Horizon Medical Products Foresees Improved Margins, Market Share and Return To Profitability in 2001 as a Result of Profit Improvement Program

Reports Year-2000 Loss, Reflecting Inventory Write-Off and Other

De-Leveraging, as Focus Shifts From Acquisitions to Developing Proprietary

Products



Apr 03, 2001, 01:00 ET from Horizon Medical Products, Inc.

    ATLANTA, April 3 /PRNewswire/ -- HMP -- Horizon Medical Products, Inc.
 (Amex:   HMP) today announced a broad-reaching program designed to maximize
 shareholder value by returning the Company to profitability and increasing
 sales, overall margins and market share.  According to the Company, these
 actions cap a yearlong effort to redirect HMP and improve its operations.
     This effort includes the completion of the following:
 
     *Entering into an agreement with Bank of America to address the existing
      default and to amend the payment schedule in 2001 under the Company's
      credit facility.
 
     *The sale of the Company's Ideas for Medicine product line, allowing HMP
      to focus on higher-growth product lines.
 
     *The appointment, to be announced shortly, of a new Chief Operating
      Officer with strong medical engineering and developmental skills, to
      manage HMP's new and future technology-driven product lines.
 
     *Streamlining manufacturing facilities to eliminate excess capacity and
      inventory while reducing fixed costs.  The Company will switch
      exclusively to in-house manufacturing of vascular access ports by
      August 1, and all other product lines by December 31, to further enhance
      manufacturing efficiencies.  Complimenting this change will be a major
      reduction in SKUs.
 
     *Rolling out a comprehensive line of vascular access ports, based on the
      Company's Vortex(TM) Technology, by the end of the third quarter.
      Accompanying this will be a change in our commission-based sales strategy
      to favor increased sales and sales prices of these higher-margin
      products.
 
     Separately, HMP reported a loss of $18.53 million, ($1.39) per diluted
 share for the fourth quarter ended December 31, 2000, compared to a loss of
 $261,000, ($0.02) cents per diluted share, in the year-ago period.  Net sales
 fell 24% to $13.8 million from $18.2 million in the year-ago period,
 reflecting a one-time shipping adjustment to customers to rationalize
 inventories in anticipation of new products.
     Reflecting a total of more than $20 million in aforementioned
 restructuring costs, HMP said it posted a year-2000 loss of $19.8 million,
 ($1.48) per diluted share, compared with net income of $1.67 million, 12 cents
 per diluted share, in 1999.  Net sales fell 16% to $63.3 million.  Shares
 outstanding remained unchanged at 13.4 million.
     Marshall B. Hunt, HMP's Chairman and CEO, said, "This year, we anticipate
 improved earnings visibility as a result of our enriched product mix,
 demonstrating the synergy we've always expected from the several medical
 device companies acquired since we went public in 1998.
     "We also expect improved earnings visibility in 2001 as a result of
 completed asset sales, inventory write-downs, consolidation, substantial cuts
 in selling, general and administrative expenses, and other actions related to
 our strategic refocus," Mr. Hunt said.  "The sale of our Ideas for Medicine
 assets to Vascutech, Inc. and our agreement with Bank of America, both
 announced yesterday, continue down this path."
     In its Form 10-K filed yesterday with the Securities and Exchange
 Commission, HMP posted 4th-quarter, 2000 and whole-year results that also
 reflect system upgrades and the write-down of goodwill and write-off of
 obsolete inventories.  "The restructuring plan and strategies for the
 Company's turnaround are now in place," Mr. Hunt said.
     "Horizon Medical Products has transformed its strategy from growth via
 acquisition to growth via product development," he added.  "Our shift in
 emphasis to higher-margin proprietary products from our broader line of
 medical devices should bring about an important improvement in the Company's
 results.  We also expect to see an improvement in customer service from some
 of our changes, such as the reduction in SKUs.
     "These latest efforts will conclude the challenging transition period that
 began last year under the leadership of Dick Redden, interim CEO of HMP and
 president and chief operating officer of The Osnos Group, a New York-based
 turnaround specialist," Mr. Hunt said.  The Osnos Group will continue to
 advise HMP management through the end of 2001.
     Mr. Redden noted that "HMP is now a major cash generator with significant
 resources, the most important being its people and its proprietary products."
 Messrs. Hunt and Redden stated that HMP is, in their opinion, better
 positioned than ever for future growth and profitability.
     As an example, Mr. Hunt cited the successful April 1 introduction of the
 Lifeport VTX(TM) Titanium Port, the first of the Company's new line of
 vascular access ports to combine Vortex(TM) Technology with proprietary
 features of existing models.
     "Going forward, we expect that adding Vortex(TM) Technology to several
 other brands will leverage our pricing power and will ultimately earn us the
 leading market share in vascular access ports, our biggest product line," he
 said.  "Last year, our customers supported a significant price increase in
 ports, despite a highly competitive pricing environment.  We expect an
 additional increase in 2001."
     In another example of HMP's shift to higher-margin proprietary product
 development, the Company plans to launch a new hemodialysis catheter in the
 fourth quarter, based on its patented Circle-C(TM) technology, that will have
 highest flow rate yet available in such a product.
 
     ABOUT HORIZON
     Horizon Medical Products, Inc. headquartered in Atlanta, is a specialty
 medical device company focused on manufacturing and marketing vascular access
 products.  The Company's oncology product lines include implantable ports,
 tunneled central venous catheters and stem-cell transplant catheters used
 primarily in cancer treatment protocols.  The Company also markets a complete
 line of acute and chronic dialysis catheters.
     Vortex(TM) Technology, which was introduced by Horizon Medical Products in
 March 2000, refers to the swirling blood flow produced by a uniquely rounded
 reservoir design and tangential outlet that virtually eliminates thrombosis,
 or the buildup of sludge from blood and drug byproducts, in the port
 reservoir, and reduces certain complications that require additional surgery.
 
     SAFE HARBOR:  Certain statements and information included herein may
 constitute "forward-looking statements" which are made pursuant to the safe
 harbor provisions of the Private Securities Litigation reform Act of 1995.
 The forward-looking statements are based on current expectations and may be
 significantly impacted by certain risks and uncertainties described herein and
 various documents filed by the Company with the US Securities and Exchange
 Commission, including but not limited to the Company's Prospectus on Form S-1
 and the Company's Annual Report on Form 10-K for the year ended December 31,
 2000.  There can be no assurance that statements made in this press release
 relating to future events will be achieved.  The Company undertakes no
 obligation to update or revise forward-looking statements to reflect changed
 assumptions, the occurrence of unanticipated events or changes to future
 operating results over time.
 
      The Company will hold a conference call to discuss its fourth quarter
       year-end results and broad-reaching profit improvement program today at
       11 am EDT (8 AM PDT).  Shareholders and analysts are invited to
       participate, using the following numbers:
 
       Phone (Domestic):       (800) 388-8975
       Phone (International):  (973) 694-2225
 
      If you are unable to participate, a replay will be available through
       March 11, 2001 by calling:
 
       Phone (Domestic):       (800) 428-6051
       Phone (International):  (973) 709-2089
       Pass-code:              175608
 
     For further information, please contact:  Fred Biddle and Roger Gillott,
 Members of the Firm, or Nancy Peck, Associate, of Sitrick and Company,
 310-778-2850, for Horizon Medical Products, Inc.  CORPORATE WEBSITE:
 http://www.hmpvascular.com.
 
 

SOURCE Horizon Medical Products, Inc.
    ATLANTA, April 3 /PRNewswire/ -- HMP -- Horizon Medical Products, Inc.
 (Amex:   HMP) today announced a broad-reaching program designed to maximize
 shareholder value by returning the Company to profitability and increasing
 sales, overall margins and market share.  According to the Company, these
 actions cap a yearlong effort to redirect HMP and improve its operations.
     This effort includes the completion of the following:
 
     *Entering into an agreement with Bank of America to address the existing
      default and to amend the payment schedule in 2001 under the Company's
      credit facility.
 
     *The sale of the Company's Ideas for Medicine product line, allowing HMP
      to focus on higher-growth product lines.
 
     *The appointment, to be announced shortly, of a new Chief Operating
      Officer with strong medical engineering and developmental skills, to
      manage HMP's new and future technology-driven product lines.
 
     *Streamlining manufacturing facilities to eliminate excess capacity and
      inventory while reducing fixed costs.  The Company will switch
      exclusively to in-house manufacturing of vascular access ports by
      August 1, and all other product lines by December 31, to further enhance
      manufacturing efficiencies.  Complimenting this change will be a major
      reduction in SKUs.
 
     *Rolling out a comprehensive line of vascular access ports, based on the
      Company's Vortex(TM) Technology, by the end of the third quarter.
      Accompanying this will be a change in our commission-based sales strategy
      to favor increased sales and sales prices of these higher-margin
      products.
 
     Separately, HMP reported a loss of $18.53 million, ($1.39) per diluted
 share for the fourth quarter ended December 31, 2000, compared to a loss of
 $261,000, ($0.02) cents per diluted share, in the year-ago period.  Net sales
 fell 24% to $13.8 million from $18.2 million in the year-ago period,
 reflecting a one-time shipping adjustment to customers to rationalize
 inventories in anticipation of new products.
     Reflecting a total of more than $20 million in aforementioned
 restructuring costs, HMP said it posted a year-2000 loss of $19.8 million,
 ($1.48) per diluted share, compared with net income of $1.67 million, 12 cents
 per diluted share, in 1999.  Net sales fell 16% to $63.3 million.  Shares
 outstanding remained unchanged at 13.4 million.
     Marshall B. Hunt, HMP's Chairman and CEO, said, "This year, we anticipate
 improved earnings visibility as a result of our enriched product mix,
 demonstrating the synergy we've always expected from the several medical
 device companies acquired since we went public in 1998.
     "We also expect improved earnings visibility in 2001 as a result of
 completed asset sales, inventory write-downs, consolidation, substantial cuts
 in selling, general and administrative expenses, and other actions related to
 our strategic refocus," Mr. Hunt said.  "The sale of our Ideas for Medicine
 assets to Vascutech, Inc. and our agreement with Bank of America, both
 announced yesterday, continue down this path."
     In its Form 10-K filed yesterday with the Securities and Exchange
 Commission, HMP posted 4th-quarter, 2000 and whole-year results that also
 reflect system upgrades and the write-down of goodwill and write-off of
 obsolete inventories.  "The restructuring plan and strategies for the
 Company's turnaround are now in place," Mr. Hunt said.
     "Horizon Medical Products has transformed its strategy from growth via
 acquisition to growth via product development," he added.  "Our shift in
 emphasis to higher-margin proprietary products from our broader line of
 medical devices should bring about an important improvement in the Company's
 results.  We also expect to see an improvement in customer service from some
 of our changes, such as the reduction in SKUs.
     "These latest efforts will conclude the challenging transition period that
 began last year under the leadership of Dick Redden, interim CEO of HMP and
 president and chief operating officer of The Osnos Group, a New York-based
 turnaround specialist," Mr. Hunt said.  The Osnos Group will continue to
 advise HMP management through the end of 2001.
     Mr. Redden noted that "HMP is now a major cash generator with significant
 resources, the most important being its people and its proprietary products."
 Messrs. Hunt and Redden stated that HMP is, in their opinion, better
 positioned than ever for future growth and profitability.
     As an example, Mr. Hunt cited the successful April 1 introduction of the
 Lifeport VTX(TM) Titanium Port, the first of the Company's new line of
 vascular access ports to combine Vortex(TM) Technology with proprietary
 features of existing models.
     "Going forward, we expect that adding Vortex(TM) Technology to several
 other brands will leverage our pricing power and will ultimately earn us the
 leading market share in vascular access ports, our biggest product line," he
 said.  "Last year, our customers supported a significant price increase in
 ports, despite a highly competitive pricing environment.  We expect an
 additional increase in 2001."
     In another example of HMP's shift to higher-margin proprietary product
 development, the Company plans to launch a new hemodialysis catheter in the
 fourth quarter, based on its patented Circle-C(TM) technology, that will have
 highest flow rate yet available in such a product.
 
     ABOUT HORIZON
     Horizon Medical Products, Inc. headquartered in Atlanta, is a specialty
 medical device company focused on manufacturing and marketing vascular access
 products.  The Company's oncology product lines include implantable ports,
 tunneled central venous catheters and stem-cell transplant catheters used
 primarily in cancer treatment protocols.  The Company also markets a complete
 line of acute and chronic dialysis catheters.
     Vortex(TM) Technology, which was introduced by Horizon Medical Products in
 March 2000, refers to the swirling blood flow produced by a uniquely rounded
 reservoir design and tangential outlet that virtually eliminates thrombosis,
 or the buildup of sludge from blood and drug byproducts, in the port
 reservoir, and reduces certain complications that require additional surgery.
 
     SAFE HARBOR:  Certain statements and information included herein may
 constitute "forward-looking statements" which are made pursuant to the safe
 harbor provisions of the Private Securities Litigation reform Act of 1995.
 The forward-looking statements are based on current expectations and may be
 significantly impacted by certain risks and uncertainties described herein and
 various documents filed by the Company with the US Securities and Exchange
 Commission, including but not limited to the Company's Prospectus on Form S-1
 and the Company's Annual Report on Form 10-K for the year ended December 31,
 2000.  There can be no assurance that statements made in this press release
 relating to future events will be achieved.  The Company undertakes no
 obligation to update or revise forward-looking statements to reflect changed
 assumptions, the occurrence of unanticipated events or changes to future
 operating results over time.
 
      The Company will hold a conference call to discuss its fourth quarter
       year-end results and broad-reaching profit improvement program today at
       11 am EDT (8 AM PDT).  Shareholders and analysts are invited to
       participate, using the following numbers:
 
       Phone (Domestic):       (800) 388-8975
       Phone (International):  (973) 694-2225
 
      If you are unable to participate, a replay will be available through
       March 11, 2001 by calling:
 
       Phone (Domestic):       (800) 428-6051
       Phone (International):  (973) 709-2089
       Pass-code:              175608
 
     For further information, please contact:  Fred Biddle and Roger Gillott,
 Members of the Firm, or Nancy Peck, Associate, of Sitrick and Company,
 310-778-2850, for Horizon Medical Products, Inc.  CORPORATE WEBSITE:
 http://www.hmpvascular.com.
 
 SOURCE  Horizon Medical Products, Inc.