Fourth Quarter Revenues up 79% on Continuing Sales Momentum
CUPERTINO, Calif., Feb. 2 /PRNewswire/ -- CardioThoracic Systems, Inc.,
(CTS), (Nasdaq: CTSI), a developer of minimally invasive cardiac surgery
devices, today reported results for the fourth quarter and year ended January
1, 1999.
For the fourth quarter of 1998, CTS reported revenues of $5.0 million, up
79 percent from revenues of $2.8 million in the fourth quarter of 1997.
Operating expenses for the fourth quarter of 1998 were $8.0 million, excluding
one-time charges of $1.6 million, which resulted in a net loss of $4.5
million, or $0.32 per share on 14.2 million weighted average shares
outstanding. One-time charges incurred in the fourth quarter of 1998 include
a $834,000 final milestone payment expense charged to research and development
associated with acquiring exclusive rights to a broad patent for minimally
invasive vessel harvesting and a restructuring charge of $736,000 associated
with the closing of the company's German subsidiary. For the fourth quarter
of 1997, operating expenses were $8.8 million and include a $1.0 million
research and development charge for a milestone payment relating to a
development contract.
Including one-time charges, the net loss for the fourth quarter of 1998
was $6.1 million, or $0.43 per share, compared to a net loss of $6.9 million,
or $0.51 per share on 13.6 million weighted average shares outstanding, for
the fourth quarter of 1997.
For the year, net revenues increased 72 percent to $16.1 million from
$9.4 million in 1997. Including fourth quarter 1998 one-time charges, the net
loss for the year was $22.6 million, or $1.62 per share, on 14.0 million
weighted average shares outstanding, compared to a net loss of $22.4 million,
or $1.66 per share on 13.5 million weighted average shares outstanding, in
1997. As of January 1, 1999, CTS had cash, cash equivalents and
available-for-sale securities of $40.3 million.
Richard Ferrari, CTS president and chief executive officer, commented, "We
are pleased with the momentum in revenue growth that is being fueled by the
continuing adoption of CTS products, including the CTS OPCAB(TM) (Off-Pump
Coronary Artery Bypass) Procedure System. Gross margins improved
significantly in the fourth quarter of 1998 to 59 percent from 42 percent in
the fourth quarter of 1997 and 57 percent in the third quarter of 1998. As we
continue to roll out new products and increase the breadth of our product
offerings, we expect to see continued gross margin improvement."
At last week's Society of Thoracic Surgeons (STS) meeting in San Antonio,
Texas, the company introduced ten new products including its fifth generation
off-pump beating heart bypass system and its first stopped heart system.
Additionally, CTS launched several accessory products, procedural kits and
product line extensions. "CTS is now in a position to sell at least one
product that can be used in virtually every adult cardiac surgery case,"
commented Ferrari.
"The recent product introductions demonstrate CTS' commitment to advancing
the field of minimally invasive cardiac surgery as well as our ability to
leverage our clinical expertise and proprietary technology platforms,"
continued Ferrari. "We are encouraged by the positive reception these
products received at the STS meeting and believe that our ability to now
provide surgeons with a broad spectrum of products for cardiac surgery will
contribute to our continued growth."
CardioThoracic Systems, Inc., located in Cupertino, Calif., is a leading
developer of proprietary technologies for use in minimally invasive cardiac
surgery. CTS introduced its first generation system for minimally invasive
beating heart bypass surgery in January 1997. Since that time, CTS has
shipped over 25,000 beating heart bypass systems.
This news release contains forward-looking information that involves risks
and uncertainties including uncertainties associated with the success of the
company's development efforts, the company's financial results, the acceptance
of the company's products and systems, the capabilities and benefits of the
CTS instrumentation and methods and the size of the market for minimally
invasive saphenous vein harvesting. Actual results may differ significantly
from the results discussed in the forward-looking statements as a result of
those and other factors, including factors set forth in the company's annual
report on Form 10-K filed with the Securities and Exchange Commission on March
31, 1998, and the company's quarterly report on Form 10-Q, filed with the
Security Exchange Commission on November 13, 1998. Copies of the Annual
Report on Form 10-K and the company's quarterly report on Form 10-Q are
available by calling the company's investor relations department at
408-342-1700.
To learn more about CardioThoracic Systems, Inc., visit the company's
website at http://www.cardioth.com.
CARDIOTHORACIC SYSTEMS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
Three Months Ended Twelve Months Ended
Jan. 1, Jan. 2, Jan. 1, Jan. 2,
1999 1998 1999 1998
(unaudited)
Net sales $5,005 $2,802 $16,149 $9,379
Cost of sales 2,038 1,631 7,237 5,962
Gross profit 2,967 1,171 8,912 3,417
Operating expenses:
Research and development 3,432 3,527 11,496 10,806
Sales, marketing, general,
and administrative 5,409 5,315 21,655 18,620
Restructuring charges 736 -- 736 --
Total operating
expenses 9,577 8,842 33,887 29,426
Loss from operations (6,610) (7,671) (24,975) (26,009)
Interest income, net 536 723 2,413 3,645
Net loss $(6,074) $(6,948) $(22,562) $(22,364)
Net loss per common share
and per common share -
assuming dilution $(0.43) $(0.51) $(1.62) $(1.66)
Shares used in computing
net loss per common share
and per common share -
assuming dilution 14,196 13,637 13,968 13,505
CONSOLIDATED CONDENSEDBALANCE SHEETS
(in thousands)
Jan. 1, 1999 Jan. 2, 1998
Cash, cash equivalents and
available-for-sale securities $40,253 $60,834
Total current assets 34,142 60,490
Property and equipment, net 3,374 3,613
Total assets 49,766 69,276
Total current liabilities 8,392 5,619
Total stockholders' equity $39,963 $60,134
SOURCE CardioThoracic Systems, Inc.
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Related links:
http://www.cardioth.com.
CONTACT:
Steve Van Dick, CFO, or Media, Ronda Prothro,
both of CardioThoracic Systems, Inc., 408-342-1700; or General
Information, Ann Trunko, Analysts, Kate Rajeck, or Media
Inquiries, Scott Marx, all of The Financial Relations Board,
415-986-1591
NOTE TO EDITORS: For more information on CardioThoracic Systems,
Inc., via fax at no cost, dial 1-800-PRO-INFO or 908-544-2850
outside the U.S. Ticker symbol: CTSI
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