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ThermoGenesis Reports Record Quarterly Revenues of $7.2 Million; Full Year Revenues Increase 31 Percent

RANCHO CORDOVA, Calif., Sept. 9 /PRNewswire-FirstCall/ -- ThermoGenesis Corp. (Nasdaq: KOOL), a leading supplier of innovative products and services that process and store adult stem cells, today said that revenues in the fourth quarter of fiscal 2008 more than doubled over the same period a year ago. Separately, the Company also announced today that it has signed a distribution agreement with Celling Technologies for ThermoGenesis' MarrowXpress(TM) (MXP(TM)) product line used for isolating stem cells from bone marrow.

Revenues for the quarter ended June 30, 2008, were $7.2 million, a 104 percent increase over revenues of $3.5 million in the fourth quarter a year ago. Disposable revenues in the quarter were $4.2 million, nearly triple the $1.5 million in disposable revenue for the fourth quarter of fiscal 2007.

The Company reported a net loss of $2.5 million, or $0.04 per share, versus a net loss of $2.6 million, or $0.05 per share, in the fourth quarter of fiscal 2007. The results for both periods include stock-based compensation expense of $303,000 and $482,000, respectively.

The Company ended fiscal 2008 with $25.3 million in cash, cash equivalents and short-term investments. Total backlog at the end of the fourth quarter was $2.3 million. This compares with $2.2 million in the same period a year ago.

"ThermoGenesis ended fiscal 2008 in very strong fashion with revenue growth in the quarter driven primarily by demand for our AXP(TM) AutoXpress Platform (AXP(TM)) disposable bagsets and our continued ability to improve manufacturing yields," said Dr. William Osgood, the Company's Chief Executive Officer. "In addition, we benefited from an increase in sales of our BioArchive(R) System having sold a record nine units in the fourth fiscal quarter".

"Our growth in revenues for the quarter," he continued, "was offset at the bottom line by a $1.0 million dollar increase in Research and Development spending year-over-year related to our veterinary stem cell initiative and salary and stock compensation charges for the newly created position Chief Technology Architect. In addition, interest income declined $265,000 versus last year due to decreased cash balances and declining interest rates."

Osgood noted that the Company has achieved several important milestones recently, including receiving a CE-Mark enabling commercial sales of its MarrowXpress(TM), or MXP(TM), in Europe, and authorization from the FDA to initiate commercial sales of the device in the U.S. The MXP is used for concentrating stem cells from bone marrow at both the point-of-care and in a laboratory setting.

"In addition, we have appointed more than a dozen new distributors for our BioArchive System following the restructuring of our agreement with GE Healthcare, giving us distributor relationships in nearly all of our key international markets. Many of these distributors previously sold one or more of our offerings-including the BioArchive-and have established relationships in their markets," Osgood noted.

Osgood said the Company realized a number of key accomplishments in its growth strategy during fiscal 2008, including:

-- Amending its distribution agreement with GE Healthcare and achieving

higher manufacturing output of its AXP bagsets.

-- Developing and receiving regulatory approval of the MXP and initiating

discussions with customers and clinical study investigators.

-- Launching Vantus(TM), Inc., a subsidiary that is a collaboration with

the Center for Equine Health at the University of California, Davis,

that will offer stem cell laboratory services and point-of-care bone

marrow and peripheral blood processing products focused initially on

the equine market.

-- Improving the performance of the Company's wound care business.

-- Initiating the development of a new point-of-care stem cell processing

platform to complement our MXP offering.

-- Initiating discussions with potential partners in regenerative medicine

and networking with key opinion leaders in the use of stem cells for

treating orthopedic, vascular, and cardiac diseases in addition to

plastic surgery applications.

-- Implementing a corporate rebranding and marketing awareness program.

-- Enhancing the management team and board of directors.

"Because of our accomplishments over the past year, ThermoGenesis is well positioned to achieve a ramp in growth and increase its presence in key areas of regenerative medicine. In addition to implementing programs that are designed to expand our cord blood business, we have a number of product and market development initiatives underway that we expect will begin to contribute initial revenues from new stem cell markets during the current fiscal year," Osgood commented.

For all of fiscal 2008, ThermoGenesis reported revenues of $21.9 million, a 31 percent increase over revenues of $16.8 million in fiscal 2007. The Company reported a net loss of $9.2 million, or $0.16 per share, compared with a net loss of $6.8 million, or $0.12 per share, in fiscal 2007. The results for both periods include stock-based compensation expense of $1.9 million and $1.1 million, respectively.

With respect to fiscal 2009, management indicated that it expects overall revenue growth to be between 30-35 percent driven in large part by increased AXP disposable bagset sales as well as new revenues from MXP, the successful launch of Vantus services, and the launch of a new point-of-care stem cell product platform. Management also expects continued gross margin improvement during the year with fourth quarter gross margin anticipated to exceed 40 percent and that operating expenses will be relatively comparable with fiscal 2008. As a result, management expects to exit the fourth fiscal quarter at break even.

Conference call details:

Dial-in (U.S.): 1-800-860-2442

Dial-in (International): 412-858-4600

Conference name: "ThermoGenesis"

To listen to the audio webcast of the call during or after the event, please visit:

An audio replay of the conference call will be available beginning approximately two hours after completion of the call for the following five business days.

To access the replay:

Access number (U.S.): 1-877-344-7529

Access number (International): 412-317-0088

Conference ID#: 385107


Condensed Consolidated Balance Sheets


June 30, June 30,

2008 2007


Current assets:

Cash and cash equivalents $4,384,000 $5,730,000

Short term investments 20,903,000 27,649,000

Accounts receivable, net 5,976,000 3,226,000

Inventory 5,131,000 5,046,000

Other current assets 367,000 415,000

Total current assets 36,761,000 42,066,000

Equipment, net 1,450,000 1,602,000

Other assets 71,000 122,000

$38,282,000 $43,790,000


Current liabilities:

Accounts payable $4,186,000 $2,074,000

Other current liabilities 2,589,000 2,233,000

Total current liabilities 6,775,000 4,307,000

Long-term liabilities 982,000 1,671,000

Stockholders' equity 30,525,000 37,812,000

$38,282,000 $43,790,000


Condensed Consolidated Statements of Operations


Three Months Ended Years Ended

June 30, June 30,

2008 2007 2008 2007

Net revenues $7,182,000 $3,520,000 $21,946,000 $16,751,000

Cost of revenues 4,832,000 2,596,000 14,976,000 11,554,000

Gross profit 2,350,000 924,000 6,970,000 5,197,000


Selling, general


administrative 2,838,000 2,817,000 10,165,000 9,630,000

Research and

development 2,157,000 1,139,000 7,172,000 4,108,000

Total operating

expenses 4,995,000 3,956,000 17,337,000 13,738,000

Interest and other

income, net 161,000 419,000 1,186,000 1,765,000

Net loss ($2,484,000) ($2,613,000) ($9,181,000) ($6,776,000)

Basic and diluted

net loss per

common share ($0.04) ($0.05) ($0.16) ($0.12)

Shares used in


per share data 55,956,452 55,369,291 55,754,578 55,169,977


Condensed Consolidated Statements of Cash Flows


Years Ended

June 30,

2008 2007

Cash flows from operating activities:

Net loss ($9,181,000) ($6,776,000)

Adjustments to reconcile net loss to

net cash used in operating activities:

Depreciation and amortization 543,000 549,000

Stock based compensation expense 1,921,000 1,094,000

Accretion of discount on short-term

investments (918,000) (1,257,000)

Loss on sale/retirement of equipment 238,000 31,000

Net change in operating assets

and liabilities:

Accounts receivable (2,750,000) 547,000

Inventories (200,000) (2,309,000)

Other current assets 48,000 47,000

Other assets 51,000 (34,000)

Accounts payable 2,112,000 143,000

Accrued payroll and related expenses 39,000 108,000

Deferred revenue (633,000) (231,000)

Other current liabilities 279,000 326,000

Net cash used in operating activities (8,451,000) (7,762,000)

Cash flows from investing activities:

Purchase of short-term investments (44,336,000) (51,420,000)

Maturities of investments 52,000,000 60,500,000

Capital expenditures (514,000) (621,000)

Net cash provided by investing

activities 7,150,000 8,459,000

Cash flows from financing activities:

Exercise of stock options 266,000 439,000

Exercise of warrants -- 1,083,000

Repurchase of common stock (293,000) --

Payments on capital lease obligations

and note payable (18,000) (16,000)

Net cash (used in) provided by

financing activities (45,000) 1,506,000

Net increase (decrease) in cash and cash

equivalents (1,346,000) 2,203,000

Cash and cash equivalents at beginning

of year 5,730,000 3,527,000

Cash and cash equivalents at end of year $4,384,000 $5,730,000

Supplemental non-cash financing and

investing information

Equipment acquired by not

payable/capital lease -- $17,000

Transfer of inventories to equipment $157,000 $124,000

Transfer of equipment to inventories $42,000 $69,000

About ThermoGenesis Corp.

ThermoGenesis Corp. ( is a leader in developing and manufacturing automated blood processing systems and disposable products that enable the manufacture, preservation and delivery of cell and tissue therapy products. These products include:

-- The BioArchive(R) System, an automated cryogenic device, is used by

cord blood stem cell banks in more than 25 countries for cryopreserving

and archiving cord blood stem cell units for transplant.

-- AXP(TM) AutoXpress Platform (AXP(TM)) is a proprietary family of

automated devices that includes the AXP and the MarrowXpress(TM) and

companion sterile blood processing disposable for harvesting stem cells

in a closed system. The AXP device is used for the processing of cord

blood. GE Healthcare is the exclusive global distribution partner for

the AXP cord blood product except for Central and South America, China

and Russia/CIS, where ThermoGenesis markets through independent

distributors. The MarrowXpress is used for isolating stem cells from

bone marrow. ThermoGenesis sells the MarrowXpress directly to global


-- The CryoSeal(R) FS System, an automated device and companion sterile

blood processing disposable, is used to prepare fibrin sealants from

plasma in about an hour. The CryoSeal FS System is approved in the

U.S. for liver resection surgeries. The CryoSeal FS System has

received the CE-Mark which allows sales of the product throughout the

European community. Asahi Medical is the exclusive distributor for the

CryoSeal System in Japan and the Company markets through independent

distributors in Europe and South America.

-- The Thrombin Processing Device(TM) (TPD(TM)) is a sterile blood

processing disposable that prepares activated thrombin from a small

aliquot of plasma in less than 30 minutes. The CE-Marked TPD is

currently being marketed in Europe by Biomet, Inc., subsidiary Biomet

Biologics, Medtronic, Inc. and independent distributors.

This press release contains forward-looking statements, and such statements

are made pursuant to the safe harbor provisions of the Private Securities

Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual outcomes to differ materially from those

contemplated by the forward-looking statements. Several factors, including

timing of FDA approvals, changes in customer forecasts, our failure to meet

customers' purchase order and quality requirements, supply shortages,

production delays, changes in the markets for customers' products,

introduction timing and acceptance of our new products scheduled for fiscal

year 2009, and introduction of competitive products and other factors beyond our control, could result in a materially different revenue outcome and/or in

our failure to achieve the revenue levels we expect for fiscal 2009. A more

complete description of these and other risks that could cause actual events to differ from the outcomes predicted by our forward-looking statements is set

forth under the caption "Risk Factors" in our annual report on Form 10-K and other reports we file with the Securities and Exchange Commission from time to
time, and you should consider each of those factors when evaluating the

forward-looking statements.

ThermoGenesis Corp.

Web site:

Contact: Investor Relations

+1-916-858-5107, or

SOURCE ThermoGenesis Corp.
Copyright©2008 PR Newswire.
All rights reserved

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