Trimedyne, Inc. Reports Financial Results for the Quarter and Fiscal Year Ended September 30, 2010

LAKE FOREST, CA--(Marketwire - January 18, 2011) - TRIMEDYNE, INC. (OTCBB: TMED) reported revenues of $6,401,000 for the fiscal year ended September 30, 2010, a 14% decline from revenues of $7,422,000 for the prior fiscal year. The decline in revenues was largely due to reduced sales due to the economic slowdown and persistent unemployment, as many people are putting-off elective procedures.

The Company had an operating loss of $(1,441,000) for the 2010 fiscal year, compared to an operating loss of $(1,214,000) for the prior fiscal year. As a result of the amicable settlement of the Company’s contract dispute with Lumenis, Ltd. of Yokneam, Israel, the Company had net income of $639,000 or $0.04 per share for the 2010 fiscal year, compared to a net loss of $(909,000) or $(0.03) per share for the prior fiscal year.

For the quarter ended September 30, 2010, the Company had revenues of $1,505,000, a 28% decline from revenues of $2,112,000 for the same quarter of the prior year. The Company had an operating loss of $(573,000) for the quarter ended September 30, 2010, compared to an operating loss of $(151,000) for the same quarter of the prior year. The Company had a net income of $1,308,000 or $0.07 per share for the quarter ended September 30, 2010, versus a net loss of $(37,000) or $0.00 per share for the year earlier quarter.

Included in the cost of sales for the fiscal year and quarter ended September 30, 2010, were charges to inventory, primarily for excess and obsolete inventory, of $241,000. Without these non-cash charges, the Company’s loss from operations would have been $(1,200,000) for the fiscal year and $(332,000) for the quarter ended September 30, 2010, and the Company’s net income for the fiscal year and quarter ended September 30, 2010, would have been $880,000 and $1,549,000, respectively.

The Company ended the 2010 fiscal year with cash and equivalents of $2,528,000 and receivables and other current assets of $868,000, versus accounts payable and accrued expenses of $717,000.

Again, due to the amicable settlement of the Company’s contract dispute with Lumenis, Ltd., the Company had net income of $1,308,000 or $0.07 per share for the quarter ended September 30, 2010, compared to a net loss of $(37,000) or $0.00 per share for the same quarter of the prior year.

The proceeds of the Settlement Agreement and the extension of royalty payments from Lumenis through July 2014, will, in addition to increasing our cash position, enable us to more actively support our sales efforts for our current products and, perhaps, conduct limited testing of two new, patented fiber-optic devices, one of which has already been cleared for sale by the FDA.

Trimedyne manufactures proprietary Holmium lasers and patented fiber optic laser devices for vaporizing prostate tissue to treat BPH, vaporizing spinal disc tissue to treat herniated or ruptured discs and in a variety of other, minimally invasive procedures, many of which are performed on an outpatient basis at substantially less cost than conventional surgery. For product, press release, financial, SEC Reports and other information, please visit Trimedyne’s website, http://www.trimedyne.com.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act:

Statements in this news release may contain forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934, including words like “expect,” “may,” “could” and others. Such statements may involve various risks and uncertainties, some of which may be discussed in the Company’s current Form 10-K Report and subsequently filed SEC reports. There is no assurance such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.

 TRIMEDYNE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS As of September 30, ---------------------------- 2010 2009 ------------ ----------- Current assets: Cash and cash equivalents $ 2,528,000 $ 1,621,000 Trade accounts receivable, net of allowance for doubtful accounts of $11,000 and $12,000, respectively 691,000 988,000 Inventories 2,613,000 2,266,000 Other current assets 177,000 226,000 ------------ ------------ Total current assets 6,009,000 5,101,000 Property and equipment, net 908,000 1,168,000 Other 102,000 87,000 Goodwill 544,000 544,000 ------------ ------------ $ 7,563,000 $ 6,900,000 ============ ============ LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 129,000 $ 449,000 Accrued expenses 588,000 497,000 Deferred revenue 75,000 100,000 Accrued warranty 17,000 54,000 Income tax payable 11,000 20,000 Current portion of note payable and capital leases 161,000 209,000 Accrued interest due to related party 3,000 -- ------------ ------------ Total current liabilities 984,000 1,329,000 Senior secured convertible note to related party, net of discount of $99,000 401,000 -- Note payable and capital leases, net of current portion 92,000 232,000 Deferred rent 80,000 51,000 Derivative liabilities 96,000 -- ------------ ------------ Total liabilities 1,653,000 1,612,000 ------------ ------------ Commitments and contingencies Stockholders’ equity: Preferred stock - $0.01 par value, 1,000,000 shares authorized, none issued and outstanding -- -- Common stock - $0.01 par value; 30,000,000 shares authorized, 18,467,569 shares issued, 18,365,960 shares outstanding at September 30, 2010 and 2009 186,000 186,000 Additional paid-in capital 51,238,000 51,461,000 Accumulated deficit (44,801,000) (45,646,000) ------------ ------------ 6,623,000 6,001,000 Treasury stock, at cost (101,609 shares) (713,000) (713,000) ------------ ------------ Total stockholders’ equity 5,910,000 5,288,000 ------------ ------------ $ 7,563,000 $ 6,900,000 ============ ============ TRIMEDYNE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Year Ended September 30, September 30, ------------------------ -------------------------- 2010 2009 2010 2009 ----------- ----------- ------------ ------------ Net Revenues $ 1,505,000 $ 2,112,000 $ 6,401,000 $ 7,422,000 Cost of sales: 1,224,000 1,237,000 4,197,000 4,637,000 ----------- ----------- ------------ ------------ Gross profit $ 281,000 $ 875,000 2,204,000 $ 2,785,000 Selling, general and administrative expenses 669,000 641,000 2,585,000 2,683,000 Research and development expenses 185,000 385,000 1,060,000 1,316,000 ----------- ----------- ------------ ------------ Loss from operations $ (573,000) $ (151,000) $ (1,441,000) $ (1,214,000) Other income, net 1,884,000 134,000 2,095,000 333,000 ----------- ----------- ------------ ------------ Loss before provision for income taxes $ 1,311,000 $ (17,000) $ 654,000 $ (881,000) Provision for income taxes 3,000 20,000 15,000 28,000 ----------- ----------- ------------ ------------ Net loss $ 1,308,000 $ (37,000) $ 639,000 $ (909,000) =========== =========== ============ ============ Basic net income (loss) per share $ 0.07 $ (0.00) $ 0.04 $ (0.03) =========== =========== ============ ============ Diluted net income (loss) per share $ (0.00) $ 0.03 $ (0.05) =========== =========== ============ ============ Basic weighted average common shares outstanding: 18,365,960 18,365,960 18,365,960 18,365,960 =========== =========== ============ ============