ev3 Inc. also Achieves Fourth Quarter Positive EBITDA
Conference Call Scheduled for February 20, 2007 at 8 a.m. CST; Simultaneous
Webcast at http://www.ev3.net
PLYMOUTH, Minn., Feb. 20 /PRNewswire-FirstCall/ -- ev3 Inc. (Nasdaq:
EVVV), a global endovascular device company, today reported financial
results for its fiscal fourth quarter of 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050615/CGEV3LOGO )
As reported on January 8, 2007, ev3's net sales in the fourth quarter
of 2006 increased 41% to $57.7 million versus net sales of $41.0 million in
the fourth quarter of 2005. Fourth quarter sales growth was broad-based and
reflected a strong contribution from each of ev3's Cardio Peripheral and
Neurovascular business segments as well as a strong contribution from both
domestic and international markets.
For the fiscal year ended December 31, 2006, ev3's net sales increased
51% to $202.4 million versus $133.7 million for the year ended December 31,
2005. Annual sales growth in 2006 also was generated internally and
reflected net sales growth in each of ev3's reportable business segments
and geographic markets.
Jim Corbett, president and CEO of ev3 Inc., commented, "We are very
pleased with yet another record quarter of sales growth which substantially
outpaced that of our target markets. With the FDA approval and launch of
our ProtegeRX carotid stent, used in combination with an ev3 embolic
protection device for carotid stenting, we are optimistic about our
prospects in 2007."
ev3's net loss attributable to common shareholders for the fourth
quarter of 2006 declined 79% to $4.6 million compared to $22.0 million in
the fourth quarter of 2005. The company's net loss attributable to common
shareholders for the fiscal year ended December 31, 2006 declined 57% to
$52.4 million compared to $122.1 million for the year ended December 31,
2005. ev3's net loss per common share attributable to common shareholders
for the fourth quarter of 2006 and fiscal year ended December 31, 2006 was
$0.08 and $0.93 per common share, respectively, compared to $0.45 per
common share in the fourth quarter of 2005 and $4.48 per common share in
the full year ended December 31, 2005. Total weighted average common shares
outstanding used in the per share calculations were 57.2 million and 56.6
million for the fourth quarter of 2006 and full year ended December 31,
2006, respectively and 49.2 million and 27.2 million for the fourth quarter
of 2005 and full year ended December 31, 2005, respectively.
ev3's earnings before interest, taxes, depreciation and amortization
(EBITDA), excluding charges for non-cash stock-based compensation, improved
approximately $19.5 million to a positive $3.0 million in the fourth
quarter of 2006, compared to a loss of $16.5 million in the fourth quarter
of 2005. ev3's EBITDA loss, excluding charges for non-cash stock-based
compensation, for the year ended December 31, 2006 improved $56.6 million
or 71%, to a loss of $23.3 million, compared to a loss of $79.9 million for
the year ended December 31, 2005. ev3 uses the non-GAAP financial measures,
EBITDA and EBITDA, excluding charges for non-cash stock-based compensation,
as supplemental measures of performance and believes that these measures
facilitate operating performance comparisons from period to period and
company to company.
EBITDA and EBITDA, excluding charges for non-cash stock-based
compensation, for the fourth quarter and year ended December 31, 2006 and
December 31, 2005 are reconciled to ev3's net loss for the respective
periods immediately following the detail of net sales by geography later in
this press release.
Corbett continued, "Since our initial public offering in mid 2005, we
have not had a more important financial objective than to achieve a
positive EBITDA, excluding non-cash stock-based compensation charges, by
the fourth quarter of 2006. Although we recognize that much work is yet to
be done, we are gratified to report that ev3's fourth quarter EBITDA was a
positive $1.4 million and that fourth quarter EBITDA, excluding non-cash
stock-based compensation, was a positive $3.0 million."
Sales Review
In the fourth quarter of 2006, ev3's Neurovascular segment net sales
increased 39% to $23.7 million versus $17.0 million in the fourth quarter
of 2005. Within the Neurovascular business segment, sales of embolic
products increased 49% to $12.0 million from $8.1 million, and sales of
Neurovascular access and delivery products were up 30% to $11.7 million
from $8.9 million. The primary growth drivers for the Neurovascular segment
were the continued market penetration of both the Onyx Liquid Embolic
System for the treatment of brain arterio-venous malformations (AVMs) and
the Nexus family of embolic coils for the treatment of brain aneurysms.
Cardio Peripheral segment net sales in the fourth quarter of 2006
increased 42% to $34.0 million versus $24.0 million in the fourth quarter
of 2005. Within the Cardio Peripheral business segment, stent sales
increased 53% to $18.5 million from $12.1 million. Sales of thrombectomy
and embolic protection products increased 79% to $6.2 million from $3.5
million, while sales of procedural support and other Cardio Peripheral
products increased 11% to $9.3 million from $8.4 million. The largest
contributors to the growth in the Cardio Peripheral segment were ev3's new
EverFlex stent product and the SpideRX Embolic Protection Device.
On a geographic basis, ev3's fourth quarter U.S. net sales increased
52% to $34.6 million, while fourth quarter international net sales
increased 26% to $23.1 million, over the prior-year quarter. Changes in
foreign currency exchange rates had a positive impact of approximately $1.2
million on fourth quarter 2006 net sales compared to the fourth quarter of
the prior year.
Outlook
ev3 expects 2007 annual net sales to be in the range of approximately
$262 to $278 million. ev3 expects first quarter of 2007 net sales to be in
the range of $59 to $63 million. ev3 also expects its quarterly operating
losses to be reduced during 2007, as compared to its quarterly operating
losses for fiscal year 2006. With respect to EBITDA, excluding non-cash
stock-based compensation, the company expects to generate $10 to $15
million in 2007 representing an improvement of $33 to $38 million over a
negative $23 million for 2006.
Earnings Call Information
ev3 will host a conference call today, February 20, 2007, beginning at
8 a.m. CST to review its results of operations for the fourth quarter of
2006 and other recent events and to discuss its 2007 business outlook.
Discussions during the conference call may include forward-looking
statements regarding such topics as, but not limited to, the company's net
sales, cost of goods sold, operating expenses, distribution arrangements,
clinical studies, regulatory status, financial position and comments the
company may make about its future in response to questions from
participants on the conference call. Any interested party may listen to the
conference call through a live audio Webcast at http://www.ev3.net . For
those unable to listen to the Webcast, a playback of the Webcast will be
available at http://www.ev3.net for approximately 90 days. Those without Internet
access may join the call from within the United States by dialing (866)
700-7173; outside the United States dial (617) 213-8838 passcode 98675467.
A playback of the conference call will be available from 11 a.m. CST,
February 20, 2007 until noon CST on February 27, 2007 by dialing (888)
286-8010 (United States) or (617) 801-6888 (International), passcode
12904482.
ev3 and the ev3 logo are trademarks of ev3 Inc., registered in the U.S.
and other countries.
This press release contains other trademarks and trade names of ev3
Inc. and other third parties, which are the property of their respective
owners.
Statements contained in this press release that are not historical
information are forward-looking statements as defined within the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
are subject to risks and uncertainties that could cause actual results to
differ materially from those projected or implied. Such potential risks and
uncertainties relate, but are not limited to, in no particular order:
product demand and market acceptance; the impact of competitive products
and pricing; delays in regulatory approvals and the introduction of new
products; and success of clinical testing. More detailed information on
these and additional factors which could affect ev3 Inc.'s operating and
financial results is described in the company's filings with the Securities
and Exchange Commission, including its most recent quarterly report on Form
10-Q and annual report on Form 10-K. ev3 Inc. urges all interested parties
to read these reports to gain a better understanding of the many business
and other risks that the company faces. Additionally, ev3 Inc. undertakes
no obligation to publicly release the results of any revisions to these
forward-looking statements, which may be made to reflect events or
circumstances occurring after the date hereof or to reflect the occurrence
of unanticipated events.
ev3 Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(unaudited)
For the Three Months Ended For the Years Ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
Net sales $57,675 $40,974 $202,438 $133,696
Operating expenses
Cost of goods sold (a) 18,988 16,610 71,321 55,094
Sales, general and
administrative (a) 32,612 35,604 141,779 130,427
Research and
development (a) 6,868 8,627 26,725 39,280
Amortization of
intangible assets 4,215 2,796 17,223 10,673
Loss on sale or
disposal of assets,
net 20 (4) 162 200
Acquired in-process
research and
development - - 1,786 868
Total operating
expenses 62,703 63,633 258,996 236,542
Loss from operations (5,028) (22,659) (56,558) (102,846)
Other (income) expense:
Gain on sale of
investments, net - - (1,063) (4,611)
Interest (income)
expense, net (224) (917) (1,695) 9,916
Minority interest in
loss of subsidiary - (801) - (2,013)
Other (income)
expense, net (584) 448 (2,117) 3,360
Loss before income
taxes (4,220) (21,389) (51,683) (109,498)
Income tax expense 360 587 688 526
Net loss (4,580) (21,976) (52,371) (110,024)
Accretion of preferred
membership
units to redemption
value - - - 12,061
Net loss
attributable to
common shareholders $(4,580) $(21,976) $(52,371) $(122,085)
Net loss per common
share attributed to
common shareholders
(basic and
diluted) (b) $(0.08) $(0.45) $(0.93) $(4.48)
Weighted average
common shares
outstanding (b) 57,228,532 49,162,046 56,585,025 27,242,712
(a) Includes stock-
based compensation
charges of:
Cost of goods sold $134 $208 $630 $653
Sales, general and
administrative 1,314 1,236 5,868 3,141
Research and
development 132 351 655 1,079
$1,580 $1,795 $7,153 $4,873
(b) Net loss per common share attributed to common shareholders and
weighted average common shares outstanding reflect the June 21, 2005
1-for-6 reverse stock split for all periods presented.
ev3 Inc.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
December 31, December 31,
2006 2005
(unaudited)
Assets
Current assets
Cash and cash equivalents $24,053 $69,592
Short-term investments 14,700 12,000
Accounts receivable, less allowance
of $3,924 and $3,607, respectively 45,137 28,519
Inventories 42,124 32,987
Prepaid expenses and other assets 7,162 7,042
Other receivables 2,669 1,535
Total current assets 135,845 151,675
Restricted cash 2,022 3,102
Property and equipment, net 24,072 17,877
Goodwill 149,061 94,456
Other intangible assets, net 40,014 26,230
Other assets 1,812 3,488
Total assets $352,826 $296,828
Liabilities and stockholders' equity
Current liabilities
Accounts payable $13,140 $11,716
Accrued compensation and benefits 16,382 14,612
Accrued liabilities 10,102 11,343
Current portion of long-term debt 2,143 -
Total current liabilities 41,767 37,671
Long-term debt 5,357 -
Other long-term liabilities 468 852
Total liabilities 47,592 38,523
Minority interest - 12,850
Stockholders' equity
Common stock: $0.01 par value; 100,000,000
shares authorized; issued and outstanding:
57,594,742 and 49,350,647, respectively 576 493
Additional paid in capital 919,221 807,032
Accumulated deficit (614,578) (562,207)
Accumulated other comprehensive income 15 137
Total stockholders' equity 305,234 245,455
Total liabilities and stockholders'
equity $352,826 $296,828
ev3 Inc.
SELECTED NET SALES INFORMATION
(Dollars in thousands, except per share amounts)
(unaudited)
For the Three For the Years
NET SALES BY SEGMENT Months Ended Ended
December December % December December %
31, 2006 31, 2005 change 31, 2006 31, 2005 change
Cardio Peripheral
Stents $18,501 $12,079 53% $64,092 $37,871 69%
Thrombectomy and
embolic
protection 6,177 3,459 79% 21,606 12,869 68%
Procedural
support and
other 9,344 8,451 11% 35,406 29,141 21%
Total cardio
peripheral 34,022 23,989 42% 121,104 79,881 52%
Neurovascular
Embolic products 12,026 8,046 49% 38,998 22,463 74%
Neuro access and
delivery
products 11,627 8,939 30% 42,336 31,352 35%
Total
neurovascular 23,653 16,985 39% 81,334 53,815 51%
Total company $57,675 $40,974 41% $202,438 $133,696 51%
NET SALES BY For the Three For the Years
GEOGRAPHY Months Ended Ended
December December % December December %
31, 2006 31, 2005 change 31, 2006 31, 2005 change
United States $34,590 $22,707 52% $121,180 $71,848 69%
International 23,085 18,267 26% 81,258 61,848 31%
Total net sales $57,675 $40,974 41% $202,438 $133,696 51%
ev3 Inc.
NON-GAAP FINANCIAL MEASURES
(Dollars in thousands)
(unaudited)
For the Three For the Years
Months Ended Ended
December December December December
31, 2006 31, 2005 31, 2006 31, 2005
Reconciliation of net loss to
EBITDA
Net loss, as reported (GAAP
basis) $(4,580) $(21,976) $(52,371) $(110,024)
Interest (income) expense, net (224) (917) (1,695) 9,916
Income tax expense 360 587 688 526
Depreciation and
amortization 5,854 4,026 22,878 14,816
EBITDA $1,410 $(18,280) $(30,500) $(84,766)
Stock-based compensation 1,580 1,795 7,153 4,873
EBITDA, adjusted for stock-
based compensation $2,990 $(16,485) $(23,347) $(79,893)
ev3 uses non-GAAP financial measures, as outlined above, as
supplemental measures of performance and believes these measures facilitate
operating performance comparisons from period to period and company to
company by factoring out potential differences caused by variations in
capital structure, tax positions, depreciation, non-cash charges and
certain large and unpredictable charges. ev3 also believes that the
presentation of these measures provides useful information to investors in
evaluating the company's operations, period over period. Non-GAAP measures
have limitations as analytical tools, and should not be considered in
isolation, or as a substitute for analysis of the company's results as
reported under Generally Accepted Accounting Principles (GAAP).
SOURCE ev3 Inc.
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Related links:
http://www.ev3.net
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20050615/CGEV3LOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Investor Relations, Patrick Spangler, CFO, of
ev3 Inc., +1-763-398-7000, or pspangler@ev3.net , or Marian
Briggs or Nancy Johnson, both of Padilla Speer Beardsley,
+1-612-455-1742, or +1-612-455-1745, or mbriggs@psbpr.com , or
njohnson@psbpr.com
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