NMT Medical Inc. has already embarked on a series of restructuring moves–including an unspecified number of layoffs–aimed at cutting its annual burn rate by $1 million.
The size and the scope of the workforce cuts, which NMT said were put in place in January, were not disclosed. NMT, which recently ousted CEO John Ahern after eight years at the helm, employs about 110 people.
Company officials announced the cost-saving moves in an earnings release March 3.
NMT, which makes non-invasive treatments for structural heart disease, reported that sales slipped significantly during the three-month period ended Dec. 31, 2008, to $4.4 million, compared to $7 million for the same period in 2007. Much of that 36 percent drop-off was attributed to the expiration of a royalty agreement the company had with C.R. Bard, which accounted for about $1.8 million of sales in Q4 of 2008. Overall, the company posted a net loss of $4.2 million for the three-month period, compared to $2.9 million from the year-ago quarter.
For the year, the company reported sales of $17.9 million, compared to $26.8 million during 2007. The revenue slide caused the company’s net loss to widen from $9 million in 2007 to a whopping $18 million in 2008.
In a conference call with analysts, COO Rick Davis chalked the poor results up to falling sales for the company’s cardiac septal repair implants, adding that the worldwide market for septal implants was off by about 30 percent in 2008.
Davis said the company’s poor performance and high burn rate prompted the cost-cutting moves, which included layoffs and curbs in executive management and board compensation.
The moves are aimed at saving the company $1 million a year, he said. NMT has just under $5 million in cash on hand, according to the earnings release; Davis said the company is seeking a line of credit from several banks.
Looking ahead to fiscal 2009, interim president and CEO Frank Martin cited positive signs from the company’s CLOSURE I and BioSTAR product lines. NMT inked new distribution deals in Europe and Latin America for BioSTAR, a bio-absorbable cardiac septal repair device it’s developing with Canton’s Organogenisis, Martin said.
NMT said it expects revenues to be relatively flat for the first quarter and full year, at $3.9 million to $4.2 million and $18 million, respectively.