MTIX Micro Therapeutics (MM)

- Joint Conference Call With ev3 Inc. Scheduled for Today at 5:00 p.m. EDT (2:00 p.m. PDT); Simultaneous Webcast at www.1mti.com - IRVINE, Calif., Aug. 2 /PRNewswire-FirstCall/ -- Micro Therapeutics, Inc. (MTI) (NASDAQ:MTIX), an endovascular medical device company focused on neurovascular disease and disorders, today reported financial results for its fiscal second quarter ended July 3, 2005. As reported on July 6, 2005, net sales in the 2005 second quarter increased 44% to $13.1 million versus net sales of $9.1 million in the second quarter of 2004, and increased 15% compared with net sales of $11.4 million in the first quarter of 2005. Contributing to net sales growth in the most recent quarter were the company's neuro embolic products, net sales of which increased by 32% to $4.2 million, and neuro access and delivery products, net sales of which increased 58% to $8.1 million. Geographically, second quarter net sales increased by 42% to $4.3 million in the United States, and international net sales increased by 44% to $8.8 million. ev3 Inc. (NASDAQ:EVVV), MTI's majority stockholder, distributes MTI's products internationally. For the six months ended July 3, 2005, net sales totaled $24.5 million, an increase of 47% compared with net sales during the first six months of 2004. "MTI's increase in net sales was driven primarily by our expanding portfolio of neurovascular products and global distribution capabilities," said Tom Wilder, MTI President and Chief Executive Officer. "Coupled with the recent regulatory approval of Onyx for the treatment of brain AVMs in the United States and regulatory clearance of our new Nexus embolic coil family in the United States and Europe, we believe that we have entered the second half of the year with substantial sales momentum." Gross margin in the second quarter grew to 68%, up from 61% in the year-ago second quarter. For the first six months of 2005, gross margin increased to 66% compared with 58% in the first six months of 2004. In addition to an improved gross margin, operating expenses were under tight control, increasing only 2% and 4% for the second quarter and first six months of 2005, respectively, in each case versus the comparable year-ago periods. For the second quarter of 2005, operating loss significantly narrowed to $2.7 million, reducing by more than half the operating loss in the year-ago second quarter. For the first six months of 2005, operating loss was $6.3 million versus $11.9 million in the first six months of 2004. Net loss for the 2005 second quarter was $2.2 million, or $0.05 per share, compared with a net loss of $4.1 million, or $0.10 per share, in the second quarter of 2004. Net loss for the first six months of 2005 was $2.2 million, or $0.05 per share, compared with a net loss of $16.5 million, or $0.41 per share, in the first six months of 2004. Weighted average shares outstanding for the 2005 and 2004 second quarters were 48.4 million and 41.4 million, respectively. The financial results for the first six months of 2005 include a first quarter gain from the receipt of $3.7 million as a result of the sale of certain assets of Genyx Medical, a company in which MTI held an equity interest, to C.R. Bard, and a second quarter gain of $878,000 from the release to MTI of previously escrowed funds related to the sale of Enteric Medical Technologies, a company in which MTI held an equity interest. The financial results for the first half of 2004 include a first quarter 2004 $6.2 million non-cash charge related to the value ascribed to the conversion feature of the $17.0 million of notes exchanged for shares of MTI's common stock in January 2004 and a second quarter 2004 gain of $1.7 million related to the receipt of previously escrowed funds from the sale of Enteric Medical Technologies. As of July 3, 2005, MTI's cash and cash equivalents totaled $5.5 million. Outlook MTI raised its financial guidance regarding net sales, forecasting third quarter 2005 net sales in the range of $12.0 to $13.0 million and total year 2005 net sales in the range of $51.0 to $54.0 million. MTI also indicated that it expects to further narrow its operating losses in the second half of 2005 compared with operating losses in the second half of 2004. About Micro Therapeutics, Inc. Micro Therapeutics develops, manufactures and markets minimally invasive medical devices for the diagnosis and treatment of vascular disease. The company is focused on catheter-based, or endovascular, technologies for the minimally invasive treatment of neurovascular disorders of the brain associated with stroke. MTI's products include: the Tetris(R) and NXT(R) lines of embolic coils; the Onyx(R) liquid embolic; and a range of access and delivery products that include micro delivery catheters, balloon catheters, and guidewires. Conference Call Information and Forward-Looking Statements The company will host a conference call today with its majority stockholder ev3 Inc. for interested parties beginning at 5:00 p.m. EDT (2:00 p.m. PDT) to review the results of operations for the second quarter of 2005 and other recent events. Discussions during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company's net sales, margins, operating expenses, distribution arrangements, clinical studies, regulatory status, and financial position, and comments the company may make about its future in response to questions from participants on the conference call. Any interested party may listen to the conference call through a live audio Internet broadcast at http://www.1mti.com/. For those unable to listen to the live broadcast, a playback of the webcast will be available at http://www.1mti.com/ for approximately one year. Statements contained in this press release that are not historical information are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Such potential risks and uncertainties relate, but are not limited, to, in no particular order: product demand and market acceptance, the impact of competitive products and pricing, and success of clinical testing. More detailed information on these and additional factors which could affect Micro Therapeutics, Inc.'s operating and financial results are described in the company's Forms 10-Q, 10-KSB, and other reports, filed or to be filed with the Securities and Exchange Commission. Micro Therapeutics, Inc. urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the company faces. Additionally, Micro Therapeutics, Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. MICRO THERAPEUTICS, INC. Consolidated Statements of Operations For the Three and Six Months Ended July 3, 2005 and July 4, 2004 (unaudited) For the three months ended For the six months ended July 3, July 4, July 3, July 4, 2005 2004 2005 2004 Net sales $13,074,000 $9,102,000 $24,459,000 $16,676,000 Cost of Sales 4,157,000 3,593,000 8,217,000 6,981,000 Gross Profit 8,917,000 5,509,000 16,242,000 9,695,000 Operating expenses Research & development, Clinical & Regulatory 3,758,000 3,517,000 7,295,000 7,355,000 Sales, general and administrative 7,819,000 7,519,000 15,259,000 14,008,000 Distributor termination -- 269,000 -- 269,000 Total operating expenses 11,577,000 11,305,000 22,554,000 21,632,000 Loss from operations (2,660,000) (5,796,000) (6,312,000) (11,937,000) Other income (expense) Amortization of conversion feature of notes -- -- -- (6,190,000) Gain on sale of investment 878,000 1,728,000 4,611,000 1,728,000 Other, net (405,000) (55,000) (546,000) (64,000) Total other income (expense) 473,000 1,673,000 4,065,000 (4,526,000) Loss before income taxes (2,187,000) (4,123,000) (2,247,000) (16,463,000) Income tax expense -- -- 2,000 2,000 Net loss $(2,187,000) $(4,123,000) $(2,249,000) $(16,465,000) Per share information Net loss available to common stockholders $(2,187,000) $(4,123,000) $(2,249,000) $(16,465,000) Net loss per share (basic and diluted) $(0.05) $(0.10) $(0.05) $(0.41) Weighted average common shares outstanding 48,432,000 41,433,000 48,429,000 40,448,000 MICRO THERAPEUTICS, INC. Consolidated Balance Sheets July 3, 2005 and December 31, 2004 July 3, December 31, 2005 2004 ASSETS (unaudited) (audited) Current assets Cash and cash equivalents $5,488,000 $11,647,000 Accounts receivable, net of allowance 8,542,000 7,712,000 Receivable from ev3 Endovascular 2,459,000 2,419,000 Inventories, net 6,571,000 6,365,000 Prepaid expenses and other assets 1,228,000 633,000 Total current assets 24,288,000 28,776,000 Property and equipment, net 2,889,000 2,139,000 Intangible assets, net 6,681,000 7,893,000 Goodwill 20,982,000 20,982,000 Other assets 351,000 1,245,000 Total assets $55,191,000 $61,035,000 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $1,076,000 $924,000 Accrued salaries and benefits 2,146,000 1,972,000 Accrued liabilities 2,479,000 3,105,000 Accrued facility consolidation costs 689,000 1,296,000 Payable to sellers of Dendron GmbH -- 3,750,000 Deferred revenue and other liabilities 2,490,000 1,993,000 Total current liabilities 8,880,000 13,040,000 Stockholders' equity Preferred stock, $0.001 par value; 5,000,000 shares authorized; no share issued or outstanding -- -- Common stock, $0.001 par value; 70,000,000 shares authorized; 48,425,000 issued and outstanding at December 31, 2004 and 48,500,000 shares issued and outstanding at July 3, 2005 49,000 48,000 Additional paid in capital 194,800,000 194,551,000 Accumulated deficit (148,463,000) (146,214,000) Accumulated other comprehensive loss (75,000) (390,000) Total stockholders' equity 46,311,000 47,995,000 Total liabilities and stockholders' equity $55,191,000 $61,035,000 MICRO THERAPEUTICS, INC. Consolidated Statements of Cash Flows For the Six Months Ended July 3, 2005 and July 4, 2004 (unaudited) For the six months ended July 3, July 4, 2005 2004 Cash flows from operating activities: Net loss $(2,249,000) $(16,465,000) Adjustments to reconcile net loss to net cash used in operating activities: Amortization of exchange feature of notes payable -- 6,190,000 Non-cash interest expense -- 98,000 Abandonment of patents 179,000 -- Depreciation and amortization 1,787,000 1,648,000 Gain on sale of investment (4,611,000) (1,728,000) Gain on sale of fixed assets (7,000) -- Non-cash compensation 23,000 162,000 Provision for doubtful accounts 206,000 231,000 Provision for inventory obsolescence 328,000 289,000 Change in operating assets and liabilities: Accounts receivable (1,020,000) (1,266,000) Receivable from ev3 (40,000) (284,000) Inventories (534,000) (1,993,000) Prepaid expenses and other current assets (612,000) 26,000 Accounts payable 152,000 (619,000) Accrued salaries and benefits 174,000 (300,000) Accrued liabilities (626,000) (224,000) Deferred revenue and other liabilities (110,000) 1,181,000 Net cash used in operating activities (6,960,000) (13,054,000) Cash flow from investing activities: Proceeds from sale of investment 4,611,000 1,728,000 Proceeds from sale of fixed assets 7,000 -- Acquisition of Dendron GmbH (3,750,000) (3,750,000) Additions to property and equipment (1,229,000) (701,000) Additions to patents and licenses (275,000) (185,000) Proceeds from conversion of formerly restricted certificates of deposit 880,000 -- Change in other assets 15,000 -- Net cash (used in) provided by investing activities 259,000 (2,908,000) Cash flow from financing activities: Proceeds from issuance of common stock under employee stock purchase plan 213,000 178,000 Proceeds from exercise of stock options 14,000 9,000 Proceeds from issuance of notes payable -- 21,008,000 Costs from issuance of notes payable and exchange of notes for common stock -- (774,000) Net cash provided by financing activities 227,000 20,421,000 Effect of exchange rate changes on cash 315,000 (9,000) Net increase (decrease) in cash and cash equivalents (6,159,000) 4,450,000 Cash and cash equivalents, beginning of year 11,647,000 16,551,000 Cash and cash equivalents, end of period $5,488,000 $21,001,000 Cash paid for income taxes $-- $2,000 Supplemental disclosure of non-cash items: Exchange of notes payable and related accrued interest for issuance of common stock $-- $11,000,000 MICRO THERAPEUTICS, INC. Net Sales by Product Lines and Geographic Markets (unaudited) For the three months ended For the six months ended July 3, July 4, July 3, July 4, 2005 2004 2005 2004 Product Line Embolic products $4,176,000 $3,152,000 $8,094,000 $5,386,000 Neuro access and delivery products 8,091,000 5,135,000 14,823,000 9,752,000 Peripheral blood clot therapy and other products 807,000 815,000 1,542,000 1,538,000 Total net sales $13,074,000 $9,102,000 $24,459,000 $16,676,000 Geographic Markets United States $4,263,000 $3,000,000 $8,447,000 $5,698,000 International 8,811,000 6,102,000 16,012,000 10,978,000 Total net sales $13,074,000 $9,102,000 $24,459,000 $16,676,000 DATASOURCE: Micro Therapeutics, Inc. CONTACT: Thomas C. Wilder of Micro Therapeutics, Inc., +1-949-837-3700; or Rob Whetstone, or Robert Jaffe, both of PondelWilkinson Inc., +1-310-279-5963, for Micro Therapeutics, Inc. Web site: http://www.1mti.com/

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