GAAP gross margin for 2007 was 58.0 percent versus 58.6 percent a year ago. Non-GAAP gross margin, which excludes SFAS No. 123R expense and is described later in this press release, was 58.7 percent versus 59.1 percent a year ago. The year-over-year decrease in gross margin is primarily due to the reserve for the ProTime(R) recall, and unfavorable non-pump product mix, offset by favorable foreign exchange rates.
Operating expenses for 2007 and 2006 on a GAAP basis were $138.5 million and $127.2 million, respectively. On a non-GAAP basis, operating expenses in 2007 were $116.1 million compared with $104.1 million in 2006. Operating expenses on a non-GAAP basis are described later in this press release. The year-over-year increase in operating expenses is primarily due to product development expense, market development initiatives, expenses from the stock option review conducted in the first quarter of 2007 and corporate activities, such as Sarbanes Oxley consulting.
The company's GAAP effective tax rate for 2007 was 38 percent benefit versus a 58 percent tax benefit in 2006. The non-GAAP tax rate for the full year, which is described later in this press release, was 29 percent versus 23 percent in the prior year.
On a non-GAAP basis the company's convertible debt was dilutive to the company's fully diluted weighted average shares outstanding for the full year. The increase in shares of approximately 7.3 million was partially offset in non-GAAP diluted Earnings per Share by the add back of interest expense related to the debt resulting in a reduction in EPS of $0.01.
GUIDANCE FOR FISCAL 2008
The following statements are based on current expectations. These
statements are forward-looking and actual results may differ materially.
|SOURCE Thoratec Corporation|
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