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Young Innovations, Inc. Announces Results for 4th Quarter and the Year and Declares Dividend
Date:2/4/2009

ense of $0.11 and $0.08 for 2008 and 2007, respectively.

Consistent with the third quarter, fourth quarter demand for our consumable products continued to be strong and was offset by weak performance in our diagnostic product line. Our consumable products, which include our preventive, infection control, applicator and home care product lines, posted solid growth in the quarter. Our diagnostic product line posted disappointing results, with revenue $1.6 million below that for the fourth quarter of 2007. We believe this product line continues to be negatively affected by on-going economic uncertainty, as we witnessed a significant increase in purchase deferrals. A stronger U.S. dollar negatively impacted sales by approximately $160,000 in the quarter. For the year, a weaker U.S. dollar provided a benefit to sales of approximately $474,000.

The gross margin for the quarter was negatively impacted by product mix and by an adjustment implemented in the quarter which reallocated approximately $130,000 in expense from selling, general and administrative into cost of goods sold. Because this adjustment was a reallocation of a full year of expense in the fourth quarter, it impacted the comparability of the fourth quarter gross margin to prior periods and made the fourth quarter gross margin lower than it would have been had we made the adjustment over the course of the year; the adjustment had no effect on the quarter's operating margin. We were generally pleased with the operating margin for the quarter, as we carefully managed expenses given the uncertain economic environment, adjusted staffing levels in certain areas of the business and began to realize the benefits of the facility consolidations we have implemented over the past two years.

We continued to make progress in implementing our strategy in the fourth quarter. We added new products to several of our product lines, including a fully integ
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SOURCE Young Innovations, Inc.
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