MONTREAL, Feb. 14 /PRNewswire-FirstCall/ - CryoCath(R) Technologies Inc., the global leader in cryotherapy products to treat cardiac arrhythmias, today announced financial results for the first quarter, ended December 31, 2007.
“In the first quarter of 2008 we have been able to make significant progress in developing our business,” said Jan Keltjens, President and CEO of CryoCath. “All regions are showing solid sales growth, and Arctic Front is starting to show its true potential with a rapid uptake in Europe. With 34 active sites and a total of more than 2,060 procedures performed, Arctic Front is rapidly building broad acceptance as a safe, easy to use and effective therapy for Paroxysmal AFib. Based on the consistently strong clinical feedback, and the rapid progression of enrollment of patients in our pivotal trial in the US, we remain confident that we can complete enrollment by April and obtain US approval towards the end of 2009, thus positioning ourselves for even more explosive growth in 2010 and beyond.”
Financial Results
The Company’s total revenue reached $8.7 million in the first quarter, a decrease of 14% from the $10.1 million for the same quarter last year. Breaking out the $8.7 million revenue number, total electrophysiology (EP) disposables revenue for the quarter reached $5.9 million, a 21% increase over the same period last year, representing 67.6% of revenue with the remainder largely made up of cryoconsole sales.
Gross profit for the first quarter of fiscal 2008 was $4.5 million or 51.8% of sales, a decrease from $6.2 million or 61.1% in the first quarter of fiscal 2007. Driving the reduced margins primarily were lower volumes due to the sale of the surgical business and an unfavorable product mix change in favor of lower margin consoles.
Total expenses were $11.2 million in the first quarter of 2008, an increase of $1.4 million over expenses in the same quarter of 2007. The increase is primarily related to foreign exchange (a $1.2 million higher expense in Q1 2008 as compared to the prior quarter) along with an increase in administrative costs related to higher professional fees as we strengthened out internal control structure. These increases were partially offset by lower sales and marketing costs.
Net research and development expenses for the first quarter of 2008 were $2.3 million compared to $2.0 million in the same quarter last year, driven primarily by the increase in enrollment for the STOP AF study.
The Company’s sales and marketing expenses for the first quarter of 2008 decreased to $4.4 million compared to $5.2 million in the same period last year. The decrease was a result of increased fiscal discipline notwithstanding increased spending to support growth initiatives in Europe.
Administrative expenses for the first quarter of 2008 increased to $2.7 million from $2.0 million for the same period last year. The increase is mostly related to increased professional fees driven by the creation of a new structure to handle global tax payments, investments in improved compliance and control processes, and higher costs for the FY2007 audit.
CryoCath’s net loss for the first quarter ended December 31, 2007 increased to $6.1 million or ($0.16) per share from a loss of $3.5 million or ($0.09) per share in the first quarter of fiscal 2007.
Operating burn for the quarter increased to $4.9 million from $2.1 million in the first quarter of 2007 while EBITDA decreased from ($2.1) million in Q1 2007 to ($4.8) million in the current quarter. The increase in burn and resulting decrease in EBITDA are both related to lower revenues in the wake of the sale of the surgical business, the lower gross margin and the aforementioned increase in expenses.
The Company, as of December 31, 2007, had access to approximately $19.4 million in cash and borrowing facilities as compared to $28.5 million at the end of September, 2007. The decrease is related to the higher operating burn as well as unfavorable movements in non-cash working capital, in particular, accounts payable which was negatively impacted by one-time payments including costs related to the sale of the surgical business and annual bonus payments.
The Company will host a conference call to discuss the first quarter and provide an update on its business this afternoon, Thursday, February 14, at 4:30 PM (EST.) The call will be audio-cast live from CryoCath’s website and archived for 90 days. CryoCath will also be holding its Annual Meeting on Thursday, February 28, 2008 in Montreal at The Queen Elizabeth Hotel at 4:30 p.m. and welcomes all shareholders, members of the financial community and interested parties to attend.
Complete financials will be filed at www.sedar.com
CryoCath - www.cryocath.com - is a medical technology company that leads the world in cryotherapy products to treat cardiac arrhythmias. With a priority focus on providing physicians with a complete solution of catheter 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.
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
