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Endocare Reports Financial Results for Second Quarter 2008
Date:8/6/2008

2008 increased to 70.4 percent, compared to 65.7 percent in the second quarter of 2007. Gross margin continued to increase from production efficiencies and reductions in materials costs. Operating expenses in the second quarter of 2008 were $7.7 million, compared to $7.6 million in the second quarter of 2007.

Endocare Chairman, CEO and President Craig T. Davenport said, "While cryoablation continues to show clinical equivalency and in some cases superiority to radiation and other treatment options, competitive procedures and their associated economics led to some dilution with existing physician customers in the first half of the year. A thorough review of our year-to-date performance -- including the number and types of cases performed by each of our physician customers -- suggested that urology prostate cancer cases were impacted primarily by the emergence of robotic prostatectomy and intensity modulated radiation therapy (IMRT). We believe that patient demand for robotics and the current opportunity for greater financial benefits to the physician from IMRT have specifically led to that dilution. While the growth in non-prostate applications continues to show strength, the decline in the number of prostate procedures is being addressed in an aggressive manner."

Davenport continued, "We already have taken steps to help us regain the growth that we have demonstrated in the past. These steps include programs intended to impact the number of new physicians trained, increase revenues from our existing customers and communicate directly and more broadly with patients to educate them about the significant benefits of cryoablation. The programs include additional new urology sales personnel, significantly enhanced patient outreach and advertising and programs that assist our existing physician customers in reaching more patients through community-based marketing. An important element of these programs is an increased emphasis on focal cryoablation, since we
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SOURCE Endocare, Inc.
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