WILMINGTON, Mass., June 28 /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 fiscal fourth quarter and year ended March 31, 2006.
For the fiscal year ended March 31, 2006, revenues were $22.4 million as compared to $21.8 million in fiscal 2005. The Company reported a net loss of $5.1 million, or $0.26 per basic and diluted share, as compared to a net loss of $1.6 million, or $0.09 per basic and diluted share, a year earlier.
For the fiscal fourth quarter, revenues were $5.2 million as compared to $5.8 million a year earlier. The net loss for the quarter was $3.3 million, or $0.17 per basic and diluted share, as compared to a net loss of $627,000, or $0.03 per basic and diluted share, for the comparable prior year period. The decrease in revenues is primarily attributable to a decrease in cardiopulmonary product sales.
The increase in CardioTech's net loss for fiscal 2006 is due to several factors. First, the Company recorded a fiscal fourth quarter goodwill impairment of $1.2 million as determined by the Company's annual impairment test. Second, there was an overall reduction of gross margin contribution from product sales of $2.3 million, in part due to first-time pilot production costs related to a key customer in the Company's private label business. Finally, the Company incurred a fiscal fourth quarter impairment of $556,000 related to the value of custom inventory for this key customer. This customer is currently performing an evaluation of products manufactured for it by the Company.
Commenting on CardioTech's performance, Dr. Michael Szycher, Chairman and CEO said: "Despite our disappointing fourth quarter results, we have $6.8 million in cash and continue to be debt free. Accordingly, we believe we have sufficient working capital to complete the European clinical trial. Our approval process for CardioPass(TM), our synthetic coronary artery bypass graft, proceeded on schedule."
The Company's activities resulted in an April approval of its clinical trial plan in the European Union. CardioTech is now starting site selection for the trial. This planned trial represents a key milepost towards reaching the Company's goal of meeting the needs of coronary artery bypass patients who cannot be treated by currently available means. CardioTech recently selected a European-based Contract Research Organization to assist in the organization, execution and completion of the clinical trial in the European Union. As previously announced, the Company is moving forward with plans to conduct a limited clinical trial of 10 patients with a post-operative follow up period of 90 days.
"We recently strengthened our core executive management team with the additions of Michael Adams, Vice President of Regulatory Affairs and Business Development and Andrew Reed, Ph.D., Vice President of Technology. Our goal is to leverage core development and manufacturing competencies across the Company. CardioTech's business model is focused on customer driven development and manufacturing of customized medical products and components that possess superior characteristics that are based on our proprietary biomaterials technology. Examples of potential future product advantages from our technology are enhanced lubricity and novel anti-microbial properties," Dr. Szycher concluded.
CONFERENCE CALL TODAY
CardioTech will host a conference call with investors at 2:30 p.m., ET on Wednesday, June 28, 2006, to discuss its fiscal fourth quarter and year end 2006 financial results. Participants should dial in 866-206-7204 (ID# 924000) 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 two weeks at 888-266-2081 reference #924000.
About CardioTech International:
CardioTech International, Inc. is a medical device company that develops, manufactures and sells advanced products for the treatment of cardiovascular and other diseases. CardioTech is currently developing new products that address annual overall worldwide markets exceeding $1 billion. CardioPass(TM) is CardioTech's proprietary, synthetic coronary artery bypass graft. The Company is partnering with CorNova to develop a drug-eluting stent. The Company generates revenues from sales of advanced medical devices and disposables used during cardiopulmonary bypass procedures, 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 Implant Sciences' filings with the Securities and Exchange Commission, including its Quarterly Reports on Form 10-Q for the periods ended June 30, 2005, September 30, 2005 and December 31, 2005. The Company assumes no obligation to update the information contained in this press release.
For Further Information Contact: Eric Walters Sylvia Dresner Chief Financial Officer Vice President & Senior Vice President CardioTech International, Inc. VMW Corporate & Investor Relations 978-657-0075 212-616-6161 general-info@cardiotech-inc.cominfo@vmwcom.com CardioTech International, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) Three Months Ended Fiscal Years Ended March 31, March 31, 2006 2005 2006 2005 Revenues: Product sales $4,952 $5,524 $21,404 $21,067 Royalties 285 234 977 774 5,237 5,758 22,381 21,841 Cost of sales 4,958 4,091 18,304 15,645 Gross margin 279 1,667 4,077 6,196 Operating expenses: Research and development, regulatory and engineering 324 282 1,385 1,258 Selling, general and administrative 1,738 1,530 6,162 6,015 Impairment of goodwill 1,152 - 1,152 - Non-cash compensation & research contract expense 187 78 193 78 CarTika acquisition expenses - 333 - 333 3,401 2,223 8,892 7,684 Loss from operations (3,122) (556) (4,815) (1,488) Interest and other income and expense: Interest expense 7 - - (20) Interest income 11 5 42 38 Other income (expense) 29 - 104 (12) Other income, net 47 5 146 6 Equity in net loss of CorNova, Inc. (184) (76) (400) (113) Net loss $(3,259) $(627) $(5,069) $(1,595) Net loss per common share, basic and diluted $(0.17) $(0.03) $(0.26) $(0.09) Shares used in computing net loss per common share, basic and diluted 19,699 18,963 19,451 18,023 CardioTech International, Inc. Consolidated Balance Sheets (In thousands, except share and per share amounts) (Unaudited) March 31, 2006 2005 ASSETS Current assets: Cash and cash equivalents $6,841 $7,469 Accounts receivable-trade, net of allowance of $572 and $326 as of March 31, 2006 and 2005, respectively 2,851 3,399 Accounts receivable-other 265 231 Inventories 4,786 4,802 Prepaid expenses and other current assets 210 195 Total current assets 14,953 16,096 Property, plant and equipment, net 4,059 4,549 Amortizable intangible assets, net 584 776 Goodwill 487 1,638 Other assets 238 198 Investment in CorNova, Inc. 130 505 Total assets $20,451 $23,762 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,750 $1,664 Accrued expenses 936 652 Deferred revenue 132 263 Total current liabilities 2,818 2,579 Deferred rent 129 173 Stockholders' equity: Preferred stock; $.01 par value; 5,000,000 shares authorized; 500,000 shares issued and none outstanding as of March 31, 2006 and 2005, respectively - - Common stock; $.01 par value; 50,000,000 shares authorized; 19,796,833 and 19,258,989 shares issued and outstanding as of March 31, 2006 and 2005, respectively 198 192 Additional paid-in capital 36,685 35,263 Accumulated deficit (19,339) (14,270) Accumulated other comprehensive loss (40) (175) Total stockholders' equity 17,504 21,010 Total liabilities and stockholders' equity $20,451 $23,762
CardioTech International, Inc.CONTACT: Eric Walters, Financial Officer of CardioTech International,Inc., +1-978-657-0075, general-info@cardiotech-inc.com; or Sylvia Dresner,Vice President & Senior Vice President, VMW Corporate & Investor Relations,+1-212-616-6161, info@vmwcom.com
Web site: http://www.cardiotech-inc.com/
