MINNEAPOLIS, Nov. 3 /PRNewswire-FirstCall/ -- ATS Medical, Inc. , manufacturer and marketer of state-of-the-art cardiac surgery products and services, today reported financial results for the third quarter ended September 27, 2008.
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Third Quarter 2008 Results
Revenue from the Company’s heart valve therapy products, consisting of mechanical valves, tissue valves and repair products, was up 39.1% on a year-over-year basis to $11.8 million. The growth reflected a 35.3% increase in mechanical valve revenue, a 117.6% increase in valve repair revenue and an 88% increase in tissue valve revenue. Revenue from the Company’s ATS CryoMaze(TM) surgical ablation products for the treatment of cardiac arrhythmias grew 21.7% to $4.0 million. Revenue from products and services other than the Company’s mechanical valves represented 34% of total revenue during the third quarter of 2008 compared with 36% in the third quarter of 2007.
Gross profit margin for the third quarter of 2008 was 59.1%, representing significant improvement from 56.3% in the third quarter of 2007. Year-over-year gross margin improvements were the result of lower product costs and increased contribution of new products. Gross margins declined sequentially from 60.9% in the second quarter of 2008 as a result of seasonality in markets where the Company sells direct, principally in the U.S. and Western Europe, and an increase in revenue from distributors, as a percentage of total revenue.
The operating loss for the third quarter of 2008 was $2.8 million compared with an operating loss of $3.6 million in the third quarter of 2007. The net loss for the third quarter of 2008 was $3.7 million, or $0.06 per share, compared with $3.3 million, or $0.06 per share in the third quarter of 2007.
“Our strong third quarter revenue growth continues to demonstrate the strength of demand across the ATS product portfolio,” said Michael Dale, Chairman, President and Chief Executive Officer. “Notably, we achieved double digit mechanical valve growth both domestically and internationally, demonstrating the continued strength and acceptance of the ATS Open Pivot(R) valve as the new mechanical heart valve standard of care in the world.”
Recent and Upcoming New Product Highlights
Surgical Arrhythmias
-- ATS CryoMaze surgical ablation clamp: The Company launched a next generation ablation clamp in the third quarter. The ATS CryoMaze clamp enables the surgeon to ablate the pulmonary veins and then remove the ablation probe and complete the Maze procedure with one product, unlike competitive offerings which require one device for vein isolation and another for linear lesions. Because the ATS CryoMaze clamp was launched late in the third quarter, revenue contribution is expected to become meaningful in the fourth quarter.
Tissue Heart Valves
-- ATS 3f(R) Aortic Bioprosthesis: As announced previously, during October 2008 the Food and Drug Administration (FDA) approved the PMA for the Company’s first tissue valve, the ATS 3f Aortic Bioprosthesis. The Company plans to launch this valve in the United States during the first quarter of 2009.
-- ATS 3f Enable(TM) Aortic Bioprosthesis: Enrollment continues to progress with excellent clinical results in the Company’s European clinical trial of its Enable sutureless tissue valve. Enable is designed to provide a less invasive approach for aortic valve replacement. To date, over 111 patients have been implanted with the Enable valve. The Company expects to complete enrollment in the CE clinical trial in the near future. Regulatory approval for this valve in Europe is expected in mid-2009.
2008 Outlook
For the full year 2008 the Company now expects revenue to be in a range of $65 to $66 million versus its previous guidance of $64 to $66 million. The Company continues to expect to generate an operating profit in the fourth quarter.
Conference Call Today
ATS management will host a conference call today, November 3, 2008 at 5:00 p.m. ET to discuss its third quarter financial results and current corporate developments. The dial-in number for the conference call is 888-396-2384 for domestic participants and 617-847-8711 for international participants. A live webcast of the call can also be accessed at http://www.atsmedical.com by clicking on the Investors icon.
A taped replay of the conference call will also be available beginning approximately one hour after the call’s conclusion and will remain available for seven days. The replay can be accessed by dialing 888-286-8010 for domestic participants and 617-801-6888 for international callers, using the passcode 39004101#.
About ATS Medical
ATS Medical, Inc. provides innovative products and services focused on cardiac surgery. The Company, global in scope, is headquartered in Minneapolis, Minnesota. More than 160,000 ATS Open Pivot(R) Heart Valves, which utilize a unique pivot design resulting in exceptional performance and low risk profile, have been implanted in patients worldwide. The ATS 3f(R) brand encompasses multiple tissue heart valve product offerings at varying steps from market introductions to clinical trials to development projects that incorporate less invasive valve replacement technology. ATS Medical’s focus on serving the cardiac surgery community is further strengthened by offerings that include ATS Simulus(R) annuloplasty products for heart valve repair and ATS CryoMaze(TM) surgical ablation products. The ATS Medical web site is http://www.atsmedical.com.
Safe Harbor
This Press Release contains forward-looking statements that may include statements regarding intent, belief or current expectations of the Company and its management. Actual results could differ materially from those projected in the forward looking statements as a result of a number of important factors, including the results of clinical trials, the timing of regulatory approvals, the outcome of pending litigation matters, the integration of the surgical cryoablation business of CryoCath Technologies, Inc., regulatory actions, competition, pricing pressures, supplier actions and management of growth. For a discussion of these and other risks and uncertainties that could affect the Company’s activities and results, please refer to the Company’s filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2007 and its most recent quarterly report on Form 10-Q.
CONTACT: Michael Dale, President\CEO, +1-763-553-7736, or Michael Kramer,
CFO, +1-763-557-2222, both of ATS Medical, Inc.; or Investors, Parice
Halbert, CFA of Westwicke Partners, +1-443-213-0500, for ATS Medical, Inc.
Web site: http://www.atsmedical.com/
