Thursday, July 23, 2009

Zoll reports earnings tumbled in Q3

By Mass High Tech Staff

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Zoll Medical Corp, hit hard by constrained hospital budgets during the economic downturn, is reporting that net income for the quarter ending June 30 has dropped by 74 percent from the same period last year.

The Chelmsford-based maker of heart defibrillators and other medical devices reported net income was approximately $1.5 million for the third quarter of the company’s fiscal year, which begins in October. Profits for the corresponding period in 2008 were $5.7 million.

Zoll (Nasdaq: ZOLL) reported revenue declined to $95.1 million year on year from $100.2 million. In addition, the company increased research and development expenditures to $10.8 million for the third quarter from $8.4 million for the same time period last year. The company’s income from operations dropped dramatically to $792,000 for the quarter, down from $8.6 million for the third quarter last year.

CEO Richard Packer wrote in a statement that “the (hospital) spending environment continues to be very challenging,” as hospitals put off capital expenditures to save money during the recession.

In April, Zoll recalled its AED Plus Defibrillators due to malfunctioning batteries and self-test software that fails to detect defective batteries.

Letters sent to customers alerted them of the problem in February, with a second letter being sent in March. Initially, Zoll recommended its customers replace defibrillator batteries every three years. The second letter suggested customers instead download new software for the defibrillators.