(Source: PrimeNewswire)
LANGHORNE, Pa., Aug. 11, 2009 (GLOBE NEWSWIRE) -- Power Medical Interventions(r), Inc. (OTCBB:PMII), a leader in developing and commercializing Intelligent Surgical Instruments(tm), today announced financial results for the three months and six months ended June 30, 2009. The company also highlighted several corporate milestones that were achieved since the completion of the first quarter of 2009 and commented on the recently announced acquisition by Covidien. The acquisition, which will take the form of an all cash tender offer, is subject to customary closing conditions and is expected to be completed by September 25, 2009.
Corporate Milestones:
* Power Medical Interventions (PMI) continued to report the positive effects of the company's organizational restructuring implemented during the fourth quarter of 2008. For the second quarter of 2009, the company reported: -- A 5 percent increase in sales during the second quarter of 2009 as compared to the second quarter of 2008; -- Excluding the impact of charges for obsolete inventory, a 50 percent improvement in gross margin to 19 percent of sales in the second quarter of 2009, compared to a gross margin of (31) percent during the second quarter of 2008; and -- A 30 percent decrease in operating expenses during the second quarter of 2009 as compared to the second quarter of 2008. * PMI announced that the U.S. Food and Drug Administration (FDA) cleared its 510(k) application for marketing the company's iDrive Intelligent Power Unit(tm) (iDrive IPU), detachable Intelligent Surgical Instruments(tm) and iConsole(tm) monitor. The iDrive IPU is a novel hand-held, computer-controlled power unit to which any of the company's detachable Intelligent Surgical Instruments(tm) can be attached, offering surgeons a broad range of cutting and stapling configurations. The iConsole monitor is a proprietary wireless device that communicates directly with the iDrive IPU during surgical procedures and provides auditory and visual feedback that allows surgeons to make real-time, critical decisions that may ultimately lead to improved patient outcomes. * PMI announced that Intuitive Surgical, Inc. elected to exercise its right to receive an irrevocable license to certain PMI intellectual property in exchange for an accelerated aggregate milestone payment of $5 million. The payment to PMI was made in connection with the License and Development Agreement signed with Intuitive in September 2008. As provided under terms of the agreement, Intuitive had the right to receive an irrevocable license by accelerating payment of remaining milestones. Intuitive's decision not only provided PMI with $5 million in non-dilutive financing, but it also provides further evidence of Intuitive's continued interest in PMI's technology. With this latest payment, PMI has received a total of $20 million under the License and Development Agreement with Intuitive. * Subsequent to the quarter end, PMI announced that the company's proprietary i60 Mid Cut Reload was used in a novel procedure known as laparoscopic vertical gastroplasty. This procedure is designed to combat obesity through a novel, less invasive surgical procedure which takes approximately 30 minutes to perform. The procedure was successful in reducing the size of the patient's stomach without removing the stomach. This new minimally invasive procedure provides benefits regarding pain and recovery time, and resulted in patients losing up to 17 pounds in the first week following surgery. This is the seventh such procedure, all performed by Jorge Sosa, M.D., chairman of the bariatric surgery department at Palmetto General Hospital, a Tenet Healthcare facility. Utilizing PMI's proprietary i60 Mid Cut Reload and Intelligent 60 mm Endoscopic Linear Cutter, Dr. Sosa has had success with all seven patients, each of them experiencing significant weight loss in the weeks and months following the procedure. In addition to weight loss, some of the seven patients also experienced the complete resolution of related health conditions including hyperlipidemia and sleep apnea, as well as significant improvement in type 2 diabetes. All seven procedures were completed safely.
Covidien Acquisition
On July 29, 2009, PMI and Covidien (NYSE:COV) announced that the companies had reached a definitive agreement through which Covidien will acquire PMI. The boards of directors of both companies unanimously approved the transaction, pursuant to which a wholly owned subsidiary of Covidien will pay $2.08 in cash per share of PMI's outstanding common stock. Aggregate consideration, including assumption of debt, will total approximately $64 million. The transaction, which will take the form of an all cash tender offer, is subject to customary closing conditions.
On August 10, 2009, Covidien Delaware Corp., an indirect, wholly owned subsidiary of Covidien, commenced the tender offer for the shares of PMI stock. Unless subsequently extended, the tender offer will be open for twenty business days and is expected to be completed at 12:00 midnight at the end of September 4, 2009.
"PMI has made great strides in the last year. The organizational changes that we have implemented since 2008 resulted in an increase in revenues, a significant decrease in expenses and improvements in quality -- all of which contributed to our growth and improved financial performance," stated Michael Whitman, chief executive officer of Power Medical Interventions. "Most importantly, PMI has gained worldwide recognition as a leading developer of next-generation surgical instrumentation. This recognition led to the recently announced acquisition of Power Medical Interventions by Covidien. We believe Covidien's move to acquire PMI affirms the value of our Intelligent Surgical Instrument(tm) technology and the growing markets that these innovative devices support. We look forward to the continued advancement of PMI's products and technologies by Covidien."
Financial Results:
The Company finished the second quarter of 2009 with unrestricted cash and cash equivalents of approximately $4.3 million compared to $4.7 million as of March 31, 2009.
