Company reports full year operating income of $856,000
IRVINE, Calif., March 25 /PRNewswire-FirstCall/ -- Cardiogenesis Corporation (Pink Sheets: CGCP), a leading developer of surgical products and accessories used in angina-relieving procedures, today reported financial results for its fourth quarter and fiscal year ended December 31, 2007.
Sales in the fourth quarter of 2007 totaled $2,767,000, a 24% decrease from the prior year fourth quarter sales of $3,664,000. During the fourth quarter of 2007, the Company sold three lasers and 462 handpiece units as compared to four lasers and 674 handpieces during the fourth quarter of 2006. The lower revenue in the current year quarter is primarily attributable to a $732,000, or 29%, decline in disposable handpiece revenue, and a $174,000, or 20%, decrease in capital sales as compared with the prior year quarter.
Sales for the year ended December 31, 2007 totaled $12,059,000, a decrease of approximately 30% from the $17,117,000 of sales recorded for the year ended December 31, 2006. The decrease in sales as compared with the prior year is primarily attributable to a $3,251,000, or 28%, decline in disposable handpiece revenue and a $1,927,000, or 43%, decline in capital sales. During the year ended December 31, 2007, the company sold 14 lasers and 2,293 handpieces as compared to 22 lasers and 3,162 handpieces in the prior year period.
"In addressing the reduction in sales during 2007, we are encouraged by the progress we have made in the second half of 2007 in expanding our sales force to support increasing sales going forward, finishing the year with 17 sales/clinical professionals in the field compared to 10 at the beginning of the year," commented Richard Lanigan, Cardiogenesis' President.
Cardiogenesis reported a fourth quarter 2007 operating loss of $32,000 as compared with an operating loss of $947,000 in the prior year quarter. The net loss for the quarter was $84,000, or $0.00 per basic and diluted share, as compared with a net loss of $493,000, or $0.01 per basic and diluted share, in the 2006 fourth quarter.
For the year ended December 31, 2007, Cardiogenesis reported operating income of $856,000 as compared with an operating loss of $1,476,000 for the prior year period. The net income for the year ended December 31, 2007 was $578,000, or $0.01 per basic and diluted share, compared with a net loss of $1,979,000, or $0.04 per basic and diluted share, for the year ended December 31, 2006.
Gross margin was 63% of sales for the quarter ended December 31, 2007 as compared with a 75% gross margin in the fourth quarter of 2006. Gross profit in absolute dollars decreased by $1,017,000 to $1,731,000 for the current year quarter as compared with $2,748,000 for the 2006 fourth quarter. The decrease in gross margin resulted primarily from inventory impairment charges of $508,000 during the quarter that did not occur in the prior year quarter. Excluding inventory impairment charges, gross margin for the 2007 fourth quarter was 81%. For the year ended December 31, 2007, gross profit was 76% of net revenues as compared to 79% of net revenues for the year ended December 31, 2006. Gross profit in absolute dollars decreased by $4,363,000 to $9,110,000 for the year ended December 31, 2007, as compared to $13,473,000 for the prior year period. The decrease in gross margin for the full year resulted primarily from inventory impairment charges. Excluding the inventory impairment charges, gross margin was approximately 80% for the years ended December 31, 2007 and 2006.
Research and development costs ("R&D") were $69,000 in the fourth quarter of 2007 as compared with $374,000 in the 2006 fourth quarter. For the year ended December 31, 2007, R&D expenses of $681,000 were $793,000 below the prior year period.
Salaries and employee benefit expenditures of $1,199,000 in the quarter ended December 31, 2007 decreased $271,000, or 18%, when compared to $1,470,000 for the quarter ended December 31, 2006. For the year ended December 31, 2007, salaries and employee benefits expenditures of $4,800,000 decreased $2,984,000, or 38%, when compared to $7,784,000 for the year ended December 31, 2006.
Sales, general and administrative expenditures ("SG&A") for the quarter ended December 31, 2007 totaled $495,000 as compared to $1,851,000 during the quarter ended December 31, 2006. This represents a reduction of $1,356,000, or 73%. For the year ended December 31, 2007, SG&A totaled $2,773,000 as compared to $5,691,000 for the year ended December 31, 2006. This represents a reduction of $2,918,000, or 51%.
About Cardiogenesis Corporation
Cardiogenesis is a medical device company specializing in the treatment of cardiovascular disease and is a leader in devices that stimulate cardiac angiogenesis. The company's market leading Holmium:YAG laser system and disposable fiber-optic accessories are used to perform a FDA-cleared surgical procedure known as Transmyocardial Revascularization (TMR) to treat patients suffering from angina. Surgical products and accessories for the Cardiogenesis TMR procedure, which are marketed in the U.S. and around the world, have been shown to reduce angina and improve the quality of life in patients with coronary artery disease. Surgical products and accessories for the company's minimally invasive Percutaneous Myocardial Channeling (PMC) procedure are currently being marketed in Europe and other international markets.
With the exception of historical information, the statements set forth
above include forward-looking statements. Any forward-looking statements in
this news release related to the company's sales, profitability, the
adoption of its technology and products and FDA clearances are based on
current expectations and beliefs and are subject to numerous risks and
uncertainties, many of which are outside the company's control, that could
cause actual results to differ materially. Factors that could affect the
accuracy of these forward-looking statements include, but are not limited
to: any inability by the company to sustain profitable operations or obtain
additional financing on favorable terms if and when needed; any failure to
obtain required regulatory approvals; failure of the medical community to
expand its acceptance of TMR or PMC procedures; possible adverse
governmental rulings or regulations, including any FDA regulations or
rulings; the company's ability to comply with international and domestic
regulatory requirements; possible adverse Medicare or other third-party
reimbursement policies or adverse changes in those policies; any inability
by the company to ship product on a timely basis; the company's ability to
manage its growth; adverse economic developments that could adversely
affect the market for our products or our ability to raise needed
financing; actions by our competitors; restrictions contained in our
convertible debt obligations requiring the issuance of shares rather than
repayment in cash; and the company's ability to protect its intellectual
property. Other factors that could cause Cardiogenesis' actual results to
differ materially are discussed in the "Risk Factors" section of the
company's Annual Report on Form 10-KSB for the year ended December 31, 2006
and the company's other recent SEC filings. The company disclaims any
obligation to update any forward-looking statements as a result of
developments occurring after the date of this press release.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three months ended Year ended
December 31, December 31,
2007 2006 2007 2006
Net revenues $2,767 $3,664 $12,059 $17,117
Cost of revenues 1,036 916 2,949 3,644
Gross profit 1,731 2,748 9,110 13,473
Research and development 69 374 681 1,474
Salaries and employee benefits 1,199 1,470 4,800 7,784
Sales, general and administrative 495 1,851 2,773 5,691
Total operating expenses 1,763 3,695 8,254 14,949
Operating (loss) income (32) (947) 856 (1,476)
Other (expense) income:
Interest expense (10) (57) (69) (781)
Interest income 26 22 120 132
Gain on insurance settlement - - - 70
Loss on disposal of fixed assets (2) (111) (2) (111)
Non-cash interest expense - (29) (89) (831)
Change in fair value of derivatives
and warrants (53) 629 (225) 1,020
Total other (expense) income, net (39) 454 (265) (501)
(Loss) Income before income taxes (71) (493) 591 (1,977)
Tax provision 13 - 13 2
Net (loss) income (84) (493) $578 $(1,979)
Net (loss) income per share:
Basic $0.00 $(0.01) $0.01 $(0.04)
Diluted $0.00 $(0.01) $0.01 $(0.04)
Weighted average shares outstanding:
Basic 45,274 45,274 45,274 45,274
Diluted 45,274 45,274 45,274 45,274
CONDENSED CONSOLIDATED BALANCE SHEET
Cash and cash equivalents $2,824
Accounts receivable, net of allowance for doubtful
accounts of $28 1,763
Inventories, net of inventory reserve of $317 1,602
Prepaids and other current assets 486
Total current assets 6,675
Property and equipment, net 457
Other assets 27
Total assets $7,159
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $169
Accrued liabilities 1,458
Deferred revenue 1,210
Current portion of capital lease obligation 12
Total current liabilities 2,849
Capital lease obligation, less current portion 19
Total liabilities 2,868
Commitments and contingencies
no par value; 5,000 shares authorized; none issued and
no par value; 75,000 shares authorized; 45,274 shares issued
and outstanding 173,826
Accumulated deficit (169,535)
Total shareholders' equity 4,291
Total liabilities and shareholders' equity $7,159
|SOURCE Cardiogenesis Corporation|
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