MONTREAL, Dec. 21 /PRNewswire-FirstCall/ - CryoCath(R) Technologies Inc., the global leader in cryotherapy products to treat cardiovascular disease, today announced financial results for the fourth quarter and year ended September 30, 2006.
Selected FY 2006 Financial and Operating Highlights: - 15% increase in revenue over fiscal 2005 to $38.4 million - 29% increase in disposable units sold over fiscal 2005 to more than 17,500 - Installed 180 new surgical and EP console systems - Commenced pivotal study for Arctic Front(TM) to treat atrial fibrillation (AFib)
"Fiscal 2006 was another solid year for CryoCath. Not only did we grow top-line sales 15 per cent, we also significantly expanded our presence, as an additional 180 centers around the world now have access to our technology," said Henri Vienneau, Interim CEO and Chairman of the Board of Directors. "Most importantly, we continued to advance Arctic Front. This technology is now available in more than 20 centers in Europe and has been used to successfully treat more than 400 AFib patients. Our pivotal IDE study is now underway, and we anticipate that enrollment will accelerate. As such we are well positioned for a successful 2007."
FY 2006
For the 12-month period ending September 30, 2006, sales increased 15% to reach $38.4 million compared to $33.3 in fiscal 2005. This is largely attributable to strong growth in disposable units which increased by 29% year-over-year.
Gross margins in fiscal 2006 were $20.5 million or 54% of sales, versus $19.9 million or 60% of sales in 2005. This reduction in margins is a result of a variety of factors including higher usage based amortization costs on consoles related to higher sales and increased costs related to ramp up of manufacturing.
Total expenses in fiscal 2006 were $51.3 million, up 24% from $41.2 million in fiscal 2005. The increase was driven by higher expenses in sales and marketing, higher net research and development costs, and one-time costs related to refocusing our operations.
Sales and marketing expenses in fiscal 2006 totaled $27.7 million versus $23.6 million for the same period a year ago. This increase is based on an expansion to the sales and marketing team initiated early in 2006.
On a 12-month basis, net research and development expenses were $11.1 million versus $10.3 million in fiscal 2005. The increased expenses in research and development are associated with the Company's pivotal STOP AF study.
Other expenses were $2.8 million in fiscal 2006 and nil in the prior year, and are one-time charges related to executive severance and the costs of exploring financing alternatives.
Total administrative expenses in fiscal 2006 were $4.4 million versus $3.7 million for the same period a year ago.
Net loss in fiscal 2006 was $30.0 million or $0.79 per share versus $18.6 million or $0.51 per share in the same period a year ago.
On a 12-month basis, the operating burn was $19.8 million versus $12.6 million in 2005.
Q4 2006
The Company's revenues were $9.5 million in the fourth quarter, a decrease of 5% from sales of $10.0 million in the fourth quarter of fiscal 2005 as a result of a shift in our revenue mix from consoles to disposables. Sales of disposable units increased by approximately 14% in the fourth quarter 2006 compared to the fourth quarter of 2005.
Gross margins for the fourth quarter of fiscal 2006 were $3.9 million, or 41% of sales, a decrease from $5.2 million or 52% in the fourth quarter of fiscal 2005. As with the year, this reduction was related to a variety of factors including higher usage based amortization from sales gains and higher inventory obsolescence.
Total expenses in the fourth quarter of 2006 were $14.6 million, up 48% from the fourth quarter of 2005, primarily from higher sales and marketing costs and one-time costs related to the refocusing of operations.
The Company's sales and marketing expenses for the fourth quarter of fiscal 2006 were $7.7 million compared to $5.7 million for the fourth quarter of fiscal 2005.
Net research and development expenses for the fourth quarter were $1.9 million, compared to $2.4 million for the fourth quarter of fiscal 2005.
Administrative expenses for the fourth quarter of 2006 were $1.5 million compared to $0.8 million for the fourth quarter ended September 30, 2005.
CryoCath's net loss for the fourth quarter ended September 30, 2006 totaled $10.5 million or $0.28 per share compared to a loss of $4.5 million or $0.12 per share in the fourth quarter of fiscal 2005.
Operating burn for the quarter was $6.4 million versus $2.8 million for the fourth quarter of 2005.
Working capital was $21 million at September 30, 2006, as compared to $33.9 million on September 30, 2005. CryoCath could access approximately $14.8 million in cash, cash equivalents and short-term investments in addition to $12.8 in unused borrowing facilities.
The Company will host a conference call to discuss the fourth quarter and year-end results on Thursday, December 21, 2006 at 4:30 p.m. EST. The call will be audio-cast live and archived for 90 days at www.financialdisclosure.ca and www.cryocath.com.
About CryoCath
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 ROW countries. The Company is developing additional products to expand its pipeline of products to treat cardiac arrhythmias.
This press release includes "forward-looking statements" that are subject to risks and uncertainties, including with respect to the timing of regulatory trials and their outcome. 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 available at www.sedar.com under the heading Risks and Uncertainties in the Management's Discussion and Analysis section.
CryoCath Technologies Inc. BALANCE SHEETS As at September 30 2006 2005 $ $ ------------------------------------------------------------------------- ASSETS Current Cash and cash equivalents 9,178,123 652,161 Short-term investments 5,616,907 25,353,537 Accounts receivable 8,119,660 8,019,186 Investment tax credits receivable 502,033 264,104 Inventories 7,105,974 6,767,472 Prepaid expenses 1,044,039 728,969 ------------------------------------------------------------------------- Total current assets 31,566,736 41,785,429 Net investments in leases 5,967 67,278 Deferred financing charges 2,636,636 1,674,376 Consoles at customers' premises 1,858,465 2,777,479 Property, plant and equipment 3,212,551 3,451,016 Intellectual property 15,194,606 16,504,553 ------------------------------------------------------------------------- 54,474,961 66,260,131 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities 10,201,378 7,593,694 Current portion of deferred revenue 491,683 334,962 ------------------------------------------------------------------------- Total current liabilities 10,693,061 7,928,656 Long term debt 22,399,317 11,007,663 Deferred revenue 228,774 76,446 ------------------------------------------------------------------------- Total liabilities 33,321,152 19,012,765 ------------------------------------------------------------------------- Commitments and guarantees Shareholders' equity Capital stock 180,655,193 179,900,284 Contributed surplus 7,469,343 4,351,347 Deficit (166,970,727) (137,004,265) ------------------------------------------------------------------------- Total shareholders' equity 21,153,809 47,247,366 ------------------------------------------------------------------------- 54,474,961 66,260,131 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CryoCath Technologies Inc. STATEMENTS OF OPERATIONS AND DEFICIT Years ended September 30 2006 2005 $ $ ------------------------------------------------------------------------- REVENUES Sales 38,375,896 33,291,084 Cost of sales (including amortization and write-off of $4,245,556; 2005 - $2,773,978) 17,824,668 13,382,039 ------------------------------------------------------------------------- Gross profit 20,551,228 19,909,045 Surgical distribution rights 233,358 1,952,086 ------------------------------------------------------------------------- 20,784,586 21,861,131 Interest income 531,978 783,756 ------------------------------------------------------------------------- 21,316,564 22,644,887 ------------------------------------------------------------------------- EXPENSES Research and development 12,093,484 11,206,053 Investment tax credits (944,172) (860,954) ------------------------------------------------------------------------- Net research and development 11,149,312 10,345,099 Administrative 4,400,465 3,715,787 Sales and marketing 27,693,875 23,583,282 Amortization and write-off of intellectual property 324,745 202,539 Amortization and write-off of property, plant and equipment 1,444,155 804,350 Amortization of deferred financing charges 261,830 195,823 Interest on long term debt 1,291,654 867,423 Foreign exchange loss 159,700 689,778 Non cash compensation expense 1,746,169 832,908 Other expenses 2,811,121 - ------------------------------------------------------------------------- 51,283,026 41,236,989 ------------------------------------------------------------------------- Net loss for the year (29,966,462) (18,592,102) Deficit, beginning of year (137,004,265) (118,412,163) ------------------------------------------------------------------------- Deficit, end of year (166,970,727) (137,004,265) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted loss per share (0.79) (0.51) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares 37,787,825 36,701,076 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CryoCath Technologies Inc. STATEMENTS OF CASH FLOWS Years ended September 30 2006 2005 $ $ ------------------------------------------------------------------------- OPERATING ACTIVITIES Net loss for the year (29,966,462) (18,592,102) Items not affecting cash Non cash compensation expense 2,303,723 832,908 Interest on long term debt 1,291,654 867,423 Amortization of deferred financing charges 261,830 195,823 Amortization and write-off of intellectual property 1,819,389 1,245,283 Amortization and write-off of consoles at customers' premises 2,281,775 1,303,158 Amortization and write off of property, plant and equipment 1,913,292 1,232,426 Forgiveness of employee share purchase loan 233,069 - Unrealized foreign exchange loss 36,321 363,733 ------------------------------------------------------------------------- (19,825,409) (12,551,348) Net change in non cash working capital balances relating to operations 1,760,663 (1,011,108) Decrease in net investments in leases 61,311 75,820 (Decrease) increase in deferred revenue 152,328 (10,165) ------------------------------------------------------------------------- Cash flows used in operating activities (17,851,107) (13,496,801) ------------------------------------------------------------------------- INVESTING ACTIVITIES Acquisition of short-term investments (25,980,051) (47,408,025) Proceeds from maturities of short-term investments 45,709,482 32,645,038 Acquisition of intellectual property (509,442) (354,956) Acquisition of property, plant, and equipment (1,674,827) (2,500,386) Increase in consoles at customers' premises (1,362,761) (1,627,362) ------------------------------------------------------------------------- Cash flows from (used in) investing activities 16,182,401 (19,245,691) ------------------------------------------------------------------------- FINANCING ACTIVITIES Repayment of employee share purchase loans 48,232 - (Repayment) of bank indebtedness - (4,510,000) Increase in long term debt 10,100,000 - Increase in deferred financing charges (409,817) (2,150) Issuance of common shares 473,608 28,843,136 Share issuance costs - (1,830,263) ------------------------------------------------------------------------- Cash flows from financing activities 10,212,023 22,500,723 ------------------------------------------------------------------------- Effect of exchange rate change on cash and cash equivalents (17,355) (52,770) ------------------------------------------------------------------------- Net change in cash and cash equivalents 8,525,962 (10,294,539) Cash and cash equivalents, beginning of year 652,161 10,946,700 ------------------------------------------------------------------------- Cash and cash equivalents, end of year 9,178,123 652,161 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash and cash equivalents consist of: Cash 4,739,592 652,161 Cash equivalents 4,438,531 - ------------------------------------------------------------------------- 9,178,123 652,161 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Supplemental cash flow information Cash paid during the year for: Interest 124,083 21,245 -------------------------------------------------------------------------
CryoCath Technologies Inc.CONTACT: visit our website at www.cryocath.com, or contact: Michael Moore,Investor Relations, Phone: (416) 815-0700 ext. 241, Fax : (416) 815-0080,E-mail: mmoore@equicomgroup.com
