WILMINGTON, Mass., Nov. 7 /PRNewswire-FirstCall/ -- CardioTech International, Inc. , a developer and manufacturer of advanced materials and medical devices for the treatment of cardiovascular and other diseases, today reported financial results for the second quarter and six months of fiscal 2007 ended September 30, 2006.
For the fiscal second quarter, revenues were $5.3 million as compared to $6.0 million in the second quarter of fiscal 2006. The Company reported a net loss of $346,000, or $0.02 per basic and diluted share, as compared to a net loss of $285,000, or $0.01 per basic and diluted share, a year earlier. In the first quarter of fiscal 2007, the net loss was $1.2 million, or $0.06 per basic and diluted share.
For the six months ended September 30, 2006, revenues were $10.3 million as compared to $11.7 million in the first six months of fiscal 2006. The Company reported a net loss of $1.6 million for the six months ended September 30, 2006, or $0.08 per basic and diluted share, as compared to a net loss of $852,000, or $0.04 per basic and diluted share, a year earlier.
During the three and six months ended September 30, 2006, gross margins benefited from the recording of $397,000 in revenue from a former Catheter and Disposables Technology, Inc. (“CDT”) key customer as both its inspection process stopped and the uncertainty of product acceptance ceased. This amount represents cash received during the six months ended September 30, 2006 and was previously deferred. Costs associated with this revenue have been recorded in prior periods.
Without this gross margin contribution from the CDT key customer, gross margin contributions for the three months ended September 30, 2006, when compared to the prior year period, were less at CDT. Contributions were also less from its Gish Biomedical, Inc. subsidiary that manufactures cardiopulmonary products.
The Company’s cash balance at September 30, 2006 was $5.3 million, a decrease of $355,000 during the quarter. Working capital was $11.2 million as of September 30, 2006.
Commenting on CardioTech’s performance, President and CEO Michael Adams said: “Our results, although disappointing, were anticipated as we moved forward with the execution of our revitalized business strategy. Our goal is to better combine our core polymer technology with new product applications and expand customers’ access to our capabilities. During the quarter, we began the process that will vertically integrate our Biomaterials division, the developer, manufacturer and marketer of our proprietary polymers, with our CDT unit, which designs and manufactures disposable medical devices. An important initial step is the recent hire of a new Vice President and General Manager who came on board to lead CDT.
“We are conducting a comprehensive review of intellectual property held by other companies in which our proprietary polymers are cited. The results of this review may lead to additional opportunities to exercise our strategy of seeking license and royalty arrangements for the exclusive use of our polymers.
“Additionally, we continue to operate from a strong financial foundation of $5.3 million in cash and no debt. I am also pleased to report that final European clinical trial preparations for our CardioPass(TM) synthetic coronary bypass graft are proceeding on schedule. The Ministry of Health in the country where the trial will be conducted is currently reviewing our application. This is an important step in the home stretch of preparations leading to patient selection,” Mr. Adams concluded.
November 7 Conference Call and Replay
CardioTech will host a conference call with investors at 2:30 p.m. ET on Tuesday, November 7, 2006, to discuss its fiscal second quarter financial results. Participants should dial in at (866) 261-2650 (ID# 984728) at least 10 minutes before the call is scheduled to begin. Outside the U.S. and Canada, please dial (703) 639-1221 (ID# 984728).
A replay will be available beginning approximately two hours after the conference call ends for a period of two weeks by dialing (888) 266-2081, Access Code 984728. Outside the U.S. and Canada, please dial (703) 925-2533 (ID# 984728).
About CardioTech International, Inc.
CardioTech International, Inc. is a medical device company that designs, develops, manufactures and sells innovative materials and products for the treatment of cardiovascular, orthopedic, oncology and other diseases. The Company’s strategic goal is to incorporate its proprietary technology into a wide range of breakthrough medical devices. CardioPass(TM) is CardioTech’s proprietary, synthetic coronary artery bypass graft. The Company generates revenues from sales of materials and advanced medical devices, as well as from contracted product design and development services. More information about CardioTech is available by visiting its website at http://www.cardiotech-inc.com.
Forward-Looking Statements
CardioTech 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 risks and uncertainties that could cause results to differ materially from the forward-looking statements. For further information on such risks and uncertainties, you are encouraged to review CardioTech’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended March 31, 2006 and its Quarterly Reports on Form 10-Q for the fiscal quarters ended June 30, 2006 and September 30, 2006. CardioTech assumes no obligation to update any forward-looking statements as a result of new information or future events or developments, except as required by law.
For Further Information Contact: Eric Walters Vice President & Chief Financial Officer CardioTech International, Inc. (978) 657-0075 general-info@cardiotech-inc.com Sylvia Dresner Senior Vice President VMW Corporate & Investor Relations (212) 616-6161 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 For The Six Months Ended September 30, September 30, 2006 2005 2006 2005 Revenues: Product sales $4,993 $5,763 $9,674 $11,200 Royalties 289 271 578 475 5,282 6,034 10,252 11,675 Cost of sales 3,685 4,410 7,712 8,882 Gross margin 1,597 1,624 2,540 2,793 Operating expenses: Research and development, regulatory and engineering 391 386 743 703 Selling, general and administrative 1,617 1,538 3,234 2,948 2,008 1,924 3,977 3,651 Loss from operations (411) (300) (1,437) (858) Interest and other income and expense: Interest income 39 86 58 96 Other income (expense) 101 (6) 101 (7) Other income, net 140 80 159 89 Equity in net loss of CorNova, Inc. (75) (65) (278) (83) Net loss $(346) $(285) $(1,556) $(852) Net loss per common share, basic and diluted $(0.02) $(0.01) $(0.08) $(0.04) Shares used in computing net loss per common share, basic and diluted 19,832 19,350 19,823 19,304 CardioTech International, Inc. Condensed Consolidated Balance Sheets (Unaudited - in thousands, except share and per share amounts) September 30, March 31, 2006 2006 ASSETS Current assets: Cash and cash equivalents $5,281 $6,841 Accounts receivable-trade, net of allowance of $365 and $572 as of September 30, 2006 and March 31, 2006, respectively 2,504 2,851 Accounts receivable-other 279 265 Inventories 5,383 4,786 Prepaid expenses and other current assets 225 210 Total current assets 13,672 14,953 Property, plant and equipment, net 3,878 4,059 Amortizable intangible assets, net 523 584 Goodwill 487 487 Other assets 123 130 Investment in CorNova, Inc. - 238 Total assets $18,683 $20,451 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $1,583 $1,750 Accrued expenses 725 936 Deferred revenue 195 132 Total current liabilities 2,503 2,818 Deferred rent 124 129 Stockholders’ equity: Preferred stock; $.01 par value; 5,000,000 shares authorized; 500,000 shares issued and none outstanding as of September 30, 2006 and March 31, 2006, respectively - - Common stock; $.01 par value; 50,000,000 shares authorized; 19,832,483 and 19,796,833 shares issued and outstanding as of September 30, 2006 and March 31, 2006, respectively 198 198 Additional paid-in capital 36,753 36,685 Accumulated deficit (20,895) (19,339) Accumulated other comprehensive loss - (40) Total stockholders’ equity 16,056 17,504 Total liabilities and stockholders’ equity $18,683 $20,451
CardioTech International, Inc.
CONTACT: Eric Walters, Vice President & Chief Financial Officer ofCardioTech International, Inc., +1-978-657-0075, general-info@cardiotech-inc.com; or Sylvia Dresner, Senior Vice President of VMW Corporate &Investor Relations, +1-212-616-6161, info@vmwcom.com
Web site: http://www.cardiotech-inc.com//
