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ev3 Inc. Reports Third Quarter 2008 Financial Results
Date:10/31/2008

Company Raises Non-GAAP Adjusted EPS Guidance for Full-Year 2008

PLYMOUTH, Minn., Oct. 31 /PRNewswire-FirstCall/ -- ev3 Inc. (Nasdaq: EVVV), a global endovascular device company, today reported financial results for its fiscal third quarter of 2008 and its updated financial guidance for 2008.

ev3's net sales were $107.0 million in the third quarter of 2008, representing a 65% increase over the same quarter of the prior year, primarily due to the acquisition of FoxHollow. Third quarter revenues included approximately $100.0 million in net product sales and approximately $7.0 million in research collaboration revenues. Net sales, excluding atherectomy and research collaboration revenues, increased 21% in the third quarter of 2008 versus the prior year quarter. By product segment, third quarter neurovascular net product sales increased by 26% and peripheral vascular net sales, excluding atherectomy increased by 19%. Third quarter atherectomy sales were $21.0 million. On a geographic basis, ev3 U.S. and international business grew by 84% and 37%, respectively over the prior year quarter. Reconciliations of non-GAAP financial measures used in this release to the most comparable U.S. GAAP measures for the respective periods can be found immediately following the detail of net sales by geography later in this release.

Robert Palmisano, president and chief executive officer of ev3 Inc., commented, "We are pleased with our performance during the third quarter, both in terms of our sales and bottom line. Third quarter product sales of $100 million were in line with our previous third quarter guidance despite a stronger dollar than was anticipated in our guidance. I am also encouraged that we were able to maintain the growth of our peripheral vascular business in the third quarter despite pressure and distraction that resulted from the activities of new competitors. More specifically, our atherectomy business is still under some pressure due to the entry of a new competitor and the ongoing physician trialing of competitive devices. However, we believe that physician trialing of competitive products ultimately will confirm the differentiated clinical performance and value that the SilverHawk Plaque Excision System offers as a front-line therapy in treating peripheral artery disease. In addition, interest in the SilverHawk is gathering momentum outside the U.S., and we believe that physician enthusiasm for our new DEFINITIVE clinical trial strategy could have a positive impact on sales and procedure adoption."

ev3's net loss for the third quarter of 2008 declined to $(7.3) million versus $(36.5) million in the third quarter of 2007 and $(27.4) million in the second quarter of 2008. ev3's net loss in the third quarter of 2007 reflected a special charge of $20.2 million and ev3's net loss in the second quarter of 2008 reflected a non-cash impairment charge of $10.5 million. ev3's net loss per common share was $(0.07) for the third quarter of 2008 versus a net loss per common share of $(0.60) in the third quarter of 2007 and a net loss per common share of $(0.26) in the second quarter of 2008. Total weighted average common shares outstanding used in the per common share calculations were 104.5 million and 60.4 million for the third quarter of 2008 and 2007, respectively, and 104.2 million for the second quarter of 2008. ev3's cash and cash equivalents balance was $45.9 million as of the end of the third quarter of 2008, an increase of $7.2 million compared to the end of the second quarter of 2008. This increase was primarily due to cash generated by operations during the third quarter of 2008.

ev3's non-GAAP adjusted net income was $3.9 million, or $0.04 per diluted share, for the third quarter of 2008. ev3's guidance range for non-GAAP adjusted EPS was $(0.02) to $0.01 per diluted share. ev3's non-GAAP adjusted net income and adjusted net earnings per share exclude amortization expense of $8.1 million and non-cash stock-based compensation of $3.1 million.

Palmisano concluded, "Our top priority is to achieve sustained profitability, so I was particularly pleased with our continued earnings progress and an increase of $7.2 million in our cash and cash equivalents balance compared to the end of the second quarter of 2008. For the remainder of 2008, our focus will be on improving execution and optimizing our cost structure to balance the investment we need to build our business and deliver profitable growth and value to our shareholders. We believe that our efforts to bring innovative, breakthrough endovascular treatments to physicians and patients around the world will create a foundation for continued long-term growth and future profitability."

Third Quarter Business Highlights

During the third quarter of 2008, ev3 reported the following business highlights:

-- Submitted 510(k) applications to the U.S. Food & Drug Administration for EverCross and NanoCross PTA balloons;

-- Reported positive 12-month follow-up results for the European DURABILITY I clinical study, a landmark peripheral stent study covering the longest lesion lengths in a challenging patient population;

-- Announced DEFINITIVE clinical trial series to expand the clinical evidence supporting the value of the SilverHawk and RockHawk Plaque Excision Systems to drive increased procedure adoption, expand clinical indications and support the use of atherectomy as a front-line therapy; and

-- Enrolled first patient in DEFINITIVE Ca++ U.S. IDE trial to evaluate RockHawk Plaque Excision System when used in conjunction with the SpiderFX Embolic Protection Device in the treatment of moderate to heavily calcified peripheral artery lesions.

Sales Review

Peripheral vascular segment product sales in the third quarter of 2008 increased 73% to $66.9 million versus $38.7 million in the third quarter of 2007. On a non-GAAP basis, excluding atherectomy revenue of $21.0 million, peripheral vascular product sales increased 19% to $45.9 million in the third quarter of 2008 versus $38.7 million in the third quarter of 2007. Stent product sales increased 16% to $26.8 million from $23.1 million. Thrombectomy and embolic protection product sales increased 29% to $6.9 million from $5.4 million, while sales of procedural support and other peripheral vascular products increased 19% to $12.2 million from $10.2 million.

In the third quarter of 2008, ev3's neurovascular segment net sales increased 26% to $33.1 million versus $26.4 million in the third quarter of 2007. Within the neurovascular business segment, sales of embolic products increased 24% to $18.2 million from $14.7 million, and sales of neurovascular access and delivery products were up 28% to $14.9 million from $11.7 million.

Research collaboration revenue resulting from ev3's former collaboration and license agreement with Merck & Co., Inc. was $7.0 million for the third quarter of 2008, which included approximately $2.0 million for wind-down activities as negotiated with Merck. ev3 expects to recognize approximately $800,000 of additional revenue from wind-down activities in the fourth quarter of 2008.

On a geographic basis, when compared to the third quarter of 2007, ev3's third quarter 2008 U.S. net sales increased 84% to $70.4 million, while third quarter 2008 international net sales increased 37% to $36.6 million, over the prior-year quarter. ev3's third quarter 2008 U.S. net sales increase was primarily due to the FoxHollow acquisition. International sales growth was primarily due to the Axium coil, further market penetration of the EverFlex family of stents and the Onyx Liquid Embolic System for the treatment of brain arterio-venous malformations (AVMs), and the introduction of atherectomy products into international markets. Changes in foreign currency exchange rates had a positive impact of approximately $1.7 million on third quarter 2008 net sales compared to the third quarter of 2007, and a negative impact of approximately $900,000 compared to the second quarter of 2008 as a result of declines in foreign currency exchange rates.

An investor presentation summarizing the company's third quarter 2008 results is available at http://ir.ev3.net.

Outlook

ev3 expects fiscal year 2008 net sales to be in the range of $418 to $423 million consisting of $398 to $403 million of product sales and $20.2 million of research collaboration revenue and the additional revenue to be recognized as a result of services to be provided to Merck to wind-down activities. Full-year revenue guidance has been updated to reflect a $3.7 million increase from ev3's previous guidance of $16.5 million of research collaboration revenue and a decrease in product sales from a range of $408 to $413 million to $398 to $403 million as a result of recent decreases in foreign currency exchange rates and new competitive entrants in the peripheral vascular marketplace. ev3 expects fiscal year 2008 non-GAAP adjusted earnings per share to be in the range of $0.06 to $0.08 per diluted share based on approximately 105 million of outstanding shares. ev3's adjusted net earnings per share guidance excludes estimated amortization expense of approximately $31.0 million, non-cash stock-based compensation of approximately $14.3 million and the $10.5 million non-cash impairment charge related to the termination of ev3's former collaboration and license agreement with Merck.

The company expects fourth quarter 2008 net sales to be in the range of $102 to $107 million and non-GAAP adjusted net earnings per share to be in the range of $0.04 to $0.06 per diluted share based on approximately 105 million of outstanding shares. ev3's non-GAAP adjusted net earnings per share excludes estimated amortization expense of approximately $6.7 million and non- cash stock-based compensation of approximately $2.6 million.

Earnings Call Information

ev3 will host a conference call today, October 31, 2008, beginning at 7:30 a.m. Central Time (8:30 a.m. Eastern Time) to review its results of operations for the third quarter of 2008 and future outlook, followed by a question and answer session.

The conference call will be available to interested parties through a live audio webcast at http://ir.ev3.net, where it will be archived and accessible for approximately 12 months. The live dial-in number for the call is 888-679- 8040 (U.S.) or 617-213-4851 (International). The participant passcode is 68443677.

If you do not have access to the Internet and want to listen to an audio replay of the conference call, dial 888-286-8010 (U.S.) or 617-801-6888 (International) and enter passcode 80099924. The audio replay will be available beginning at 9:30 a.m. Central Time on Friday, October 31, 2008 until Friday, November 7, 2008.

About ev3 Inc.

Since its founding in 2000, ev3 has been dedicated to developing innovative, breakthrough and clinically proven technologies and solutions for the treatment of peripheral vascular and neurovascular diseases. ev3's products are used by endovascular specialists to treat a wide range of peripheral vascular and neurovascular diseases and disorders. The company offers a comprehensive portfolio of treatment options, including the primary interventional technologies used today -- peripheral angioplasty balloons, stents, plaque excision systems, embolic protection devices, liquid embolics, embolization coils, thrombectomy catheters and occlusion balloons. More information about the company and its products can be found at http://www.ev3.net.

ev3, the ev3 logo, Axium, Onyx, EverFlex, EverCross, FoxHollow, SilverHawk and RockHawk are trademarks of ev3 Inc., registered in the U.S. and other countries. All trademarks and trade names referred to in this press release are the property of their respective owners.

Forward-Looking Statements

Statements contained in this press release that relate to future, not past, events are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements often can be identified by words such as "expect," "anticipate," "intend," "will," "may," "believe," "could," "continue," "future," "outlook," "guidance," or the negative of these words or other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Uncertainties and risks may cause ev3's actual results to be materially different than those expressed in or implied by ev3's forward- looking statements. For ev3, particular uncertainties and risks include, among others, ev3's future operating results and financial performance, fluctuations in foreign currency exchange rates, ev3's ability to implement, fund and achieve sustainable cost savings measures that will better align its operating expenses with its anticipated net sales levels and reallocate resources to better support growth initiatives, the effect of the current global economic crisis, the timing of regulatory approvals and introduction of new products, market acceptance of new products, success of clinical testing, availability of third party reimbursement, impact of competitive products and pricing and changes in the regulatory environment. More detailed information on these and additional factors that could affect ev3's actual results are described in ev3's filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. Except as required by law, ev3 undertakes no obligation to update publicly its forward-looking statements.

Use of Non-GAAP Financial Measures

To supplement ev3's consolidated condensed financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), ev3 uses certain non-GAAP financial measures in this release. Reconciliations of the non-GAAP financial measures used in this release to the most comparable U.S. GAAP measures for the respective periods can be found in tables later in this release immediately following the detail of net sales by geography. Non-GAAP financial measures have limitation as analytical tools and should not be considered in isolation or as a substitute for ev3's financial results prepared in accordance with GAAP.

ev3 Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share amounts)

(unaudited)

For the Three For the Nine

Months Ended Months Ended

September September September September

28, 30, 28, 30,

2008 2007 2008 2007

Sales

Product sales $100,018 $65,060 $296,577 $191,955

Research collaboration 7,011 - 19,426 -

Net sales 107,029 65,060 316,003 191,955

Operating expenses

Product cost of goods

sold (a) 36,182 23,097 102,442 65,916

Research collaboration 2,100 - 5,647 -

Sales, general and

administrative (a) 53,005 45,353 178,769 125,372

Research and

development (a) 12,133 10,708 37,913 29,464

Amortization of

intangible assets 8,101 3,952 24,285 11,916

Intangible asset

impairment - - 10,459 -

Loss (gain) on sale or

disposal of assets,

net 116 - 116 (988)

Special charges - 20,183 - 20,183

Total operating

expenses 111,637 103,293 359,631 251,863

Loss from operations (4,608) (38,233) (43,628) (59,908)

Other (income) expense:

Realized and

unrealized gains on

investments, net (142) - (542) -

Interest (income)

expense, net 49 (417) (307) (823)

Other (income)

expense, net 2,279 (1,554) 192 (2,066)

Loss before income

taxes (6,794) (36,262) (42,971) (57,019)

Income tax expense 516 250 1,531 858

Net loss $(7,310) $(36,512) $(44,502) $(57,877)

Earnings per share:

Net loss per common

share (basic and

diluted) $(0.07) $(0.60) $(0.43) $(0.98)

Weighted average common

shares outstanding 104,474,600 60,365,027 104,276,029 59,141,035

(a) Includes stock-based

compensation charges of:

Product cost of goods

sold $121 $101 $596 $446

Sales, general and

administrative 2,572 2,100 9,608 6,166

Research and

development 366 269 1,478 717

$3,059 $2,470 $11,682 $7,329

ev3 Inc.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

September 28, December 31,

2008 2007

(unaudited)

Assets

Current assets

Cash and cash equivalents $45,947 $81,060

Short-term investments - 9,744

Accounts receivable, less allowance

of $7,536 and $6,783, respectively 73,593 66,170

Inventories 56,269 64,044

Prepaid expenses and other assets 6,773 6,371

Other receivables 695 981

Total current assets 183,277 228,370

Restricted cash 1,442 2,204

Property and equipment, net 33,643 37,985

Goodwill 598,448 586,648

Other intangible assets, net 198,506 231,000

Other assets 467 899

Total assets $1,015,783 $1,087,106

Liabilities and stockholders' equity

Current liabilities

Accounts payable $18,366 $21,511

Accrued compensation and benefits 28,388 35,301

Accrued liabilities 25,455 49,429

Deferred revenue - 9,347

Current portion of long-term debt 2,500 3,571

Total current liabilities 74,709 119,159

Long-term debt 7,083 6,429

Other long-term liabilities 5,381 3,037

Total liabilities 87,173 128,625

Stockholders' equity

Common stock, $0.01 par value;

300,000,000 shares authorized;

shares

issued and outstanding:

105,896,421 shares at September

28, 2008 and

105,078,769 shares at December 31,

2007 1,059 1,051

Additional paid in capital 1,753,572 1,739,064

Accumulated deficit (825,541) (781,039)

Accumulated other comprehensive loss (480) (595)

Total stockholders' equity 928,610 958,481

Total liabilities and stockholders'

equity $1,015,783 $1,087,106

ev3 Inc.

SELECTED NET SALES INFORMATION

(Dollars in thousands, except per share amounts)

(unaudited)

For the Three For the Nine

NET SALES BY SEGMENT Months Ended Months Ended

September September September September

28, 30, % 28, 30, %

2008 2007 change 2008 2007 change

Peripheral vascular

Atherectomy $20,992 $- NA $68,624 $- NA

Stents 26,772 23,105 16% 77,932 65,064 20%

Thrombectomy

and embolic

protection 6,938 5,368 29% 19,990 20,029 0%

Procedural

support and

other 12,184 10,240 19% 35,243 30,742 15%

Total

peripheral

vascular 66,886 38,713 73% 201,789 115,835 74%

Neurovascular

Embolic

products 18,174 14,698 24% 53,469 40,451 32%

Neuro access

and delivery

products 14,958 11,649 28% 41,319 35,669 16%

Total

neurovas-

cular 33,132 26,347 26% 94,788 76,120 25%

Research

collaboration 7,011 - NA 19,426 - NA

Total company $107,029 $65,060 65% $316,003 $191,955 65%

For the Three For the Nine

NET SALES BY GEOGRAPHY Months Ended Months Ended

September September September September

28, 30, % 28, 30, %

2008 2007 change 2008 2007 change

United States $70,452 $38,312 84% $208,773 $113,028 85%

International 36,577 26,748 37% 107,230 78,927 36%

Total net sales $107,029 $65,060 65% $316,003 $191,955 65%

ev3 Inc.

NON-GAAP FINANCIAL MEASURES To supplement ev3's consolidated condensed financial statements prepared in accordance with GAAP, ev3 uses certain non-GAAP financial measures in this release. These non-GAAP financial measures include "net sales, excluding atherectomy and research collaboration revenues," "peripheral vascular net sales, excluding atherectomy," "non-GAAP adjusted net income (loss)" and "non-GAAP adjusted net earnings (loss) per share."

Reconciliations of the non-GAAP financial measures used in this release to the most comparable U.S. GAAP measures for the respective periods can be found in the tables below. In addition, an explanation of the manner in which ev3's management uses these non-GAAP measures to conduct and evaluate its business, the economic substance behind management's decision to use these non-GAAP measures, the substantive reasons why management believes that these non-GAAP measures provide useful information to investors, the material limitations associated with the use of these non-GAAP measures and the manner in which management compensates for those limitations is included following the reconciliation tables below.

ev3 Inc.

RECONCILIATION OF NET SALES TO NET SALES,

EXCLUDING ATHERECTOMY

AND RESEARCH COLLABORATION REVENUES

(Dollars in thousands)

(unaudited)

For the Three For the Nine

Months Ended Months Ended

September September September September

28, 30, % 28, 30, %

2008 2007 change 2008 2007 change

Net sales, as reported $107,029 $65,060 65% $316,003 $191,955 65%

Less: Atherectomy 20,992 - NA 68,624 - NA

Less: Research

collaboration 7,011 - NA 19,426 - NA

Net sales, excluding

atherectomy and

research collaboration

revenues(non-GAAP) $79,026 $65,060 21% $227,953 $191,955 19%

ev3 Inc.

RECONCILIATION OF PERIPHERAL VASCULAR NET SALES TO

PERIPHERAL

VASCULAR NET SALES, EXCLUDING ATHERECTOMY

(Dollars in thousands)

(unaudited)

For the Three For the Nine

Months Ended Months Ended

September September September September

28, 30, % 28, 30, %

2008 2007 change 2008 2007 change

Peripheral vascular

segment net sales, as

reported $66,886 $38,713 73% $201,789 $115,835 74%

Less: Atherectomy 20,992 - NA 68,624 - NA

Peripheral vascular net

sales, excluding

atherectomy (non-GAAP) $45,894 $38,713 19% $133,165 $115,835 15%

ev3 Inc.

RECONCILIATION OF NET LOSS TO

NON-GAAP ADJUSTED NET INCOME

(LOSS)

(Dollars in thousands)

(unaudited)

For the Three For the Nine

Months Ended Months Ended

September September September September

28, 30, 28, 30,

2008 2007 2008 2007

Net loss, as reported $(7,310) $(36,512) $(44,502) $(57,877)

Amortization of intangible assets 8,101 3,952 24,285 11,916

Stock-based compensation 3,059 2,470 11,682 7,329

Intangible asset impairment - - 10,459 -

Non-GAAP adjusted net income (loss) $3,850 $(30,090) $1,924 $(38,632)

ev3 Inc.

RECONCILIATION OF NET LOSS PER COMMON SHARE TO

NON-GAAP ADJUSTED

NET EARNINGS (LOSS) PER SHARE

(Dollars in thousands, except per share

amounts)

(unaudited)

For the Three For the Nine

Months Ended Months Ended

September September September September

28, 30, 28, 30,

2008 2007 2008 2007

Net loss per common

share, as reported $(0.07) $(0.60) $(0.43) $(0.98)

Amortization of

intangible assets 0.08 0.06 0.24 0.21

Stock-based compensation 0.03 0.04 0.11 0.12

Intangible asset

impairment - - 0.10 -

Non-GAAP adjusted net

earnings (loss)

per diluted share $0.04 $(0.50) $0.02 $(0.65)

Weighted average diluted

shares outstanding 104,961,329 60,365,027 104,661,794 59,141,035

ev3 Inc.

RECONCILIATION OF ESTIMATED NET LOSS PER SHARE TO

ESTIMATED NON-

GAAP ADJUSTED NET EARNINGS PER SHARE

(Dollars in thousands, except per

share amounts)

(unaudited)

For the Three Months Ended For the Year Ended

December December December December

31, 31, 31, 31,

2008 2008 2008 2008

Estimate Estimate Estimate Estimate

(Low) (High) (Low) (High)

Estimated net loss per

share $(0.05) $(0.03) $(0.48) $(0.46)

Amortization of

intangible assets 0.06 0.06 0.30 0.30

Stock-based

compensation 0.03 0.03 0.14 0.14

Intangible asset

impairment - - 0.10 0.10

Estimated non-GAAP

adjusted net

earnings per diluted

share 0.04 0.06 0.06 0.08

Estimated weighted

average diluted

shares outstanding 105,000,000 105,000,000 105,000,000 105,000,000

"Use and Economic Substance of Non-GAAP Financial Measures Used by ev3 and Usefulness of Such Non-GAAP Financial Measures to Investors

ev3 uses the non-GAAP financial measures described above as supplemental measures of performance and believes these measures facilitate operating performance comparisons from period to period and company to company by factoring out potential differences caused by acquisitions, dispositions, non- recurring, unusual or infrequent charges not related to ev3's regular, ongoing business, variations in capital structure, tax positions, depreciation, non- cash charges and certain large and unpredictable charges. ev3's management uses the non-GAAP financial measures used in this release to analyze the underlying trends in ev3's business, assess the performance of ev3's core operations, establish operational goals and forecasts that are used in allocating resources and evaluate ev3's performance period over period and in relation to its competitors' operating results. Additionally, ev3's management is evaluated on the basis of some of these non-GAAP financial measures when determining achievement of their incentive compensation performance targets.

ev3 believes that presenting the non-GAAP financial measures used in this release provides investors greater transparency to the information used by ev3's management for its financial and operational decision-making and allows investors to see ev3's results "through the eyes" of management. ev3 also believes that providing this information better enables ev3's investors to understand ev3's operating performance and evaluate the methodology used by ev3's management to evaluate and measure such performance. ev3's management believes that non-GAAP financial measures are useful to investors to evaluate ev3's performance period over period and in relation to its competitors' operating results. Because ev3 historically has reported some of these non- GAAP results to the investment community, management also believes that the disclosure of these non-GAAP measures provides consistency in ev3's financial reporting and facilitates investors' understanding of ev3's historic operating trends by providing an additional basis for comparisons to prior periods.

The following is an explanation of each of the items that management excluded from one or more of the non-GAAP financial measures used in this release and the reasons for excluding each of these individual items:

-- Atherectomy net sales. In the fourth quarter of 2007, ev3 acquired FoxHollow Technologies, Inc. (FoxHollow). Prior to this acquisition, ev3 did not recognize any atherectomy net sales. In addition to disclosing net sales and growth rates that are determined in accordance with GAAP, ev3's management believes that in order to properly understand underlying business trends in and performance of ev3's peripheral vascular segment business, management has found and investors may find it useful to consider the impact of excluding atherectomy net sales from ev3's total net sales and from ev3's peripheral vascular segment net sales.

-- Research collaboration revenue. As a result of ev3's FoxHollow acquisition, ev3 was engaged in a research collaboration with Merck & Co., Inc. (Merck). Prior to ev3's acquisition of FoxHollow, ev3 did not recognize any research collaboration revenue. This research collaboration was terminated by Merck effective in July 2008. ev3's management believes that in order to properly understand underlying business trends in and performance of ev3's ongoing operations, management has found and investors may find it useful to consider the impact of excluding research collaboration revenue from ev3's total net sales.

-- Research collaboration asset impairment. As a result of the termination of ev3's research collaboration with Merck, ev3 recorded an asset impairment charge of $10.5 million during the second quarter 2008 to write-off the remaining carrying value of the related Merck intangible asset that was established at the time of ev3's acquisition of FoxHollow. In addition to disclosing net income that is determined in accordance with GAAP, ev3's management believes that in order to properly understand the underlying business trends and performance of ev3's ongoing operations, management has found and investors may find it useful to consider the impact of excluding the $10.5 million research collaboration asset impairment charge recorded by ev3 in second quarter 2008.

-- Non-cash stock-based compensation. ev3 excludes stock-based compensation expense from its non-GAAP financial measures primarily because such expense, while constituting an ongoing and recurring expense, is not an expense that requires cash settlement and is not used by ev3's management to assess the core profitability of ev3's business operations. ev3's management also believes that excluding this item from ev3's non-GAAP results is useful to investors to understand the application of SFAS 123R and its impact on ev3's operational performance, liquidity and its ability to invest in research and development and fund acquisitions and capital expenditures and it allows for greater transparency to certain line items in ev3's financial statements.

-- Amortization expense. ev3 excludes amortization expense from its non- GAAP financial measures primarily because such expense, while constituting an ongoing and recurring expense, is not an expense that requires cash settlement and is not used by ev3's management to assess the core profitability of ev3's business operations. ev3's management also believes that excluding this item from ev3's non-GAAP results is useful to investors to understand ev3's operational performance, liquidity and its ability to invest in research and development and fund acquisitions and capital expenditures.

Material Limitations Associated with the Use of Non-GAAP Financial Measures and Manner in which ev3 Compensates for these Limitations

Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for ev3's financial results prepared in accordance with GAAP. Some of the limitations associated with ev3's use of these non-GAAP financial measures are:

-- Items such as stock-based compensation do not directly affect ev3's cash flow position; however, such items reflect economic costs to ev3 and are not reflected in ev3's "non-GAAP adjusted net income (loss)" or "non-GAAP adjusted net earnings (loss) per share," and therefore these non-GAAP measures do not reflect the full economic effect of these items.

-- Items such as the research collaboration asset impairment do not directly affect ev3's cash flow position; however, such items represent a reduction in value of ev3's assets. The expense associated with this reduction in value is not included in ev3's "non-GAAP adjusted net income (loss)" or "non-GAAP adjusted net earnings (loss) per share," and therefore these non-GAAP measures do not reflect the full economic effect of the reduction in value of this asset.

-- Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and therefore other companies may calculate similarly titled non-GAAP financial measures differently than ev3, limiting the usefulness of those measures for comparative purposes.

-- ev3's management exercises judgment in determining which types of charges or other items should be excluded from the non-GAAP financial measures ev3 uses.

ev3 compensates for these limitations by relying primarily upon its GAAP results and using non-GAAP financial measures only supplementally. ev3 provides full disclosure of each non-GAAP financial measure ev3 uses and detailed reconciliations of each non-GAAP measure to its most directly comparable GAAP measure. ev3 encourages investors to review these reconciliations. ev3 qualifies its use of non-GAAP financial measures with cautionary statements as to their limitations.


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(Date:2/11/2016)... 11, 2016   BioInformant announces the February ... Research Products, Opportunities, Tools, and Technologies – Market Size, ... The first and ... cell industry, BioInformant has more than a decade of ... market, by stem cell type. This powerful 175 page ...
(Date:2/10/2016)... 2016 Early-career researchers from ... , Uganda and Yemen ... and nutrition   Indonesia , Nepal ... and Yemen are being honored for their accomplishments ... also celebrated for mentoring young women scientists who are pursuing careers in ...
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(Date:2/3/2016)... --> --> ... Fingerprint Identification System Market by Component (Hardware and Software), ... Finance, Government, Healthcare, and Transportation) and Geography - Global ... expected to be worth USD 8.49 Billion by 2020 ... 2020. The transformation and technology evolution from the manual ...
(Date:2/2/2016)... , Feb. 2, 2016 This ... the bioinformatic market by reviewing the recent advances ... tools that drive the field forward. Includes forecast ... Identify the challenges and opportunities that exist ... and software solution developers, as well as IT ...
(Date:2/2/2016)... 2, 2016  Based on its recent analysis ... recognizes US-based Intelligent Retinal Imaging Systems (IRIS) with ... for New Product Innovation. IRIS, a prominent cloud-based ... America , is poised to set the ... retinopathy market. The IRIS technology presents superior price-performance ...
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