CryoCath Announces Fiscal 2005 First Quarter Results
Montreal, Quebec, Canada - February 14, 2005 - CryoCath Technologies Inc., the global leader in cryotherapy products to treat cardiovascular disease, today announced financial results for the first quarter ended December 31, 2004.
Selected First Quarter Financial and Operating Highlights
- 28% increase in revenue over first quarter on fiscal 2004;
- 38% increase in disposable units sold over first quarter of fiscal 2004;
- Increased gross margins from 55% in first quarter of 2004 to 64% in first quarter of 2005;
- Repeat orders as a percentage of total orders reached 70%;
- Expanded installed base by 44 new centres during the quarter;
- Entered strategic alliance with ATS Medical for the marketing and distribution of surgical product line;
- Launched Freezor® MAX into the U.S.;
- Reported strong clinical results from Arctic Front™ (formerly known as Arctic Circler® Balloon) program for the treatment of chronic Atrial Fibrillation (AF); and
- Closed $25 million financing.
“An expanded sales and marketing infrastructure was put in place during the first quarter, which will allow us to continue to achieve significant rates of growth for the remainder of the fiscal year,” said Steve Arless, President and CEO. “Specifically, now with more clinical specialists active in the field, the ATS Medical relationship secured and the launch of Freezor MAX’s into the U.S., we are already seeing a positive impact on our sales performance early in this calendar year.”
The Company’s total sales reached $6.0 million for the first quarter, an increase of 28% over the $4.7 million for the same quarter last year. Total disposable units sold for the quarter reached a record 2,637, an increase of 47% from the same period last year and a 2% increase from the 2,588 units reported in the previous quarter. Sales dropped on a quarter over quarter basis from the $7.0 million recorded in the fourth quarter of fiscal 2004.
“The decline in the value of the U.S. dollar negatively impacted sales in the first quarter by approximately $0.4 million compared to the previous quarter,” said Steve Gannon, Chief Financial Officer. “As well, we experienced a historically higher incidence of leased transactions for our consoles during this quarter, which reduced new equipment sales by $0.4 million.”
Gross margins for the first quarter of fiscal 2005 were $3.9 million or 64% of sales, an increase from the 61% level achieved during the fourth quarter of last year and from the 55% level seen in the first quarter of fiscal 2004. The increase in margins was partially the result of continuous manufacturing improvements undertaken in 2004.
Net research and development expenses for the quarter ended December 31, 2004 were $2.1 million, a nominal decrease of $0.1 million from the fourth quarter and an increase from $1.9 million in the first quarter of last year. Research projects currently ongoing include work on Arctic Front, a catheter to treat AF, an Investigational Device Exemption (IDE) study using a toolbox approach to treat AF and its flagship interventional cardiology program, PermaFrost, for the treatment of Peripheral Artery Disease (PAD). The Company expects to see increased research and development expenditures as it advances its AF clinical program.
Administrative expenses for the first quarter of 2005 increased slightly to $0.88 million from $0.8 million from the same period last year. As a percentage of the total expense burden, administrative expenses have declined and represent 9.5% of the total expenses, down from 10.2% in the first quarter a year ago.
The Company’s sales and marketing expenses for the first quarter of 2005 increased to $5.4 million from $4.8 million for the same period last year, but decreased as a percentage of sales to 89% from 101%.
CryoCath’s net loss for the first quarter ended December 31, 2004 increased slightly to $5.2 million or ($0.15) per share from a loss of $5.0 million, or ($0.15) per share, in the first quarter of fiscal 2004.
Operating burn for the quarter versus the previous quarter increased by $0.1 million, from $3.6 million in the fourth quarter of 2004 to $3.7 million in the first quarter of 2005.
Working capital increased to $42 million as at December 31, 2004, an $18.8 million increase from $23.2 million at September 30, 2004. The Company at December 31, 2004 had access to approximately $50.5 million in cash or borrowing facilities. The Company believes that it will continue to be able to access sufficient working capital to meet its current and future requirements.
The Company will host a conference call to discuss the first quarter on Monday, February 14, 2005 at 4:40 p.m. EST. The call will be audio-cast live and archived for 90 days at www.financialdisclosure.ca and www.cryocath.com.
About Medtronic CryoCath
CryoCath is a medical technology company that leads the world in cryotherapy products to treat cardiovascular disease. With a priority focus on providing physicians with a complete solution of catheter and surgical products to treat cardiac arrhythmias, CryoCath has multiple products approved in the U.S., across Europe and several other ROW countries. The Company is developing additional products to expand its pipeline of products to treat cardiac arrhythmias and has development projects for the treatment of cardiac ischemia (angina) and peripheral arterial disease (PAD).
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