Q3 2004 Zoll Medical Earnings Conference Call - Part 1.

(From Fair Disclosure Wire)

OPERATOR: Thanks for holding, for the Zoll Medical's 2004 third quarter earnings results. Today's call is being recorded at the request of Zoll Medical. If anyone has any objections, you may disconnect at this time. All participants will be in listen-only. A question and answer period will follow today's speakers. I would like to introduce to your host Mr. Rick Packer, President and Chief Executive Officer. Sir, you may begin. RICHARD PACKER, PRESIDENT AND CEO, ZOLL MEDICAL CORPORATION: Great. Good morning. Thank you for joining us this morning to discuss our Q3 results, Erne Whiton, CFO, joins me on this call. I'll ask Erne to cover our Safe Harbor statements. ERNEST WHITON, VICE PRESIDENT OF ADMINISTRATION AND CFO, ZOLL MEDICAL CORPORATION: Thanks Rick. In the course of this call, we anticipate making a number of forward-looking statements concerning the business, and it's prospects. These statements are subject to numerous risks, which could cause actual results to differ materially from these forward-looking statements. For more information concerning these risks, I urge you to review carefully the forward-looking statements disclosure contained in our press release this morning, as well as the risk factors set forth in our SEC filings. RICHARD PACKER: Thank you Erne. Both myself and Erne will start with some remarks on the quarter, then we'll take your questions. I also have substantial comments and informations about our potential revive in transaction to cover. But, let's start with the quarter first. Our topline growth was obviously very strong this past quarter. We are very pleased with the strong showing in the North American business, hospital business and our AED business as well. This good growth allowed us to achieve earnings stronger than what we discussed with you on last quarter's call, we are very pleased to see that. We still have ways to go to regain the profit levels that we're capable of achieving. But, this is obviously a big, big step forward. In the North American hospital market, we achieved strong results. The hospital market has been decent for us all year, but this was our strongest performance to-date. It was led by a terrific win, as we standardize the MD Anderson Cancer Center in Houston, Texas to 100% Zoll.

This was a competitors account, which we won on the strength of our clinical superiority, mainly by creating a preference for Zoll by (inaudible) . We shift over 200 units to this prestigious account. We are very proud to have this center as our account. In addition to many other wins, we continue to penetrate the military market with new orders approaching $2m in the quarter. AED was the other bright spot. We grew over 60% and continue to outphase the market, which we estimate is going to grow about 20% in 2004. So, we are clearly taking share as our distribution has matured, and as the market begins to understand the advantages of our CPR technology. During the quarter, we sold our largest Police Department to-date. They Daytona Beach Police Department.

We sold over 600 units to various states for their grant programs. We won many more corporate accounts such as Scana, the power company at South Carolina, Kinetic Concepts Inc, and Revlon's consumers products division. We are starting to get some penetration into the US military with AED Plus, putting units into places like Fort Riley, Lackland Air Force base, Madigan Air Force base, and our first AEDs have gone to our forces in Iraq. One of our biggest orders was 200 units to the Athens Ambulance Service as they continue to prepare for the Summer Olympics after having standardized on the Zoll AED Plus. During the quarter, we also received our approval for the pediatric indication for AED Plus.

Weapon from our competitors arsenal, and hope to see benefit from this as we move forward. Breaking out, our $7.8m of sales, we sold less to international than last quarter, only about 15% of our sales went to international. And more to the EMFs public safety sector, which accounted for about 40% of that $7.8m. North American PAD accounted for ...