Cardiovascular Systems Inc. (NSDQ:CSII) posted second-quarter sales of $15.1 million for the three months ended Dec. 31, 2009, up 7.8 percent compared with $14 million during the same period last year. The company pared its net losses by 22.3 percent, to $6.8 million compared with $8.7 million during Q2 2009:
Press Release
Cardiovascular Systems Reports Fiscal Second-Quarter 2010 Financial
Results
- Key results improved in fiscal second quarter 2010 over fiscal
second quarter 2009 - Revenue increased 8 percent
- Revenue from reorders grew to 92 percent of total revenue from 76
percent - Net loss improved 22 percent
- Gross margin rose to 77 percent from 70 percent
- Optimal large vessel protocol successfully increases adoption in
key target accounts - Prospective clinical trials advance
- FDA conditionally approves coronary Investigational Device
Exemption application - CALCIUM 360° small vessel leg study enrolls first patient
- COMPLIANCE 360° large vessel leg study advances enrollment
ST. PAUL, Minn.–(BUSINESS WIRE)–Cardiovascular Systems, Inc. (CSI) (Nasdaq: CSII), a medical device
company developing and commercializing innovative interventional
treatment systems for vascular disease, today reported financial results
for its fiscal second quarter ended December 31, 2009.
CSI’s revenue in the second quarter rose to $15.1 million, an 8-percent
increase over revenue of $14.0 million in the second quarter of last
fiscal year. The net loss improved at a higher rate of 22 percent to
$(6.8) million, benefiting from improved gross margins and lower
operating expenses. Adjusted EBITDA, calculated as loss from operations,
less depreciation and amortization and stock-based compensation expense,
improved by 39 percent to a loss of $(4.3) million versus $(6.9) million
in the year-ago period.
David L. Martin, CSI president and chief executive officer, said,
“Revenue grew in line with our expectation this quarter, while the net
loss narrowed significantly through careful expense management. We
installed optimal large vessel protocols for using the Diamondback 360°
at selected target accounts. The result was an increase in device usage
of over 50 percent in those accounts from the first quarter of this
fiscal year. Given this success, we have broadened our program
substantially for the third quarter of fiscal 2010.” The company’s
Diamondback 360® PAD System treats peripheral arterial
disease (PAD) in vessels throughout the leg in a few minutes of
treatment time.
Net loss per diluted share was $(0.46) in the current quarter, compared
to $(2.34) per diluted share in the second quarter of fiscal 2009, which
included accretion of redeemable convertible preferred stock of $3.0
million. The number of weighted average common shares outstanding
increased to 14.7 million in second quarter fiscal 2010 from 5.0 million
in last year’s second quarter, primarily due to new shares issued in
conjunction with the February 2009 reverse merger with Replidyne, Inc.,
including conversion of all preferred stock to common stock.
Revenue generated from customer reorders continued to grow, increasing
by $3.3 million to 92 percent of total revenue for the fiscal 2010
second quarter from 76 percent in last year’s second quarter, reflecting
CSI’s emphasis on driving adoption in existing accounts.
The fiscal second-quarter 2010 gross margin rose to 77 percent from 70
percent in the same period last year, due to product cost reductions,
manufacturing efficiencies and shipment of fewer controller units.
Operating expenses decreased 2 percent to $18.1 million, a result of
effective expense management and the completion and timing of
development projects and clinical studies.
In the first six months of fiscal 2010, revenue grew to $30.3 million,
18 percent above the same period last fiscal year. The gross margin in
the first six months of fiscal 2010 was 77 percent, up from 69 percent
in the year-ago first half, while operating expenses declined 10
percent. In the first half of fiscal 2010, the net loss was $(13.0)
million, a 42-percent improvement over the first half of last fiscal
year. The net loss available to common shareholders was $(13.0) million,
or $(0.89) per diluted share, in the first half of fiscal 2010, compared
to $(25.4) million, or $(5.09) per diluted share last year, which
included accretion of redeemable convertible preferred stock of $3.0
million.
Clinical Trials Update
As previously announced, CSI recently received FDA conditional
Investigational Device Exemption (IDE) approval to evaluate the safety
and effectiveness of the Diamondback 360° to treat calcified coronary
lesions. The ORBIT II pivotal clinical trial can initially enroll up to
100 patients at as many as 50 U.S. sites.
Martin added, “The coronary indication for calcified lesions represents
a large, underserved market opportunity for CSI. Removing plaque, safely
and quickly, benefited ORBIT I patients who were otherwise untreatable,
scheduled for surgery, or facing difficulty with stent deployment due to
calcified plaque. We are confident that we can repeat the favorable
outcomes of our ORBIT I coronary feasibility study in the ORBIT II
trial.”
In addition, CSI is conducting clinical trials to advance understanding
of the Diamondback 360° to treat PAD, and to provide clinically useful
and scientifically sound data for physicians. In mid-November, CSI
enrolled the first patient in CALCIUM 360°, a clinical trial to evaluate
using the Diamondback 360° in lesions behind and below the knee. This
study complements the COMPLIANCE 360° study, which is evaluating the
Diamondback 360° for above-the-knee lesions, and has been enrolling
patients since June 2009. Both studies are prospective, randomized
clinical trials that will enroll 50 patients at up to 10 sites and
follow patients for 12 months.
Fiscal 2010 Third-Quarter Outlook
For the fiscal 2010 third quarter ending March 31, 2010, CSI management
anticipates:
-
Revenue in the range of $15.5 million to $16.5 million, or growth of 3
percent to 9 percent over the third quarter of fiscal 2009, as the
company continues its focus on customer education, adoption and PAD
awareness; -
Gross profit as a percentage of revenue at approximately the same
level as the fiscal 2010 second quarter; -
Net loss in a range of $(6.5) million to $(7.1) million, or loss per
diluted share ranging from $(0.44) to $(0.48), assuming 14.9 million
shares outstanding; and -
Adjusted EBITDA loss between $(3.6) million and $(4.2) million, versus
a loss of $(4.6) million in last fiscal year’s third quarter.
Management expects the net loss and adjusted EBITDA to improve as
revenue grows in the future.
Martin continued, “Installing the large vessel protocol has been
successful in key accounts, and we will continue to expand this
initiative to more customers in the coming quarters. This requires
considerable time and resources, but positions CSI for sustainable,
long-term growth going forward. Given the current progress of this
initiative, we expect revenue growth of approximately 10 percent to 15
percent for fiscal year 2010 over fiscal year 2009. Revenue growth will
continue to be balanced with progress toward profitability, as we target
to achieve our first profitable quarter during fiscal 2011, while living
within our cash resources and debt capacity.”