basic and $4.30 per diluted share, in 2001. The Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142 effective January 1, 2002.
The required adoption of SFAS No. 142 as discussed in Note 2 to the Company’s Consolidated Financial Statements included herein is considered a change
in accounting principle and the cumulative effect of adopting this standard resulted in a $1.6 million, or $ .96 per basic and $ .88 per diluted share, non-
cash, after-tax charge in 2002.
Operating revenues were $62.8 million in 2003, compared with $59.5 million in 2002 and $57.6 million in 2001. These revenue increases are generally
attributable to higher sales volumes. The 5 percent revenue increase in 2003 over the prior year is primarily attributable to an 8 percent increase in the
revenues of the Company’s ophthalmic products, an 8 percent increase in the revenues of the Company’s cardiovascular products, a 3 percent increase in
the Company’s fluid delivery products and a 2 percent increase in the Company’s other medical and non-medical products and services. The 3 percent
revenue increase in 2002 over the prior year is primarily attributable to an 8 percent increase in the revenues of the Company’s cardiovascular products,
a 4 percent increase in the Company’s fluid delivery products and a 4 percent increase in the Company’s other medical and non-medical products and
services.
The Company’s cost of goods sold was $40.6 million in 2003, compared with $39.2 million in 2002 and $35.8 million in 2001. The increase in cost of
goods sold for 2003 over 2002 was primarily related to the increase in revenues discussed above and increased insurance costs partially offset by an
improvement in manufacturing variances resulting from increased production volumes. The increase in cost of goods sold for 2002 over 2001 was
primarily related to a shift in product mix, which resulted in lower gross margins, and the increase in revenues discussed above.
Gross profit was $22.2 million in 2003, compared with $20.3 million in 2002 and $21.8 million in 2001. The Company’s gross profit in 2003 was 35
percent of revenues compared with 34 percent of revenues in 2002 and 38 percent of revenues in 2001. The increase in gross profit percentage in 2003
24
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS