PLYMOUTH, Minn., April 27 /PRNewswire-FirstCall/ -- ev3 Inc. , a global endovascular device company, today reported financial results for its fiscal first quarter of 2007.
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As previously reported, ev3’s net sales in the first quarter of 2007 increased 46% to $61.5 million versus net sales of $42.2 million in the first quarter of 2006. First quarter sales growth was broad-based and reflected a strong contribution from each of ev3’s Cardio Peripheral and Neurovascular business segments, as well as a strong contribution from both domestic and international markets.
Jim Corbett, president and CEO of ev3 Inc., commented, “Our first quarter sales growth continued at a rate consistent with us achieving our longer term business and financial objectives. We are very pleased with our balanced growth and enthusiastic about the potential for several of our new products including the EverFlex Stent, the Onyx Liquid Embolic System, and the recently approved Protege RX Stent combined with the SpideRX Embolic Protection Device for carotid stenting.”
ev3’s net loss for the first quarter of 2007 declined 61% to $9.5 million compared to $24.5 million in the first quarter of 2006. ev3’s net loss per common share was $0.17 for the first quarter of 2007 compared to $0.44 per common share in the first quarter of 2006. Total weighted average common shares outstanding used in the per share calculations were 57.5 million and 55.9 million for the first quarter of 2007 and 2006, respectively.
ev3’s earnings before interest, taxes, depreciation and amortization (EBITDA), excluding charges for non-cash stock-based compensation, was a negative $1.2 million in the first quarter of 2007, compared to a negative $17.7 million in the first quarter of 2006. ev3 uses the non-GAAP financial measures, EBITDA and EBITDA, excluding charges for non-cash stock-based compensation, as supplemental measures of performance and believes that these measures facilitate operating performance comparisons from period to period and company to company.
EBITDA and EBITDA, excluding charges for non-cash stock-based compensation, for the first quarter ended April 1, 2007 and April 2, 2006 are reconciled to ev3’s net loss for the respective periods immediately following the detail of net sales by geography later in this press release. This information is also made available on the company’s website at http://www.ev3.net.
Corbett continued, “2007 is a year in which we will be increasing our investment in clinical trials to further validate the performance advantages of our products and provide physicians and third party payers with increased clinical data. However, we remain committed to a significant year over year improvement in our 2007 EBITDA performance.”
Sales Review
In the first quarter of 2007, ev3’s Neurovascular segment net sales increased 48% to $25.0 million versus $16.9 million in the first quarter of 2006. Within the Neurovascular business segment, sales of embolic products increased 75% to $12.9 million from $7.4 million, and sales of Neuro access and delivery products were up 27% to $12.1 million from $9.5 million. The primary growth drivers for the Neurovascular segment were the continued market penetration of both the Onyx Liquid Embolic System for the treatment of brain arterio-venous malformations (AVMs) and the Nexus family of embolic coils for the treatment of brain aneurysms.
Cardio Peripheral segment net sales in the first quarter of 2007 increased 44% to $36.5 million versus $25.3 million in the first quarter of 2006. Within the Cardio Peripheral business segment, stent sales increased 52% to $19.8 million from $13.1 million. Sales of thrombectomy and embolic protection products increased 54% to $6.2 million from $4.0 million, while sales of procedural support and other Cardio Peripheral products increased 27% to $10.5 million from $8.2 million. The largest contributors to the growth in the Cardio Peripheral segment were the EverFlex stent and the recently approved Protege RX stent combined with the SpideRX Embolic Protection Device for carotid stenting.
On a geographic basis, ev3’s first quarter U.S. net sales increased 42% to $35.1 million, while first quarter international net sales increased 51% to $26.4 million, over the prior-year quarter. Changes in foreign currency exchange rates had a positive impact of approximately $1.4 million on first quarter 2007 net sales compared to the first quarter of the prior year.
Outlook
ev3 continues to expect 2007 annual net sales to be in the range of approximately $262 to $278 million. ev3 expects second quarter of 2007 net sales to be in the range of $63 to $67 million. Further, ev3 continues to expect its EBITDA, excluding non-cash stock-based compensation, to be positive in 2007.
Earnings Call Information
ev3 will host a conference call today, April 27, 2007, beginning at 8 a.m. CT to review its results of operations for the first quarter of 2007 and other recent events and to discuss its 2007 business outlook. Discussions during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company’s net sales, cost of goods sold, operating expenses, distribution arrangements, clinical studies, regulatory status, financial position and comments the company may make about its future in response to questions from participants on the conference call. Any interested party may listen to the conference call through a live audio Webcast at http://www.ev3.net. For those unable to listen to the Webcast, a playback of the Webcast will be available at http://www.ev3.net for approximately 90 days. Those without Internet access may join the call from within the United States by dialing (866) 277-1181; outside the United States dial (617) 597-5358 passcode 93392122. A playback of the conference call will be available from 11 a.m. CT, April 27, 2007 until noon CT on May 4, 2007 by dialing (888) 286-8010 (United States) or (617) 801-6888 (International), passcode 18302612.
Statements contained in this press release that are not historical information are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Such potential risks and uncertainties relate, but are not limited to, in no particular order: product demand and market acceptance; the impact of competitive products and pricing; delays in regulatory approvals and the introduction of new products; and success of clinical testing. More detailed information on these and additional factors which could affect ev3 Inc.'s operating and financial results is described in the company’s filings with the Securities and Exchange Commission, including its most recent annual report on Form 10-K. ev3 Inc. urges all interested parties to read this report to gain a better understanding of the many business and other risks that the company faces. Additionally, ev3 Inc. undertakes no obligation to publicly release the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.
ev3 and the ev3 logo are trademarks of ev3 Inc., registered in the U.S. and other countries.
All trademarks and tradenames referred to in this press release are the property of their respective owners.
ev3 Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (unaudited) For the Three Months Ended April 1, April 2, 2007 2006 Net sales $61,499 $42,237 Operating expenses Cost of goods sold (a) 20,457 16,488 Sales, general and administrative (a) 39,137 37,861 Research and development (a) 7,433 6,774 Amortization of intangible assets 4,100 4,243 Loss on sale or disposal of assets, net 16 170 Acquired in-process research and development --- 1,786 Total operating expenses 71,143 67,322 Loss from operations (9,644) (25,085) Other (income) expense: Interest (income) expense, net (109) (699) Other (income) expense, net (317) (54) Loss before income taxes (9,218) (24,332) Income tax expense 276 169 Net loss $(9,494) $(24,501) Earnings per share: Net loss per common share (basic and diluted) $(0.17) $(0.44) Weighted average common shares outstanding 57,514,255 55,944,925 (a)Includes stock-based compensation charges of: Cost of goods sold $158 $214 Sales, general and administrative 1,859 1,366 Research and development 182 214 $2,199 $1,794 ev3 Inc. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) April 1, December 31, 2007 2006 (unaudited) Assets Current assets Cash and cash equivalents $18,732 $24,053 Short-term investments 7,900 14,700 Accounts receivable, less allowance of $4,247 and $3,924, respectively 49,413 45,137 Inventories 46,199 42,124 Prepaid expenses and other assets 5,565 7,162 Other receivables 3,652 2,669 Total current assets 131,461 135,845 Restricted cash 1,307 2,022 Property and equipment, net 24,140 24,072 Goodwill 149,061 149,061 Other intangible assets, net 45,837 40,014 Other assets 730 1,812 Total assets $352,536 $352,826 Liabilities and stockholders’ equity Current liabilities Accounts payable $14,465 $13,140 Accrued compensation and benefits 12,358 16,382 Accrued liabilities 12,954 10,102 Current portion of long-term debt 2,976 2,143 Total current liabilities 42,753 41,767 Long-term debt 8,988 5,357 Other long-term liabilities 1,113 468 Total liabilities 52,854 47,592 Stockholders’ equity Common stock: $0.01 par value; 100,000,000 shares authorized; issued and outstanding: 58,243,788 and 57,594,742, respectively 582 576 Additional paid in capital 923,945 919,221 Accumulated deficit (624,788) (614,578) Accumulated other comprehensive income (57) 15 Total stockholders’ equity 299,682 305,234 Total liabilities and stockholders’ equity $352,536 $352,826 ev3 Inc. SELECTED NET SALES INFORMATION (Dollars in thousands, except per share amounts) (unaudited) NET SALES BY SEGMENT For the Three Months Ended April 1, April 2, 2007 2006 % change Cardio Peripheral Stents $19,806 $13,046 52% Thrombectomy and embolic protection 6,218 4,037 54% Procedural support and other 10,467 8,249 27% Total cardio peripheral 36,491 25,332 44% Neurovascular Embolic products 12,926 7,383 75% Neuro access and delivery products and other 12,082 9,522 27% Total neurovascular 25,008 16,905 48% Total company $61,499 $42,237 46% NET SALES BY GEOGRAPHY For the Three Months Ended April 1, April 2, 2007 2006 % change United States $35,140 $24,774 42% International 26,359 17,463 51% Total net sales $61,499 $42,237 46% ev3 Inc. NON-GAAP FINANCIAL MEASURES (Dollars in thousands) (unaudited) For the Three Months Ended April 1, April 2, 2007 2006 Reconciliation of net loss to EBITDA Net loss, as reported (GAAP basis) $(9,494) $(24,501) Interest (income) expense, net (109) (699) Income tax expense 276 169 Depreciation and amortization 5,904 5,517 EBITDA $(3,423) $(19,514) Stock-based compensation 2,199 1,794 EBITDA, adjusted for stock-based compensation $(1,224) $(17,720)
ev3 uses non-GAAP financial measures, as outlined above, as supplemental measures of performance and believes these measures facilitate operating performance comparisons from period to period and company to company by factoring out potential differences caused by variations in capital structure, tax positions, depreciation, non-cash charges and certain large and unpredictable charges. ev3 also believes that the presentation of these measures provides useful information to investors in evaluating the company’s operations, period over period. Non-GAAP measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of the company’s results as reported under Generally Accepted Accounting Principles (GAAP). This information is also made available on the company’s website at http://www.ev3.net.
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CONTACT: Patrick Spangler, CFO of ev3 Inc., +1-763-398-7000,pspangler@ev3.net; or Media Relations, Laura Nobles of NoblesCommunications, +1-310-795-0497, laura@noblescommunications.com, for ev3Inc.; or Investor Relations, Marian Briggs, +1-612-455-1742,mbriggs@psbpr.com, or Nancy A. Johnson, +1-612-455-1745,njohnson@psbpr.com, both of Padilla Speer Beardsley for ev3 Inc.
Web site: http://www.ev3.net/
