MONTREAL, Dec. 5 /PRNewswire-FirstCall/ - CryoCath Technologies Inc., the global leader in cryotherapy products to treat cardiovascular disease, today announced financial results for the fourth quarter and fiscal year-ended September 30, 2005.
Selected Fiscal 2005 Financial and Operating Highlights - 37% increase in revenue over fiscal 2004 from $24.3 million to $33.3 million - 50% increase in disposable units sold over fiscal 2004 from 9070 to 13,580 - Increased Gross Margins from 58% in 2004 to 62% in 2005 - Operating burn for the year decreased from $18.6 million in 2004 to $12.5 million in 2005 - 223 centres added throughout fiscal 2005 (62 new centres in the fourth quarter) - Entered strategic alliance with ATS Medical for the marketing and distribution of the surgical product line - Launched Freezor(R) MAX in the U.S. - Beta launched Arctic Front(TM) in Europe in fiscal fourth quarter - Launched FrostByte(R) globally in fiscal fourth quarter - Initiated feasibility IDE trial, the Cryo System Trial of Paroxysmal Atrial Fibrillation (STOP AF), in preparation for the pivotal study for U.S. regulatory approval of Arctic Front
“Fiscal 2005 was another solid year of consistent performance across our entire organization - we grew sales, improved gross margins, launched new products, expanded into new territories, refined our sales structure, grew our installed base, reduced our burn rate and advanced our U.S. regulatory and clinical program for Arctic Front.” said Steven G. Arless, President and CEO. “Fiscal 2006 will be no less productive - we will continue to improve our business fundamentals, increase the presence of Arctic Front throughout Europe and proceed with the pivotal stage of the Arctic Front clinical trial in the U.S.
The Company’s total sales reached $10.0 million for the fourth quarter, an increase of 43% over the $7.0 million for the same quarter last year. For the 12-month period ending September 30, 2005, sales increased 37% to $33.3 million compared to $24.3 million in 2004.
Total disposable units sold for the quarter reached 3,995, an increase of 54% from the same period last year. For the year, the Company sold 13,580 disposable units, a 50% increase from the 9,070 units sold in the previous year.
Gross margins for the fourth quarter of fiscal 2005 were $5.8 million or 58% of sales, a decrease from the 61% level seen in the fourth quarter of fiscal 2004. This reduction was due to the continued decline of the U.S. dollar versus the Canadian dollar, and to an increase in the mix of sales to distributors versus direct sales. For the year, gross margins were $20.5 million, or 62%, versus $14.2 million, or 58%, in 2004.
Net research and development expenses for the quarters ended September 30, 2005 and 2004 were $2.4 million and $2.2 million respectively. On an annual basis, net R&D expenses were $10.3 million versus $9.4 million in 2004. Research and development expenses are expected to increase next year as the Company embarks on a U.S. pivotal study for AF. Total clinical costs for this study are expected to reach close to $10 million.
Administration expenses for the fourth quarter of 2005 were $0.8 million, a modest increase from $0.74 million from the same period last year. On a year to date basis, administrative expenses increased slightly from $3.3 million, for the year ended September 30, 2004, to $3.7 million in fiscal 2005.
The Company’s sales and marketing expenses for the fourth quarter of 2005 were $6.3 million, up from $5.5 million in the fourth quarter of 2004. For the year, sales and marketing expenses increased 7%, to $24.2 million from $22.5 million. As a percentage of sales, however, sales and marketing expenses continued to decline. Sales and marketing expenses for the fourth quarter of fiscal 2005 as a percentage of sales were 63%, down from the 78% for the fourth quarter of fiscal 2004. For the year, sales and marketing expenses as a percentage of sales declined to 72.7% from 92.5% for fiscal 2004. The Company expects to continue this downward trend.
CryoCath’s net loss for the fourth quarter ended September 30, 2005 decreased to $4.5 million or ($0.12) per share from a loss of $5.0 million, or ($0.15) per share, in the fourth quarter of fiscal 2004. On an annual basis, the net loss was $18.6 million or ($0.51) per share versus $22.6 million, or ($0.68) in 2004.
Operating burn for the quarter was $2.8 million versus $3.5 million in the fourth quarter of 2004. On an annual basis, the operating burn was $12.5 million versus $18.6 million in 2004.
Working capital increased to $34 million as at September 30, 2005, a $10.8 million increase from $23.2 million at September 30, 2004. The Company at September 30, 2005 had access to approximately $41.1 million in cash or borrowing facilities. The Company believes that it will continue to be able to access sufficient working capital to meet its current and future requirements.
The Company will host a conference call to discuss the fourth quarter and year-end results on Monday, December 5, 2005 at 10 a.m. EST. The call will be audio-cast live and archived for 90 days at www.financialdisclosure.ca and www.cryocath.com.
About CryoCath(R)
CryoCath - www.cryocath.com - is a medical technology company that leads the world in cryotherapy products to treat cardiovascular disease. With a priority focus on providing physicians with a complete solution of catheter and surgical products to treat cardiac arrhythmias, CryoCath has multiple products approved in the U.S., across Europe and several other ROW countries. The Company is developing additional products to expand its pipeline of products to treat cardiac arrhythmias and has development projects for the treatment of cardiac ischemia (angina) and peripheral arterial disease (PAD).
This press release includes “forward looking statements” that are subject to risks and uncertainties. For information identifying legislative or regulatory, economic, climatic, currency, technological, competitive and other important factors that could cause actual results to differ materially from those anticipated in the forward looking statements, see CryoCath’s Annual Report under the heading Risks and Uncertainties in the Management’s Discussion and Analysis section.
Balance Sheets As at September 30 September 30 2005 2004 $ $ ---------------------------- Assets Current Assets Cash and cash equivalents 652,161 10,946,700 Short-term investments 25,353,537 10,710,665 Accounts receivables 8,019,186 5,414,986 Investment tax credits receivable 264,104 295,050 Inventories 6,767,472 5,548,750 Prepaid expenses 728,969 762,857 ---------------------------- Total current assets 41,785,429 33,679,008 Net investments in leases 67,278 143,098 Deferred financing charges 1,674,376 1,868,049 Consoles at customers’ premises 2,777,479 3,452,986 Property, plant, and equipment 3,451,016 2,183,056 Intellectual property 16,504,553 17,394,880 ---------------------------- 66,260,131 58,721,077 ---------------------------- ---------------------------- Liabilities and shareholders’ equity Current Liabilities Bank indebtedness - 4,510,000 Accounts payable and accrued liabilities 7,593,694 5,990,539 Current portion of deferred revenue 334,962 - ---------------------------- Total current liabilities 7,928,656 10,500,539 Long-term debt 11,007,663 10,140,240 Deferred revenue 76,446 86,611 ---------------------------- Total Liabilities 19,012,765 20,727,390 ---------------------------- Shareholders’ equity Capital stock 179,900,284 152,860,848 Other paid-in capital 4,351,347 3,545,002 Deficit (137,004,265) (118,412,163) ---------------------------- Total shareholders’ equity 47,247,366 37,993,687 ---------------------------- 66,260,131 58,721,077 ---------------------------- ---------------------------- Statements of Operations and Deficit Three Months Three Months Ended Ended Year Ended Year Ended September 30, September 30, September 30, September 30, 2005 2004 2005 2004 $ $ $ $ ---------------------------------------------------------- Revenues Sales 9,993,143 7,043,103 33,291,084 24,336,023 Cost of Sales (net of amortization of $841,652 and $2,773,978; 2004 - $642,539 and $2,261,408) 4,190,268 2,768,054 12,778,015 10,110,226 ---------------------------------------------------------- Gross Profit 5,802,875 4,275,049 20,513,069 14,225,797 Surgical distribution rights - - 1,952,086 - ---------------------------------------------------------- 5,802,875 4,275,049 22,465,155 14,225,797 Interest income 173,032 57,191 783,756 475,308 ---------------------------------------------------------- 5,975,907 4,332,240 23,248,911 14,701,105 ---------------------------------------------------------- Expenses Research and development 2,614,179 2,483,825 11,206,053 10,236,472 Investment tax credits (171,968) (302,878) (860,954) (800,000) ---------------------------------------------------------- Net research and development 2,442,211 2,180,947 10,345,099 9,436,472 Administrative 794,641 740,778 3,715,787 3,282,015 Sales and marketing 6,292,995 5,490,060 24,187,306 22,519,187 Amortization of intellectual property 54,242 47,717 202,539 182,031 Amortization of property, plant, and equipment 167,425 180,119 804,350 734,946 Amortization of deferred finance charges 49,342 49,620 195,823 60,536 Interest on long-term debt 227,156 196,217 867,423 240,240 Foreign exchange losses 272,225 371,206 689,778 277,468 Non-cash compensation expense 154,343 145,493 832,908 378,749 Field corrective action expenses - - - 152,150 ---------------------------------------------------------- 10,454,580 9,402,157 41,841,013 37,263,794 ---------------------------------------------------------- Net loss before taxes (4,478,673) (5,069,917) (18,592,102) (22,562,689) Income taxes - 37,501 - - ---------------------------------------------------------- Net loss (4,478,673) (5,032,416) (18,592,102) (22,562,689) Deficit, beginning of period (132,525,592) (113,379,747) (118,412,163) (95,849,474) ---------------------------------------------------------- Deficit, end of period (137,004,265) (118,412,163) (137,004,265) (118,412,163) ---------------------------------------------------------- Basic and diluted loss per share (0.12) (0.15) (0.51) (0.68) ---------------------------------------------------------- Weighted average number of common shares 37,662,562 33,185,204 36,701,076 32,940,270 ----------------------------------------------------------
CryoCath Technologies Inc.
CONTACT: visit our website at www.cryocath.com, or contact: Steven G.Arless, President & CEO, CryoCath Technologies Inc., Tel: (514) 694-1212ext. 224, sarless@cryocath.com; Mike Polonsky, Investor Relations, Tel:(416) 815-0700 ext. 231, Fax: (416) 815-0080, mpolonsky@equicomgroup.com
