MONTREAL, May 15 /PRNewswire-FirstCall/ - CryoCath Technologies Inc., the global leader in cryotherapy products to treat cardiovascular disease, today announced financial results for the second quarter, ended March 31, 2007.
Selected Second Quarter Financial and Operational Highlights: - Reported record second quarter revenue of $11.3 million, a 10.4% quarter-over-quarter increase from the previous record quarter of $10.3 million in Q2 2006; a 12.5% sequential growth - Increased gross margins from 60.1% in the second quarter of 2006 to 63.1% in the second quarter of 2007 - Received FDA approval to expand pivotal STOP AF IDE trial to full cohort of 270 patients in all 20 centers - Reported six-month follow up data from 18 patients treated during feasibility stage of the STOP AF IDE trial; all patients were free of detectable AFib
“The second quarter of fiscal 2007 was a solid one for CryoCath. Record revenue and continued upward momentum in gross margins reflect the progress we are making penetrating the market with our established products to treat cardiac arrhythmias,” said Jan Keltjens, President and CEO. “Our results are even more remarkable considering they do not include the full potential for Arctic Front. Data emerging from both Europe and from our pivotal STOP AF IDE trial reinforce our belief in this product’s potential. As such, obtaining Arctic Front approval in the U.S. and driving its commercial success in Europe and other outside U.S. markets remain our top priorities.”
The Company’s total sales reached $11.3 million for the second quarter, an increase of 10.4% over the $10.3 million for the same quarter last year. For the six-month period ending March 31, 2007, sales increased 11.6% to $21.4 million compared to $19.2 million in the same period a year ago.
Gross margins for the second quarter of fiscal 2007 were $7.2 million or 63.1% of sales an increase over the $6.2 million or 60.1% seen in the second quarter of fiscal 2006. On a six-month year-to-date basis, gross margins were $13.3 million or 62.1% of sales, versus $11.7 million or 61.2% from the same period a year ago. The rise in gross margins reflects the results of our focus on the product supply process which is producing increased output and better yields.
Net research and development expenses for the quarter ended March 31, 2007 were $2.8 million compared to $3.4 million in the same quarter last year. On a six-month year-to-date basis, R&D expenses were $5.2 million versus $6.0 million in the same period in 2006. Development expenses declined during the period due to the elimination of non-core development projects. Clinical expenses, on the other hand, increased, reflecting our ongoing STOP AF IDE pivotal trial enrollment.
The Company’s sales and marketing expenses for the second quarter of 2007 decreased to $6.6 million compared to $7.2 million in the same period last year. On a six-month year-to-date basis, sales and marketing expenses were $12.4 million versus $12.8 million for the same period a year ago. Both data demonstrate the increased efficiencies in our sales and marketing processes.
Administrative expenses for the second quarter of 2007 increased to $2.0 million from $1.1 million for the same period last year. On a six-month year-to-date basis, administrative expenses were $3.2 million versus $2.0 million for the same period a year ago. Increases were a result of the Company’s decision to invest the required resources in building a robust infrastructure required for rapid and sustainable growth.
CryoCath’s net loss for the second quarter ended March 31, 2007 decreased to $6.0 million or ($0.16) per share from a loss of $6.7 million, or ($0.18) per share in the second quarter of fiscal 2006.
Operating burn for the quarter decreased by 26% to $3.6 million versus $4.9 million in the second quarter of 2006. On a six-month year-to-date basis, operating burn decreased to $5.3 million from $7.7 million in 2006.
The Company, as of March 31, 2007, had access to approximately $17.6 million in cash and borrowing facilities. Management believes it will continue to be able to access sufficient capital to fund current and future requirements.
The Company will host a conference call to discuss the second quarter and provide an update on its business on Tuesday, May 15 at 4:30PM (EST.) The call will be audio-cast live and archived for 90 days.
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.
Balance Sheets (unaudited) As at March 31 September 30 2007 2006 $ $ ASSETS Current Assets Cash and cash equivalents 9,643,983 9,178,123 Cash subject to restrictions 525,000 - Short-term investments held to maturity - 5,616,907 Accounts receivable 10,009,889 8,119,660 Investment tax credits receivable 857,008 502,033 Fair value of derivative financial instruments 14,022 - Inventories 7,657,227 7,105,974 Prepaid expenses 611,719 1,044,039 ------------------------------------------------------------------------- Total current assets 29,318,848 31,566,736 Cash subject to restrictions 1,006,250 - Net investments in leases - 5,967 Deferred financing charges - 2,636,636 Consoles at customers’ premises 2,177,100 1,858,465 Property, plant, and equipment 3,115,813 3,212,551 Intellectual property 14,443,381 15,194,606 ------------------------------------------------------------------------- 50,061,392 54,474,961 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Bank indebtedness 3,000,000 - Accounts payable and accrued liabilities 9,427,569 10,201,378 Current portion of long-term debt 1,060,512 - Current portion of deferred revenue 573,225 491,683 ------------------------------------------------------------------------- Total current liabilities 14,061,306 10,693,061 Long-term debt 23,192,932 22,399,317 Deferred revenue 325,541 228,774 ------------------------------------------------------------------------- Total Liabilities 37,579,779 33,321,152 ------------------------------------------------------------------------- Shareholders’ equity Capital stock 180,777,848 180,655,193 Contributed surplus 8,239,099 7,469,343 Deficit (176,535,334) (166,970,727) ------------------------------------------------------------------------- Total shareholders’ equity 12,481,613 21,153,809 ------------------------------------------------------------------------- 50,061,392 54,474,961 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Statement of Operations and Deficit (unaudited) Three months Three months Six months Six months ended ended ended ended March 31, March 31, March 31, March 31, 2007 2006 2007 2006 $ $ $ $ REVENUES Sales 11,343,533 10,279,315 21,420,098 19,201,695 Cost of sales (including amortization and write-off of consoles at customers’ premises of $885,947 and $1,553,307; 2006 - $778,837 and $1,448,799) 4,187,920 4,104,153 8,106,861 7,452,418 ------------------------------------------------------------------------- Gross Profit 7,155,613 6,175,162 13,313,237 11,749,277 Interest income 59,628 143,914 173,028 310,801 ------------------------------------------------------------------------- 7,215,241 6,319,076 13,486,265 12,060,078 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EXPENSES Research and development 3,101,763 3,571,725 5,551,617 6,379,063 Investment tax credits (254,040) (190,270) (354,975) (354,318) ------------------------------------------------------------------------- Net research and development 2,847,723 3,381,455 5,196,642 6,024,745 Administrative 2,044,821 1,092,302 3,150,272 2,039,364 Sales and marketing 6,588,626 7,157,763 12,357,535 12,842,203 Amortization of intellectual property 73,088 55,719 114,835 109,079 Amortization of property, plant, and equipment 263,103 311,056 430,994 544,689 Amortization of deferred financing charges 118,705 45,684 258,698 97,830 Interest on long-term debt 626,674 257,639 1,213,048 501,358 Foreign exchange loss (gain) 238,931 (60,065) (726,160) (87,109) Loss (gain) on foreign exchange embedded derivative 43,679 - (14,022) - Non-cash compensation expense 395,934 450,000 769,756 800,894 Other expenses - 326,970 299,274 326,970 ------------------------------------------------------------------------- 13,241,284 13,018,523 23,050,872 23,200,023 ------------------------------------------------------------------------- Net loss and other comprehensive loss (6,026,043) (6,699,447) (9,564,607) (11,139,945) Deficit, beginning of period (170,509,291) (141,444,763) (166,970,727) (137,004,265) ------------------------------------------------------------------------- Deficit, end of period (176,535,334) (148,144,210) (176,535,334) (148,144,210) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic and diluted loss per share (0.16) (0.18) (0.25) (0.30) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Weighted average number of common shares 37,974,433 37,706,985 37,973,848 37,688,839 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Statement of Cash Flows (unaudited) Three months Three months Six months Six months ended ended ended ended March 31, March 31, March 31, March 31, 2007 2006 2007 2006 $ $ $ $ OPERATING ACTIVITIES Net loss for the period (6,026,043) (6,699,447) (9,564,607) (11,139,945) Items not affecting cash Non-cash compensation expense 395,934 450,000 769,756 800,894 Interest on long-term debt 571,013 257,639 1,140,355 501,358 Amortization of intellectual property 514,265 317,600 974,417 638,275 Amortization of consoles at customers’ premises 269,474 412,566 478,312 740,240 Amortization of property, plant, and equipment 438,399 415,447 646,407 724,053 Amortization of deferred financing charges 118,705 45,684 258,698 97,830 Unrealized (gain) loss on foreign exchange embedded derivative 43,679 - (14,022) - Unrealized foreign exchange (gain) loss 58,092 (94,551) 58,092 (74,032) ------------------------------------------------------------------------- (3,616,482) (4,895,062) (5,252,592) (7,711,327) Net change in non-cash working capital balances relating to operations (1,774,460) 877,878 (3,000,842) (975,188) Increase in net investments in leases - 15,996 5,967 33,181 Increase in deferred revenue 29,041 30,033 178,309 30,922 ------------------------------------------------------------------------- Cash flows from (used in) operating activities (5,361,901) (3,971,155) (8,069,158) (8,622,412) ------------------------------------------------------------------------- INVESTING ACTIVITIES Proceeds from maturities of short-term investments 1,992,697 17,450,591 5,616,907 27,519,941 Acquisition of short-term investments - (7,356,176) - (9,507,263) (Increase) decrease in cash subject to restrictions 109,375 - (1,531,250) - Acquisition of intellectual property (112,800) (277,212) (223,192) (292,922) Acquisition of property, plant, and equipment (292,459) (698,319) (573,956) (941,889) Increase in consoles at customers’ premises (499,429) (522,790) (926,008) (1,096,215) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash flows from (used in) investing activities 1,197,384 8,596,094 2,362,501 15,681,652 ------------------------------------------------------------------------- ------------------------------------------------------------------------- FINANCING ACTIVITIES Issuance of common shares 120,105 398,612 120,105 398,612 Repayment of employee share purchase loans - 16,320 2,550 16,320 (Increase) in deferred financing charges - - (167) - Increase in long-term debt - - 3,534,000 - Repayment of long-term debt (221,223) - (442,123) - Increase in bank indebtedness 3,000,000 5,000,000 3,000,000 5,000,000 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash flows from (used in) financing activities 2,898,882 5,414,932 6,214,365 5,414,932 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Effect of exchange rate change on cash and cash equivalents (41,848) 19,576 (41,848) 14,798 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net change in cash and cash equivalents (1,307,483) 10,059,447 465,860 12,488,970 Cash and cash equivalents, beginning of period 10,951,466 3,081,684 9,178,123 652,161 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash and cash equivalents, end of period 9,643,983 13,141,131 9,643,983 13,141,131 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Cash and cash equivalents consist of: Cash 7,338,183 7,679,676 7,338,183 7,679,676 Cash equivalents - commercial paper and other investments with maturities less than 90 days 2,305,800 5,461,455 2,305,800 5,461,455 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 9,643,983 13,141,131 9,643,983 13,141,131 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Supplemental cash flow information Cash paid during the period Interest 12,632 36,056 30,982 36,460 ------------------------------------------------------------------------- -------------------------------------------------------------------------
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
