Company reports full year operating income of $856,000 IRVINE,
Calif., March 25 /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 fourth quarter and fiscal year
ended December 31, 2007. Sales in the fourth quarter of 2007
totaled $2,767,000, a 24% decrease from the prior year fourth
quarter sales of $3,664,000. During the fourth quarter of 2007, the
Company sold three lasers and 462 handpiece units as compared to
four lasers and 674 handpieces during the fourth quarter of 2006.
The lower revenue in the current year quarter is primarily
attributable to a $732,000, or 29%, decline in disposable handpiece
revenue, and a $174,000, or 20%, decrease in capital sales as
compared with the prior year quarter. Sales for the year ended
December 31, 2007 totaled $12,059,000, a decrease of approximately
30% from the $17,117,000 of sales recorded for the year ended
December 31, 2006. The decrease in sales as compared with the prior
year is primarily attributable to a $3,251,000, or 28%, decline in
disposable handpiece revenue and a $1,927,000, or 43%, decline in
capital sales. During the year ended December 31, 2007, the company
sold 14 lasers and 2,293 handpieces as compared to 22 lasers and
3,162 handpieces in the prior year period. "In addressing the
reduction in sales during 2007, we are encouraged by the progress
we have made in the second half of 2007 in expanding our sales
force to support increasing sales going forward, finishing the year
with 17 sales/clinical professionals in the field compared to 10 at
the beginning of the year," commented Richard Lanigan,
Cardiogenesis' President. Cardiogenesis reported a fourth quarter
2007 operating loss of $32,000 as compared with an operating loss
of $947,000 in the prior year quarter. The net loss for the quarter
was $84,000, or $0.00 per basic and diluted share, as compared with
a net loss of $493,000, or $0.01 per basic and diluted share, in
the 2006 fourth quarter. For the year ended December 31, 2007,
Cardiogenesis reported operating income of $856,000 as compared
with an operating loss of $1,476,000 for the prior year period. The
net income for the year ended December 31, 2007 was $578,000, or
$0.01 per basic and diluted share, compared with a net loss of
$1,979,000, or $0.04 per basic and diluted share, for the year
ended December 31, 2006. Gross margin was 63% of sales for the
quarter ended December 31, 2007 as compared with a 75% gross margin
in the fourth quarter of 2006. Gross profit in absolute dollars
decreased by $1,017,000 to $1,731,000 for the current year quarter
as compared with $2,748,000 for the 2006 fourth quarter. The
decrease in gross margin resulted primarily from inventory
impairment charges of $508,000 during the quarter that did not
occur in the prior year quarter. Excluding inventory impairment
charges, gross margin for the 2007 fourth quarter was 81%. For the
year ended December 31, 2007, gross profit was 76% of net revenues
as compared to 79% of net revenues for the year ended December 31,
2006. Gross profit in absolute dollars decreased by $4,363,000 to
$9,110,000 for the year ended December 31, 2007, as compared to
$13,473,000 for the prior year period. The decrease in gross margin
for the full year resulted primarily from inventory impairment
charges. Excluding the inventory impairment charges, gross margin
was approximately 80% for the years ended December 31, 2007 and
2006. Research and development costs ("R&D") were $69,000 in
the fourth quarter of 2007 as compared with $374,000 in the 2006
fourth quarter. For the year ended December 31, 2007, R&D
expenses of $681,000 were $793,000 below the prior year period.
Salaries and employee benefit expenditures of $1,199,000 in the
quarter ended December 31, 2007 decreased $271,000, or 18%, when
compared to $1,470,000 for the quarter ended December 31, 2006. For
the year ended December 31, 2007, salaries and employee benefits
expenditures of $4,800,000 decreased $2,984,000, or 38%, when
compared to $7,784,000 for the year ended December 31, 2006. Sales,
general and administrative expenditures ("SG&A") for the
quarter ended December 31, 2007 totaled $495,000 as compared to
$1,851,000 during the quarter ended December 31, 2006. This
represents a reduction of $1,356,000, or 73%. For the year ended
December 31, 2007, SG&A totaled $2,773,000 as compared to
$5,691,000 for the year ended December 31, 2006. This represents a
reduction of $2,918,000, or 51%. 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. Surgical
products and accessories for the company's minimally invasive
Percutaneous Myocardial Channeling (PMC) procedure are currently
being marketed in Europe and other international markets. 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, 2006 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 Year ended December 31, December 31, 2007 2006
2007 2006 Net revenues $2,767 $3,664 $12,059 $17,117 Cost of
revenues 1,036 916 2,949 3,644 Gross profit 1,731 2,748 9,110
13,473 Operating expenses: Research and development 69 374 681
1,474 Salaries and employee benefits 1,199 1,470 4,800 7,784 Sales,
general and administrative 495 1,851 2,773 5,691 Total operating
expenses 1,763 3,695 8,254 14,949 Operating (loss) income (32)
(947) 856 (1,476) Other (expense) income: Interest expense (10)
(57) (69) (781) Interest income 26 22 120 132 Gain on insurance
settlement - - - 70 Loss on disposal of fixed assets (2) (111) (2)
(111) Non-cash interest expense - (29) (89) (831) Change in fair
value of derivatives and warrants (53) 629 (225) 1,020 Total other
(expense) income, net (39) 454 (265) (501) (Loss) Income before
income taxes (71) (493) 591 (1,977) Tax provision 13 - 13 2 Net
(loss) income (84) (493) $578 $(1,979) Net (loss) income per share:
Basic $0.00 $(0.01) $0.01 $(0.04) Diluted $0.00 $(0.01) $0.01
$(0.04) Weighted average shares outstanding: Basic 45,274 45,274
45,274 45,274 Diluted 45,274 45,274 45,274 45,274 CARDIOGENESIS
CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (in thousands)
(unaudited) ASSETS Current assets: Cash and cash equivalents $2,824
Accounts receivable, net of allowance for doubtful accounts of $28
1,763 Inventories, net of inventory reserve of $317 1,602 Prepaids
and other current assets 486 Total current assets 6,675 Property
and equipment, net 457 Other assets 27 Total assets $7,159
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts
payable $169 Accrued liabilities 1,458 Deferred revenue 1,210
Current portion of capital lease obligation 12 Total current
liabilities 2,849 Capital lease obligation, less current portion 19
Total liabilities 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 173,826
Accumulated deficit (169,535) Total shareholders' equity 4,291
Total liabilities and shareholders' equity $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/
http://www.heartofnewlife.com/
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