(Source: Business Wire)
Micrus Endovascular Corporation (Nasdaq: MEND) today reported
financial results for the three and six months ended September 30, 2009
and increased fiscal 2010 revenue guidance.
Highlights for the second quarter and first six months of fiscal 2010
include the following (comparisons are with the comparable periods in
fiscal 2009):
Neurovascular revenues from the United States increased 15% to a
record $11.2 million in the second quarter, and increased 16% to $21.3
million in the first six months
Revenues from Europe increased 5% (or 8% in constant currencies) to
$6.4 million in the second quarter, and increased 9% (or 18% in
constant currencies) to $12.7 million in the first six months
Revenues from Asia Pacific decreased $0.5 million to $2.8 million in
the second quarter, and increased 18% to $6.5 million in the first six
months
Total revenues increased 3% (or 4% in constant currencies) to $21.5
million in the second quarter, and increased to 9% (or 12% in constant
currencies) to $42.7 million in the first six months
Operating income increased $4.1 million to $2.1 million in the second
quarter compared with an operating loss of $2.0 million in the
prior-year period; operating income for the six months increased $13.0
million to $4.1 million versus an operating loss of $8.9 million in
the prior-year period
Total cash as of September 30, 2009 of $24.3 million increased $7.2
million from March 31, 2009
Net income for the second quarter of fiscal 2010 was $3.6 million, or
$0.22 per diluted share on 16.4 million weighted-average shares
outstanding, and included $1.5 million or $0.09 per diluted share of
non-cash stock-based compensation expense. The net loss for the second
quarter of fiscal 2009 was $2.7 million, or $0.17 per share on 15.7
million weighted-average shares outstanding, and included $1.6 million
or $0.10 per share of non-cash stock-based compensation expense.
"Our year-to-date neurovascular sales increase of 16% in the highly
competitive U.S. market and 18% in constant currencies in Europe is
extremely rewarding. Our growth was fueled by new products such as
DeltaPaq and our ability to sell into new accounts. We continued to
make significant progress toward full-year profitability by effectively
managing operating expenses while growing revenues and we have $24.3
million in total cash after our third consecutive quarter of positive
cash flow from operations," said John Kilcoyne, Chairman and CEO of
Micrus Endovascular Corporation.
"We are exceptionally pleased with the rapid adoption of both our bare
platinum and Cerecyte® DeltaPaq filling microcoils, which
represented 18% of our second quarter revenues. We continue on track for
additional product introductions in the coming months providing us
potential access to new accounts and incremental revenue opportunities."
Fiscal Second Quarter Financial Results
Gross margin for the second quarter of fiscal 2010 was 77%, compared
with 73% in the second quarter of fiscal 2009. The improvement was
primarily due to increased direct sales of higher-margin products.
Research and development expenses for the second quarter of fiscal 2010
were $2.7 million, down from $2.9 million for the comparable prior-year
period. The decrease was primarily due to lower consulting, materials
and supplies, and personnel expenses, partially offset by a $500,000
upfront payment to Flexible Stenting Solutions Inc. to jointly develop a
flow diversion product.
Sales and marketing expenses for the second quarter of fiscal 2010 were
$6.6 million, down from $8.0 million for the second quarter of fiscal
2009. The decrease was primarily due to lower travel, personnel and
sales incentive expenses, and a decrease in meeting and conference costs.
General and administrative expenses for the second quarter of fiscal
2010 were $5.1 million, down from $6.4 million for the comparable
prior-year period. The decrease is primarily due to lower legal fees as
well as lower personnel and travel costs, and a decline in consulting
expenses.
Operating income for the second quarter of fiscal 2010 was $2.1 million,
compared to an operating loss of $2.0 million for the second quarter of
fiscal 2009.
Other income, net, of $1.8 million for the second quarter of fiscal 2010
included the recognition of a deferred gain of $1.9 million in
connection with the sale of non-neurological assets to Merit Medical
Systems, Inc. in January 2008. This compares with other expense, net, of
$0.7 million for the second quarter of fiscal 2009.
Year-to-Date Financial Results
For the six months ended September 30, 2009, total revenues were $42.7
million, up 9% from $39.1 million in the comparable prior-year period,
reflecting higher sales of microcoil products. Gross margin for the
first six months of fiscal 2010 was 76%, compared with 74% in the first
six months of fiscal 2009. Operating expenses for the first half of
fiscal 2010 were $28.2 million, down from $37.9 million in the
prior-year period. Operating income for the first half of fiscal 2010
was $4.1 million compared with an operating loss of $8.9 million in the
prior-year period. Other income, net, was $2.6 million for the six
months ended September 30, 2009, compared with other expense, net, of
$0.7 million for the first six months of the prior fiscal year.
Net income for the six months ended September 30, 2009 was $5.9 million,
or $0.36 per diluted share on 16.3 million weighted-average shares
outstanding. Net income included $3.3 million or $0.21 per share of
non-cash stock-based compensation expense. This compares with a net loss
of $9.3 million, or $0.60 per share on 15.6 million weighted-average
shares outstanding, in the comparable prior-year period. The net loss
included $3.1 million or $0.20 per share of non-cash stock-based
compensation expense.
As of September 30, 2009, Micrus had total cash of $24.3 million,
stockholders' equity of $53.6 million and working capital of $35.5
million. As of September 30, 2009, Micrus had outstanding borrowings of
$2.5 million under its line of credit, unchanged from December 31, 2008.
Use of Non-GAAP Financial Information
A reconciliation of the Company's non-GAAP financial measures to the
corresponding GAAP measures, and an explanation of the use of non-GAAP
measures, is included at the end of this news release. There are
limitations in using this non-GAAP financial measure because it is not
prepared in accordance with GAAP and may be different from non-GAAP
financial measures used by other companies. This non-GAAP financial
measure should not be considered in isolation or as a substitute for
GAAP financial measures. Investors and potential investors should
consider non-GAAP financial measures only in conjunction with the
Company's consolidated financial statements prepared in accordance with
GAAP and the reconciliation of the non-GAAP financial measure provided
in the attached schedule.
Fiscal Year 2010 Financial Guidance
Micrus Endovascular raised its expectation for total revenues for fiscal
2010 to be in the range of $84 million to $87 million. This compares
with prior guidance for total revenues to be in the range of $82 million
to $86 million.
Conference Call
Micrus management will host an investment-community conference call
today beginning at 10:30 a.m. Eastern time (7:30 a.m. Pacific time) to
discuss these results and answer questions. To participate in the call
please dial (888) 803-8296 from the U.S., or (706) 679-0753 from outside
the U.S. Those interested in listening to the conference call live via
the Internet may do so by visiting the Investor Relations section of the
Company's Web site at www.micruscorp.com.
A telephone replay will be available for 48 hours following the
conclusion of the call by dialing (800) 642-1687 from the U.S., or (706)
645-9291 from outside the U.S., and entering reservation code 32806729.
A webcast replay will be available for 30 days.
About Micrus Endovascular Corporation
Micrus develops, manufactures and markets implantable and disposable
medical devices for use in the treatment of cerebral vascular diseases.
Micrus products are used by interventional neuroradiologists,
interventional neurologists and endovascularly trained neurosurgeons to
treat both cerebral aneurysms responsible for hemorrhagic stroke and
intracranial atherosclerosis, which may lead to ischemic stroke.
Hemorrhagic and ischemic stroke are both significant causes of death and
disability worldwide. The Micrus product lines enable physicians to gain
access to the brain in a minimally invasive manner through the vessels
of the arterial system. Micrus' proprietary, three-dimensional
microcoils anatomically deploy within the aneurysm, forming a scaffold
that conforms to a wide diversity of aneurysm shapes and sizes. Micrus
also sells stents, balloon catheters, access devices such as guide
catheters, microcatheters, guidewires and accessory products used in
conjunction with its microcoils. For more information, visit www.micruscorp.com.
Forward-Looking Statements
Micrus, from time to time, may discuss forward-looking information,
including estimated fiscal year 2010 revenues and profitability. Except
for the historical information contained in this release, all
forward-looking statements are predictions by the Company's management
and are subject to various risks and uncertainties that may cause
results to differ from management's current expectations. Such factors
include the risk of inconclusive or unfavorable clinical trial results,
the Company's ability to obtain, and the timing of, regulatory approvals
and clearances for its products, product enhancements or future
products, continued growth in embolic coiling procedures and market
acceptance of our products and other risks affecting the Company,
including the current worldwide economic conditions, the Company's
limited operating history and history of significant operating losses,
fluctuations in quarterly operating results, which are difficult to
predict, currency exchange rate fluctuations, the Company's dependence
on developing new products or product enhancements, challenges
associated with complying with applicable state, federal and
international regulations related to sales of medical devices and
governing Micrus' relationships with physicians and other consultants,
the Company's ability to compete with large, well-established medical
device manufacturers with significant resources and other risks as
detailed from time to time in risk factors and other disclosures in the
Company's Annual Report on Form 10-K for the fiscal year ended March 31,
2009, as well as in its other filings with the Securities and Exchange
Commission. All forward-looking statements in this release represent the
Company's judgment as of the date of this release. The Company
disclaims, however, any intention or obligation to update
forward-looking statements.
MICRUS ENDOVASCULAR CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30, March 31,
2009 2009
ASSETS
Current Assets:
Cash and cash equivalents $ 24,107 $ 17,050
Restricted cash 145 -
Accounts receivable, net 12,776 12,205
Inventories 13,338 11,857
Prepaid expenses and other current assets 1,281 1,237
Total current assets 51,647 42,349
Property and equipment, net 6,384 6,982
Goodwill 7,573 6,762
Intangible assets, net 4,075 4,684
Deferred tax assets 118 260
Other assets 479 469
Total assets $ 70,276 $ 61,506
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,695 $ 2,138
Accrued payroll and other related expenses 5,495 5,515
Short-term borrowings 2,500 2,500
Accrued liabilities 6,434 7,877
Total current liabilities 16,124 18,030
Other non-current liabilities 550 902
Total liabilities 16,674 18,932
Stockholders' Equity:
Common stock 160 158
Additional paid-in capital 131,579 127,121
Accumulated other comprehensive loss (1,591 ) (2,289 )
Accumulated deficit (76,546 ) (82,416 )
Total stockholders' equity 53,602 42,574
Total liabilities and stockholders' equity $ 70,276 $ 61,506
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MICRUS ENDOVASCULAR CORPORATION
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months EndedSeptember 30, Six Months EndedSeptember 30,
2009 2008 2009 2008
Revenues $ 21,510 $ 20,792 $ 42,733 $ 39,116
Cost of goods sold 4,905 5,614 10,469 10,207
Gross profit 16,605 15,178 32,264 28,909
Operating expenses:
Research and development 2,749 2,877 4,963 5,850
Sales and marketing 6,629 7,961 12,845 16,079
General and administrative 5,118 6,364 10,384 15,926
Total operating expenses 14,496 17,202 28,192 37,855
Income (loss) from operations 2,109 (2,024 ) 4,072 (8,946 )
Interest and investment income 12 80 28 190
Interest expense (29 ) - (65 ) (4 )
Other income (expense), net 1,827 (681 ) 2,596 (683 )
Income (loss) before income taxes 3,919 (2,625 ) 6,631 (9,443 )
Income tax provision (benefit) 313 111 761 (105 )
Net income (loss) $ 3,606 $ (2,736 ) $ 5,870 $ (9,338 )
Net income (loss) per share:
Basic $ 0.23 $ (0.17 ) $ 0.37 $ (0.60 )
Diluted $ 0.22 $ (0.17 ) $ 0.36 $ (0.60 )
Weighted-average number of shares used in per share calculations:
Basic 15,873 15,668 15,852 15,645
Diluted 16,394 15,668 16,268 15,645
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MICRUS ENDOVASCULAR CORPORATION
Non-GAAP Constant Currency Revenues Reconciliation
(in thousands)
(unaudited)
Three Months EndedSeptember 30, Change
2009 2008 As ReportedCurrency Basis ConstantCurrency Basis
(Dollars in thousands) (GAAP) (Non-GAAP)
Revenues:
Americas $ 12,357 $ 11,407 8 % 8 %
Europe 6,356 6,040 5 % 8 %
Asia Pacific 2,797 3,345 (16 %) (16 %)
Total Revenues, as reported $ 21,510 $ 20,792 3 % 4 %
Six Months EndedSeptember 30, Change
2009 2008 As ReportedCurrency Basis ConstantCurrency Basis
(Dollars in thousands) (GAAP) (Non-GAAP)
Revenues:
Americas $ 23,513 $ 21,940 7 % 7 %
Europe 12,718 11,685 9 % 18 %
Asia Pacific 6,502 5,491 18 % 18 %
Total Revenues, as reported $ 42,733 $ 39,116 9 % 12 %
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To calculate operating segment revenue growth rates that exclude the
impact of foreign exchange rates the Company converts actual current
period revenues from local currency to U.S. dollars using constant
foreign exchange rates. The GAAP measure most comparable to this
non-GAAP measure is growth rate percentages based on GAAP revenue. A
reconciliation of this non-GAAP financial measure to the corresponding
GAAP measure is included in the table above. The impact of foreign
exchange rates is highly variable and difficult to predict. The Company
provides constant dollar revenue changes for Europe revenues because
management uses the measures to understand the underlying change in
revenue excluding the impact of items that are not under management's
direct control, such as changes in foreign exchange rates.
A service of YellowBrix, Inc.
