand from some of our largest Applied Technology Division customers. In order to mitigate these fluctuations, our strategy is to continue to expand and diversify both our customers and our products. In this regard, we believe that the strong revenue from our engineering services for the third quarter and for the first nine months of 2006, indicates that revenue from this division will likely grow in the future. "We are delighted to report record net income for the first nine months of 2006," continued Mr. McNally. "Our gross margins as a percentage of sales, however, declined from 38% during the third quarter of 2005 to 34% during the third quarter of 2006. This decrease was the result of the product mix during the quarter, which included significant low-margin revenue from the servicing of pumps within our Therapeutics Division. In the first half of 2007, however, we believe that we can recapture the overall decline in our gross margins from both higher margin revenue in our Applied Technology Division and from on-going cost reduction programs in our Therapeutics Division. During the third quarter, our net income was also impacted by taxes and increased general and administrative expenses, as well as by our increased investments in sales and marketing, and research and development. "I would like to remind investors that the large tax benefits that we enjoyed through 2005 and during the first half of 2006 have expired. This quarter's results reflect the impact of taxes on our earnings. Further, we reiterate that our initial compliance activities related to the internal control requirements of Sarbanes Oxley 404 will lead to additional expenses during the fourth quarter of this year. We also expect to incur expenses of approximately $100,000 during the fourth quarter related to stock option and restricted stock unit awards, as we did in the third quarter. In view of these factors, and barring any unforeseen circumstances, we expect to achieve operating profit of 7% to 9% in the next quarter." Tables to Follow -0- *T ZEVEX INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended Nine months ended September 30, September 30, 2006 2005 2006 2005 (unaudited) (unaudited) (unaudited) (unaudited) ------------ ------------------------ ------------ Revenue: Product sales $10,260,922 $7,985,249 $30,857,138 $20,512,430 Engineering services 181,558 151,974 654,315 406,610 ------------ ----------- ------------ ------------ Total revenue 10,442,480 8,137,223 31,511,453 20,919,040 Cost of sales 6,932,666 5,056,861 20,562,223 13,183,688 ------------ ----------- ------------ ------------ Gross profit 3,509,814 3,080,362 10,949,230 7,735,352 Operating expenses: General and administrative 1,273,201 1,125,484 3,999,423 3,254,096 Selling and marketing 1,043,698 819,716 3,072,871 2,492,773 Research and development 487,017 330,242 1,211,263 895,870 ------------ ----------- ------------ ------------ Total operating expenses 2,803,916 2,275,442 8,283,557 6,642,739 Operating income 705,898 804,920 2,665,673 1,092,613 Other income (expense): Interest and other income 40,242 12,337 64,310 28,892 Patent infringement settlement - - 947,760 - Interest expense (30,749) (31,774) (100,867) (119,766) ------------ ----------- ------------ ------------ Income before income taxes 715,391 785,483 3,576,876 1,001,739 Provision for income taxes (296,859) - (196,970) (2,635) ------------ ----------- ------------ ------------ Net income $418,532 $785,483 $3,379,906 $999,104 ============ =========== ============ ============ Basic net income per share $0.07 $0.15 $0.61 $0.20 ============ =========== ============ ============ Weighted average shares outstanding 5,633,149 5,110,936 5,502,806 5,106,823 ============ =========== ============ ============ Diluted net income per share $0.07 $0.15 $0.55 $0.19 ============ =========== ============ ============ Diluted weighted average shares outstanding 6,323,146 5,363,213 6,189,496 5,297,835 ============ =========== ============ ============ *T -0- *T ZEVEX INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS September 30, December 31, 2006 2005 ASSETS (unaudited) -------------------------- Current assets Cash and cash equivalents $3,362,761 $1,284,218 Designated cash for sinking fund payment on industrial development bond 65,509 89,037 Accounts receivable, net of allowance for doubtful accounts of $129,000 at September 30, 2006 and $130,000 at December 31, 2005 7,430,511 5,641,229 Inventories 5,454,909 4,586,418 Deferred income taxes 511,634 - Prepaid expenses and other current assets 515,438 213,612 ------------- ------------ Total current assets 17,340,762 11,814,514 Property and equipment, net 4,562,326 4,639,136 Patents, trademarks and other intangibles, net 341,182 348,467 Goodwill, net 4,048,264 4,048,264 Deferred income taxes, non-current 204,692 - ------------- ------------ Total assets $26,497,226 $20,850,381 ============= ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $2,690,273 $2,462,071 Other accrued liabilities 1,506,773 1,293,876 Deferred revenue - 52,081 Current portion of industrial development bond 100,000 100,000 Current portion of other long-term debt 58,557 56,219 ------------- ------------ Total current liabilities 4,355,603 3,964,247 Industrial development bond 1,000,000 1,100,000 Other long-term debt 665,928 710,143 Stockholders' equity Common stock; $.001 par value, 22,000,000 authorized shares, 5,692,543 issued and 5,633,841 outstanding at September 30, 2006 and 5,349,890 issued and 5,291,040 outstanding at December 31, 2005 5,692 5,350 Additional paid in capital 18,746,436 16,719,396 Unrealized loss on marketable securities (5,850) - Treasury stock, 58,702 shares (at cost) at September 30, 2006 and 58,850 shares (at cost) at December 31, 2005 (89,085) (89,422) Retained earnings (accumulated deficit) 1,818,502 (1,559,333) ------------- ------------ Total stockholders' equity 20,475,695 15,075,991 ------------- ------------ Total liabilities and stockholders' equity $26,497,226 $20,850,381 ============= ============ *T CONFERENCE CALL ZEVEX International Inc. invites all those interested to join the ZEVEX management team for its earnings conference call for the third quarter ended September 30, 2006. The call will be held Tuesday, October 31, 2006 at 2:30 p.m. Mountain Time (4:30 p.m. Eastern, 3:30 p.m. Central, and 1:30 p.m. Pacific). The telephone numbers for the call are as follows: Domestic: 1-800-257-7087 International: 1-303-262-2138 A live webcast and a rebroadcast of the conference call will be available on the Company's website at www.zevex.com. To listen to the live broadcast, please enter the site 10-15 minutes prior to the call in order to download any necessary software. ABOUT ZEVEX ZEVEX International, Inc., (www.zevex.com), founded in 1986, is a diversified medical device company committed to creating products that transform life with patented and proprietary medical device technologies - from sensors and surgical tools to medical electronic systems. Forward-Looking Statements Statements made in this press release, including those relating to anticipated growth and other statements regarding future performance, are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Among other things, the Company's efforts to improve its sales and margins in its core businesses may not be effective or such efforts could be more difficult or expensive than the Company currently anticipates. Moreover, the Company could experience delays in orders for its contract manufacturing products or in the launch of planned new products that could delay the receipt of anticipated revenue. In addition to the foregoing, the economic, competitive, governmental, technological and other factors identified in the Company's filings with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2005, may cause actual results or events to differ materially from those described in the forward-looking statements in this press release.