Cytori Reports 3rd Quarter 2009 Financial Results

http://www.businesswire.com/news/home/20091109005463/en

SAN DIEGO--(Business Wire)--
Cytori Therapeutics (NASDAQ:CYTX) is reporting its financial results for the
quarter and nine months ended September 30, 2009. More information on commercial
and clinical progress is posted online in the `Q3 Shareholder Letter` at
http://ir.cytoritx.com.

During the third quarter, the number of Celution and StemSource systems in the
field continued to grow, as did the number of patients treated. The cumulative
`revenue base` of combined systems increased in Q3 from 70 to 85, 12 of which
were sold to physician customers or distributors. In addition, a total of 314
consumables were shipped in the third quarter of 2009 and, as in previous
quarters, the majority represented reorders to existing accounts. To put this in
perspective, this represents more than 100% growth of the cumulative revenue
base of systems and 75% growth in the number of quarterly consumables shipped
since the beginning of 2009.

Product revenues were $1.4 million and $4.6 million for the previous three and
nine months ended September 30, 2009, respectively. This compares to $2.3
million and $3.9 million for the same periods in 2008. Gross profit was $0.6
million and $1.9 million for the three and nine months ended September 30, 2009,
respectively, compared to $1.7 million and $2.5 million for the same periods in
2008. The difference in gross profit between the third quarters of 2008 and 2009
is attributable mostly to the high margin sale of a Cell Bank in Europe in the
third quarter of 2008, with no comparable sale in 2009.

Total operating expenses, less the change in fair value of warrants and option
liabilities, were $6.7 million and $20.7 million for the three and nine months
ended September 30, 2009, respectively, compared to $8.3 million and $26.6
million, for the same periods in 2008. Compared to 2008, operating expenses have
been reduced significantly due to reductions in R&D as products have gone from
development to full commercial launch and a significant reduction in G&A, offset
by a modest increase in sales and marketing.

Net loss was $6.8 million and $13.7 million for the three and nine months ended
September 30, 2009, respectively, compared to $6.8 million and $23.5 million for
the same periods in 2008. The improvement in net loss for the first nine months
of 2009 compared to 2008 is attributable mostly to increased development
revenues and the reduction in research and development and general and
administrative expenses.

Cytori ended the third quarter of 2009 with $13.1 million in cash and cash
equivalents plus $1.9 million in accounts receivable, compared to $12.6 million
in cash and cash equivalents and $1.3 million in accounts receivable as of
December 31, 2008. Subsequent to the quarter ended September 30, 2009, we
completed three scheduled closings with Seaside 88, LP during the period of
October 1, 2009 through our filing date of November 9, 2009, raising in
aggregate approximately $2.6 million in gross proceeds from the sale of 825,000
shares of our common stock in connection with the agreement we entered into with
Seaside 88, LP on June 19, 2009.

Conference Call & Shareholder Letter

Cytori's third quarter update and financial results shareholder letter are now
available on the Company's Investor Relations homepage at
http://ir.cytoritx.com. Cytori will host a conference call and question and
answer session at 10:30 a.m. Eastern Time today to further discuss these
results. The audio webcast of the conference call may be accessed under
"Webcasts" in the Investor Relations section of Cytori's website
(www.cytoritx.com). The webcast will be available live and by replay two hours
after the call and archived for 90 days. A telephone replay will be available
for one week, accessible at +1 (303) 590-3030 (PIN: 4178319).

About Cytori

Cytori is committed to providing patients and physicians around the world with
medical technologies, which harness the potential of adult stem and regenerative
cells from adipose tissue. With the introduction of a family of medical devices,
we have made a patient's own clinical grade stem and regenerative cells
available to them at the point-of-care. The Celution® System family of medical
devices and instruments is being sold into the European and Asian cosmetic and
reconstructive surgery markets, while we seek regulatory clearance for it in the
United States. Our StemSource® product line is sold globally for cell banking
and research applications. www.cytoritx.com

Cautionary Statement Regarding Forward-Looking Statements

This press release includes forward-looking statements regarding events, trends
and business prospects, which may affect our future operating results and
financial position. Such statements, including, but not limited to, those
regarding our forecasts for 2009 product revenues, anticipated continued
reduction in operating expenses for 2009 and the timing of that reduction, our
sales expectations from our marketing and distribution partners, customer
consumable reorder trends, anticipated StemSource® Cell Bank orders, our ability
to introduce complementary cosmetic and reconstructive surgery products in 2009,
are all subject to risks and uncertainties that could cause our actual results
and financial position to differ materially. Some of these risks and
uncertainties include, but are not limited to, risks related to our history of
operating losses, the need for further financing and our ability to access the
necessary additional capital for our business, inherent risk and uncertainty in
the protection intellectual property rights, regulatory uncertainties regarding
the collection and results of, clinical data, dependence on third party
performance, as well as other risks and uncertainties described under the "Risk
Factors" in Cytori's Securities and Exchange Commission Filings. We assume no
responsibility to update or revise any forward-looking statements to reflect
events, trends or circumstances after the date they are made.

Consolidated Condensed Balance Sheets
(Unaudited)

As of As of

September 30, 2009
December 31, 2008

Assets
Current assets:
Cash and cash equivalents $ 13,140,000 $ 12,611,000
Accounts receivable, net of allowance for doubtful accounts of $573,000 and $122,000 in 2009 and 2008, respectively 1,855,000 1,308,000
Inventories, net 1,894,000 2,143,000
Other current assets 1,116,000 1,163,000

Total current assets 18,005,000 17,225,000

Property and equipment, net 1,547,000 2,552,000
Investment in joint venture 289,000 324,000
Other assets 548,000 729,000
Intangibles, net 690,000 857,000
Goodwill 3,922,000 3,922,000

Total assets $ 25,001,000 $ 25,609,000

Liabilities and Stockholders` Deficit
Current liabilities:
Accounts payable and accrued expenses $ 3,999,000 $ 5,088,000
Current portion of long-term obligations 2,634,000 2,047,000

Total current liabilities 6,633,000 7,135,000

Deferred revenues, related party 9,224,000 16,474,000
Deferred revenues 2,412,000 2,445,000
Warrant liability 3,256,000 -
Option liability 1,500,000 2,060,000
Long-term deferred rent - 168,000
Long-term obligations, less current portion 3,399,000 5,044,000

Total liabilities 26,424,000 33,326,000

Commitments and contingencies
Stockholders` deficit:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; -0- shares issued and outstanding in 2009 and 2008 - -
Common stock, $0.001 par value; 95,000,000 shares authorized; 38,203,569 and 31,176,275 shares issued and 38,203,569 and 29,303,441 shares outstanding in 2009 and 2008, respectively 38,000 31,000
Additional paid-in capital 171,554,000 161,214,000
Accumulated deficit (173,015,000 ) (162,168,000 )
Treasury stock, at cost - (6,794,000 )

Total stockholders` deficit (1,423,000 ) (7,717,000 )

Total liabilities and stockholders` deficit $ 25,001,000 $ 25,609,000

Consolidated Condensed Statements of Operations
(Unaudited)

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2009 2008 2009 2008

Product revenues:
Related party $ 9,000 $ - $ 582,000 $ 28,000
Third party 1,377,000 2,319,000 3,994,000 3,848,000
1,386,000 2,319,000 4,576,000 3,876,000

Cost of product revenues 782,000 648,000 2,645,000 1,383,000

Gross profit 604,000 1,671,000 1,931,000 2,493,000

Development revenues:
Development, related party - - 7,250,000 774,000
Research grant and other 5,000 1,000 27,000 50,000
5,000 1,000 7,277,000 824,000
Operating expenses:
Research and development 2,618,000 3,875,000 9,006,000 13,873,000
Sales and marketing 1,621,000 1,357,000 4,369,000 3,431,000
General and administrative 2,483,000 3,049,000 7,287,000 9,322,000
Change in fair value of warrants 446,000 - 1,558,000 -
Change in fair value of option liabilities (140,000 ) 200,000 (560,000 ) 200,000

Total operating expenses 7,028,000 8,481,000 21,660,000 26,826,000

Operating loss (6,419,000 ) (6,809,000 ) (12,452,000 ) (23,509,000 )

Other income (expense):
Interest income 2,000 49,000 19,000 163,000
Interest expense (346,000 ) (19,000 ) (1,120,000 ) (60,000 )
Other expense, net (31,000 ) (30,000 ) (139,000 ) (72,000 )
Equity loss from investment in joint venture (8,000 ) (8,000 ) (35,000 ) (26,000 )

Total other income (expense) (383,000 ) (8,000 ) (1,275,000 ) 5,000

Net loss (6,802,000 ) (6,817,000 ) (13,727,000 ) (23,504,000 )

Basic and diluted net loss per common share $ (0.18 ) $ (0.24 ) $ (0.39 ) $ (0.90 )

Basic and diluted weighted average common shares 37,176,165 27,951,369 34,893,303 26,078,196

Cytori Therapeutics
Tom Baker, 858-875-5258
tbaker@cytoritx.com

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