IRVINE, Calif., Nov. 10 /PRNewswire-FirstCall/ -- Cardiogenesis Corporation
(Pink Sheets: CGCP), a leading developer of surgical products used in the
treatment of patients suffering from severe angina, today reported financial
results for its third quarter ended September 30, 2009.
Net revenues in the third quarter of 2009 totaled $2,134,000 an 18% decrease
from prior year third quarter net revenues of $2,618,000. The decrease in
sales was primarily attributed to the absence of laser sales during the three
month period ended September 30, 2009 as compared to laser sales of $373,000
for the three months ended September 30, 2008.
Net revenues in the first nine months of 2009 totaled $7,222,000, a 26%
decrease from net revenues of $9,719,000 in the first nine months of 2008.
Laser sales decreased $1,832,000 and handpiece sales decreased $786,000 as
compared to the prior year nine month period.
"We continue to make progress in our efforts to re-engage the cardiology
community and to refocus our sales force on utilization of previously
installed lasers. We are taking the right steps to increase our core TMR
business," said Paul McCormick, Executive Chairman. He continued, "At the
same time we are stepping up our investment in research and development as we
prepare to initiate a U.S. clinical trial for our PHOENIX(TM) Combination
Delivery System, which permits the intramyocardial delivery of both TMR and
stem cells. Based upon our recent meeting with the FDA we expect to make our
IDE submission by the end of the year."
The Company reported a third quarter 2009 operating loss of $718,000 as
compared with an operating loss of $310,000 in the prior year quarter. The
net loss for the quarter was $739,000 or $0.02 per basic and diluted share, as
compared with net loss of $308,000, or $0.01 per basic and diluted share in
the 2008 third quarter.
For the first nine months of 2009, Cardiogenesis reported an operating loss of
$1,577,000 as compared with operating income of $235,000 for the same period
in 2008. The net loss for the first nine months of 2009 was $1,643,000 or
$0.04 per basic and diluted share, compared with net income of $258,000, or
$0.01 per basic and diluted share, for the first nine months of 2008.
Gross margin was 82% of net revenues for the quarters ended September 30, 2009
and 2008. Gross profit decreased by $390,000 to $1,754,000 for the current
year third quarter as compared with $2,144,000 for the 2008 third quarter.
For the nine months ended September 30, 2009, gross margin was 82% of net
revenues as compared to 84% for the nine months ended September 30, 2008.
Gross profit in absolute dollars decreased by $2,215,000 to $5,915,000 for the
nine months ended September 30, 2009, as compared to $8,130,000 for the nine
months ended September 30, 2008. The decrease in the gross margin percentage
for the three months and nine month periods was primarily attributed to a
decrease in laser sales.
Research and development expenses were $379,000 in the third quarter of 2009
as compared with $165,000 in the 2008 third quarter. Year to date, R&D
expenses of $1,013,000 were $380,000 or 60% above the prior year period of
$633,000. The dollar increase for the three month and nine month periods are
primarily attributed to regulatory expenses incurred for FDA submissions.
Sales and marketing expenses of $1,363,000 in the quarter ended September 30,
2009 decreased $173,000, or 11%, compared with $1,536,000 for the quarter
ended September 30, 2008. For the nine months ended September 30, 2009, sales
and marketing expenditures totaled $4,104,000, a decrease of $754,000, or 16%,
compared with $4,858,000 for the nine months ended September 30, 2008. The
decrease in sales and marketing expenditures for both the third quarter and
nine month periods ended September 30, 2009 as compared to the corresponding
prior year periods, was primarily due to lower commissions and related
employee expenses. In addition, travel expenses for the nine months ended
September 30, 2009 were $151,000 lower than the first nine months of 2008.
General and administrative expenses for the quarter ended September 30, 2009
totaled $730,000 as compared to $753,000 during the quarter ended September
30, 2008. For the nine months ended September 30, 2009, general and
administrative expenses totaled $2,375,000 as compared to $2,404,000 for the
nine months ended September 30, 2008.
About Cardiogenesis Corporation
Cardiogenesis is a medical device company specializing in the treatment of
cardiovascular disease and is a leader in devices that treat severe angina.
Our market leading holmium:YAG laser system and single use fiber-optic
delivery systems are used to perform a FDA-cleared surgical procedure known as
Transmyocardial Revascularization (TMR).
For more information on Cardiogenesis and its products, please visit our
website at http://www.cardiogenesis.com or the direct to patient website at
http://www.heartofnewlife.com.
Safe Harbor Statement
This press release contains forward-looking statements, including, without
limitation, with respect to the Company's expectation to file an IDE for the
Company's PHOENIX(TM) Combination Delivery System. Any forward-looking
statements in this news release 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 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; the
effects of recent disruptions in global credit and equity markets and other
adverse economic developments that could adversely affect the market for our
products or our ability to raise needed financing; actions by our competitors;
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-K for the year ended December 31, 2008 and the Company's other filings with
the Securities and Exchange Commission. 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 Nine months ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Net revenues $2,134 $2,618 $7,222 $9,719
Cost of revenues 380 474 1,307 1,589
--- --- ----- -----
Gross profit 1,754 2,144 5,915 8,130
----- ----- ----- -----
Operating expenses:
Research and development 379 165 1,013 633
Sales and marketing 1,363 1,536 4,104 4,858
General and administrative 730 753 2,375 2,404
--- --- ----- -----
Total operating expenses 2,472 2,454 7,492 7,895
----- ----- ----- -----
Operating income (loss) (718) (310) (1,577) 235
Other income (expense):
Interest expense (4) (1) (35) (22)
Interest income 1 13 3 55
Other non-operating expense (20) - (20) -
---- --- ---- ---
Total other income (expense), net (23) 12 (52) 33
---- --- ---- ---
Income (loss) before
income taxes (741) (298) (1,629) 268
Provision for income taxes (2) 10 14 10
--- --- --- ---
Net income (loss) (739) (308) (1,643) 258
===== ===== ======= ===
Net earnings (loss) per share:
Basic $(0.02) $(0.01) $(0.04) $0.01
====== ====== ====== =====
Diluted $(0.02) $(0.01) $(0.04) $0.01
====== ====== ====== =====
Weighted average shares
outstanding:
Basic 45,549 45,292 45,519 45,292
------ ------ ------ ------
Diluted 45,549 45,292 45,519 45,328
------ ------ ------ ------
CARDIOGENESIS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September December
30, 31,
2009 2008
(unaudited) (audited)
---------- --------
ASSETS
Current assets:
Cash and cash equivalents $2,517 $2,907
Accounts receivable, net of allowance
for doubtful accounts of $7 and $20,
respectively 941 1,330
Inventories 984 1,164
Investments in marketable securities - 75
Prepaids and other current assets 356 395
--- ---
Total current assets 4,798 5,871
Property and equipment, net 350 382
Other assets, net 18 18
--- ---
Total assets $5,166 $6,271
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $338 $200
Accrued liabilities 1,020 1,103
Deferred revenue 971 800
Note payable 140 -
Current portion of capital lease
obligations 9 6
--- ---
Total current liabilities 2,478 2,109
Capital lease obligations, less current portion 16 13
--- ---
Total liabilities 2,494 2,122
----- -----
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;
45,549 and 45,487 shares issued and
outstanding, respectively 174,165 173,999
Accumulated deficit (171,493) (169,850)
--------- ---------
Total shareholders' equity 2,672 4,149
----- -----
Total liabilities and shareholders'
equity $5,166 $6,271
====== ======
SOURCE Cardiogenesis Corporation
William R. Abbott, Senior Vice President and Chief Financial Officer of
Cardiogenesis Corporation, +1-949-420-1800
