WILMINGTON, Mass., Aug. 14 /PRNewswire-FirstCall/ -- CardioTech International, Inc. , a developer and manufacturer of advanced medical device products for the treatment of cardiovascular and other diseases, today reported financial results for the first quarter of fiscal 2007 ended June 30, 2006.
For the fiscal first quarter, revenues were $5.0 million as compared to $5.6 million in first quarter of fiscal 2006. The Company reported a net loss of $1.2 million, or $0.06 per basic and diluted share, as compared to a net loss of $567,000, or $0.03 per basic and diluted share, a year earlier.
The increase in CardioTech’s net loss for the quarter was primarily due to a decline in revenues at its Gish Biomedical, Inc. subsidiary that manufactures cardiopulmonary products, a reduction in gross margin percentage due to overall product mix, increased general and administrative expenses related principally to one-time higher professional fees, additional employees, and a noncash charge for an increase in equity in net loss of CorNova. The quarter benefited from an increase in royalty revenues.
The Company’s cash balance at June 30, 2006 was $5.6 million, a decrease of $1.2 million during the quarter. Several specific factors contributed to the increased use of cash during the quarter, including: inventory rework costs completed during the quarter for a key customer, one-time professional fees, and a decrease in accounts payable.
Commenting on CardioTech’s performance, CEO and President Michael Adams said: “Our first quarter performance was affected, in part, by events in one of our subsidiary operations that occurred in the final weeks of fiscal 2006. Accordingly, we reduced the number of manufacturing personnel at the end of the first quarter to align capabilities with anticipated future production volume from existing customers. We are working diligently to improve our operations and continue to benefit from our strong financial foundation of $5.6 million in cash and no debt.
“I am pleased to report that we are on schedule with the approved 10 patient European clinical trial of CardioPass(TM), our proprietary synthetic bypass graft. With the assistance of the contract research organization that came on board in the first quarter, a site was selected and recently a principal investigator signed a letter of agreement to conduct the trial. The lead investigator has participated in a wide variety of cardiovascular trials. Patient enrollment is scheduled to begin at the end of calendar 2006. The opportunity to lead our talented scientific and business teams to bring CardioTech to the next level is very exciting,” Mr. Adams concluded.
AUGUST 14 CONFERENCE CALL
CardioTech will host a conference call with investors at 2:30 p.m., ET on Monday, August 14, 2006, to discuss its fiscal first quarter financial
results. Participants should dial in (866) 814-1917 (ID# 937432) at least 10 minutes before the call is scheduled to begin.
REPLAY INFORMATION
A replay will be available approximately 2 hours after the conference call ends for a period of weeks at (888) 266-2081, Access Code 937432.
About CardioTech International:
CardioTech International, Inc. is a medical device company that designs, develops, manufactures and sells innovative products for the treatment of cardiovascular, orthopedic, oncological and other diseases. The Company provides its customers access to a range of proprietary and novel polymer and surface modification technologies. CardioPass(TM) is CardioTech’s proprietary, synthetic coronary artery bypass graft. (SynCAB) The Company generates revenues from sales of advanced medical devices, as well as from contracted product design and development services. More information about CardioTech is available at its website: http://www.cardiotech-inc.com
CardioTech International believes that this press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties. Such statements are based on management’s current expectations and are subject to facts that could cause results to differ materially from the forward-looking statements. For further information you are encouraged to review CardioTech’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the period ended March 31, 2006. The Company assumes no obligation to update the information contained in this press release.
For Further Information Contact: Eric Walters Vice President & Chief Financial Officer CardioTech International, Inc. 212-616-6161 general-info@cardiotech-inc.com Sylvia Dresner Senior Vice President VMW Corporate & Investor Relations 978-657-0075 info@vmwcom.com (FINANCIAL TABLES FOLLOW) CardioTech International, Inc. Condensed Consolidated Statements of Operations (Unaudited -- in thousands, except per share amounts) For The Three Months Ended June 30, 2006 2005 Revenues: Product sales $4,681 $5,436 Royalties 289 204 4,970 5,640 Cost of sales 4,027 4,472 Gross margin 943 1,168 Operating expenses: Research and development, regulatory and engineering 352 318 Selling, general and administrative 1,618 1,409 1,970 1,727 Loss from operations (1,027) (559) Interest and other income and expense: Interest income 20 11 Other income (expense) - (1) Other income, net 20 10 Equity in net loss of CorNova, Inc. (203) (18) Net loss $(1,210) $(567) Net loss per common share, basic and diluted $(0.06) $(0.03) Shares used in computing net loss per common share, basic and diluted 19,813 19,258 CardioTech International, Inc. Condensed Consolidated Balance Sheets (Unaudited -- in thousands, except share and per share amounts) June 30, March 31, 2006 2006 ASSETS Current assets: Cash and cash equivalents $5,636 $6,841 Accounts receivable-trade, net of allowance of $285 and $572 as of June 30, 2006 and March 31, 2006, respectively 3,093 2,851 Accounts receivable -- other 279 265 Inventories 4,877 4,786 Prepaid expenses and other current assets 187 210 Total current assets 14,072 14,953 Property, plant and equipment, net 3,941 4,059 Amortizable intangible assets, net 550 584 Goodwill 487 487 Other assets 123 130 Investment in CorNova, Inc. - 238 Total assets $19,173 $20,451 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $1,382 $1,750 Accrued expenses 769 936 Deferred revenue 570 132 Total current liabilities 2,721 2,818 Deferred rent 128 129 Stockholders’ equity: Preferred stock; $.01 par value; 5,000,000 shares authorized; 500,000 shares issued and none outstanding as of June 30, 2006 and March 31, 2006, respectively - - Common stock; $.01 par value; 50,000,000 shares authorized; 19,832,683 and 19,796,833 shares issued and outstanding as of June 30, 2006 and March 31, 2006, respectively 198 198 Additional paid-in capital 36,750 36,685 Accumulated deficit (20,549) (19,339) Accumulated other comprehensive loss (75) (40) Total stockholders’ equity 16,324 17,504 Total liabilities and stockholders’ equity $19,173 $20,451
CardioTech International, Inc.
CONTACT: Eric Walters, Vice President & Chief Financial Officer ofCardioTech International, Inc., +1-212-616-6161,general-info@cardiotech-inc.com; or Sylvia Dresner, Senior Vice Presidentof VMW Corporate & Investor Relations, +1-978-657-0075, info@vmwcom.com
Web site: http://www.cardiotech-inc.com/
