Cardiogenesis Reports First Quarter 2008 Results
May 15 2008 - 7:30AM
PR Newswire (US)
Company reports 21% sequential growth in domestic handpiece unit
sales IRVINE, Calif., May 15 /PRNewswire-FirstCall/ --
Cardiogenesis Corporation (Pink Sheets: CGCP), a leading developer
of surgical products and accessories used in angina-relieving
procedures, today reported financial results for its first quarter
ended March 31, 2008. Sales in the first quarter of 2008 totaled
$2,982,000, a 12% decrease from the prior year first quarter sales
of $3,370,000. During the first quarter of 2008, the Company sold
three lasers and 540 handpiece units as compared to five lasers and
656 handpieces during the first quarter of 2007. The lower revenue
in the current year quarter is primarily attributable to a
$260,000, or 11%, decline in disposable handpiece revenue, and a
$104,000, or 14%, decrease in capital sales as compared with the
prior year quarter. "We are very encouraged by the 21% sequential
growth in domestic sales of disposable units from the fourth
quarter of 2007. We believe it is an indication of the impact our
new sales team is having in establishing themselves and increasing
the usage of our technology," commented Richard Lanigan,
Cardiogenesis' President. Lanigan also noted "The Company continues
to balance its investment in sales and marketing with its finances.
A combination of an increased ending cash balance of $2,917,000,
and the fact that we were essentially break even from operations in
the first quarter, means that we can continue to invest in "feet on
the street" to maintain our sales momentum." Cardiogenesis reported
a first quarter 2008 operating loss of $37,000 as compared with
operating income of $465,000 in the prior year quarter. The net
loss for the quarter was $36,000, or $0.00 per basic and diluted
share, as compared with net income of $327,000, or $0.01 per basic
and diluted share, in the 2007 first quarter. Gross margin was 82%
of sales for the first quarter of 2008 as compared with an 81%
gross margin in the first quarter of 2007. Gross profit in absolute
dollars decreased by $270,000, or 10%, to $2,457,000 for the
current year quarter as compared with $2,727,000 for the 2007 first
quarter. Research and development costs were $216,000 in the first
quarter of 2008 as compared with $212,000 in the first quarter of
2007. Salaries and employee benefit expenditures of $1,524,000 in
the quarter ended March 31, 2008 increased $200,000, or 15%, when
compared to $1,324,000 for the quarter ended March 31, 2007. Sales,
general and administrative expenditures for the quarter ended March
31, 2008 totaled $754,000 as compared to $726,000 during the
quarter ended March 31, 2007. This represents an increase of
$28,000, or 4%. As the Company noted in its recent filings, due to
disruptions of, and the resulting reduced liquidity in certain
financial markets, the Company's AAA rated auction rate securities
with a total purchased cost of approximately $350,000 experienced
failed auctions during 2008. The securities in question do not have
stated maturity dates since they are perpetual securities and reset
every 7 to 28 days. Due to the failed auctions, the Company was
unable to sell the securities at their respective costs, resulting
in a temporary decrease in fair value. As a result, the Company has
classified $350,000 of auction rate securities as long-term
investments in marketable securities. The Company has concluded
that any unrealized losses on these investments are temporary
because the Company believes that the decline in market value that
has occurred is due to general market conditions, the auction rate
securities continue to be of a high credit quality and interest is
paid as due and the Company has the intent and ability to hold
these investments to maturity or until a recovery in market value
occurs. The fair value of these securities could change
significantly in the future and the Company may be required to
record other-than-temporary impairment charges or additional
unrealized losses in future periods. About Cardiogenesis
Corporation Cardiogenesis is a medical device company specializing
in the treatment of cardiovascular disease and is a leader in
devices that stimulate cardiac angiogenesis. The company's market
leading Holmium:YAG laser system and disposable fiber-optic
accessories are used to perform a FDA-cleared surgical procedure
known as Transmyocardial Revascularization (TMR) to treat patients
suffering from angina. Surgical products and accessories for the
Cardiogenesis TMR procedure, which are marketed in the U.S. and
around the world, have been shown to reduce angina and improve the
quality of life in patients with coronary artery disease. For more
information on the company and its products, please visit the
Cardiogenesis company website at http://www.cardiogenesis.com/ or
the direct to patient website at http://www.heartofnewlife.com/.
With the exception of historical information, the statements set
forth above include forward-looking statements. Any forward-looking
statements in this news release related to the company's sales,
profitability, the adoption of its technology and products and FDA
clearances are based on current expectations and beliefs and are
subject to numerous risks and uncertainties, many of which are
outside the company's control, that could cause actual results to
differ materially. Factors that could affect the accuracy of these
forward-looking statements include, but are not limited to: any
inability by the company to sustain profitable operations or obtain
additional financing on favorable terms if and when needed; any
failure to obtain required regulatory approvals; failure of the
medical community to expand its acceptance of TMR or PMC
procedures; possible adverse governmental rulings or regulations,
including any FDA regulations or rulings; the company's ability to
comply with international and domestic regulatory requirements;
possible adverse Medicare or other third-party reimbursement
policies or adverse changes in those policies; any inability by the
company to ship product on a timely basis; the company's ability to
manage its growth; adverse economic developments that could
adversely affect the market for our products or our ability to
raise needed financing; actions by our competitors; restrictions
contained in our convertible debt obligations requiring the
issuance of shares rather than repayment in cash; and the company's
ability to protect its intellectual property. Other factors that
could cause Cardiogenesis' actual results to differ materially are
discussed in the "Risk Factors" section of the company's Annual
Report on Form 10-KSB for the year ended December 31, 2007 and the
company's other recent SEC filings. The company disclaims any
obligation to update any forward-looking statements as a result of
developments occurring after the date of this press release.
CARDIOGENESIS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except per share amounts) (unaudited)
Three months ended March 31, 2008 2007 Net revenues $ 2,982 $ 3,370
Cost of revenues 525 643 Gross profit 2,457 2,727 Operating
expenses: Research and development 216 212 Salaries and employee
benefits 1,524 1,324 Sales, general and administrative 754 726
Total operating expenses 2,494 2,262 Operating (loss) income (37)
465 Other income (expense): Interest expense (20) (31) Interest
income 21 28 Non-cash interest expense - (46) Change in fair value
of derivatives - (114) Other non-cash income, net - 25 Total other
income (expense), net 1 (138) Net (loss) income (36) $ 327 Net
(loss) earnings per share: Basic $ - $ 0.01 Diluted $ - $ 0.01
Weighted average shares outstanding: Basic 45,274 45,274 Diluted
45,274 45,290 CARDIOGENESIS CORPORATION CONDENSED CONSOLIDATED
BALANCE SHEETS (in thousands) March 31, December 31, 2008 2007
(unaudited) (audited) ASSETS Current assets: Cash and cash
equivalents $ 2,917 $ 2,824 Accounts receivable, net of allowance
for doubtful accounts of $28 1,268 1,763 Inventories 1,492 1,602
Prepaids and other current assets 389 486 Total current assets
6,066 6,675 Long-term investments in marketable securities 350 -
Property and equipment, net 403 457 Other assets, net 27 27 Total
assets $ 6,846 $ 7,159 LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Accounts payable $ 257 $ 169 Accrued liabilities 1,040
1,458 Deferred revenue 1,240 1,210 Current portion of capital lease
obligation 10 12 Total current liabilities 2,547 2,849 Capital
lease obligation, less current portion 18 19 Total liabilities
2,565 2,868 Commitments and Contingencies Shareholders' equity:
Preferred stock: no par value; 5,000 shares authorized; none issued
and outstanding - - Common stock: no par value; 75,000 shares
authorized; 45,274 shares issued and outstanding 173,852 173,826
Accumulated deficit (169,571) (169,535) Total shareholders' equity
4,281 4,291 Total liabilities and shareholders' equity $ 6,846 $
7,159 DATASOURCE: Cardiogenesis Corporation CONTACT: William R.
Abbott, Senior Vice President and Chief Financial Officer of
Cardiogenesis Corporation, +1-949-420-1800 Web site:
http://www.cardiogenesis.com/
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