LAKE FOREST, CA--(Marketwire - August 26, 2010) - TRIMEDYNE, INC. (OTCBB: TMED) today reported its financial results for the quarter and nine month period ended June 30, 2010.
Revenues for the current quarter were $1,515,000, a decrease of 27% from revenues of $2,068,000 for the prior year's quarter. The $553,000 decrease in revenues was due to lower revenues from sales of fiber optic devices and lasers, as the current worldwide recession has caused many people to put-off elective, outpatient medical procedures, such as those in which the Company's products are used. The gross profit margin in the current quarter was 49% of revenues, compared to 40% for the prior year quarter, due to the Company's tight control of costs. The Company had a net loss of $62,000 or $0.00 per share for the current quarter, a 32% reduction from the loss of $82,000 or $0.00 per share for the prior year quarter.
For the nine months ending June 30, 2010, revenues were $4,896,000, an 8% decrease over revenues of $5,310,000 in the prior year period, and the Company's net loss for this period was $669,000 or $0.04 per Share, a 23% reduction from the net loss of $872,000 or $0.05 per Share for the prior year period.
Commenting on the financial results for the quarter, Marvin P. Loeb, Sc.D., Chairman of Trimedyne, said, "While we are disappointed in the decline in revenues in the Quarter ended June 30, 2010, our cost reduction efforts increased our gross profit margin to 49% from 40% and reduced our loss for the quarter to $62,000, an 80% reduction from our loss of $307,000 for the immediately preceding quarter ending March 31, 2010."
The Company's Business
Trimedyne developed a new side firing optical fiber for use with 80 and 100 watt Holmium Lasers for the treatment of benign prostate hyperplasia or BPH, commonly called an enlarged prostate, primarily for sale to Lumenis Ltd. of Yokneam, Israel ("Lumenis"), one of the world's largest manufacturers of medical lasers with annual sales of about $250 million. Lumenis markets certain of its products through Boston Scientific Corporation in the U.S. and Japan.
BPH is a condition which affects an estimated 50% of men over age 55 and an increasing percentage of men at older ages. About 200,000 men are treated each year in the U.S. with laser or radiofrequency ("RF") energy or other means to treat this condition. The laser procedure can be performed on an outpatient basis and minimizes the adverse effects of the RF surgical procedure, which typically requires a hospital stay and entails significant bleeding and the risks of a blood transfusion, infection, impotence and incontinence.
The Company has begun marketing its new side-firing fiber-optic device under our VaporMAX® trademark at a price significantly lower than the prices of side firing fibers marketed by certain of our competitors. Our VaporMAX® Fiber is very durable and is designed to operate at 80 or 100 watts of Holmium Laser energy for one hour or longer. Side firing fibers made by certain of our competitors sometimes fail before a BPH patient's treatment has been completed, interrupting the procedure and requiring the hospital to use a second fiber.
On August 1, 2010, Wade B. Hampton joined the Company as Director of U.S. Sales. Mr. Hampton previously served as a Senior Vice President of Accuracy, Inc. and, earlier, of Lumenis. On the same date, Baron Minor Group, Inc. ("BMG"), of which Mr. Hampton is a principal, entered into a Sales Management Agreement with the Company to market the Company's lasers and fiber-optic devices on a commission basis through its 15 laser sales representatives in the United States. Some of these sales representatives were formerly employed by Lumenis.
BMG also agreed to assist the Company on sales of its products outside the United States. The Company granted a Non-Qualified Stock Option to purchase 60,000 shares of the Company's Common Stock at its closing price on August 1, 2010 to each of Mr. Hampton and BMG.
The Company's Financial Condition
The Company's working capital has declined, and it has incurred losses during the past four years from operations and the development of its new side firing optical fiber device. There can be no assurance that the Company will be able to maintain or achieve sales growth to offset these losses, or that the Company will again become profitable.
The Company has taken various steps to reduce its costs through a significant reduction in personnel positions and overhead costs. Also the Company's Chairman has deferred all of his salary and the Company's President has deferred 15% of his salary.
The Company recently renegotiated its lease on its facility in Lake Forest, California and signed a new lease agreement which will result in a savings of over $111,000 in rent expense through the next twelve months. The Company also plans to raise additional capital through the sale of notes, debentures, equity capital or other Company assets. However, there is no assurance these efforts will be successful.
Based on its current cash flow projections, the Company expects its existing resources will be sufficient to fund its operations through December 31, 2010. However, the Company's management is unsure if the Company's liquidity and anticipated revenues will be sufficient to meet its obligations as they become due for the next 12 months from June 30, 2010. This raises substantial doubt about the Company's ability to continue as a going concern (See "The Company's Dispute with Lumenis" for information on $200,000 of the proceeds of Notes, recently purchased by the Company's Chairman & CEO, being available for use in operations by the Company).
The Company's Dispute with Lumenis
In June 2010, the Company began negotiating an amicable settlement of its claims against Lumenis. If the Company and Lumenis do not promptly reach an amicable settlement of the Company's claims against Lumenis, the Company will again take legal action against Lumenis.
On August 20, 2010, The Company sold to Marvin P. Loeb, its Chairman and CEO, $500,000 of 6% Senior Secured Convertible Notes ("the Notes") due five (5) years from their date of issue. The Notes are secured by all of the assets of the Company, are redeemable by the holder and are convertible, with accrued interest, into Common Stock of the Company at its closing price on August 20, 2010. Up to $200,000 of the proceeds of the Notes will be used for operations and the balance will be used, if a settlement with Lumenis is not promptly reached, to pay any legal fees and costs in the Company's legal action against Lumenis which are not covered by a contingent fee agreement.
General
Trimedyne manufactures proprietary Holmium lasers and patented fiber optic laser devices for vaporizing the prostate 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 Form 10-K Report for the year ended September 30, 2009 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
June 30, 2010 September 30, 2009
---------------- ----------------
Current assets:
Cash and cash equivalents $ 406,000 $ 1,621,000
Trade accounts receivable, net of
allowance for doubtful accounts of
$12,000 at March 31, 2010 and
September 30, 2009 720,000 988,000
Inventories 2,981,000 2,266,000
Other current assets 189,000 226,000
---------------- ----------------
Total current assets 4,296,000 5,101,000
Property and equipment, net 950,000 1,168,000
Other 91,000 87,000
Goodwill 544,000 544,000
---------------- ----------------
Total Assets $ 5,881,000 $ 6,900,000
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 298,000 $ 449,000
Accrued expenses 488,000 497,000
Deferred revenue 91,000 100,000
Accrued warranty 26,000 54,000
Income tax payable 21,000 20,000
Current portion of note payable and
capital leases 190,000 209,000
---------------- ----------------
Total current liabilities 1,114,000 1,329,000
Note payable and capital leases, net of
current portion 123,000 232,000
Deferred rent 41,000 51,000
Long term warrant liability 4,000 --
---------------- ----------------
Total liabilities 1,282,000 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 at June 30,
2010 and September 30, 2009,
18,365,960 shares outstanding at June
30, 2010 and September 30, 2009 186,000 186,000
Additional paid-in capital 51,235,000 51,461,000
Accumulated deficit (46,109,000) (45,646,000)
---------------- ----------------
5,312,000 6,001,000
Treasury stock, at cost (101,609
shares) (713,000) (713,000)
---------------- ----------------
Total stockholders' equity 4,599,000 5,288,000
---------------- ----------------
Total liabilities and stockholder's
equity $ 5,881,000 $ 6,900,000
================ ================
TRIMEDYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
June 30, June 30,
2010 2009 2010 2009
----------- ----------- ----------- -----------
Net revenues $ 1,515,000 $ 2,068,000 $ 4,896,000 $ 5,310,000
Cost of revenues 771,000 1,250,000 2,973,000 3,400,000
----------- ----------- ----------- -----------
Gross profit 744,000 818,000 1,923,000 1,910,000
Operating expenses:
Selling, general and
administrative 628,000 653,000 1,916,000 2,042,000
Research and
development 254,000 317,000 875,000 931,000
----------- ----------- ----------- -----------
Total operating
expenses 882,000 970,000 2,791,000 2,973,000
----------- ----------- ----------- -----------
Loss from operations (138,000) (152,000) (868,000) (1,063,000)
Other income, net 79,000 74,000 211,000 199,000
----------- ----------- ----------- -----------
Loss before provision
for income taxes (59,000) (78,000) (657,000) (864,000)
Provision for income
taxes 3,000 4,000 12,000 8,000
----------- ----------- ----------- -----------
Net loss $ (62,000) $ (82,000) $ (669,000) $ (872,000)
=========== =========== =========== ===========
Net loss:
Basic $ (0.00) $ (0.00) $ (0.04) $ (0.05)
=========== =========== =========== ===========
Diluted $ (0.00) $ (0.00) $ (0.04) $ (0.05)
=========== =========== =========== ===========
Weighted average number
of shares outstanding:
Basic 18,365,960 18,365,960 18,365,960 18,365,960
=========== =========== =========== ===========
Diluted 18,365,960 18,365,960 18,365,960 18,365,960
=========== =========== =========== ===========
