Nov. 2, 2009 (PR Newswire) -- MINNEAPOLIS, Nov. 2 /PRNewswire-FirstCall/ -- ATS Medical, Inc. (Nasdaq: ATSI), manufacturer and marketer of state-of-the-art cardiac surgery products and services, today reported financial results for its third quarter ended October 3, 2009.

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Third Quarter 2009 Results

Revenue for the quarter was $18.8 million, or 17.3% higher than the third quarter of 2008. Revenue from the Company's heart valve therapy products, consisting of mechanical valves, tissue valves and repair products, was up 20.5% on a year-over-year basis to $14.2 million. Revenue from the Company's ATS CryoMaze® cryoablation products for the treatment of cardiac arrhythmias was $4.5 million, an increase of 12.0% compared to the third quarter of 2008. Excluding the impact of foreign currency fluctuations revenue growth for the quarter was 19.4% overall, 23.0% for heart valve therapy products and 12.6% for cryoablation products.

Gross profit margin for the third quarter of 2009 was 62.9% vs. 59.1% in the third quarter of 2008, continuing the trend of significant margin improvement. Year-over-year gross margin improvements were primarily the result of lower mechanical valve and ATS CryoMaze product costs resulting from increased production.

Operating loss for the third quarter of 2009 was $0.6 million compared with an operating loss of $2.8 million in the third quarter of 2008. The net loss for the third quarter of 2009 was $1.0 million, or $0.01 per share, compared with $3.7 million, or $0.06 per share, in the third quarter of 2008.

The Company also reported non-GAAP earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter of 2009 of $1.1 million compared to an EBITDA loss of $1.6 million in the third quarter of 2008. A reconciliation of net loss to non-GAAP EBITDA for these periods is provided in a schedule accompanying this press release. The Company ended the third quarter with $12.1 million in cash and generated positive cash flow during the quarter of $770,000.

"Our third quarter financial performance was strong, once again yielding robust sales growth, margin expansion and profitability improvements, which are particularly gratifying given the challenging global economic environment," said Michael Dale, President and Chief Executive Officer. "Importantly, in the third quarter we generated positive cash flow of more than $700,000. The leverage we are experiencing in our business significantly enhances our ability to capitalize on our strategic initiatives and related new product development."

Product Highlights

Mechanical Heart Valves

--  Mechanical valve revenue was $11.6 million in the third quarter of 2009,
an increase of 10% over the third quarter of 2008.
--  The Company saw significant ATS Open Pivot® Mechanical Heart Valve
sales growth in Asia and continued to benefit from the recent launch of
the AP360 valve in Japan.

--  Two significant long-term Open Pivot valve studies were made public in
Q3.  The authors Van Nooten and Sezai both report very positive 15 year
experiences with the Open Pivot valve with excellent outcomes and low
complication rates.  These papers are a strong addition to the growing
body of science supporting the lower propensity for thromboembolic
complications with the fundamentally superior Open Pivot design.

Tissue Heart Valves

--  Tissue valve revenue during the third quarter of 2009 was $1.4 million
compared to $0.3 million in the comparable quarter of 2008.
--  In September, the Company announced that Columbia University Medical
Center achieved a milestone 100 implants of the ATS 3f® Aortic
Bioprosthesis.  The Columbia University surgeons have utilized the ATS
3f® Aortic Bioprosthesis predominantly in small aortic roots where
conventional stented tissue valves often involve a tradeoff in terms of
clinical performance.

--  ATS sponsored a 3f Revolution Symposium at the EACTS meeting in Vienna
that included a faculty of key opinion leaders in aortic valve surgery.
Professor Sven Martens from JW Goethe University in Frankfurt, Germany
presented his results with the ATS 3f® Enable(TM) valve demonstrating
excellent pressure gradients and good outcomes.  Professor Thierry
Carrel from the University of Berne, in Berne Switzerland presented on
his surgical approach in performing a biological Bentall procedure

Heart Valve Repair

--  Heart valve repair revenue in the third quarter of 2009 was $1.2
million, an increase of 29% compared to the third quarter of 2008.

--  The Company announced FDA approval and first implants of a new ATS
Simulus semi-rigid band. The semi-rigid band expands the Company's
annuloplasty repair product portfolio to meet broader clinical
applications.  The Company anticipates at least one additional repair
product launch prior to the end of 2009.

Surgical Ablation

--  Cryoablation revenues of $4.5 million in the third quarter of 2009
increased 12% over third quarter of 2008.
--  The third quarter saw the early stages of U.S. launch for the new ATS
CryoMaze® 10-S Surgical Cryoablation Probe, which offers increased
support throughout the length of the ablation segment. The increased
rigidity of the probe addresses the preference of some surgeons to have
a cryoablation probe with the feel of a more substantial surgical
instrument.  The ATS CryoMaze 10-S Probe has optimal shape retention
while remaining distinctly malleable by hand.  This combination of
attributes makes the probe particularly useful in minimally invasive
cardiac arrhythmia procedures.

--  The Company received CE Mark for the new ATS CryoMaze 10-S Probe in
October.  European launch of the 10-S Probe will begin in the fourth
quarter.

"Our focused R&D investments continue to deliver new products that are specifically designed to meet the unique needs of our cardiac surgeon customers around the world," commented Mr. Dale.