MTMD Microtek Medical Hldgs (MM)

ALPHARETTA, Ga., Oct. 6 /PRNewswire-FirstCall/ -- Microtek Medical Holdings, Inc. (NASDAQ:MTMD), a leading manufacturer and marketer of infection control products, fluid control products and safety products to healthcare professionals, announced today that it has completed the acquisition of Europlak, a surgeon-owned marketer of minimally invasive surgical products and devices. Headquartered near Toulon, France and recognized in the 2003 Deloitte European Technology Fast 500, Europlak currently markets its innovative products exclusively in France primarily to urology, gastroenterology and related surgical specialties. Europlak's most notable product is its surgeon-preferred tissue glue, a non-toxic, non- mutagenic tissue glue approved for internal use in securing hernia mesh. The financial terms of the acquisition were not disclosed. "Europlak will become an important component of Microtek Medical's worldwide growth strategy as we seek to expand Europlak's current market presence in France initially, throughout Europe and then to the United States with our combined product capabilities," stated Dan R. Lee, Microtek Medical's President and CEO. "We expect Europlak to add approximately $5 million in annualized revenues at gross margins that reflect the premium quality of its specialized product offerings. Due to planned investments in research and development, we currently expect Europlak to be accretive to earnings beginning in the second half of 2007. For the balance of 2006, we expect Europlak to contribute approximately $1.0 million to our net sales in the fourth quarter and to be neutral to our fourth quarter operating income and earnings." Mr. Lee continued, "Microtek Medical's current acquisition strategy focuses on those strategic opportunities which will provide more technologically advanced product platforms and increased penetration into fast growing surgical specialties. Europlak marks a key achievement in the execution of this strategy as their existing products not only complement and strengthen Microtek's own product offerings, but also provide a platform for expansion of Microtek Medical's products into France, a market not specifically targeted by our current direct sales force. At the same time, Microtek Medical will use Europlak's proven record of successful innovation of technologically sound, surgeon-preference products to accelerate our product development processes." Mr. Lee concluded, "We are excited about the prospects that the Europlak transaction holds for Microtek Medical. The entrepreneurial and product development expertise of Europlak's three principal owners, all of whom are surgeons and inventors, is the foundation for Europlak's success. We believe that their medical training and their commitment to product innovation, combined with Microtek Medical's proven management and sales and marketing expertise, will not only strengthen Europlak's unique market position in France but will also expand Microtek Medical's global market presence and open other areas of opportunity." CMC Consulting, mergers and acquisitions advisors in healthcare, introduced the two parties. About Microtek Medical Holdings, Inc.: Microtek Medical is a leading manufacturer and supplier of innovative product solutions for patient care, occupational safety and management of infectious and hazardous waste for the healthcare industry. Headquartered near Atlanta, Georgia, the Company offers an extensive line of infection control, fluid control and safety products, such as disposable equipment and patient drapes, which are marketed to healthcare professionals through multiple channels, including direct sales, original equipment manufacturers ("OEM's") and private label arrangements. Microtek Medical's goal is to provide healthcare professionals with innovative product solutions that encompass a high-level of patient care and prevention of cross infection in operating rooms and ambulatory surgical centers worldwide. For further information, visit http://www.microtekmed.com/. Actual Results Could Differ From Forward-Looking Statements: This Press Release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, the Company's belief that Europlak will become an important component of its worldwide growth strategy as the Company seeks to expand Europlak's current market presence in France initially throughout Europe and then to the United States, the Company's expectations that the Europlak acquisition will add approximately $5 million in annualized revenues at gross margins which reflect the premium quality of its specialized product offerings, the Company's expectation that Europlak will be accretive to earnings beginning in the second half of 2007, the Company's expectation that the Europlak acquisition will contribute approximately $1.0 million to the Company's net sales in the fourth quarter of 2006 and will be neutral to the Company's fourth quarter 2006 operating income and earnings, the Company's belief that Europlak's existing products complement and strengthen Microtek Medical's own product offerings and provide a platform for expansion of Microtek Medical's products into France, the Company's ability to use Europlak's proven record of successful innovation of technologically sound, surgeon-preference products to accelerate Microtek Medical's product development processes, and the Company's belief that the medical training of Europlak's three principal owners and their commitment to product innovation, combined with Microtek Medical's proven management and sales and marketing expertise, will strengthen Europlak's unique market position in France and will also expand Microtek Medical's global market presence and open other areas of opportunity. Such statements are subject to certain factors, risks and uncertainties that may cause actual results, events and performance to differ from those referred to in such statements. These risks include, without limitation, the following: low barriers to entry for competitive products could cause the Company to reduce the prices for its products or lose customers; large purchasers of the Company's products regularly negotiate for reductions in prices for the Company's products, which may reduce the Company's profits; because a few distributors control much of the delivery of hospital supplies to hospitals, the Company relies significantly on these distributors in connection with the sale of the Company's branded products; the Company's relatively small sales and marketing force may place the Company at a competitive disadvantage to its competition; the Company's contract manufacturing division relies upon a small number of customers, the loss of any of which could have a material adverse impact on the Company; the inability of the Company to complete acquisitions of businesses at an attractive cost could adversely affect the Company's growth; if the Company is successful in acquiring businesses, the failure to successfully integrate those businesses could adversely affect the Company; the Company's growing international operations subject the Company's operating results to numerous additional risks; markets in which the Company competes are highly competitive, which may adversely affect the Company's growth and operating results; the Company's products are subject to extensive governmental regulations, compliance or non-compliance with which could adversely affect the Company; the Company's strategies to protect its proprietary assets may be ineffective, allowing increased competition with the Company; fluctuations in the value of the dollar against foreign currencies have in the past and may in the future adversely affect the Company's operating results; and the Company's expenses for raw materials and product distribution are adversely affected by increases in the price for petroleum. The foregoing risks are intended to identify some of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included herein. These factors should be read in conjunction with the more detailed risk factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2005 filed with the Securities and Exchange Commission. The Company does not undertake to update its forward-looking statements to reflect future events or circumstances. DATASOURCE: Microtek Medical Holdings, Inc. CONTACT: Dan R. Lee, President & CEO, or Jerry Wilson, CFO, or John Mills, Investor Relations, of Microtek Medical Holdings, Inc., +1-800-476-5973, or Web site: http://www.microtekmed.com/

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