MONTREAL, Feb. 14 /PRNewswire-FirstCall/ - CryoCath Technologies Inc., the global leader in cryotherapy products to treat cardiovascular disease, today announced financial results for the first quarter ended December 31, 2005.
Selected First Quarter Financial and Operating Highlights - Increased revenues by 48% over first quarter of fiscal 2005, from $6.0 million to $8.9 million; - Increased gross margins from 62% in first quarter of 2005 to 64% in first quarter of 2006; - Installed 46 new surgical and EP console systems; - Reported 87% of 15 patients treated in feasibility stage of the STOP AF trial were AF free at 3-month follow up at the Boston Atrial Fibrillation Symposium; - Supported a successful live cryoablation case using Arctic Front(TM) at the Boston Atrial Fibrillation Symposium in which all four pulmonary veins were isolated and no adverse effects were recorded.
"The first quarter of fiscal 2006 was another period of solid growth for CryoCath - 48% rise in revenue, 2% increase in gross margins and the installation of another 46 cryoconsoles. This ongoing growth in our fundamentals continues to fortify our Company as we pursue our mission to become the preeminent solution to treat atrial fibrillation," said Steve Arless, President and CEO. "In that regard, the first quarter of 2006 was the first full quarter of the Arctic Front beta launch in Europe. Based on the positive feedback received, we anticipate sales for this product to gain momentum throughout 2006 as we execute on a broader launch."
The Company's total sales reached $8.9 million, a 48% increase over the $6.0 million for the same quarter last year. Total disposable units sold for the quarter reached 4,141 units, a 58% increase from the same period last year.
Gross margins for the first quarter of fiscal 2006 were $5.7 million, or 64.1% of sales, an increase from the 61.9% level seen in the first quarter of fiscal 2005. Lower costs generated by greater production efficiencies and larger volumes, higher U.S. margins, in particular FrostByte(R) and Freezor(R) MAX, and the commercial launch of Arctic Front in Europe contributed to these improved margins.
Net research and development expenses for the quarter ended December 31, 2005 were $2.6 million, an increase from $2.1 million in the first quarter of the last year. The increase can be attributed in large part to expenditures incurred in the feasibility phase of the STOP AF IDE study and in preparation for the follow-on pivotal stage. The Company expects research and development costs to increase as it embarks on the pivotal stage of this study.
Administrative expenses for the first quarter of 2006 increased slightly to $0.95 million from $0.88 in the same period last year. As a percentage of the total expense burden, administrative expenses have declined and represent 9.3% of total expenses, down from 9.7% in the first quarter a year ago.
The Company's sales and marketing expenses for the first quarter of 2006 increased to $5.7 million from $5.3 million for the same period last year, but decreased substantially as a percentage of sales to 63.7% from 87.1%.
CryoCath's net loss for the first quarter ended December 31, 2005 decreased to $4.3 million or ($0.11) per share from a loss of $5.2 million, or ($0.15) per share in the first quarter of fiscal 2005.
Operating burn for the quarter versus the same quarter last year, decreased $0.9 million, from $3.7 million in 2005 to $2.8 million in 2006.
Working capital decreased to $30.5 million as of December 31, 2005, a $11.5 million decrease from the $42 million as of December 31, 2004. At December 31, 2005, the Company had access to approximately $35.6 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, with a slide presentation, to discuss the first quarter results on Tuesday, February 14, 2006 at 10:00 am EST. The call will be audio-cast live and archived for 90 days at 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 (unaudited) As at December 31 September 30 2005 2005 $ $ ASSETS Current Assets Cash and cash equivalents 3,081,684 652,161 Short-term investments 17,429,152 25,353,537 Accounts receivables 8,682,029 8,019,186 Investment tax credits receivable 428,151 264,104 Inventories 7,242,059 6,767,472 Prepaid expenses 576,042 728,969 ------------------------------------------------------------------------- Total current assets 37,439,117 41,785,429 Net investments in leases 50,093 67,278 Deferred financing charges 1,947,930 1,674,376 Consoles at customers' premises 2,925,307 2,777,479 Property, plant, and equipment 3,385,980 3,451,016 Intellectual property 16,199,588 16,504,553 ------------------------------------------------------------------------- 61,948,015 66,260,131 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable and accrued liabilities 6,660,210 7,593,694 Current portion of deferred revenue 321,287 334,962 ------------------------------------------------------------------------- Total current liabilities 6,981,497 7,928,656 Long-term debt 11,251,382 11,007,663 Deferred revenue 91,010 76,446 ------------------------------------------------------------------------- Total Liabilities 18,323,889 19,012,765 ------------------------------------------------------------------------- Shareholders' equity Capital stock 179,900,284 179,900,284 Other paid-in capital 5,027,941 4,351,347 Deficit (141,304,099) (137,004,265) ------------------------------------------------------------------------- Total shareholders' equity 43,624,126 47,247,366 ------------------------------------------------------------------------- 61,948,015 66,260,131 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Statement of Operations and Deficit (unaudited) Three months Three months ended ended December 31, December 31, 2005 2004 $ $ REVENUES Sales 8,922,380 6,046,141 Cost of sales (including amortization of $557,502; 2004 - $645,467) 3,207,601 2,302,542 ------------------------------------------------------------------------- Gross Profit 5,714,779 3,743,599 Interest income 166,887 140,333 ------------------------------------------------------------------------- 5,881,666 3,883,932 EXPENSES Research and development 2,807,338 2,287,734 Investment tax credits (164,048) (223,623) ------------------------------------------------------------------------- Net research and development 2,643,290 2,064,111 Administrative 947,062 878,233 Sales and marketing 5,684,440 5,268,803 Amortization of intellectual property 53,360 48,121 Amortization of property, plant, and equipment 233,633 198,359 Amortization of deferred financing charges 52,146 49,408 Interest on long-term debt 243,719 209,565 Foreign exchange (gain) loss (27,044) 226,067 Non-cash compensation expense 350,894 148,403 ------------------------------------------------------------------------- 10,181,500 9,091,070 Net loss (4,299,834) (5,207,138) Deficit, beginning of period (137,004,265) (118,412,163) ------------------------------------------------------------------------- Deficit, end of period (141,304,099) (123,619,301) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted loss per share (0.11) ($0.15) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares 37,671,040 33,978,448 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Statement of Cash Flows (unaudited) Three Months Three Months Ended Ended December 31, December 31, 2005 2004 $ $ OPERATING ACTIVITIES Net loss for the period (4,299,834) (5,207,138) Items not affecting cash Non-cash compensation expense 350,894 148,403 Interest on long-term debt 243,719 209,565 Amortization of intellectual property 320,675 274,369 Amortization of consoles at customers' premises 215,214 318,309 Amortization of property, plant, and equipment 308,606 299,269 Amortization of deferred financing charges 52,146 49,408 Unrealized foreign exchange loss 20,519 202,585 ------------------------------------------------------------------------- (2,788,061) (3,705,230) Net change in non-cash working capital balances relating to operations (1,881,270) (774,234) Decrease (increase) in net investments in leases 17,185 (64,546) Increase in deferred revenue 889 2,622 ------------------------------------------------------------------------- Cash flows used in operating activities (4,651,257) (4,541,388) ------------------------------------------------------------------------- INVESTING ACTIVITIES Proceeds from maturities of short-term investments 10,069,350 4,839,865 Acquisition of short-term investments (2,151,087) (13,179,247) Acquisition of intellectual property (15,710) (13,083) Acquisition of property, plant, and equipment (243,570) (283,206) Increase in consoles at customers' premises (573,425) (388,591) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash flows used in investing activities 7,085,558 (9,024,262) ------------------------------------------------------------------------- ------------------------------------------------------------------------- FINANCING ACTIVITIES Issuance of common shares - 25,000,300 Share issuance costs - (1,472,352) Increase in deferred financing charges - (2,150) Repayment of bank indebtedness - (4,510,000) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash flows from financing activities - 19,015,798 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Effect of exchange rate change on cash and cash equivalents (4,778) (59,252) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net change in cash and cash equivalents 2,429,523 5,390,896 Cash and cash equivalents, beginning of period 652,161 10,946,700 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash and cash equivalents, end of period 3,081,684 16,337,596 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash and cash equivalents consist of: Cash 945,709 675,044 Cash equivalents - commercial paper and other investments with maturities less than 90 days 2,135,975 15,662,552 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 3,081,684 16,337,596 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Supplemental cash flow information Cash paid during the period Interest 404 2,655 ------------------------------------------------------------------------- -------------------------------------------------------------------------
CryoCath Technologies Inc.CONTACT: For further information visit our website at www.cryocath.com, orcontact: Steven G. Arless, President & CEO, CryoCath Technologies Inc.,Tel: (514) 694-1212 ext. 224, sarless@cryocath.com; Mike Polonsky, InvestorRelations, Tel: (416) 815-0700 ext. 231, Fax: (416) 815-0080,mpolonsky@equicomgroup.com
