Trimedyne, Inc. Reports Its Financial Results for the Quarter Ended June 30, 2011

LAKE FOREST, CA--(Marketwire - August 23, 2011) - Trimedyne, Inc. (OTCQB: TMED) (OTCBB: TMED) today reported its financial results for the quarter ended June 30, 2011.

Revenues for the current quarter were $1,409,000, a decrease of 7.0% from revenues of $1,515,000 for the prior year's quarter. The $106,000 decrease in revenues was due to the current worldwide downward economic trend impacting sales of medical products used in elective procedures. The Company had a net loss of $429,000 or $0.02 per share, based on a weighted average of 18,395,960 shares outstanding for the current quarter, compared to a loss of $62,000 or $0.00 per share, based on a weighted average of 18,365,960 shares outstanding for the prior year quarter.

For the nine month period ended June 30, 2011, revenues were $4,924,000, an increase of 1.0% from $4,896,000 for the same period of 2010. For the nine months ended June 30, 2011, the Company's net loss was $797,000 or $0.04 per share, based on a weighted average of 18,395,960 shares outstanding, a 19% increase from a net loss of $669,000 or $0.04 per share, based on a weighted average of 18,365,960 shares outstanding for the same nine month period of 2010.

Commenting on the financial results for the quarter, Marvin P. Loeb, Sc.D., Chairman of Trimedyne said, "The quarter ended June 30, 2011 was a difficult quarter for us due to the financial malaise throughout the world. However, we see signs that our business prospects are improving, and we hope our results for the quarter ended September 30, 2011 will enable us to close this fiscal year with improved financial results.

"We are carefully controlling costs and judicially devoting funds to the development of new products and expanding our sales organization. However, we cannot assure that we will be able to achieve or maintain sales growth or further reduce our costs."

Trimedyne manufactures proprietary Holmium lasers and patented fiber optic laser devices for vaporizing the prostate to treat BPH, vaporizing excess 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.                              
                    CONDENSED CONSOLIDATED BALANCE SHEETS                   
                                 (UNAUDITED)                                
                                                                            
                                                                            
                    ASSETS                                                  
                                                              September 30, 
                                               June 30, 2011       2010     
                                               -------------  ------------- 
                                                                            
Current assets:                                                             
  Cash and cash equivalents                    $   1,308,000  $   2,528,000 
  Trade accounts receivable, net of allowance                               
   for doubtful accounts of $12,000 at June                                 
   30, 2011 and September 30, 2010                   598,000        691,000 
  Inventories                                      2,686,000      2,613,000 
  Other current assets                               190,000        177,000 
                                               -------------  ------------- 
    Total current assets                           4,782,000      6,009,000 
                                                                            
Property and equipment, net                        1,094,000        908,000 
Other                                                 63,000        102,000 
Goodwill                                             544,000        544,000 
                                               -------------  ------------- 
    Total Assets                               $   6,483,000  $   7,563,000 
                                               =============  ============= 
                                                                            
     LIABILITIES AND STOCKHOLDERS' EQUITY                                   
                                                                            
Current liabilities:                                                        
  Accounts payable                             $     268,000  $     129,000 
  Accrued expenses                                   467,000        588,000 
  Deferred revenue                                    43,000         75,000 
  Accrued warranty                                    35,000         17,000 
  Income tax payable                                  11,000         11,000 
  Current portion of note payable and capital                               
   leases                                            185,000        161,000 
  Current portion of note payable to related                                
   party                                             219,000             -- 
  Accrued interest due to related party                   --          3,000 
                                               -------------  ------------- 
    Total current liabilities                      1,228,000        984,000 
                                                                            
Note payable and capital leases, net of                                     
 current portion                                      33,000         92,000 
Senior secured convertible note to related                                  
 party, net of discount of $89,000 and                                      
 $99,000, respectively`                                   --        401,000 
Deferred rent                                         84,000         80,000 
Derivative liabilities                                    --         96,000 
                                               -------------  ------------- 
                                                                            
    Total liabilities                              1,345,000      1,653,000 
                                               -------------  ------------- 
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, 2011 and September 30, 2010,                                 
   18,365,960 shares outstanding at June 30,                                
   2011 and September 30, 2010                       186,000        186,000 
  Additional paid-in capital                      51,263,000     51,238,000 
  Accumulated deficit                            (45,598,000)   (44,801,000)
                                               -------------  ------------- 
                                                   5,851,000      6,623,000 
Treasury stock, at cost (101,609 shares)            (713,000)      (713,000)
                                               -------------  ------------- 
                                                                            
    Total stockholders' equity                     5,138,000      5,910,000 
                                               -------------  ------------- 
                                                                            
    Total liabilities and stockholder's equity $   6,483,000  $   7,563,000 
                                               =============  ============= 
                                                                            
                                                                            

See accompanying notes to condensed consolidated financial statements

                                                                            
                                                                            
                               TRIMEDYNE, INC.                              
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS              
                                 (UNAUDITED)                                
                                                                            
                            Three Months Ended         Nine Months Ended    
                                 June 30,                  June 30,         
                         ------------------------  ------------------------ 
                             2011         2010         2011         2010    
                         -----------  -----------  -----------  ----------- 
                                                                            
Net revenues             $ 1,409,000  $ 1,515,000  $ 4,924,000  $ 4,896,000 
Cost of sales                882,000      771,000    3,011,000    2,973,000 
                         -----------  -----------  -----------  ----------- 
    Gross profit             527,000      744,000    1,913,000    1,923,000 
                                                                            
Operating expenses:                                                         
  Selling, general and                                                      
   administrative            707,000      628,000    2,123,000    1,916,000 
  Research and                                                              
   development               248,000      254,000      629,000      875,000 
                         -----------  -----------  -----------  ----------- 
    Total operating                                                         
     expenses                955,000      882,000    2,752,000    2,791,000 
                                                                            
Loss from operations        (428,000)    (138,000)    (839,000)    (868,000)
                                                                            
Other income, net                 --       79,000       47,000      211,000 
                         -----------  -----------  -----------  ----------- 
                                                                            
Loss before provision for                                                   
 income taxes               (428,000)     (59,000)    (792,000)    (657,000)
                                                                            
Provision for income                                                        
 taxes                         1,000        3,000        5,000       12,000 
                         -----------  -----------  -----------  ----------- 
                                                                            
Net loss                 $  (429,000) $   (62,000) $  (797,000) $  (669,000)
                         ===========  ===========  ===========  =========== 
                                                                            
Net loss per share:                                                         
  Basic                  $     (0.02) $     (0.00) $     (0.04) $     (0.04)
  Diluted                $     (0.02) $     (0.00) $     (0.04) $     (0.04)
                                                                            
Weighted average number                                                     
 of shares outstanding:                                                     
                                                                            
  Basic                   18,395,960   18,365,960   18,395,960   18,365,960 
  Diluted                 18,395,960   18,365,960   18,395,960   18,365,960 
                                                                            
                                                                            

See accompanying notes to condensed consolidated financial statements

                                                                            
                                                                            
                               TRIMEDYNE, INC.                              
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS              
                                 (UNAUDITED)                                
                                                                            
                                                       Nine Months Ended    
                                                           June 30,         
                                                      2011          2010    
                                                   ------------ ----------- 
Cash flows from operating activities:                                       
Net loss                                           $  (797,000) $  (669,000)
  Adjustments to reconcile net loss to net cash                             
   (used in) operating activities:                                          
    Stock-based compensation                            25,000       13,000 
    Depreciation and amortization                      226,000      246,000 
    Gain on change in fair value of derivative                              
     liabilities                                       (43,000)     (29,000)
    Loss on disposal of assets                           3,000        2,000 
    Loss on extinguishment of debt and derivative                           
     liabilities                                        36,000           -- 
    Changes in operating assets and liabilities:                            
      Trade accounts receivable                         93,000      268,000 
      Inventories                                      (73,000)    (715,000)
      Other assets                                      26,000       93,000 
      Accounts payable                                 139,000     (151,000)
      Accrued expenses                                (121,000)      (9,000)
      Income tax payable                                    --        1,000 
      Deferred revenue                                 (32,000)      (9,000)
      Accrued warranty                                  18,000      (28,000)
      Deferred rent                                      4,000      (10,000)
      Accrued interest related party note               (3,000)          -- 
                                                   -----------  ----------- 
                                                                            
        Net cash (used in) operating activities       (499,000)    (997,000)
                                                                            
Cash flows from investing activities:                                       
  Purchase of property and equipment                  (415,000)     (30,000)
                                                   -----------  ----------- 
                                                                            
        Net cash (used in) investing activities       (415,000)     (30,000)
                                                                            
Cash flows from financing activities:                                       
                                                                            
  Proceeds from note payable to related party          250,000           -- 
  Payments on note payable to related party            (31,000)          -- 
  Payments on senior secured note to related party    (500,000)          -- 
  Payments on notes payable and capital leases         (25,000)    (188,000)
                                                   -----------  ----------- 
                                                                            
        Net cash (used in) financing activities       (306,000)    (188,000)
                                                   -----------  ----------- 
                                                                            
Net (decrease) in cash and cash equivalents         (1,220,000)  (1,215,000)
Cash and cash equivalents at beginning of period     2,528,000    1,621,000 
Cash and cash equivalents at end of period         $ 1,308,000  $   406,000 
                                                   ===========  =========== 
                                                                            
                                                                            

Supplemental disclosure of cash flow information:

Cash paid for income taxes during the nine months ended June 30, 2011 and 2010 was $2,000 and $12,000 respectively.

Cash paid for interest during the nine months ended June 30, 2011 and 2010 was approximately $53,000 and $26,000, respectively.

Supplemental disclosure of non-cash investing activity:

During the nine months ended June 30, 2011 and 2010, the Company financed the purchase of certain insurance policies with a $136,000 and a $60,000 note respectively.


CONTACT:
Jeffrey Rudner
(949) 951-3800, Ext. 285
jrudner@trimedyne.com

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